Ethics & Standards Quarterly: dealing with the regulatory authority

However, this does not mean that you can ignore a request for information or documents from a regulatory authority or decline to make a notification which the Legal Profession Uniform Law (NSW)(Uniform Law) requires you to make.  If you do so, you may face disciplinary consequences.

Lawyers have an obligation to communicate honestly and in a timely fashion to the relevant regulatory authority with respect to complaints made about the lawyer.In Veghelyi v The Council of the Law Society of New South Wales (Unreported, Supreme Court of New South Wales, Smart J, 6 September 1989), Smart J stated at p6:

‘It is important that solicitors respond promptly to the [Law] Society when it asks for a reply in response to complaints which have been made. It will be an unusual and complex case when a delay of more than 14 days is acceptable and often the reply should be delivered within a shorter period such as 7-10 days. Replies to the Law Society in respect of complaints warrant a high priority. Such replies should be full and complete and deal directly with complaints made.’”

As Dal Pont states in the Solicitor’s Manual:

“Just as misleading or obstructing investigators from the Law Society Council or Legal Services Commissioner is clearly unprofessional and capable of attracting a disciplinary sanction (and possibly a severe one)…, it follows that so may a failure to respond (whether within a reasonable time1 or at all), or to adequately respond, to such inquiries. It has been noted, to this end, that:

“… whilst one as a member of the legal profession must devote time to the needs of clients as a matter of duty there is also a duty to attend to the requirements of the regulatory regime under which the legal practitioners practice and it is not sufficient to say that one is too busy to deal with such matters. This forms part of the work of a practice.  [Legal Services Commissioner v Canals [2008] VCAT 576 at [6]].”

Representatives of the Law Society, it has been said, “are not adversaries, but [are] charged by statute with specified duties which they must fulfil and … in fulfilling those duties, they are entitled to cooperation and courtesy from the legal profession” [Legal Services Commissioner v Nikolaidis (No 3) [2005] NSWADT 200 at [140]].”

Rule 43 of the Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (Conduct Rules) enshrines the obligation to respond to the regulatory authority.  Rule 43 has been recently amended and applies to more than just complaints. It states that “subject only to his or her duty to the client, a solicitor must be timely, open and frank in his or her dealings with a regulatory authority.”

Consequences that may arise from failing to respond to the regulatory authority:

Not responding to a regulatory authority or making the appropriate notification can delay your matter and may result in disciplinary consequences:

• A breach of rule 43 (or any other rule for that matter) is conduct that may amount to unsatisfactory professional conduct or professional misconduct (s298 of the Uniform Law) and may result in a complaint being made by or to the NSW Commissioner.
• If you have been asked to provide information or documents in relation to a complaint, a trust account investigation or compliance audit and do not do so, the regulatory authority may issue a compulsive notice under ss 370 or 371 of the Uniform Law. A failure to respond to such a notice issued may result in the suspension of your practising certificate until such time as you do respond (s466(7) of the Uniform Law) or a complaint being made to or by the NSW Commissioner.  You may also face a civil penalty of 50 penalty units for not complying with the notice.
• If you are aware of an irregularity in relation to your law practice’s trust accounts and you fail to give notice to the regulatory authority as required by s154(1) of the Uniform Law, a complaint may be made to or by the NSW Commissioner in relation to the failure to make the notification as this is conduct that may amount to unsatisfactory professional conduct or professional misconduct (s446(6) of the Uniform Law). You may also face a civil penalty of 50 penalty units for an individual or 250 penalty units for a corporation.
• If you believe on reasonable grounds that “there is an irregularity in connection with the receipt, recording or disbursement of any trust money received by” another law practice and you fail to notify the regulatory authority (s154(2) of the Uniform Law) as soon as practicable, a complaint may be made to or by the NSW Commissioner as this is conduct that may amount to unsatisfactory professional conduct or professional misconduct (s446(6) of the Uniform Law).  You may also face a civil penalty of 50 penalty units.
• If you have been issued with a notice pursuant to s95 of the Uniform Law requiring you to provide specified documents or information or to be medically examined or to cooperate with any inquiries by the regulatory authority and you fail to do so, it is grounds for making an adverse decision in relation to the action being considered by the regulatory authority to grant, renew, vary, suspend or cancel your practising certificate (s95(3) of the Uniform Law).
• If a Supervisor has been appointed to the trust money of your law practice or a Manager to your Law Practice, you may face a civil penalty of 50 penalty units or a complaint being made to the NSW Commissioner if you prevent them from exercising their functions (s364 of the Uniform Law) without a reasonable excuse.
• Under rule 13(1)(n) of the Legal Profession Uniform General Rules 2015, if you have “provided incorrect or misleading information in relation to any application for an Australian practising certificate” (eg by failing to disclose a matter that should have been disclosed), this is a matter relevant to whether you are a fit and proper person to hold a practising certificate and may result in a complaint being made to the NSW Commissioner (Tangsilsat v Council of the Law Society of New South Wales [2019] NSWCA 144) or the refusal of an application for a grant or renewal of a practising certificate.

The way in which you respond to or notify a regulatory authority may also impact on the disciplinary action taken.  In the Solicitor’s Manual, Dal Pont states:

“… On various occasions, a lawyer’s failure or delay in responding, or the furnishing of incomplete or inaccurate responses, has led the disciplinary tribunal or court to subject the lawyer to a more severe disciplinary sanction than would ordinarily have been imposed in respect of the conduct the subject of the investigation. In fact, even in circumstances where the investigation has not uncovered misconduct, lawyers who have ignored or obstructed such an investigation have found themselves the subject of an adverse disciplinary finding arising out of that behaviour… On the other hand, that a lawyer responds in an honest and frank manner to the inquiries of the relevant professional body is to his or her credit, for it shows either that he or she has nothing to hide, or that if there has been misconduct, he or she does not shirk away from the consequences of his or her own wrongdoing.”

So, what should I do?

It is important to ensure your contact details are up to date with the Law Society’s Registry so that the regulatory authority is able to contact you. Clause 61 of the Legal Profession Uniform Law Application Regulation 2015 requires you to notify the Registry, in writing of any change in particulars within 7 days of the change occurring.

If you have been asked to provide submissions to the regulatory authority and do not wish to do so, as a matter of courtesy and to avoid further delays, please notify the regulatory authority that you won’t be making submissions.

If you would like to respond to a request for submissions but need more time, contact the regulatory authority to seek an extension.

If you’ve been asked or required to provide information or documents and need more time contact the regulatory authority to seek an extension.

If you’ve been contacted by the Law Society or the OLSC and you need to provide information or submissions and need guidance and assistance, the Law Society’s website has information about resources available for solicitors. This includes the Professional Conduct Advisory Panel (PCAP).  PCAP provides confidential support to solicitors who are subject to complaints or other disciplinary action which is independent of the regulatory authorities.