Legal ethical obligations, misconduct and discovery: issues arising

4.115 A range of factors, illustrated by the key forms of discovery abuse and misconduct outlined above, currently have an impact upon the occurrence and prevalence of such abuse and enforcement of relevant legal ethical obligations. As discussed below, these include the adversarial nature of the civil justice system, and more specifically:

  • lack of knowledge about, and the broad nature and articulation of, legal ethical obligations;
  • narrow application of legal ethical obligations; and
  • limited enforcement of such obligations.

4.116 In many respects, the ALRC’s proposals in other chapters of this Consultation Paper, encouraging a more active case management approach to discovery, will assist in countering potential discovery abuse generally.[121]

4.117 In addition, however, the ALRC considers that the proposals made below concerning: the need for greater awareness of legal ethical obligations; clearer articulation and explanation of obligations with respect to discovery; and wider application of the obligations and greater enforcement, will address the key legal ethical concerns expressed in relation to the discovery process.

Lack of awareness and the broad nature of legal ethical obligations

4.118 Lawyers operate within a duty matrix. However, the ALRC has heard that in some cases lawyers are not aware of their legal ethical obligations, other than in a general sense; or, more specifically, that lawyers may face difficulties in applying broad legal ethical obligations and concepts to specific circumstances arising in practice.

4.119 This difficulty appears to arise in part as a result of limited legal education about the practical application of ethics to practices such as discovery; the overly broad nature of the obligations; and lack of uniformity in the obligations across jurisdictions.

4.120 The impact of this lack of awareness is illustrated through the examples of alleged discovery abuse and misconduct outlined earlier in the chapter which demonstrate the difficulties which may arise in applying broad legal ethical in the context of discovery practice.

4.121 Professional conduct rules, as the primary site of articulated legal ethical obligations, fulfil a number of important roles within the Australian civil justice system. In particular they provide

a base for education, practical guidance to practitioners, and an agreed standard of behaviour to which disciplinary bodies can refer. For professional practice rules to be useful, the rules should represent attainable aims and be useful in dealing with the continuing ethical dilemmas of professional life, command respect and be enforceable.[122]

4.122 However, legal ethical obligations contained in professional rules in Australia, which are likely to arise in the context of discovery, may be overly broad and lack clarity. In particular, there are no obligations of specific application to the discovery process, but rather they have general application to the full range of activities undertaken by lawyers in their professional capacity.

4.123 The general obligations include: facilitating the administration of justice; not abusing court processes; narrowing the issues in dispute; properly advising clients; completing work as soon as possible; not misleading the court; and not destroying documents.

4.124 However, in many instances the rules do not contain a positive or specific duty, and lawyers are required to apply broad concepts to specific scenarios which arise in everyday practice. This may contribute to lawyers’ uncertainty about their obligations because, aside from those cases involving blatant professional misconduct, it is often difficult to establish where lawyers’ behaviour amounts to discovery abuse in a broad sense or, more specifically, where misconduct is sufficient to attract sanctions or disciplinary action.

4.125 For example, to the extent that the Model Rules provide that by choosing to confine a matter to the issues in dispute a lawyer will not have breached their duty to the client, the Rules have been criticised for not imposing a positive duty. This may be particularly relevant to the practice of trolley load litigation.[123]

4.126 Similarly, with respect to delay, the Model Rules provide that a lawyer will not have breached their obligation to the client where they exercise forensic judgment so as to present the client’s case as quickly and simply as is consistent with its robust advancement.[124] However, this rule has been criticised on the basis that it does not impose a positive obligation on a lawyer to conduct a matter quickly and simply but merely allows a lawyer to do so, operating in a ‘passive, defensive role (primarily for the benefit of the advocate) rather than in active support of the court’s function’.[125]

Options for reform

4.127 There has been much debate surrounding the form that professional conduct rules should take and whether such rules should be positive or aspirational and the appropriate level of detail.

4.128 In this instance there appear to be two possible approaches to ensuring that legal ethical obligations articulated in professional rules are sufficiently specific and clear so that lawyers are aware of their obligations concerning discovery.

4.129 The first approach is to articulate specific legal ethical obligations that apply in the context of the discovery. Such an approach would draw together existing broad legal ethical obligations and make them more relevant to the discovery process, and impose new obligations such as disclosure of the existence of all documents considered relevant to the proceedings at the earliest practicable time.[126]

4.130 The other approach is through the adoption of a principle–rule–commentary approach to professional conduct rules.[127] In ALRC Report 89 the ALRC recommended that the Law Council convene a working group to coordinate the drafting of commentary to legal practice standards, to be issued as part of, or as a supplement to, national model professional conduct rules.[128] As the ALRC has noted, such an approach to professional rules

combines appropriate features of these varied publications in one document, provides a more accessible and authoritative guide to professional conduct and improves the relevance of professional practice rules to the daily work of practitioners.[129]

4.131 The inclusion of commentary as part of, or as a supplement to, professional rules would provide guidance for the practical interpretation of the obligations in the context of discovery.

ALRC’s views

4.132 The ALRC has heard that in some cases lawyers are not aware of their legal ethical obligations other than in a general sense, or that they face difficulties in applying broad legal ethical obligations to specific circumstances arising in practice. The ALRC is interested in stakeholder views on this matter.

4.133 If lawyers are not fully aware of their legal ethical obligations—either generally or as they apply in the context of discovery—then the ALRC welcomes stakeholder feedback on the best way of ensuring that lawyers and litigants are properly informed about their professional and legal responsibilities in relation to the discovery of documents.

4.134 The ALRC currently considers that the best way to raise awareness of the existence and practical application of legal ethical obligations is through legal education at a university level, and on a continuing basis. The ALRC has made a number of proposals with respect to this in the final part of this chapter.[130]

4.135 In addition, the ALRC considers that the current regulation of the legal profession on a state and territory basis is likely to contribute to any uncertainty about legal ethical obligations with respect to discovery. In light of the National Legal Profession Reform Project, consideration should be given to ensuring that lawyers and litigants are properly informed about their legal ethical obligations under any new uniform regulatory regime.

4.136 Legislation and professional rules in some instances contain overly broad or unclear statements of legal ethical obligations. In order to address discovery abuse there is a need for more clearly articulated obligations. In particular, standards of conduct expected in the context of the discovery process should be outlined more explicitly. The ALRC is interested in hearing more from stakeholders about whether existing general legal ethical obligations in professional rules are sufficiently specific and clear so that lawyers are aware of their obligations concerning discovery, and if they are not, about the best way to reform this.

General options for reform

4.137 The ALRC has considered two possible approaches to ensuring that legal ethical obligations in professional rules are sufficiently specific and clear so that lawyers are aware of their obligations concerning discovery.

4.138 The principle–rule–commentary approach appears preferable. The inclusion of commentary as part of, or as a supplement to, professional rules would provide guidance for the practical interpretation of the obligations in the context of discovery, as is the case under the Legal Profession (Solicitors) Rule 2007 (Qld).

4.139 While acknowledging the merits of articulating specific obligations concerning discovery, the ALRC considers that almost all general legal ethical obligations have relevance to the discovery process and that a clear explanation of their application to discovery would be sufficient to ensure lawyers are aware of their obligations.

4.140 In addition, the ALRC considers that the creation of obligations which only apply in the context of discovery may detract from the force of general legal ethical obligations on lawyers’ conduct outside this process. The links between such commentary and the role and form of legal education are discussed in the final part of this chapter.

Question 4–9 Are lawyers and litigants properly informed about their professional and legal responsibilities in relation to discovery? If not, what are the best ways of ensuring that lawyers and litigants are properly informed about their professional and legal responsibilities in relation to discovery?

Question 4–10 Are existing general legal ethical obligations in professional rules sufficiently specific and clear so that lawyers are aware of their obligations concerning discovery?

Question 4–11 Should professional conduct rules be amended to include specific legal ethical obligations concerning discovery?

Proposal 4–1 The Law Council of Australia, the Australian Bar Association and legal professional bodies in each state and territory should develop commentary as part of, or as a supplement to, the professional conduct rules with a particular focus on a lawyer’s legal ethical obligations with respect to the discovery of documents.

Costs specific reforms

4.141 One area in which lack of awareness, clarity and specificity of legal ethical obligations is particularly evident is with respect to costs. While the ALRC is not aware of any widespread overcharging for discovery costs, discovery has the potential to serve as a ‘profit centre’ for law firms.

4.142 The preceding chapters have considered ways in which to limit the use and scope of discovery, and thereby the associated costs. Similarly, the means by which the ALRC proposes to address abuse of discovery procedures, including trolley load litigation and delay, both of which increase the costs of discovery, will also address costs concerns.

4.143 In attempting to reduce the costs of discovery, the VLRC in its Civil Justice Review, recommended that courts be given the power to limit the costs incurred in connection with discovery to those which represent the actual cost of carrying out necessary work.[131] However, as discussed in Chapter 3, in the ALRC’s preliminary view, the amount charged to clients for discovery should generally a matter for cost assessment or review under existing legal profession legislation.

4.144 While arguably it is implicit in the context of the legal profession rules with respect to costs that lawyers should do so,[132] the ALRC has formed the preliminary view that all legal profession legislation or professional rules should include an obligation to charge no more than fair and reasonable legal costs.

4.145 The Draft National Law provides an instructive model and would require that a law practice only charge costs which are reasonable having regard to a number of factors. In particular, under the Draft National Law costs are fair and reasonable if they:

  • are reasonably incurred and are reasonable in amount; and
  • are proportionate in amount to the importance and complexity of the issues involved in a matter, the amount or value involved in a matter, and whether the matter involved a matter of public interest; and
  • reasonably reflect the level of skill, experience, specialisation and seniority of the lawyers concerned; and
  • conform to any applicable requirements of legal profession legislation, professional conduct rules and fixed costs legislative provisions.[133]

4.146 The ALRC also considers it important that overcharging is capable of constituting unsatisfactory professional conduct or professional misconduct—in line with recommendations made in ALRC Report 89 and subsequently incorporated into professional rules.[134]

Proposal 4–2 The Australian Government, state and territory governments, the Law Council of Australia, the Australian Bar Association and legal professional bodies in each state and territory should ensure legal profession legislation and/or professional conduct rules provide that a law practice can only charge costs for discovery which are fair and reasonable.

Question 4–12 How should lawyers determine what are fair and reasonable costs in the context of discovery?

Narrow application of legal ethical obligations

4.147 A central issue that affects the operation of the discovery process and the abuse of the process, highlighted by the VLRC in the Civil Justice Review, is the limited application of legal ethical obligations on participants in the civil justice system other than lawyers.[135]

4.148 This issue arises in the context of legal ethical obligations and discovery given the control exerted by participants other than lawyers on the discovery process, and the role played by legal culture in shaping the behaviour of individual lawyers.

Expansion of legal ethical obligations

4.149 Throughout the discovery process, control is exercised by a range of participants other than lawyers—by clients, but also by insurers, litigation funders and other third parties, for example electronic discovery service providers—over decisions affecting the discovery process itself, and influencing the operation of the civil justice system more broadly.

4.150 In a submission to the VLRC’s Civil Justice Review, IMF Australia, a litigation funder, acknowledged that such parties ‘have a greater capacity than most to systemically assist or retard’ court processes.[136]

4.151 However, current legislation and professional rules impose obligations on the conduct of lawyers, or in the case of recently introduced overarching purpose clauses in some legislation, on the courts, rather than other parties.

4.152 For example, the Federal Court of Australia Act imposes an obligation on litigants to act consistently with the overarching purpose of civil practice and procedure. However, this is only a secondary responsibility, in the sense that the court has primary responsibility and the parties are only under an obligation to assist the court. It does not impose any obligation directly on a party to take proactive steps.

Options for reform

4.153 There are two models of relevance in discussing the potential expansion of legal ethical obligations beyond lawyers.

4.154 The first is the model recommended by the VLRC in its Civil Justice Review and subsequently enacted in the Civil Procedure Act 2010 (Vic), which contains provisions directly defining overriding obligations and duties imposed on all key participants in civil proceedings before Victorian courts. The overarching obligations apply to parties, lawyers, law practices, and ‘any person who provides financial assistance or other assistance’ to a party where that person exercises either direct or indirect control over the conduct of the civil proceeding or of a party, including but not limited to insurers and litigation funders.[137] The court can make a range of orders where a participant contravenes the overriding obligations.[138]

4.155 The second model is that imposed by the model litigant obligations, which are contained in the Legal Services Directions. Under the Legal Services Directions, the Commonwealth and its agencies—and by extension, lawyers working for the Australian Government—are required to behave as model litigants in the conduct of litigation. Relevantly the obligation includes, for example, endeavouring to avoid, prevent and limit the scope of legal proceedings and keeping costs to a minimum.[139]

In essence, being a model litigant requires that the Commonwealth and its agencies, as parties to litigation, act with complete propriety, fairly and in accordance with the highest professional standards.[140]

4.156 Indeed, the obligations contained in the Legal Services Directions go ‘beyond the requirement for lawyers to act in accordance with their ethical obligations’ under the legal profession acts and professional rules.[141]

ALRC’s views

4.157 The control that all participants in civil litigation exercise together over the conduct of proceedings is significant. As a result, in order to avoid discovery abuse there is a need to impose legal ethical obligations on all key participants in civil proceedings.

4.158 To the extent that the Civil Procedure Act 2010 (Vic) imposes obligations on all key participants in civil proceedings, the ALRC favours that approach. At a federal level, in order to impose obligations on parties other than lawyers it would be necessary to amend a range of federal legislation concerning civil procedure and the courts. While proposing such a review is beyond the scope of this Inquiry,[142] the ALRC suggests that any such review by the Government should consider the extension of legal ethical obligations beyond lawyers to other legal players, such as clients, insurers, litigation funders and electronic discovery (e-discovery) service providers.

Cultural change

4.159 Like many professionals, lawyers are influenced by the culture in which they work—by how their colleagues make decisions and what they believe their supervisors and clients expect of them. The Queensland Legal Services Commissioner, John Britton, has commented on the role of law firm culture and the ‘reality that individual lawyers conduct themselves in ways that are a function in part at least of the workplace cultures of the law firms within which they work’.[143]

4.160 Similarly, in addressing the weaknesses of the current regulatory regime, Associate Professor Christine Parker and others have been vocal in recognising the difficulties associated with identifying individuals within firm structures who are responsible for misconduct, particularly where behaviour that runs contrary to legal ethical obligations may be an entrenched part of workplace culture.[144]

4.161 Further, as outlined above with respect to issues arising from delegation, the ALRC has heard some concerns arising from instances in which paralegals and junior lawyers exercise judgment with respect to discovery under minimal supervision by senior lawyers where they may not have sufficient experience to balance competing issues and interests.

4.162 The growth of commercial alliances between firms and corporations and the public listing of law firms has also increased the importance of ensuring that regulatory structures are responsive to the role played by firms and third parties in shaping the behaviour of individual lawyers, particularly where such structures may create tension between lawyers’ legal ethical obligations and those owed, for example, to a company’s shareholders.

4.163 Parker and her colleagues have argued that, although the values of individual lawyers influence their behaviour, ‘law firms and work teams structure and frame individual lawyer’s ethical decisions and behaviours’ and they do this in three main ways:

(a) limiting individual lawyers’ capacity to ‘see’ ethical issues;

(b) constraining or creating options and opportunities for individual lawyers to make ethical judgments and act on them; and

(c) creating internal incentives, or magnifying external ones, that pressure individual lawyers to choose certain ethical behaviours.[145]

4.164 Parker and her colleagues argue for ‘organisational level bulwarks to counteract organisational level pressures for unethical conduct’. This is broadly described as an ‘ethical infrastructure’:

A law firm ethical infrastructure means formal and informal management policies, procedures and controls, work team cultures, and habits of interaction and practice that support and encourage ethical behaviour. It might include the appointment of an ethics partner and/or ethics committee; written policies on ethical conduct in general, and in specific areas such as conflicts of interest, billing, trust accounting, opinion letters, litigation tactics and so on; specified procedures for ensuring ethical policies are not breached and to encourage the raising of ethical problems with colleagues and management; the monitoring of lawyer compliance with policies and procedures; and, ethics education, training and discussion within the firm.[146]

4.165 Others have proposed that firms could engage in various forms of ‘ethical auditing’:

Departments and work-groups could be asked to formulate plans that would articulate standards or practice and propose mechanisms for ensuring compliance. On a rotating basis, departments, workgroups, and individual lawyers could be evaluated in terms of their performance with respect to these standards ...

It is time to begin to charge lawyers with responsibility for designing systems that regularly and actively analyse professional judgments.[147]

4.166 Legal Services Commissions in both NSW and Queensland have developed voluntary questionnaires to encourage consideration of ethical issues by lawyers and law firms.[148] It has been suggested, in consultations, that the development of a questionnaire around legal ethical obligations arising in the context of discovery may be useful in promoting discussion and agreement about ethical discovery practice within law firms.

ALRC’s views

4.167 The ALRC considers that law firms could assist in improving discovery process and minimising discovery abuse by training their own lawyers, setting strict ethical and practice standards, closely monitoring compliance with those standards, and insisting that discovery is pursued honestly, ethically, and in accordance with the letter and spirit of the rules. Law firms might, in this way, foster a culture of responsible litigation and ethical discovery practice. Such a culture should affect how litigation is conducted and focus on real decisions rather than mere ‘symbolic or formalistic ethics management initiatives that do not make any difference to everyday actions and behaviours’.[149]

4.168 Further, to significantly improve the efficiency and ethical practice of discovery, a shift in culture in the wider legal community is necessary. While such a culture shift might be fostered by stricter discovery laws and a more rigorous enforcement of those laws, the ALRC welcomes stakeholder comment on the best ways to ensure legal ethical obligations are observed by both individual lawyers and by other legal participants such as large firms.

Question 4–13 How might law firms foster a culture of reasonable and ethical discovery practice?

Difficulties in enforcement and responding to misconduct

4.169 Despite reforms to the disciplinary and court-based structures for enforcement of legal ethical obligations, ‘there are still few cases of disciplinary action being taken against lawyers for breach of their duty to the court or the law’.[150] Parker and Associate Professor Adrian Evans have commented that ‘it is hard to believe that there really are so few cases in each of these categories where disciplinary action might be warranted’.[151]

4.170 It appears that this is due to a number of factors related to identification and reporting of misconduct and the general nature of the disciplinary model, rather than specific legal professional disciplinary structures.

4.171 In particular, the weaknesses of enforcement appear to arise from: lack of awareness about what conduct constitutes misconduct (dealt with earlier in the chapter); failure to report misconduct; and a disciplinary model which is reactive rather than proactive and focuses on individual behaviour rather than on more systemic causes of misconduct. Each of these are considered in turn below.

Failure to report misconduct

4.172 A large proportion of disciplinary matters brought to the attention of the relevant disciplinary body arise as a result of client complaints.[152] However, courts, costs assessors and other lawyers also have a role to play in reporting alleged misconduct.

4.173 There is limited recognition of the obligation owed by lawyers to report the misconduct of other lawyers under the legal profession legislation and professional rules in Australia. Indeed, there is no obligation under legal profession legislation for lawyers to report misconduct that may arise in the context of discovery.

4.174 Under professional rules in Victoria and South Australia, lawyers have an obligation to disclose conduct which is contrary to the general standards of conduct expected of lawyers—not to engage in conduct that is dishonest; or calculated or likely to a material degree to be prejudicial to the administration of justice or diminish public confidence in the administration of justice—and any conduct or event which may adversely impact on a lawyer’s ability to practise according to the professional rules.[153] Whether such an obligation applies to lawyers reporting the conduct of other lawyers is unclear. It is arguable, however, that the obligation is restricted to self-reporting.

4.175 In addition, courts both as guardians of the administration of justice and in upholding their obligations under various pieces of legislation—the purposes of which are to facilitate the just, quick and inexpensive resolution of disputes—are charged with responsibility for responding to alleged lawyer misconduct. However, the ALRC understands that court-initiated enforcement action, other than through the imposition of costs orders, is rarely taken in response to alleged legal ethical misconduct.

4.176 Finally, under the Draft National Law and in some jurisdictions, where a matter is subject to a costs assessment or review and the costs assessor considers that the legal costs charged are grossly excessive, they are under an obligation to refer the matter to the Legal Service Commission, or an equivalent body, to consider whether disciplinary action should be taken against the lawyer.[154] Similarly, however, the ALRC understands that this occurs rarely.

Options for reform

4.177 The approach taken in New Zealand (NZ), the United Kingdom (UK) and the US to ensuring lawyers report the misconduct of other lawyers provides for what has been referred to as ‘lawyer whistleblowing’.[155]

4.178 In these jurisdictions, rules require lawyers to report where they consider another lawyer’s conduct raises a ‘substantial question as to that lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects’,[156] constitutes ‘serious misconduct’,[157] or where there are reasonable grounds to suspect the other lawyer is guilty of misconduct.[158]

4.179 There are difficulties associated with imposing such an obligation on lawyers, in particular with respect to the need to support and, in some cases, protect lawyers who make such reports[159] and mechanisms for safeguarding against vexatious reports. In addition, in consultations, stakeholders expressed concerns about the impact such a requirement would have on the costs of discovery.

4.180 The ALRC is not aware of any suitable models, aside from judicial education, for addressing court-initiated enforcement action.[160]

ALRC’s views

4.181 Consumers of legal services as well as the courts, costs assessors and other lawyers play an important role in reporting misconduct, and as a result, in the effectiveness of means by which misconduct is brought to the attention of the relevant bodies.

4.182 In a self-regulated profession, another way of ensuring that misconduct is reported to relevant disciplinary bodies is imposing mandatory reporting obligations on lawyers. In the ALRC’s preliminary view, imposing mandatory obligations on lawyers to report the misconduct of other lawyers would assist in the better enforcement of legal ethical obligations.

4.183 The ALRC considers the formulation currently included in the Professional Conduct and Practice Rules 2005 (Vic) if expanded, and the approaches in NZ, UK and US, to be useful models.

4.184 Consequently, the ALRC is interested in stakeholder feedback on whether professional rules should provide that a practitioner must promptly disclose the occurrence of possible misconduct by either themselves or another lawyer in the course of discovery and, if so, what conduct. For example, misconduct may constitute conduct that a practitioner considers to be: dishonest; or calculated (or likely to a material degree) to be prejudicial to, or diminish public confidence in, the administration of justice; or prejudice a practitioner’s ability to practise.

4.185 As proposed with respect to the specificity and clarity of legal ethical obligations if such a reporting obligation were introduced, the development of commentary to accompany any such reporting obligation would be desirable.

4.186 However, given the difficulties associated with any such obligation, the ALRC is interested in stakeholder feedback on other ways to ensure alleged misconduct is reported to relevant disciplinary bodies, and whether imposition of a mandatory reporting obligation on lawyers would be an effective mechanism through which to achieve this.

4.187 With respect to the role of costs assessors in reporting misconduct, the ALRC is interested in hearing how often, in practice, costs assessors comply with requirements to refer matters to the legal disciplinary bodies where they consider that the legal costs charged are grossly excessive.

4.188 The ALRC is interested in stakeholder views on the best way to address the apparent infrequency with which judges report possible misconduct with respect to discovery in matters before them to legal professional bodies.

Question 4–14 What is the best way to ensure clients, lawyers and courts report allegations of lawyer misconduct to relevant disciplinary bodies?

Question 4–15 Should professional conduct rules provide that a practitioner must promptly disclose to the relevant legal professional body the occurrence of any misconduct arising in the context of discovery?

Question 4–16 If practitioners should be required to disclose misconduct in accordance with Question 4–15, what conduct should they be required to disclose?

Question 4–17 In practice, how often do costs assessors refer lawyers to disciplinary bodies for investigation of suspected gross overcharging?

Reactive regulatory system

4.189 As John Britton, the Queensland Legal Services Commissioner has commented, current regulatory systems and sanctions are

almost entirely reactive rather than proactive and preventative in character. They address past and not future behaviour, and they are all stick and no carrot. They do no more to encourage high standards of conduct than threaten disciplinary consequences for conduct that falls short of the mark.[161]

4.190 However, in some jurisdictions the Offices of Legal Services Commissioners (OLSC) have attempted to play a more proactive and educative role in the enforcement of legal ethical obligations. For example, in NSW, the OLSC’s approach is ‘regulating for professionalism’ within the framework of ‘education towards compliance’.[162] The strategy involves working with lawyers to engender the development of an ethical legal culture, including requiring firms to ‘self-assess and report on their implementation of appropriate management systems’ as well as addressing individual misconduct and complaints.[163]

ALRC’s views

4.191 In addressing the reactive nature of regulatory structures, the ALRC commends the ‘education towards compliance’ concept and considers that bodies such as the OLSC in each jurisdiction have a vital role to play in ensuring legal ethical obligations are observed and enforced.

4.192 The ALRC considers this issue and makes several proposals related to the role of education in the final part of this chapter.

Focus on individual misconduct

4.193 The primary focus of the current disciplinary framework in Australia is on protection rather than punishment, and on the behaviour of individual lawyers rather than the systemic causes of misconduct.

4.194 Commentators such as Parker have criticised this individual focus, arguing that the current disciplinary approach

is one that can easily lead to making a scapegoat of an individual practitioner for character failure rather than systemic change to address public concerns about consumer service quality and the administration of justice.[164]

4.195 Britton has suggested that the system ‘puts the spotlight on individual lawyers’ and ‘lets law firms almost entirely off the hook’.[165] This issue is considered earlier in this chapter in discussing the need for cultural change.

ALRC’s views

4.196 The ALRC considers moves towards extending obligations to all parties in the civil justice system, for example as envisaged under the Civil Procedure Act 2010 (Vic), would assist in addressing the individual focus of currently regulatory structures and in holding law firms responsible where workplace culture, management and firm structures had a role in the alleged misconduct of individual lawyers.

4.197 The other key reforms which are likely to refocus current regulatory structures and thereby enhance the effectiveness of enforcement of legal ethical obligations are discussed above in the context of the need for change to the legal culture in Australia.

4.198 Overall, it appears that weaknesses in enforcement of legal ethical obligations arise as a result of factors such as failure to identify and report misconduct, and the general nature of the disciplinary model rather than specific legal professional disciplinary structures. However, the ALRC is interested in hearing from stakeholders about whether existing legal professional disciplinary structures are sufficient to deal with discovery abuse, and if not, how they might be reformed.

Question 4–18 Are existing legal professional disciplinary structures sufficient to deal with allegations of discovery abuse?

Question 4–19 If existing legal professional disciplinary structures are not sufficient to deal with allegations of discovery abuse, how should lawyers be disciplined for:

(a) a failure to comply with discovery obligations; or

(b) conduct intended to delay, frustrate or avoid discovery of documents?

The changing legal context and future challenges

4.199 The changing nature of the Australian legal system and the changing context within which existing professional obligations arise increasingly impacts on discovery.

4.200 A number of emerging issues are of particular relevance, including the rise of e-discovery and the applicability of practitioner obligations outside traditional courtroom processes.

Electronic discovery

4.201 The increasing frequency with which documents are stored electronically adds a new dimension to lawyers’ legal ethical obligations with respect to discovery.

4.202 For example, e-discovery brings into focus the obligations owed by lawyers to the client and the court, which in part involve a duty to advise clients about their discovery obligations and exercise personal judgment about the existence and relevance of documents in the proceedings.

4.203 To some extent the ALRC’s proposal with respect to discovery plans, which would specify the scope of discovery, including the parameters of electronic searches, provides an articulation of lawyer’s obligations.[166]

4.204 However, the extent of a lawyer’s obligation to ensure that a client preserves documents and is aware of a client’s document retention policy and electronic document management systems is largely unclear.

4.205 As discussed earlier in the chapter, the ALRC considers there are two possible ways to ensure professional rules are sufficiently clear so that lawyers are aware of their obligations—in this instance—concerning e-discovery. These are either through the articulation of specific legal ethical obligations which apply in the context of e-discovery; or through the adoption of a principle–rule–commentary approach to professional rules, which would provide guidance about the application of general legal ethical obligations in the specific context of e-discovery.

4.206 In the context of e-discovery, lawyers could also be held responsible for implementing a legal hold when litigation is anticipated, as occurs in the US.[167]

ALRC’s views

4.207 The ALRC is interested in feedback from stakeholders on the impact of e-discovery on the legal ethical obligations of lawyers.

4.208 As outlined above, in the ALRC’s view, a principle–rule–commentary approach is the best approach to providing guidance for lawyers to assist them in the practical interpretation of their obligations in the context of discovery. The ALRC considers that such clarification would also be useful in the context of e-discovery. However, the ALRC welcomes submissions on this point and with respect to the potential application of obligations similar to those arising from a legal hold in an Australian context.

Question 4–20 What impact, if any, has electronic discovery had on the legal ethical obligations owed by lawyers?

Question 4–21 Are existing general legal ethical obligations in professional rules sufficiently specific and clear so that lawyers are aware of their obligations in the context of electronic discovery?

Question 4–22 Should professional conduct rules be amended to include specific legal ethical obligations concerning electronic discovery?

Proposal 4–3 The Law Council of Australia, the Australian Bar Association and the legal professional bodies in each state and territory should develop commentary as part of, or a supplement to, the professional conduct rules with a particular focus on a lawyer’s legal ethical obligations with respect to the electronic discovery of documents.

Legal ethical obligations and alternative processes

4.209 Another emerging issue is the applicability of traditional legal ethical obligations outside courtroom processes, for example during pre-action protocols, pre-trial management and alternative dispute resolution processes.

4.210 Currently, professional rules define ‘court’ broadly to encompass: courts and tribunals; investigations or inquiries established or conducted under statute or by a Parliament; Royal Commissions; and arbitrations, mediations or any other form of dispute resolution.[168]

4.211 However, significant debate exists with respect to the imposing of legal ethical and conduct obligations on such processes, an issue recently considered by the National Alternative Dispute Resolution Advisory Council (NADRAC).[169]

4.212 NADRAC has suggested that examination of the issue involves consideration of: which participants should be subject to the obligations; the ambit and framing of obligations; when the obligations would apply; and enforcement.[170]

ALRC’s views

4.213 The ALRC considers that COAG, the Law Council and legal professional bodies in each state and territory should consider the application of legal ethical obligations outside traditional courtroom processes in formulating or revising professional rules. These bodies should also consider issuing clarification about the legal ethical obligations of lawyers in these new forums.

[121] See, eg, Proposals 3–1, 3–2, 3–3.

[122]Australian Law Reform Commission, Review of the Federal Civil Justice System, Discussion Paper 62 (1999), [5.2].

[123] See, eg, C Parker and A Evans, Inside Lawyers’ Ethics (2007), 89.

[124]Law Council of Australia, Model Rules of Professional Conduct and Practice (2002) r 13.2.2. See also: Law Council of Australia, Legal Profession National Rules: Solicitors’ Rules (2010) r 17.2.2; Australian Bar Association, Legal Profession National Rules: Barristers’ Rules (2010) r 42(b); Professional Conduct and Practice Rules 1995 (NSW) r 23-A.15A(e); New South Wales Barristers’ Rules r 19(b); Legal Profession (Solicitors) Rule 2007 (Qld) r 13.2.2; Barristers Rule 2007 (Qld) r 21(b); Rules of Professional Conduct and Practice (SA) r 13.2.2; Barristers’ Conduct Rules 2010 (SA) r 42(b); Professional Conduct and Practice Rules 2005 (Vic) r 13.2.2; Victorian Bar Practice Rules (Vic) r 17(b); Conduct Rules (WA) r 18(b); Legal Profession (Solicitors) Rules (ACT) r 17.2(b); Legal Profession (Barristers) Rules 2008 (ACT) r 19(b); Rules of Professional Conduct and Practice (NT) r 17.4(b).

[125]C Parker and A Evans, Inside Lawyers’ Ethics (2007), 89.

[126] This was one of the overarching obligations recommended by the VLRC and enacted in the Civil Procedure Act 2010 (Vic).

[127]Australian Law Reform Commission, Managing Justice: A Review of the Civil Justice System, Report 89 (2000), Rec 14.

[128]Ibid, Rec 14. To date, only the Legal Profession (Solicitors) Rule 2007 (Qld) features commentary.

[129]Australian Law Reform Commission, Managing Justice: A Review of the Civil Justice System, Report 89 (2000), [3.78].

[130] See, eg, Proposal 4–4, 4–5.

[131]Victorian Law Reform Commission, Civil Justice Review, Report 14 (2008), Rec 90.

[132] For example, this was the Law Council’s argument in its submission to Australian Law Reform Commission, Managing Justice: A Review of the Civil Justice System, Report 89 (2000).

[133]National Legal Profession Reform Project, Legal Profession National Law: Consultation Draft (2010) s 4.3.4(2).

[134]Australian Law Reform Commission, Managing Justice: A Review of the Civil Justice System, Report 89 (2000), Rec 27.

[135]Victorian Law Reform Commission, Civil Justice Review, Report 14 (2008), 149, 153–155.

[136]IMF Australia, Submission by IMF to Victorian Law Reform Commission Civil Justice Review (2007) <www.imf.com.au/> at 24 October 2010.

[137]Civil Procedure Act 2010 (Vic) s 10(1).

[138]Ibid ss 28, 29.

[139]Legal Services Directions 2005 (Cth) Appendix B, ss 2(d), 2(e).

[140]Ibid, Appendix B, Note 2.

[141]Ibid, Appendix B, Note 3.

[142] Note the ALRC undertook a review of the civil justice system in 2000: Australian Law Reform Commission, Managing Justice: A Review of the Civil Justice System, Report 89 (2000).

[143]J Britton, ‘Rethinking the Regulation of Lawyer Conduct: The Centrality of Law Firm Management and Ethical Infrastructures’ (Paper presented at Australian Legal Practice Management Association National Conference, Gold Coast, 15 August 2009), 7. See also: C Parker and others, ‘The Ethical Infrastructure of Legal Practice in Larger Law Firms: Values, Policy and Behaviour’ (2008) 31(1) University of New South Wales Law Journal 158; C Parker and L Aitken, ‘The Queensland Workplace Culture Check: Learning from Reflection on Ethics Inside Law Firms’ (2010) forthcoming in Georgetown Journal of Legal Ethics, 2011 .

[144] See, eg, S Le Mire and C Parker, ‘Keeping it In-house: Ethics in the Relationship between Large Law Firm Lawyers and their Corporate Clients through the Eyes of In-house Counsel’ (2008) 11 Legal Ethics 201.

[145]C Parker and others, ‘The Ethical Infrastructure of Legal Practice in Larger Law Firms: Values, Policy and Behaviour’ (2008) 31(1) University of New South Wales Law Journal 158, 163.

[146]Ibid, 172 (citations omitted).

[147]R Nelson, ‘The Discovery Process as a Circle of Blame: Institutional, Professional, and Socio-economic Factors that Contribute to Unreasonable, Inefficient, and Amoral Behavior in Corporate Litigation’ (1999) 67 Fordham Law Review 773, 806–7.

[148] See, eg, C Parker and L Aitken, ‘The Queensland Workplace Culture Check: Learning from Reflection on Ethics Inside Law Firms’ (2010) forthcoming in Georgetown Journal of Legal Ethics, 2011 .

[149]C Parker and others, ‘The Ethical Infrastructure of Legal Practice in Larger Law Firms: Values, Policy and Behaviour’ (2008) 31(1) University of New South Wales Law Journal 158, 182.

[150]C Parker and A Evans, Inside Lawyers’ Ethics (2007), 47.

[151]Ibid, 47.

[152]G Dal Pont, Lawyers’ Professional Responsibility (4th ed, 2010), 535.

[153] See, eg, Law Council of Australia, Model Rules of Professional Conduct and Practice (2002) r 31.

[154] See, eg, National Legal Profession Reform Project, Legal Profession National Law: Consultation Draft (2010) s 4.3.30; Legal Profession Act 2004 (NSW) s 393; Legal Profession Act 2007 (Qld) s 343; Legal Profession Act 2004 (Vic) s 3.4.46; Legal Profession Act 2008 (WA) s 307; Legal Profession Act 2006 (ACT) s 303.

[155]G Dal Pont, Lawyers’ Professional Responsibility (4th ed, 2010), 536.

[156]American Bar Association, Model Rules of Professional Conduct (2010) r 8.3(a).

[157] Any conduct involving dishonesty or deception or a serious criminal offence: Solicitors Regulation Authority (UK), The Guide to the Professional Conduct of Solicitors, cl 20.06.

[158]Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (NZ) rr 2.8, 2.9.

[159] See G Dal Pont, Lawyers’ Professional Responsibility (4th ed, 2010), 537.

[160]Judicial education is discussed in Ch 3.

[161]J Britton, ‘The Business of Ethics’ (Paper presented at University of Queensland Alumni Lunchtime Lecture, Brisbane, 12 May 2010).

[162]S Mark, ‘Regulating for Professionalism: The New South Wales Approach’ (Paper presented at American Bar Association Annual Meeting, San Francisco, 5 August 2010).

[163]C Parker, T Gordon and S Mark, ‘Regulating Law Firm Ethics Management: An Empirical Assessment of an Innovation in Regulation of the Legal Profession in New South Wales’ (2010) 37 Journal of Law and Society 466, 468.

[164]C Parker, ‘Regulation of the Ethics of Australian Legal Practice: Autonomy and Responsiveness’ (2002) 25 University of New South Wales Law Journal 676, 682.

[165]J Britton, ‘The Business of Ethics’ (Paper presented at University of Queensland Alumni Lunchtime Lecture, Brisbane, 12 May 2010).

[166] See discussion in Ch 3 and in particular Proposal 3–2.

[167] The use of legal holds is discussed earlier in this chapter.

[168] See, eg, Law Council of Australia, Model Rules of Professional Conduct and Practice (2002), 3.

[169]National Alternative Dispute Resolution Advisory Council (NADRAC), The Resolve to Resolve: Embracing ADR to Improve Access to Justice in the Federal Jurisdiction (2009), sch 2.

[170]Ibid, sch 2.