Lawyers lose their cloak of immunity

David Watt

Barristerial immunity - it sounds like an inoculation against a nasty affliction. Well, if you were a barrister, in a way it was.

It is the law which has protected barristers from being sued for negligence since Napoleon was touring Europe, and which our Supreme Court swept away this month in a unanimous five-judge decision.

The judges, headed by Sian Elias, saw no reason for lawyers to have such protection when other professions charged with a duty of care did not.

The judges described it as an "anomalous immunity". Its abolition was "long overdue", said Justice Ted Thomas.

They have the support of Law Commission president Sir Geoffrey Palmer, who applauds the elimination of an anachronism.

Palmer says he hopes Parliament will leave this new piece of case law alone. "It was an exception to the general law and now that exception is not found to be justified, it seems to me, that's fine."

Arguments that it would open the way for unreasonable or vexatious clients to blame their lawyers for a lost case, or that barristers might consequently become overly cautious for fear of making a mistake, haven't gained much support.

Processes exist to strike out unmeritorious claims and, says Palmer, competent barristers have nothing to fear.

"I don't think it is going to make much difference. People do the best they can usually and they have to meet a proper standard of care. The standard of a reasonable lawyer, not a super human standard. That's no different than for doctors or accountants or anyone else."

Australia recently decided to retain the immunity, which makes it the odd one out. New Zealand's move puts us in step with England, which removed immunity six years ago. England, notes Palmer, "hasn't seen the heavens fall in". Only a few negligence claims have been brought before the English courts.

In the one case so far determined, the House of Lords ultimately ruled the lawyer could not be found solely responsible for the disappointing outcome for her client.

What might a lawyer have to do to be sued for negligence? It would have to be a significant blunder, says Canterbury University's associate law professor, Duncan Webb. A lawyer being drunk and disorderly in court perhaps, or counsel falling asleep with drastic consequences for their client.

Forgetting to call a key witness, failing to put a crucial contention to an opposition witness with the consequence that you cannot therefore call key evidence.

Clients who have decided their barrister's negligence was the cause of a costly court decision going against them can sue but the case is likely to prove difficult, long, costly and ultimately may yield no benefit.

Litigation comes with the uncertainty of what a judge will hold to be the facts and negligence cases against barristers will have to get over the considerable hurdle of establishing that the barrister was to blame for the loss of a case.

"As in any tort case it involves causation questions," says Palmer. "What is a cause of what is a big item ... and proof will be difficult, especially if you are dealing with the featureless generality of a jury verdict."

Neither Palmer nor Webb expect many lawsuits from the removal of barristerial immunity but a rise in litigation insurance premiums may be a consequence.

On Webb's reading of the Supreme Court's ruling, those who believe their lawyers' incompetence resulted in them getting a criminal conviction must first overturn the conviction. Otherwise contrary verdicts could ensue: where the client successfully sues the lawyer for negligence but is nonetheless held guilty of the crime alleged against him.

Few clients will encounter incompetence on a level to warrant a negligence suit. Many, though, have grumbles about their lawyer. The Auckland District Law Society last year opened 586 new complaint files. Twelve disciplinary tribunal hearings were held in the same year. Webb says most can be summarised as bad service: "Said it would cost this and it cost that, said it would take two months and it took two years, never responded to my telephone calls until I made this complaint; all those things. They slip under the radar because they don't reach the high threshold of what amounts to misconduct for lawyers."

Because most are settled by agreement, it is difficult to tell what proportion of such complaints to law societies have merit. But the sheer number of complaints indicates a lot of people are unhappy with some aspect of the service they receive. Some also feel law societies serve the interests of members before the interests of the members' clients.

The passing of the Lawyers and Conveyancers Act is expected to produce a better system of monitoring lawyer standards and of handling complaints, including recourse to an independent Ombudsman-like body.

Webb expects it to raise the bar regarding base standards and to boost compensation that law societies can order.

"The Lawyers and Conveyancers Act is much more significant for your average punter in the street than the immunity rule," he says. Though it won't eliminate irresponsible lawyers, the new legislation should produce a "better mechanism for redress and of measuring what lawyers are doing and whether it is up to scratch".

It may be more than a year before the new system is operating. Regulations are being drawn up and will need to be signed off by the Justice Minister. Under the new system, service-type complaints are expected to be dealt with under a concept called "unsatisfactory conduct".

Webb: "This will set a benchmark for minimally good service ... and this is what has been missing for a long time."

The task of deciding whether conduct is unsatisfactory will fall to standards committees - containing 50 per cent lay members - which will replace existing complaints committees and disciplinary tribunals.

The most significant change, says Webb, is the creation of a new office outside the Law Society structure, called the Legal Complaints Review Officer.

"If the client doesn't like the resolution the standards committee has given they can shoot it off to the legal complaints review officer."

The restructure may help avoid perceived or real conflicts of interest where law society members sit in judgment on peers. Such conflicts can be more difficult to manage the fewer members a law society has.

When their misdeeds make news headlines, however, the details generally involve theft or fraud, a police investigation and a lawyer in the dock.

Retired solicitor Brian Joseph Fay, found guilty in March of 109 charges of abusing his power of attorney to steal $700,000 from an 85-year-old client, is an example. The Christchurch District Court was told the money was used on gambling, international travel, university fees and investments. Another is Andrea Gwen Gregory, a Gore lawyer, sentenced to community service for stealing $22,000 from a law trust account.

But such convictions are not a guarantee that clients' losses will be made good from reparation or the solicitor's fidelity guarantee fund, or that the guilty lawyers will be stripped of their practising certificates.

Clients of Wayne Stuart Ross were turned down by the fund and had to go to court for a ruling to force the society to give them documents relating to its decision. By the time they won that interim argument seven years had passed since Ross was jailed for crimes involving more than $1 million and he had long been released from prison.

Wheels of justice move slowly to bar lawyer

It may be that the Hoare family's fight is just beginning despite the lawyer in their case, David Watt, being jailed for 15 months in April for a criminal breach of trust.

Watt emptied a family estate by claiming fees of $160,000 in six-minute bites, each costing $25. The court ordered Watt to pay $60,000 reparation, leaving Valda Hoare, 85, and her five step-sons to pursue the balance through the solicitors' fiduciary guarantee fund, administered by the New Zealand Law Society. That is seldom a fast and smooth process and may be slowed in this case by Watt having appealed his conviction. The reserved decision on that is pending.

Watt is not yet struck off the role of barristers and solicitors, although he's no longer listed as a practising lawyer on the Auckland District Law Society's website.

Law society executive director Margaret Malcolm said Watt would face a disciplinary hearing once the outcome of his appeal was known. It was usual for lawyers found guilty of a criminal offence punishable by a prison sentence to be struck off, she said.

One of the sons, Murray Hoare, said he understood Watt had been writing to clients from his cell advising that he was taking a break but intended to return to his practice.

As a trustee of the estate of the late Leonard Hoare, Watt charged fees of $160,000 over a three-year period when his only real duties were to sell the Hoares' Piha home and buy a cheaper one for Valda Hoare.

She learned of the loss when she asked Watt how much of a nest egg she had. There was none, she was told. In fact, once the cash had gone, Watt took out a $60,000 mortgage on her home and continued to pay himself.

Murray Hoare said it had badly affected his stepmother materially but also personally because of the betrayal of her trust. She had placed her lawyer "up there with God as a person you can absolutely trust with everything. Well, hello?"

He is critical of the profession for not earlier seeking law changes to rein in the lax, corrupt or avaricious. "Some of them are filling their boots. They charge in six-minute bites. They'll do a minute or two's work on the phone and they'll still charge six minutes."