Summary of PCC decisions: November 2025

There were two disciplinary matters determined in the September Quarter, which involved the following conduct issues:

• Borrowing money from a client;
• Failure to provide a costs agreement/costs disclosure;
• Withdrawing legal costs from trust;
• Failure to pay Counsel fees; and
• Failure to disclose bankruptcy to Counsel.

Borrowing money from a client, failing to provide costs disclosure and withdrawing legal costs from trust

The PCC considered a complaint against a solicitor by a person who had a history of mental health problems and was considered to be a vulnerable person.

The PCC found that the solicitor did not account for trust money with the client/complainant’s authority or knowledge. The PCC noted that, although the solicitor asserted that oral confirmation had been provided by the client for every disbursement from trust, the solicitor was unable to produce written authorities to support this assertion. In the circumstances, the PCC considered the case of Metro Waterloo Pty Ltd v HWL Ebsworth Lawyers [2021] QDC 295, in which Barlow KC DCJ made the following comments about the importance of file notes:

“A solicitor in a commercial practice is generally expected to record in file notes at least important matters arising in conversations with the client and other persons. Where the solicitor has not recorded, either in a file note or elsewhere, the fact or the substance of a conversation in which, for example, the solicitor says that the client gave the solicitor certain instructions, a court in later proceedings in which that conversation is of crucial importance may well have cause to doubt the accuracy of the solicitor’s evidence and to prefer that of the client, including where the client denies that the conversation occurred at all. This is not because a court considers, or there is a principle of law, that, in the absence of a written record by the solicitor, it is always the case that ‘the word of the client is to be preferred to the word of the solicitor, or, at any rate, more weight is to be given to it, but because it is generally expected that a competent and diligent solicitor will, in the course his or her usual practice, keep a written record of instructions and other relevant matters relayed to the solicitor by the client. This is not only good practice to protect the client’s interests, but it also protects the solicitor’s interests in case of future litigation (such as this) as, without such a record, the solicitor’s evidence may well be disbelieved.”

The PCC also considered the apparent lack of costs agreements/costs disclosures provided by the solicitor. Although the PCC considered earlier applicable legislation, it is worth noting the cost disclosure obligations inherent in section 174 of the Legal Profession Uniform Law (NSW) (Uniform Law) and that a lack of compliance with those disclosure obligations “is capable of constituting unsatisfactory professional conduct or professional misconduct on the part of any principal of the law practice or any legal practitioner associate or foreign lawyer associate involved in the contravention” (section 178(1)(d) of the Uniform Law).

In this regard, the PCC noted the case of Berger v Council of the Law Society of New South Wales [2019] NSWCA 119, in which the Court of Appeal upheld a finding of professional misconduct with respect to a solicitor’s repeated failure to provide costs disclosures to a client over many years in acting on various matters, in circumstances where the client was vulnerable (being elderly, unwell and socially isolated), and the costs being incurred were significant: at [315].

The PCC further considered the withdrawal of monies from trust, by the solicitor, for the payment of legal costs. The client denied receiving invoices from the solicitor or being aware of the withdrawals from trust. In this regard, solicitors are reminded that rule 42 of the Legal Profession Uniform General Rules 2015 outlines when money can be withdrawn from trust for the payment of legal costs.

Lastly, the PCC considered whether the solicitor had borrowed money from the client, namely the complainant. The PCC noted, amongst other things, that borrowing money from a client can amount to a breach of rule 12.3 of the Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (Conduct Rules) and can constitute professional misconduct, unless a number of steps are taken by solicitor to ensure the fairness of the transaction: Council of The Law Society of NSW v Pizzinga [2012] NSWADT 211 at [117].  In these circumstances, there was no evidence that the loans were made on fair terms, or any terms, including for the provision of payment of interest, or otherwise, or that the client received independent legal or financial advice, noting in particular that the client was vulnerable due to health issues.

The solicitor was fined, reprimanded, required to undertake further ethics training and was also required to provide a written apology to the client.

Failure to pay Counsel and to disclose bankruptcy status

In this matter, the PCC considered a complaint made by two barristers concerning a solicitor’s failure to pay Counsel’s fees in circumstances where the solicitor had not informed Counsel that the solicitor was an undischarged bankrupt.

When considering the behaviour of the solicitor, the PCC considered the general responsibilities of a solicitor, particularly a principal of a law practice, set out in sections 34 and 35 of the Uniform Law and supported by Rule 4.1.5 of the Conduct Rules.

The PCC also considered the requirements in section 148(d) and (f) of the Bankruptcy Act 1966 (Cth), which establish that, for a bankrupt to have engaged in misleading conduct they may have:

1. obtained goods or services without informing the other party that they were bankrupt, or
2. engaged in a business/partnership without informing the other members of the partnership of their bankruptcy.

The relevance of applying the above legislation is that a solicitor is expected and required to comply with the law generally and that, specifically in this matter, the solicitor should have informed Counsel of the bankruptcy.

Therefore, the PCC considered that the solicitor was aware that he was incurring debt by way of Counsel’s fees in circumstances where he was bankrupt and such conduct fell below the standards of competence and diligence that a member of the public was/is entitled to expect.

In addition to the above, the solicitor also failed to pay Counsel for work they had performed in the matter.

The PCC was satisfied that the solicitor failed to pay Counsel’s fees in respect of a litigation matter. In reaching that conclusion, the PCC considered the matter of Law Society of NSW v McCarthy [2003] NSWADT 198 (McCarthy), in which the court stated at paras 47:

“The obligation to pay third parties in a timely way applies “[w]hether the third party professional is a barrister, a medical practitioner or some other form of service provider”

Further, as set out McCarthy, a solicitor has the obligation to pay Counsel fees promptly on receipt of payment.

In view of the above and the solicitor’s responses to the investigator, which the PCC noted did not demonstrate an understanding of the solicitor’s responsibilities and obligations as a principal, the PCC considered that the solicitor’s conduct was unsatisfactory professional conduct.

The solicitor was reprimanded (in accordance with s299(1)(b) of the Uniform Law), required to undertake ethics training and a practice management course, and if he did not undertake those courses within 6 months, then the PCC would consider referring the matter to the Council for consideration of a condition on the solicitor’s practicing certificate.