An ACT-based sole practitioner has been found guilty of unsatisfactory professional conduct and professional misconduct for engaging in a matter despite there being a conflict of interest and for making trust account withdrawals without authorisation.

The solicitor, whose name has been redacted from the judgment, came to the ACT Law Society’s attention when a client made a formal complaint over the withdrawal and transfer of settlement money from a trust account and into an office account. The professional relationship between the two parties was itself a conflict of interest.

Between June 2011 and November 2018, the solicitor made 64 advances to two of his associates, three of which were documented as loan agreements. In July 2016, when these associates jointly owed him a total of $101,890, the solicitor agreed to accept instructions from one associate in relation to a motor vehicle accident.

Up until the settlement was reached in November 2018, the solicitor had several conversations with the associate, Alan (no last name provided in judgment). In one, Alan said a $70,000 settlement “would be nice”, but the solicitor said that he “can’t see that happening” and did not provide any further written or oral advice.

In November 2018, when the solicitor was having “financial difficulties”, the client advised him to make a $30,000 offer, which was accepted by the car insurer. This, the solicitor conceded, was a conflict of interest because he had “a vested interest in the settlement funds”, given that at that time, Alan owed $97,140 to the solicitor.

Around this time, Alan requested that the solicitor transfer some of the funds from the settlement to him, but the solicitor replied that his loans had to be paid and that he didn’t “think you can pay me if I release the funds to you”. Ultimately, the solicitor rendered a tax invoice and cover letter but did not send either to Alan.

The $27,000 settlement – minus the $3,000 for Medicare – was eventually transferred to the solicitor, which he then disbursed into four payments. The first three were documented as “reduction of the loan”, but the fourth amount of $4,200 was paid into his office account “in settlement of costs and disbursements”.

Alan, who did not authorise the $4,200 costs transfer, discovered that the solicitor had disbursed the settlement and made a complaint with the ACT Law Society.

A trust account supervisor later discovered that the solicitor frequently acted for clients in conveyancing matters. In eight of those matters, the solicitor issued the tax invoices to clients but did not include any notification of the client’s rights. In six of the cases, the solicitor withdrew trust money without authorisation.

The solicitor accepted that he breached the Legal Profession Act by causing the withdrawal of trust money owed to Alan and, further, that he caused a breach by causing the withdrawals of trust money relating to the conveyancing matters.

The solicitor was also charged with failing to provide sufficient notification of rights to Alan and to eight of his other clients that set out the avenues that were open to them if there was a dispute in relation to legal costs and time limits for taking action.

“Turning to penalty, the respondent provided little in the way of explanation or elaboration to the tribunal and nothing by means of mitigation, other than the submission that charge two was a consequence of recklessness rather than negligence,” the ACT Civil and Administrative Tribunal found in judgment.

The tribunal ordered that the solicitor pay a $12,000 fine, complete courses approved by the Law Society, and pay the applicants costs in the sum of $6,000 within six months or the orders behind handed down. The solicitor has also been publicly reprimanded, although his name remains removed from public judgment.

“A public reprimand, in particular, represents a significant penalty to the respondent, having a detrimental effect on his reputation and business interests. This is a serious penalty. The practitioner has conceded wrongdoing, and there is nothing to suggest that he requires further deterrence. However, a public reprimand may be justified as warning to other practitioners not to offend in a similar way,” the tribunal noted.

The entire judgment can be read on AustLII and JADE: Council of the Law Society of the ACT v LP 202103 (Occupational Discipline) [2021] ACAT 105 (28 October 2021)