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WA solicitor guilty of ‘obvious and blatant’ conflict of interest

A Western Australian legal director has been found guilty of professional misconduct and unsatisfactory professional conduct for an “obvious” conflict of interest.

user iconNaomi Neilson 10 June 2020 Big Law
Western Australia
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Kevin Staffa of incorporated legal practice Legal Success was engaged by a company – name redacted – through its managing director, W (whose name was also suppressed to protect his identity). While providing advice to the company, Mr Staffa also assisted W in his employment termination, including withdrawing $378,000 from the company.

Mr Staffa then rendered bills to the company for legal services performed for W, and then advised W to transfer said amount from the company’s account to W’s personal account, in anticipation of W’s entitlements upon the termination of his employment.

“He was unable to protect the interests of his client the company by at least informing his client of the transfer of funds and advising the company appropriately, without breaching his duty of confidentiality to his client W,” read State Administrative Tribunal documents.

 
 

“It was, in the tribunal’s view, a substantial failure on his part.”

Mr Staffa and W discussed steps that could be taken to protect and advance W’s personal interests in obtaining anticipated termination entitlements, before his employment ended. W proposed “taking and parking” money from the company, in an amount he believed to be sufficient enough to cover his anticipated employment entitlements.

Mr Staffa agreed with this, putting in writing to W in an email: “I see no option but for you to take proactive steps to protect your entitlements. I therefore confirm that my advice to you is that you immediately transfer into a bank account controlled only by you.”

When W expressed some concerns, Mr Staffa then wrote: “I have agreed with your idea of putting the funds into the holding account and in fact have stated clearly that that is my advice. This should give you some comfort as no matter how matters unfold, you will now be able to state, categorically, that you sought legal advice and acted only in accordance.”

The conduct of providing advice to W on his termination entitlements and by advising him to then transfer money belonging to the first client into an account owned by W amounted to professional misconduct. By then rendering two invoices to the first client in respect of work carried out for another client amounted to unsatisfactory professional conduct.

Another charge for professional misconduct was borne from Mr Staffa’s failure to be open and candid in his dealings with the Legal Profession Complaints Committee. He told the committee that he provided no input into W’s decision to withdraw the money.

“Such conduct brings the profession into disrepute and is below the standard of practice which members of the public and the legal profession can expect from a legal practitioner,” read tribunal documents.