It took a while. Dean Palmer was suspended from practising law for 18 months and ordered to pay $65,000, following a Lawyers and Conveyancers Disciplinary Tribunal penalty hearing last week.
The decision related to three incidents involving sexual harassment spanning three years. The first incident dated back to2015, while working at Anderson Lloyd. After that incident, he took up a role as a consultant at Duncan Cotterill.
It’s distressing to see the length of time it’s taken to get to this point and the number of women who have borne the brunt of this hideous pattern of behaviour. Just last year former Russell McVeagh partner James Gardner Hopkins was suspended following sexual misconduct in 2015 and 2016.
In contrast, Neshia Holdaway was struck off in April following complaints in 2022 that she failed to act on client instructions, or responding to requests from clients, fellow practitioners, and a standards committee. The Lawyers and Disciplinary Tribunal found the Auckland lawyer was not a fit and proper person as she had not provided any credible explanation for her conduct.
Disgraced lawyer Neshia Holdaway, found guilty of flagrant and gross misconduct and who clients say took and misused their funds, arrives for her penalty hearing before the Lawyers and Conveyancers Tribunal in Auckland on March 23. Photo / Dean Purcell
The lag in recognition of sexual misconduct and sexual misconduct stems from limitations in the Lawyers and Conveyancers Act 2006, which aims to maintain public confidence in the profession and protect consumers of legal and conveyancing services. Professional standards are difficult to apply in areas involving employment issues or in the above cases, sexual misconduct.
Former justice minister Andrew Little put it best in 2018: “If it’s the stuff that bears upon character or fitness to practise, it doesn’t really fit the system so someone could act in a pretty heinous way towards staff or even set up another law firm if they get booted out, and none would be the wiser.”
A bit of history
The Act’s inception superseded the Law Practitioners Act 1982, which provided for a federal structure with the Law Society and 12 district law societies with their own statutory powers. The Auckland District Law Society poo-pooed the move and has operated independently since, while the others transferred their assets and liabilities to the New Zealand Law Society 2009.
According to Inside Lawyers’ Ethics, the majority of complaints in the noughties concerned excessive adversarialism in litigation, the high cost of litigation, conflicting loyalties, excessive billing and overcharging, and the role of lawyers in corporate misconduct. Workplace welfare was not a thing, apparently.
Misappropriation of client funds was in the public discourse, at home and beyond. In the UK, for example, the Legal Services Act 2007 provided for a legal services board with a consumer panel.
When US energy company Enron Corp filed for bankruptcy in 2002, auditor Arthur Andersen was convicted for obstructing justice, yet questions were raised as to how its lawyers, Vinson & Elkins, managed to emerge unscathed. Similarly, the role of lawyers was criticised in a 1998 Australian waterfront union dispute involving Patrick Corporation and a mass restructuring of its workforce.
Fidelity funds
Closer to home, 1992 saw perhaps the largest fraud committed by a law firm. Renshaw Edwards partner Patrick John Renshaw was sentenced to seven years imprisonment on 42 charges of fraud and theft involving $6.4m of clients’ funds. His partner, Keith Edwards, was sentenced to six years on 51 charges of theft involving $3.5m.
In theory, the Solicitors’ Fidelity Guarantee Fund under the Law Practitioner’s Act should have covered client claims for compensation arising from theft by lawyers. Incredibly, the fund was cleared out, and 2800 lawyers across the country had to settle the bill at $10,000 each.
It’s of little surprise, therefore, that when the Lawyers and Conveyancers’ Act was introduced in 2006, a new fidelity fund included a cap of $100,000 for individuals. It also did not cover clients for any loss relating to money a lawyer was instructed to invest. For context, a Law Society spokesperson told me the contribution per practitioner was $368 for the 2022/2023 year.
Meanwhile, the Solicitors’ Fidelity Guarantee Fund continued to operate, receiving claims for compensation for theft by a solicitor occurring on or before 31 July 2008. This year, the fund is winding up, where the last day to make a claim for compensation was 7 February.
Under the Lawyers and Conveyancers Act, a third of the balance will go to the Lawyers’ Fidelity Fund. The other two-thirds are held in trust, to be applied to the representative function of the Law Society.
Where to from here?
This year’s release of the highly anticipated independent review into the Law Society marks a paradigm shift for the profession. After 12 months of engagement, research, and analysis, the panel found the current regulatory model does not work.
Panellists Professor Ron Paterson, Jane Meares, and Professor Jacinta Ruru recommended establishing a new independent regulator for the profession, one separate from the Law Society. It also seeks to reform the system for handling complaints. As it stands, submissions on the report and its recommendations are due this week.
Will it mean there’s a better framework that moves beyond addressing misappropriation of client funds to meaningfully addresses power imbalances, employment welfare, and sexual misconduct?
As I wait with bated breath perhaps a better incentive is needed to deter such behaviour. A #metoo fund of sorts to compensate victims of sexual harassment or worse at the hands of lawyers might fit the bill. But it could mean lawyers across the country could be paying more than $10,000, I’m sure.
