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Solicitor reprimanded, fined for trust account breaches
An NSW-based solicitor who failed to direct large amounts of money into his firms’ trust account has been found to have engaged in professional misconduct and, in addition to a $5,000 fine, was reprimanded and ordered to undertake a course.
Naomi Neilson
The NSW Civil and Administrative Tribunal (NCAT) found sole practitioner Alexander Martin guilty of professional misconduct for breaches relating to his practice Martin Legal’s trust account. The conduct in question took place at the beginning of 2016 and concerned two payments from a new client worth up to $30,000.
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In February of that year, Mr Martin requested that the client pay a $20,000 deposit prior to the firms’ “immediate start” on proceedings before the Federal Court. In early March, he again requested that a further $10,000 be transferred to the practice to cover counsel fees, of which just over $6,000 was used to do so.
While the remaining amount should have been entrusted to the practices’ trust account, NCAT noted that neither payment was deposited into it. By transferring them to the office account instead, the money was intermixed with general funds.
“It is axiomatic and uncontroversial that the proper handling of clients’ money is an essential part of the solicitor’s professional responsibilities and one of the fundamental exceptions which the public has of the profession.
“Any departure by a solicitor from compliance with those provisions will fall short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer, and accordingly constitute unsatisfactory professional conduct by the solicitor,” NCAT wrote in the recent judgment.
A separate ground brought before NCAT was found to be a “quite complex issue” and, as such, it chose not to make any findings. This ground concerned a retainer agreement that included a caveat that should any funds be unpaid, the firm could claim a legal or equitable interest in any of the clients’ real property.
However, at no time did the client pay a requested amount of $33,592 requested in an email containing the retainer agreement or communicate to Mr Martin that she had “received, read, understood or accepted” the retainer agreement.
The entire judgement can be read on AustLII and JADE: Council of the Law Society of New South Wales v Martin [2021] NSWCATOD 194 (1 December 2021)
