Relations with other persons

1. A solicitor must not take unfair advantage of the obvious error of another solicitor or other person, if to do so would obtain for a client a benefit which has no supportable foundation in law or fact.

Commentary

30.1 No taking advantage of error

Rule 30 is aimed at sharp practice. It is both unprofessional and unconscionable to take advantage of an obvious error e.g. a drafting error. A solicitor owes a professional responsibility to disclose to the other side the error the opponent has made (see Wall QC DCJ's 8 point summary in Paynter Dixon Queensland Pty Ltd v The Ayr Anzac Memorial Club Inc [2002] QDC 227). An attempt to take advantage of the other party's 'clerical or arithmetical error' is 'just a shabby trick and indubitably unconscionable', and will produce a result against which equity will give relief: Deputy Commissioner of Taxation v Chamberlain (1990) 93 ALR 729, 741, cited with approval in Paynter Dixon. 

The solicitor is under no duty to seek the client's instructions before informing the opponent of the error. If a solicitor wishes to notify the client of the obvious error and the obligation to correct it, it should prudently be put as a matter requiring that action, rather than an enquiry as to how the client wishes to proceed. The solicitor's duty both to the court and to the client requires the correction. The solicitor's paramount duty to the court and the administration of justice are likely ill-served by conduct that the court may consider 'a shabby trick' or 'unconscionable'. Neither is it the client’s best interests. In Tamlura NV v CMS Cameron McKenna [2009] EWHC 538, a draft share sale agreement erroneously contained a mechanism for valuing the shares that differed from that previously agreed by the parties. Mann J found that the solicitor was obliged not to take advantage of the mistake and not obliged to contact the client. Rather, in that case, taking advantage of the mistake may have involved the client in a rectification action, imperiled the transaction or resulted in misleading other shareholders. Similar cases may lead to a finding of misleading or deceptive conduct, or other negative consequences for the client.

Exception. A defence lawyer has no duty to disclose a client's previous convictions when the prosecution has failed to do so: see Rule 19.10 and its commentary.

Disciplinary consequences. In Chamberlain v Law Society of the ACT (1993) 43 FCR 148, the ATO took action against the solicitor to recover unpaid income tax. The writ stated that the amount of unpaid income tax due was $25,557.92, rather than the correct sum of $255,579.20. The legal practitioner was 'well aware' of the mistake and took advantage of it by getting the ATO to sign terms of settlement and consent to a judgment for the lower figure. The solicitor's conduct 'transcended mere "sharp tactics'" by inveigling the ATO to enter a 'corrupt judgment.' The Supreme Court of the ACT found the solicitor guilty of professional misconduct, and the Federal Court dismissed his appeal.

1. Unless otherwise permitted or compelled by law, a solicitor to whom material known or reasonably suspected to be confidential is disclosed by another solicitor, or by some other person and who is aware that the disclosure was inadvertent must not use the material and must:
   1. return, destroy or delete the material (as appropriate) immediately upon becoming aware that disclosure was inadvertent; and
   2. notify the other solicitor or the other person of the disclosure and the steps taken to prevent inappropriate misuse of the material.
2. A solicitor who reads part or all of the confidential material before becoming aware of its confidential status must:
   1. not disclose or use the material, unless otherwise permitted or compelled by law,
   2. notify the opposing solicitor or the other person immediately, and
   3. not read any more of the material.
3. If a solicitor is instructed by a client to read confidential material received in error, the solicitor must refuse to do so.

Commentary

31.1 Not to use inadvertently disclosed material

Rule 31 is designed to preserve confidential information which may have been accidentally disclosed. A solicitor who mistakenly receives information that they reasonably suspect to be confidential must stop reading it, destroy or return it, and notify the solicitor who sent it. The Rule applies to any mistaken disclosure, not only to privileged communications, or to disclosures in discovery or other curial processes. The Law Institute of Victoria's Inadvertent Disclosure Guidelines (20 November 2008), give practical advice on the operation of the Rule.

If the receiving solicitor believes that there is a genuine dispute over the ‘confidentiality’ of the material, then the material should be secured, pending resolution of the issues in dispute by agreement or court order.

This Rule does not alter the law concerning express or implied waiver of legal professional privilege: see Rule 9.2.2. 

The High Court of Australia considered the question of inadvertent disclosure in the context of discovery in Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd [2013] HCA 46⁸³ ("Expense Reduction"). In Expense Reduction the parties were ordered to give verified, general discovery. ERA's solicitors served their client's verified List of Documents on the Armstrong Parties’ solicitors, letters were exchanged whereby ERA's solicitors claimed that a number of the documents were subject to legal professional privilege and had been inadvertently disclosed. ERA (through its solicitors) requested the inadvertently disclosed documents be returned and that the Armstrong Parties solicitors provide an undertaking to not use information gained as a result of the inadvertent disclosure. The Armstrong Parties disputed their obligation to return the documents and give such an undertaking. The High Court considered a number of issues:

1. Waiver: "waiver is an intentional act done with knowledge whereby a person abandons a right (or privilege) by acting in a manner inconsistent with that right (or privilege)": Craine v Colonial Mutual Fire Insurance Co Ltd (1920) 28 CLR 305, 326. In Expense Reduction the court held that a mistake does not amount to an abandonment of privilege and that any question the Armstrong Parties had about ERA's claims for privilege were dispelled by the letter from ERA's solicitors promptly advising of the inadvertent disclosure. The court also said that the issue of waiver should never have been raised [35];
2. Complexity of the discovery process: Discovery is not intended to affect a person's ability to maintain confidentiality of documents where the law permits. The court said:
   "It follows that where a privileged document is inadvertently disclosed, the court should ordinarily permit the correction of the mistake and order the return of the document, if the party receiving the documents refuses to do so" [45].
3. Professional responsibility: In Expense Reduction the court referred to a solicitor's responsibility in these words:

"The question for a party to civil proceedings and its legal representatives is not just whether there is any real benefit to be gained from creating a dispute about whether a mistake in the course of discovery should be corrected. The CPA imposes a positive duty upon a party and its legal representatives to facilitate the CPA's purposes. Requiring a court to rule upon waiver and the grant of injunctive relief in circumstances such as the present could not be regarded as consistent with that duty" [64].

A solicitor's duty should be directed towards assisting "the court to facilitate the overriding purposes of the …" Uniform Civil Procedure Rules 1999 ('UCPR'). "It is an example of professional, ethical obligations of practitioners supporting the objectives of the proper administration of justice" [67].

Consequences. While solicitors receiving confidential information are bound by Rule 31, solicitors who have made the inadvertent disclosure may have breached their duty to the client: see Rule 9. All solicitors should therefore establish systems to avoid the risk of mistaken disclosure. Solicitors should also consider, in the context of disclosure or discovery, the consequences of waiver (express, implied or imputed).⁸⁴

Example. In Kingston v State Fire Commission (1998) 8 Tas R 152, solicitors for the plaintiff briefed counsel to advise on liability, quantum and evidence in a personal injuries action. The barrister mistakenly returned the brief to the solicitors for the defendant, who acting upon advice, read the brief, took notes and made photocopies. The court held that inadvertent disclosure of the material caused it to lose its privileged status but this did not mean that the plaintiffs had waived privilege. The confidential status of the material had not been lost. The defendant's solicitors and counsel were restrained from making any use of the inadvertently disclosed material for the purpose of the action.

For consideration of the issues that may arise from the sending of documents between opponents and the need to prevent "mining" of metadata, see GE Dal Pont, 'Reading outside the lines' (2012) 50(1) Law Society Journal 40. 

83 See N Knowlman 'Inadvertent Disclosure and your Duty to the Administration of Justice' (3 December 2013), QLS Ethics website.

84 GE Dal Pont, Lawyers' Professional Responsibility (Thomson Reuters, 5th ed, 2013) 405, [11.275].

1. A solicitor must not make an allegation against another Australian legal practitioner of unsatisfactory professional conduct or professional misconduct unless the allegation is made bona fide and the solicitor believes on reasonable grounds that available material by which the allegation could be supported provides a proper basis for it.

Commentary

32.1 Unfounded allegations

Section 487 LPA applies to a person who makes a complaint about the conduct of an Australian lawyer or a law practice employee. The person is not liable civilly or criminally or under administrative process for making the complaint. Section 487 LPA provides that merely because the person makes the complaint, gives the notice or otherwise gives information … the person cannot be held to have –

1. breached any code of professional etiquette or ethics; or
2. departed from accepted standards of professional conduct.

Such allegations may only be made by a solicitor in good faith and with supporting evidence. This includes allegations that have been formalised as a complaint to the Legal Services Commissioner. See also Rule 21.4 on any serious allegation during a court process. Lawyers have been disciplined for making unfounded allegations against another, generally opposing, lawyer without reasonable grounds:

• McLaren v Legal Practitioners Disciplinary Tribunal (2010) 26 NTLR 45;
• Legal Profession Complaints Committee v in de Braekt [2011] WASAT 1.

1. In representing a client, a solicitor shall not communicate about the subject of the representation with a person the lawyer knows to be represented by another practitioner unless:
   1. the other practitioner has previously consented;
   2. the solicitor believes on reasonable grounds that:
      1. the circumstances are so urgent as to require the solicitor to do so; and
      2. the substance of the communication would not be unfair to the opponent’s client;
   3. the communication is solely to enquire whether the other party or parties to a matter are represented and, if so, by whom; or
   4. there is notice of the solicitor’s intention to communicate with the other party or parties, but the other practitioner has failed, after a reasonable time, to reply and there is a reasonable basis for proceeding with communication.

Commentary

33.1 'No contact' rule

Subject to the exceptions below, a solicitor shall not communicate about the subject of the representation with a person the solicitor knows to be represented by another practitioner; the 'no contact rule.' The Law Institute of Victoria's 'Communicating with Another Practitioner's Client Guidelines'⁸⁵ is a detailed practice guide to the Rule. It is most often invoked when the contact is initiated by the client. If a solicitor is contacted by another solicitor's client, the solicitor must inform the client that they:

• cannot speak to them about the matter;
• cannot listen to what the client has to say; and
• can only communicate through the person’s own solicitor

and should immediately terminate the conversation and advise the client's lawyer.

Rationale. The rule is to protect the opposing party. "The lawyer may … secure damaging admissions, or access to privileged material, or undermine the opponent’s client’s trust in that person’s lawyer": Legal Services Commissioner v Bradshaw [2008] LPT 9, [26].⁸⁶ "It is also highly cognisant with good sense and convenience, because otherwise solicitors cannot really do their duty, and it is impossible for business to be properly conducted unless the solicitors have the full confidence of their clients and are enabled to communicate the one with the other upon that footing": Re Margetson and Jones [1897] 2 Ch 314, 318 – 319.

Examples. In Legal Services Commissioner v Hurley [2009] NSWADT 125 the NSW Administrative Decisions Tribunal found a solicitor guilty of professional misconduct for impersonating the solicitor acting for the opposing party in an attempt to obtain information for better discovery and expose deliberate withholding of discoverable documents.

Social media. To adopt a contemporary perspective, a solicitor would breach this Rule by becoming a 'friend' of another solicitor's client for example, using Facebook, Myspace etc. Further, to do so without disclosing the true purpose of the request may also involve a breach of the duty of honesty in Rule 4.1.2. See the QLS publication, 'Seven ethical sins in social media.' As to whether a solicitor's agent (such as an investigator or loss adjustor) may seek to 'friend' another solicitor's client, caution should be exercised. 

Absent judicial guidance as to Facebook etiquette, some assistance is offered by an opinion of the Philadelphia Bar Association (Opinion 2009-02, March 2009)⁸⁷ in which the view (albeit informed by a greater level of codification of the lawyer's responsibilities and duties) is offered that for a solicitor to make the friend request likely constitutes deception and misconduct, and that to request a third party to make the request for the solicitor's purposes (or otherwise make use of the information thereby obtained) would not insulate the solicitor from ethical responsibility for the conduct. 

Second opinions. Rule 33 does not preclude a solicitor from accepting instructions to provide a second opinion on a client's matter.

85 On rule 25 of the Professional Conduct and Practice Rules 2005 (Vic), the Victorian equivalent of Rule 33.

86 A case on the former Legal Profession (Barristers) Rule 2004 (Qld) r 55.

87 http://www.philadelphiabar.org/WebObjects/PBAReadOnly.woa/Contents/WebServerResources/CMSResources/Opinion_2009-2.pdf

1. A solicitor must not in any action or communication associated with representing a client:
   1. make any statement to another person:
      1. which grossly exceeds the legitimate assertion of the rights or entitlements of the solicitor's client, and
      2. which misleads or intimidates the other person,
   2. threaten the institution of a criminal or disciplinary complaint against the other person if a civil liability to the solicitor's client is not satisfied; or
   3. use tactics that go beyond legitimate advocacy and which are primarily designed to embarrass or frustrate another person.
2. In the conduct or promotion of a solicitor's practice, the solicitor must not seek instructions for the provision of legal services in a manner likely to oppress or harass a person who, by reason of some recent trauma or injury, or other circumstances, is, or might reasonably be expected to be, at a significant disadvantage in dealing with the solicitor at the time when the instructions are sought.

Commentary

34.1.1 Exceeding the legitimate assertion of rights. A solicitor should bear Rule 34.1.1 in mind at the earliest stages of his or her involvement, such as in preparing a letter of demand. The early impact or advantage of a bold demand must be tempered by ensuring any statement does not grossly exceed the legitimate assertion of the client's rights or entitlement and does not mislead or intimidate the other person. Examples of overstepping the mark may include:

Claiming that the costs of the letter of demand will be recoverable as costs in any proceedings to recover the debt (ACCC v Sampson [2011] FCA 1165 – consent order);

In Legal Practice Complaints Committee v Segler [2009] WASAT 91, a solicitor's letter demanded immediate payment of a judgment debt, notwithstanding that the Magistrate had allowed seven days for payment. The letter amounted to unprofessional conduct;

Collection of debts barred by the Limitation of Actions Act must be conducted in a way which does not involve misrepresenting to the debtor the extent of the creditor's right to collect the debt nor in a manner which amounts to unconscionable conduct in breach of consumer protection legislation. An example of circumstances in which it was held that, having regard to the debtor's personal and financial circumstances and the manner in which she was contacted, a clerk in a debt collection capacity was guilty of unconscionable conduct is provided by Collection House v Taylor [2004] VSC 49.

34.1.2 Threatening criminal proceedings. Rule 34.1.2 has received judicial consideration in both civil and disciplinary cases. In Legal Services Commissioner v Sing [2007] LPT 004 the issue related to the extent to which (at [2]) 'a solicitor may ethically go in raising the prospect of recourse to criminal process with a view to encouraging the discharge of civil liability.’ At the time of the disciplinary complaint, this question had not arisen in Queensland (at [2]) ‘for more than a century.' The threats capable of being in breach of professional standards include:

• Threats to launch criminal proceedings if civil satisfaction not made out: Coogan [1914] St R Qd 197.
• Threats to institute a prosecution: Re Swanwick; ex parte Bain [1883] 1 QLJ 117; Chubb [1887] 3 QLJ 35.

In Sing, the respondent solicitor and his wife rented out commercial premises to the complainant's company. Cheques in payment of the bond and first month's rent were dishonoured, but those amounts were later paid. The respondent then wrote to the complainant "out of frustration", threatening that if future payments of rent were not made, he would write to the police requesting investigation of the circumstances in which the dishonoured cheques had been issued. Chief Justice de Jersey held that there had been no breach of the Criminal Code to the extent that it prohibits soliciting a benefit in return for stifling a prosecution. The letter would therefore have been unobjectionable if written by a non-lawyer. The solicitor had not made any improper use of his position as a solicitor and the application was dismissed. The dividing line between legitimate pressure and improper intimidation is difficult to draw, but the following examples may cross this line:

• A threat to institute criminal proceedings;
• The use of the solicitor's professional position to intimidate the addressee. Pressure is not impermissible by itself provided it is carried out with reasonable restraint and in a measured way; and
• Threats to make a report to the police or professional body if a person does not discharge their legal obligations. It is suggested that a solicitor should err on the side of caution by avoiding any threat of a report to the police or professional body if a person does not discharge their legal obligations. This ensures that the solicitor is not at risk of committing the offence of compounding an indictable offence pursuant to the Criminal Code (Qld) s 133(1). Any negotiations, mediations, discussions or communications should be undertaken in accordance with the exceptions set out in s 133(5).

34.1.3  Tactics to embarrass or frustrate. See Rule 28 for conduct that may be of the kind addressed by Rule 34.1.3.

1. If a solicitor instructs a third party on behalf of the client, and the solicitor is not intending to accept personal liability for payment of the third party’s fees, the solicitor must advise the third party in advance.

Commentary

35.1 Contracting with third parties

When a solicitor instructs a third party (for example a search agent, doctor, valuer, engineer or another solicitor) to undertake work for or to assist in a client's matter, the solicitor will be responsible for the payment of the third party’s fees unless the solicitor has advised the third party in advance that they will not accept personal liability for the payment of the third party's fees.

A solicitor who has referred a client to another solicitor should not be considered responsible for the payment of that other solicitor's fees except where otherwise agreed.