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Law Society sham led to huge waste in members’ funds: insider tells

Law Society sham led to huge waste in members’ funds: insider tells

THE LAW SOCIETY of New South Wales has received criticism from within its own ranks about the way it has spent hundreds of thousands of dollars of members’ funds in the past year. According to…

THE LAW SOCIETY of New South Wales has received criticism from within its own ranks about the way it has spent hundreds of thousands of dollars of members’ funds in the past year.

According to Law Society councillor, Tony de Govrik, there has been a “shameful waste” of members’ funds by the Law Society Council that, he claims, involved an attempted dismissal of the CEO, as well as the blocking of president-elect from succeeding to presidency, and the ensuing court case.

De Govrik, who is standing for re-election to the Council next month to ensure “that the sins of the past are not repeated”, told Lawyers Weekly that he thought some of the decisions taken by a majority of factionalised councillors last year were appalling, arguing that they had cost the Law Society both financially and in terms of reputation.

Two major errors of judgement had cost the Law Society hundreds of thousands of dollars last year, said de Govrik. He said the first was made by then president of the Law Society, June McPhie, to seek the “voluntary resignation” of then CEO Mark Richardson about 12 months ahead of the expiry of his contract.

“Paying out Richardson ahead of his contract came at a huge cost to the Law Society, but members were never informed of the full extent of this,” de Govrik said.

He labelled the reasoning behind the suggested resignation as nothing more than a “personality clash”, noting that Richardson had a contract until the end of 2006.

“But he got paid out … So he wasn’t working but getting paid until 30 June [the following year], and then of course he didn’t work for the rest of the year,” he said. “So he got paid for nearly 12 months of work that he didn’t do.”

According to de Govrik, McPhie and Richardson had different philosophical approaches to the Law Society, its policies and campaigns. “Particularly of a political nature relating to tort law reform, and that is where it all stems from,” he said.

“She just felt, presumably, that she could not work alongside [Richardson], although it is of course a shame because a president’s term, in any event, is only for one year. So she got rid of someone who had 14 years’ at the law Soifcety when she was only there a 12 month term,” de Govrik said.

The dismissal cost the Law Society hundreds of thousands of dollars, he said, caused by moving the CEO ahead of the expiry of the term of his contract.

De Govrik also criticised the decision by a majority of counsellors late last year to try to block vice-president Geoff Dunlevy from succeeding to the presidency. He labelled this an unprecedented attempt to hand a second term to then president McPhie.

Dunlevy had assumed he would automatically become president on New Year’s Day, although some councillors said it was up to the council to fill what was a casual vacancy.

Acting on his expectation, Dunlevy quit his Moree partnership and moved with his wife and young child to Sydney.

Supreme Court action ensued against the Law Society, resulting in a declaratory order in Dunlevy’s favour. Legal costs were awarded against the Law Society. De Govrik recalls that following the Court decision there was considerable support amongst members to requisition an extraordinary general meeting to dismiss those counsellors responsible for the Dunlevy incident.

“There was a lot of adverse publicity about the Law Society and these sorts of shenanigans, if I can call them that,” he said.

The matter “sullied the reputation of the Law Society and it also sullied the reputation of the Council of the Law Society and the profession generally”.

According to reports at the time, the Law Society position was that since Dunlevy was filling a casual vacancy, he was not elected to the position. But the technicality was dismissed by the Court, and Justice Peter Young CJ determined that there was no difference between being appointed to fill a casual vacancy and being elected.

As chair of the Audit Committee, de Govrik said he was concerned primarily by the considerable waste in members’ funds. He labelled it a “shameful waste”, and said he believed members should know the full extent of it.

“I believe that in terms of good corporate governance and in the interests of transparency and accountability to the membership, there should be more openness in relation to these sorts of matters. But there hasn’t been,” de Govrik said.

Dunlevy was reinstated as president of the Law Society this year. He was being sworn in as a magistrate as Lawyers Weekly went to press this week. The Law Society did not return Lawyers Weekly calls in time for press. McPhie was overseas at time of press, so was unable to respond to Lawyers Weekly calls.

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