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Dear Emma 27 01 13
Thank you for responding to me.
I will outline:
- The sections of Australian Consumer Law that the Melbourne law firm Russell Kennedy, Ian Bult, and Arthur Bolkas a lawyer employed by Russell Kennedy breached.
- The contract that exists between Melbourne law firm Russell Kennedy and my late mother`s family.
- The actions that Melbourne law firm Russell Kennedy, Ian Bult, and Arthur Bolkas performed that led to them breaching the specified sections of consumer law.
Misleading and Deceptive Conduct, Section 18 of the ACL provides:
“ Section 18 of the ACL is headed “Misleading or deceptive conduct” and says at subsection (1) that “A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.”
The section is the keystone of the ACL. It is similar to section 52 of the former Trade Practices Act but extends its application to include natural persons. It applies generally to lawyers at all stages of the lawyer-client relationship, whether or not the client fits the definition of “consumer”.
The prohibition has wide impact, and the term “misleading or deceptive” is given its ordinary meaning. Conduct is misleading or deceptive if it leads, or is capable of leading, a person into error.”
Unconscionable conduct Part 2-2 of the ACL
“Part 2-2 of the ACL deals with unconscionable conduct. The term “unconscionable conduct” is not defined in the ACL, but the term has been considered in a number of cases. Based on the case law,20 the type of conduct by lawyers that would be caught by this part of the ACL is “something clearly unfair or unreasonable” or that is “irreconcilable with what is right or reasonable”.
The relationship between lawyer and client is a fiduciary one, which means that a lawyer has a higher duty to protect a client’s interests than in an ordinary contract for services. A lawyer who acts unconscionably will also likely be in breach of his or her fiduciary duties to the client.
There is also an overlap with section 328(2) of the LPA which provides that a costs agreement between a lawyer and a client can be set aside if it is not “fair and reasonable”. The matters set out in s328(2) are similar to those a court would look at when deciding if a fee agreement could be set aside for unconscionable conduct.”
Unfair terms Sections 23 to 28 of the ACL
“Sections 23 to 28 of the ACL provide consumers with new protections against unfair terms in standard form contracts. Previously the focus was on the process for entering into the contract. The new unfair terms law looks at whether the substance of the contract is unfair.
The unfair contract law applies to the contract between the lawyer and a client, including the costs agreement, if:
it is a consumer contract, and the contract is a standard form contract.
Whether a contract is a consumer contract will depend on the particular circumstances. A consumer contract “is a contract for goods or services… to an individual… wholly or predominantly for personal, domestic or household use or consumption””
Two. The contract that exists between Melbourne law firm Russell Kennedy and my late mother`s family.
The contract is in the form of two wills and three letters.
My mother went to Melbourne law firm Russell Kennedy`s in 1998 and her will was written by Ian Bult. During that process three letters were written, two by Ian Bult to my mother and one from my mother to Ian Bult dated 30 10 198 which we received in mid-2011. These documents form the contract between (my mother and her children, one nominated as an executor, the other three as beneficiaries) and Melbourne law firm Russell Kennedy.
My mother`s will was amended in 2002, the significant changes were that instead of nominating Ian Bult in conjunction with my sister as executors she now nominated all of the members of Melbourne law firm Russell Kennedy at the time of her death as executors in conjunction with my sister.
She also clarified the amounts Russell Kennedy could charge thereby negating any possibility of an executor’s commission.
Please refer to Appendix 1, 2, 3, 4,
The basis of the contract is set out in clause 1, and 8 of her will and in the opening paragraph of my mother`s letter to Ian Bult in the letter dated 30 10 98 where she states.
“Dear Mr Bult,
Thank you very much for your letter and thank you for staying on as my executor in conjunction with “my daughter”. However if at any time you want to rethink this, let me know – but I do need someone who understands the tax law and other laws relating to wills. It can be a minefield and none of my family are trained in this area so maybe you could suggest someone within your office.”
The key phrase being: in conjunction with “My Daughter”.
It is also relevant to read this information which is posted on Melbourne law firm, Russell Kennedy’s web site
WILLS & ESTATE PLANNING
We are conscious of the importance to all of our clients of matters affecting their personal affairs. With a high level of knowledge and expertise and working with financial and taxation advisers as appropriate, we provide sound legal advice in private estate and trust law, property matters and succession planning in both the family and business contexts.
We assist our clients in their estate planning, with a focus on the protection of family assets and incomes and where expedient, the formation or administration of companies, trusts and superannuation funds. We specialise in the preparation of succession documentation including wills, superannuation nominations and trust succession deeds, particularly for high net worth individuals.
We also specialise in probate matters of all types, whether contested or uncontested and we administer deceased estates with due regard to all circumstances, especially taxation complexities.
The key phrase being: with a focus on the protection of family assets and incomes.
Hence my mother engaged the Melbourne law firm Russell Kennedy to act in conjunction with my sister ***** to administer her estate after her death in the interests of her children as any normal mother would do. She engaged a law firm to assist because she was aware of the difficulties that may be encountered, particularly in regards to taxation and to wills law and is the basis of the contract.
In late June of 2004 my mother passed away. In early August of 2004 her family met at my sister’s house to read the will. Since my sister was the executor she had taken the opportunity to have her husband’s brother who is a practicing lawyer read the will prior to the meeting.
The estate was split into four equal shares with my share going to a testamentary trust. This had occurred due to the misapprehension by my mother that my inheritance required protection from my trustees in bankruptcy. This misapprehension was initiated by Ian Bult a senior commercial lawyer who failed to explain to her the difference between a company going into administration, signing a deed of arrangement with its creditors and fulfilling that deed and personal bankruptcy. Never the less my mother as with all mothers was doing her best to protect me as the company I was running and owned fell into difficulties whilst exporting product into Japan in 1996.
The clause regarding my share of the estate is contained in part 4 A of her will.
It states that the trustees can apply all or part of the income and all or part of the capital to benefit any member of my family.
Hence it was possible for the trustees under the will to present me with all of the capitol in the same way as my brother and sisters, allowing us to all be treated equally provided there was no threat from creditors.
At the meeting based on what we understood our mother`s wishes to be and based upon the advice given by ****** we agreed for my two sisters and my brother to meet with Russell Kennedy.
A meeting occurred on 18 08 2004 between my sister , her husband r (a medical practitioner), my sister*******, her husband ******** (Both practicing psychologists), my brother Tim Hannigan with Ian Bult representing the members of Melbourne law firm Russell Kennedy and Arthur Bolkas (Russell Kennedy’s wills expert).
The proposition was put to Ian Bult that I should be treated equally and that Melbourne law firm Russell Kennedy should also agree to release all of the capitol of my share of the estate to me as I was never in a situation where my inheritance required protection from my trustees in bankruptcy and this would be our mother’s wishes.
Ian Bult disagreed with this proposition, and stated he had information in the form of a letter from my mother that it was not my mother’s wish for me to be treated in the same way as her other children. My sister the executor objected to this suggestion and stated that my mother would never have wanted any of her children to be treated in any way but equal. Both of my brother inlaws explained to Ian Bult the ramifications of his opinion and how destructive they would be to the inter personal relationships between my mother`s children. My sister requested a copy of the letter dated 30 10 1998 so as verify Mr Ian Bult`s opinion. Mr Bult refused to provide a copy of this letter on the advice of Arthur Bolkas claiming legal client privilege over the letter.
During this process Mr Bult continually intimated that if the family did not agree with him then the legal costs would significantly erode the value of the estate.
When this meeting failed to reach agreement I engaged a lawyer, John Pavlidies. John Pavlides attempted to obtain the notes of the construct of the will from Melbourne law firm Russell Kennedy which would have contained the three letters but was again refused by Russell Kennedy on the grounds of legal client privilege.
In the meantime my sister who refused to agree with Ian Bult`s point of view along with all of my mother’s children received a letter from Ian Bult strongly recommending her not to partake in the probate of the will.
The matter was bought to the ethics committee by Russell Kennedy as there was a questionable conflict of interest. The ethics committee decided that Melbourne law firm Russell Kennedy could act and probate was granted to Ian Bult of Russell Kennedy.
The four children of my mother then attempted to resolve the matter by requesting Ian Bult to equally distribute the estate and equally hold a portion in trust from each of the beneficiaries with the agreement that any money released from the trust would be paid back to the beneficiaries, this would have allowed the estate to be divided equally. Mr Ian Bult again refused to treat us equally stating this was not my mother`s wish.
Two years after Ian Bult retired as a lawyer he appointed Paul Gleeson to be the trustee, by a miracle of divine intervention he released the letter (mid 2011) that Ian Bult continually referred to and refused to release. The letter as you can plainly see asks Ian Bult or Melbourne law firm Russell Kennedy to act in conjunction with her daughter, as none of her children are experienced with wills or tax law and she was aware that it could be a nightmare. It also refers to a situation regarding the possibility of my death and how she would want my inheritance to be dealt with in that event. I am not dead.
There is absolutely no reference to me being treated unequally as Ian Bult has stated in correspondence he sent to my lawyer, my sister and to the ethics committee.
Ref: appendix 10 to 13 in my first correspondence.
Ian Bult by misrepresenting the contents of the letter as a representative of Melbourne law firm Russell Kennedy therefore engaged in misleading and deceptive conduct. Knowing that he had lied he then engaged in unconscionable conduct by refusing to release the letter to my sister. Arthur Bolkas and the members of Melbourne law firm Russell Kennedy assisted in this deception and conduct by failing to take due care and ensure by inspecting the letter and discussing its contents with my sister.
Considering Ian Bult’s position as the most senior partner in the law firm and being a senior commercial lawyer when faced with the dilemma and the letter written by Ian Bult on behalf of Melbourne law firm Russell Kennedy it is no wonder that my sister faced with ailing mental health as a result of Ian Bult’s bulling and intimidating tactics made the decision not to partake in the probate of the will.
Ref: appendix 8 in my first correspondence.
This act by Ian Bult as the representative of Melbourne law firm Russell Kennedy utilising his experience and his position as a lawyer place him in a far more powerful position than my sister or my mother`s family. He utilised that power within the contract of the will unfairly. since the terms relating to his ability to conceal important information that was required to determine my mother’s wishes from her children were never spelt out in the will and in fact were invisible with only Ian Bult and the members of Melbourne law firm Russell Kennedy being aware of the unfairness coupled with the fact that Ian Bult was the lawyer who wrote the will thus it falls into the realm of “Unfair terms”.
This led to an uneven distribution of the estate by Ian Bult of Russell Kennedy (a brutal and hurtful action) which ruptured the interfamily relationships for ever.
It resulted in the law firm:
- wasting at least $80,000 of my share of the estate
- The Melbourne law firm Russell Kennedy charging $75,000 in fees against the estate despite the fact that the will was not contested.
- Failing to collect at least $25,000 in rent from a retirement unit
- Selling that unit for $80,000 in 2007 when it had been purchased for $100000 in 1998
- Causing two nervous break downs of my mother’s children
- Causing a complete destruction of interfamily relationships.
Unfortunately the conduct did not end with the resignation of Ian Bult as trustee. Mr Paul Gleeson replaced Ian Bult as trustee.
As you can realise the discovery of the deception revealed in the contents of the letter raised many questions. Mr Gleeson has been asked by my brother and me to allow us access to the estate file. Considering the lies and deception and the damage these have wrought upon our mother`s family it appears to be a rational course of action in finding out what our mother`s true wishes were and to discover what went wrong. During the course of these communications we have found Mr Paul Gleeson is also capable of telling mistruths and preventing important information from being obtained.
He has been asked to provide us with the internal documentation that delegates Ian Bult as the nominated executor by Russell Kennedy at that meeting on 18 August 2004. He has refused.
He was asked about who Mr Bolkas was representing at that meeting, as surely he was representing the estate and should have been protecting my sister’s interests and if he was aware of a lie, which he should have been, if he had been doing his job properly, should then have informed my sister of that lie. Mr Gleeson responded by stating that my sister had been informed by Russell Kennedy that Arthur Bolkas would not be representing her at that meeting and that she would require independent legal representation. This is another lie.
By refusing to provide access to the estate files and by lying Mr Paul Gleeson is also engaging in misleading and deceptive conduct, unconscionable conduct and in empowering himself in a contract unfairly.
From dealing with Melbourne law firm Russell Kennedy over the past 8 years, from my own experience, I have discovered that their method is systematic and their decision making processes do not protect the value of the estate as stated on their web site, but in fact erode the value of the estate in favour of their legal fees. I have also come in contact with two other people who have had similar problems with this law firm. One of whom is a lawyer who had dealt with them over a deceased estate in which he found them to be most uncooperative in settling matters with a purposeful desire to continue any possible disagreement in order to run up their legal costs. In that matter the legal costs for both parties amounted to $500,000.
With this information I was very aware of how damaging any form of litigation would cause the estate so I chose to accept $75,000 and deal with matters outside of the courts. Unfortunately Mr Ian Bult went and gambled the money held in trust on the stock market and because the shares were not managed lost $80,000 when compared with a situation where the funds had just sat in a bank account and accumulated interest.
Whilst managing this disaster Melbourne law firm Russell Kennedy charged the trust at least $10,000 in management fees.
I kept my communications with Melbourne law firm Russell Kennedy to an absolute minimum as did my brother and sisters as we soon realised that every communication went through a process of vetting by Arthur Bolkas, discussion between Arthur Bolkas and Ian Bult., then a reply, this meant that any communication with Melbourne law firm Russell Kennedy involved a minimum of $500 in legal fees being charged against the estate. More often than not Melbourne law firm Russell Kennedy would send a letter to each of my four children, my wife and I despite the fact that five of us lived in the same house. These letters were extremely destructive to my own family’s interpersonal relationships and have caused great stress as you can imagine within the family home as the process has demeaned my position within the family. What Ian Bult and Russell Kennedy did is truly an example of evil lawyering. Try to imagine my own position as a father of four children who has worked all his life to support his family being told by a lawyer who hardly knew his mother that she did not trust him with his inheritance and how that would erode the relationships within his own family. Imagine the emotional hurt it caused to the relationship my mother’s oldest son that is myself had with his own mother particularly when the whole episode is based upon a lie..
My mother engaged a commercial lawyer from a top law firm for two reasons.
- She wanted the best service for her family. By the way no advice or strategy was ever offered by Melbourne law firm Russell Kennedy to the estate in terms of optimising taxation or asset retention.
- Her late husband migrated with us in 1965 to take up a position as head of the Legal Studies Department at Melbourne University where he worked until his retirement in the late 70`s. During that period, particularly earlier on he was involved in developing the trade practices act as a commercial lawyer from the academic perspective. She was fully aware of the provisions of misleading and deceptive conduct as they were topics of family discussion at the dinner table during the time the laws were developed. She assumed that any lawyer particularly a lawyer in a leading Melbourne law firm would be very familiar with the act and would never engage in misleading as deceptive conduct. Her trust in commercial lawyers was implicit and Ian Bult of Russell Kennedy was fully aware of that trust, which makes the whole saga even more distressing.
The Victorian Legal Services Commissioner in his round table discussion on inheritance confirmed he gets at least 300 complaints a year against lawyers who are acting in this field of law. I have attached the round table discussion for your reference. The review of Victoria’s inheritance laws in its terms of reference acknowledges there is a problem with lawyers who act as executors and I have attached the terms of reference. The Queensland Legal Services Commissioner has issued guidelines for lawyers.
THE APPLICATION OF THE AUSTRALIAN CONSUMER LAW TO LAWYERS Regulatory Guide 2-2012
Which I have attached for your reference.
I understand that it is possible for the ACCC to obtain access to the files held by The Victorian Legal Services Commissioner. If this were done it would go a long way to showing that there is a systemic problem in the way lawyers are currently managing deceased estates and the families whose consumer rights are being abused.
In Summary The Melbourne law firm Russell Kennedy was engaged by my mother to work in conjunction with my sister in managing my mother’s affairs after her death. In her letter of 30 10 1998 to Ian Bult my mother infers that they are to assist in providing their expertise in the area of wills and tax law.
Hence the Melbourne law firm Russell Kennedy was engaged by the contract of the will and the letters to provide a service pertaining to their expertise as lawyers; the service being to assist my sister with the distribution of the inheritance, the inheritance being used to enhance their families thus to be used for domestic purposes.
- The Melbourne law firm Russell Kennedy, Ian Bult and Arthur Bolkas engaged in misleading and deceptive conduct when Ian Bult (who at the time was representing the members of Russell Kennedy) lied to my dead mother`s children about what was contained in the letter of 30 10 1998.
- The Melbourne law firm Russell Kennedy, Ian Bult and Arthur Bolkas engaged in unconscionable conduct when they falsely claimed the letter held privileged information and refused to share its contents with my mother’s family.
- The Melbourne law firm Russell Kennedy, Ian Bult and Arthur Bolkas engaged in unfair trading terms under a contract when they advised my sister not to take up her position as executor when applying for probate.
- The Melbourne law firm Russell Kennedy, Ian Bult and Arthur Bolkas engaged in unconscionable conduct when they failed to acknowledge the input from my mother’s children in relation to their knowledge of my mother`s wishes.
- The Melbourne law firm Russell Kennedy, Ian Bult and Arthur Bolkas engaged in unconscionable conduct when they then went ahead and failed to distribute my mother’s estate equally which would have been according to my mother’s wishes.
- Russell Kennedy, represented by Paul Gleeson engaged in misleading and deceptive conduct when they lied about notifying my sister ****** that Arthur Bolkas would not be representing her at the meeting of 18 08 2004.
- The Melbourne law firm Russell Kennedy represented by Paul Gleeson are engaging in unfair trading terms under the contract of the will by denying the family access to the estate file.
To understand this you need to look at the problem as it exists today and the solution that could have been achieved.
Instead the Melbourne law firm Russell Kennedy through their actions created this saga. Their motive being to obtain and maintain control of the estate, create conflict within the family so as to generate more fees for themselves.
The example I used of sending five letters to the same address at a charge of $50.00 each when one would of done the job is just one of many forms of financial abuse that the Melbourne law firm Russell Kennedy used to enhance their own financial gain from the estate.
There is the saga of the family jewellery.
The eight year search for the letter
The saga of the medical records
Just to name a few.
The Victorian Legal Services Commissioner has stated that he receives over 300 complaints a year about lawyers regarding deceased estates. Having regard for the fact that most lawyers and law firms are reputable one can assume that the problem although wide spread is contained within a selected group of law firms. The only way to discover how those complaints relate to particular law firms is for the ACCC to utilise its power and obtain the relevant files from the Victorian Legal Services Commissioner.
Is there a systemic problem within Victoria and Australia between consumers and the legal service providers as to how they administer deceased estates?
At least 15% of complaints over the past seven years, received by the Victorian Legal Services Commissioner pertain to issues relating to the way lawyers have handled deceased estates.
The Victorian Legal Services Commissioner convened a round table conference to discuss these problems in 2010
The terms of reference of the Review on Inheritance law reform currently being administered by the Victorian Law Reform Commission contains the following:
- Legal Practitioner Executors.
Whether there should be special rules for legal practitioners who act as executors and also carry out legal work on behalf of the estate, including rules for charging costs and commission.
If you require any more information I will be only too happy to provide any that I have. Unfortunately as you can see the Melbourne law firm Russell Kennedy through its unfair terms has the greater part of the file.
From: Infocentre Sent: Wednesday, February 13, 2013 3:45 PM
Dear Mr Hannigan
Thank you for your further email of 28 January 2013 to the Australian Competition and Consumer Commission (ACCC) regarding your concerns about the conduct Russell Kennedy Pty Ltd, with regard to the execution of your mother’s will.
The ACCC endeavours to focus on systemic or widespread issues rather than trying to resolve all individual consumer complaints. In general, investigations are conducted confidentially and the ACCC does not comment on matters it may or may not be investigating.
The ACCC cannot pursue all the complaints it receives. While all complaints are carefully considered, the ACCC must exercise its discretion to direct resources to the investigation and resolution of matters that provide the greatest overall benefit for consumers and businesses. The ACCC’s Compliance and Enforcement policy describes in more detail how this discretion is exercised. This policy, which is available on the ACCC’s website [www.accc.gov.au/policy], lists a number of factors that are weighed including whether conduct raises national or international issues, involves significant consumer detriment or a blatant disregard of the law
Your complaint has been recorded by the ACCC and will be used in monitoring whether there is a level of conduct by Russell Kennedy Solicitors or a pattern within the legal industry which may raise concerns sufficient to warrant intervention by the ACCC.
However, the Legal Services Commissioner is responsible for the receipt, investigation and resolution of complaints about legal practitioners, which includes the settlement of disputes between legal practitioners and their clients. Where the complaint is about the costs charged by a legal practitioner or where it is alleged that the legal practitioner’s actions caused financial loss, the Legal Services Commissioner will attempt to resolve the dispute. Further information about how complaints are made and how complaints are dealt with is available on the website of the Legal Services Commissioner.
Thank you for contacting the ACCC with your concerns. I trust this information is of assistance.
1300 302 502
Attention Emma Sunday 7th of April
Thank you for your response.
In your response to my complaint you state the following.
- The ACCC endeavours to focus on systemic or widespread issues rather than trying to resolve all individual consumer complaints.
- The ACCC’s Compliance and Enforcement lists a number of factors that are weighed including whether conduct raises national or international issues, involves significant consumer detriment or a blatant disregard of the law.
- Your complaint has been recorded by the ACCC and will be used in monitoring whether there is a level of conduct by Russell Kennedy Solicitors or a pattern within the legal industry which may raise concerns sufficient to warrant intervention by the ACCC. However, the Legal Services Commissioner is responsible for the receipt, investigation and resolution of complaints about legal practitioners, which includes the settlement of disputes between legal practitioners and their clients.
To understand the problem from a systemic perspective it is necessary to address the following:
1. Is there systemic abuse within the legal profession of people who consume their services, IE Consumers?
Please refer to section one and the following three attachments.
- Summary of the 2010 Succession Law Round Table convened by the Legal Services Commissioner of Victoria
- Victorian Succession Law Terms of reference.
- Civil Justice Research Group, Melbourne Law School, University of Melbourne presents: The Impact of Australian Consumer Law on Lawyers Monday 28 May, 2012 6pm – 7.45 Melbourne Law School.
These three documents when read together, reveal the existence of systemic abuse, by the legal profession of consumers of their services.
Please refer to section one for a full and detailed analysis.
This analysis concludes from the authoritative information provided by the Victorian attorney generals department and by the legal services commissioners of N S W and Victoria that: There is systemic abuse within the legal profession of people who consume their services, IE Consumers.
2. Why have the regulators not dealt with the systemic abuse by the legal profession of consumers of their services?
The respective legal services commissioners in each state handle all complaints against lawyers by consumers, even the complaints that are received by the respective state fair trading bodies are referred to the legal services commissioners. Even the complaints received directly by the ACCC are referred back to the respective legal services commissioners, as is evidenced in your response.
The respective legal services commissioners operate under their own respective Legal Professional Acts.
Steve Marks. The NSW Legal Services Commissioner stated .Pg 10 C J Research
“These acts treat consumers as clients. Consumer laws give consumer rights. The Legal Profession Act does not give consumer rights; that’s not its intention. So we have a completely different philosophical starting point.”
Due to this anomaly within the investigation process the investigators involved never reveal the systemic abuse of consumer rights by the legal profession because they do not deal with it and it is not covered by the legislation that they operate under. These acts operate under a completely different philosophical basis to consumer law.
The complaints are handled under the legal professional act where consumers become clients and clients do not have consumer rights. Hence the rights of consumers of legal services do not exist under this system, It is impossible to ascertain from these state government funded legal regulators whether or not there is systemic abuse of consumer rights by legal service providers. Under the law the legal services commissioners are governed by there are no consumers, there are only clients, without consumer rights.
3. Why I believe the ACCC should act!
Your own letter to me states”
“The ACCC’s Compliance and Enforcement policy lists a number of factors that are weighed including whether conduct raises national or international issues, involves significant consumer detriment or a blatant disregard of the law.”
Steve Marks. The N S W Legal services commissioner has stated.
“Because it’s presently a big gap and a big hole.” (In reference to the anomaly in legislation that is denying consumers of legal services their rights.)
I believe the ACCC should act in the national and international interest of Australia to address this huge hole in the regulatory structure that currently involves significant consumer detriment or a blatant disregard of the law.
I will address my response to you in three separate segments.
1.The evidence supporting the claim that there is systemic abuse by the legal profession of Australian consumers in relation to Inheritance matters. 2. The reasons it is in the national and international interest of Australia to prevent this consumer abuse by lawyers of Australian families in regards to Inheritance matters. 3. The reasons why the ACCC does not receive complaints about these matters and why Australian consumers are denied their consumer rights when dealing with the legal profession in Inheritance matters and the need for the ACCC to act now in the national interest.
The evidence supporting the claim that there is systemic abuse by the legal profession of Australian consumers in relation to Inheritance matters.
In your reply you state the following.
The ACCC endeavours to focus on systemic or widespread issues rather than trying to resolve all individual consumer complaints.
Is inheritance abuse of families by lawyers, or law firms wide spread and systemic?
I would like to point you to three separate documents that suggest the problem is wide spread and systemic in nature.
- Summary of the 2010 Succession Law Round Table convened by the Legal Services Commissioner of Victoria
Ref pg 4.
(b) Probate and estate law generates a high level of complaints
Succession law, involving wills, probate and estate law, consistently attracts a high number of complaints each year. Since the LSC was established, this area of law has attracted high complaint numbers.
For the four year period from 1 January 2006 until 31 December 2009, a total of 919 complaints had been received about lawyers relating to probate and estate matters. These complaints contained 1411 separate allegations; some complaints contained more than one allegation.
The most common complaints made about lawyers in the area of probate and estate include:
- overcharging (for work done, not done or for a bill exceeding the quote)
- failure to communicate with the client or another solicitor
- negligent service (including bad case handling and bad advice)
- other professional conduct matters
7 CJRG Roundtable discussion 28May2012 transcript, Melbourne Law School, University of Melbourne presents: The Impact of Australian Consumer Law on Lawyers Monday 28 May, 2012 6pm – 7.45 Melbourne Law School.
Steve Marks: Please refer Pg 34
Again, I don’t think you’ll get any disagreement on any of that. A couple of points. The first point is we’ve had unconscionable conduct for a long time and indeed we use it all the time. We just rarely use that terminology. I recently went to senior counsel in New South Wales to try to get a complaint of unconscionable conduct against a particular firm because of a whole range of overcharging. Because again, we’re a disciplinary unit, not a compensatory one. The difficulty we often have, and VCAT probably has some of these difficulties too – we certainly have it big in New South Wales, I hope you don’t have it as big here – and that is that you get what we call our frequent flyers – the practitioners that are very well known to us that are always doing a little bit wrong.
Often not enough in any one of those cases to be wrong enough for us to really get them. We negotiate a lot of complaints, we mediate a lot of complaints, but I’d like to see them depart from the legal profession. The only way that I’m going to be able to do that now is to use unconscionable conduct. I use it under the old Contracts Review Act.
Well actually yes, the NSW Contracts Review Act is broader again I think.
Exactly. Well that’s what I use because again, as a regulator of the profession, I can do that. But again I have to stress, because this is not based on consumer rights. What you’re talking about is a different thing and they can coexist. I don’t think one has to take over from the other. The issue of coexistence is what’s really important. Because as Michael said, we couldn’t – I come from legal service. I couldn’t agree more that that sort of thing which we’ve all seen a billion times, and we as regulators see constantly and our staff get immensely frustrated. But our job is to try to shift that whole regime, not get individual settlements for individual people necessarily.
So when we’re talking about what we’re trying to do – that’s why I talked a bit about purpose. The concept of purpose is to actually make the profession understand this. We have an education role to try to do that and to try to achieve change in the profession to make it more professional and better for consumers. So it’s working together that we need to do, it’s not one or the other. I think that once we get in the national laws, I’m a big fan of moving to principle base regulation rather than prescriptive. I love unconscionable conduct. I’d love to have just that because that gives me so much more leverage to deal with practitioners but ultimately you’re going to have a real problem with proof.
In all of your matters – in all the matters when you talk about unconscionable conduct, it is so common to us that you have one person’s word against another. The extraneous evidence in the consumer jurisdiction, you might have much more ability to get that evidence in. We don’t. So there’s, again, congruency here that would be useful, but for us when we get somebody who says I was bullied into signing this contract, then the lawyer comes back and brings forward the interpreter, and brings forward the signed agreement and everything else, that’s the end of it for us. We can’t pursue it any further. Even though there might be a smell there.
So there are real issues there around proof that are difficult in a disciplinary term. That’s why we try to settle – as Michael said – we try to resolve so many of these complaints before we get to discipline because disciplines the last gasp and it doesn’t give the consumer usually anything.
Can I just make a comment there then. It seems then that it’s important for regulators to talk to each other a lot.
Steve: We do.
Because your comment about the repeat offenders – the Australian Consumer Law provisions on unconscionable conduct say – actually specify that engaging in a course of conduct can be unconscionable. So that repeat offender who you’re saying is offending again, and again, and again, might not be unconscionable conduct in a one off situation but it might be again, and again, and again. It’s quite possible that it would actually be caught under this legislation.
1. Victorian Succession Law Terms of reference.
The evidence points to systemic abuse by legal practitioners of consumers of their services when dealing with inheritance matters.
In 2010 the Victorian Legal Services Commissioner held a round table discussion on the issues regarding complaints against lawyers with regards to inheritance matters. That amount to at least 900 complaints from the public over a four year period in the state of Victoria alone.
This round table discussion led to the Victorian Attorney General Identifying the issue in his terms of reference to The Review of Inheritance Laws in Victoria that is currently being carried out by the Victorian Law Reform Commission.
We have the N S W Legal Services Commissioner admitting they have serial offenders who remain in the profession and that his staff are continually frustrated. Keddies Lawyers are a well published example of this abuse of Australian consumers in regards to personal injury matters.
I leave you to make your own assessment!
The reasons it is in the national and international interest of Australia to prevent this consumer abuse by lawyers of Australian families in regards to inheritance matters.
In your reply you state the following.
2. The ACCC’s Compliance and Enforcement lists a number of factors that are weighed including whether conduct raises national or international issues, involves significant consumer detriment or a blatant disregard of the law.
The problem of systemic abuse by legal practitioners of consumers of their services when dealing with inheritance matters is of national importance.
According to the Australian bureau of statistics 2009, approximately 150,000 Australians die every year leaving an estate worth an average of $500,000. The majority of the costs incurred during the transfer of these assets to the families of the deceased are legal costs. They amount to somewhere between 5% and 10 % of the value of deceased estates, an amount of between 4 billion to 7.5 billion dollars per year.
A large percentage of this money is wasted due to an inefficient time consuming and unaccountable legal process. A process designed by lawyers, administered and run by lawyers for the benefit of lawyers.
If Australian Consumer Law were applied to this process and the industry were “cleaned up”, I would estimate a saving in the region of 50%, the accumulative effect over a ten year period being in the order of 30 to 50 billion dollars being rightfully transferred to Australian families, rather than going into the pockets of a few privileged lawyers.
- As you can see the scope for an overall benefit for consumers, if there were systemic abuse by the legal profession is significant.
- If there were systemic abuse by the legal profession in the area of inheritance transfer it does raise national or international issues and involves significant consumer detriment and could well be a blatant disregard of the law.
- If we as a nation turn a blind eye to a systemic abuse by our legal profession at a time of family vulnerability within our own community then how will we be regarded by people who live outside of our community? How will the international community see us?
- As a nation that permits its legal profession to cannibalise family inheritance, so as to increase their living standards whilst disregarding the needs of the families of the deceased.
The reasons why the ACCC does not receive complaints about services provided by legal practitioners and why Australian consumers are denied their consumer rights when dealing with the legal profession in inheritance matters and the need for the ACCC to act now in the national interest.
In your reply you state the following.
Your complaint has been recorded by the ACCC and will be used in monitoring whether there is a level of conduct by Russell Kennedy Solicitors or a pattern within the legal industry which may raise concerns sufficient to warrant intervention by the ACCC.
However, the Legal Services Commissioner is responsible for the receipt, investigation and resolution of complaints about legal practitioners, which includes the settlement of disputes between legal practitioners and their clients.
Both the N S W and Victorian Legal Services Commissioners have an agreement with their respective fair trading regulators and the ACCC to handle complaints against lawyers. These regulators have a completely different philosophical view of the law in relation to consumer rights.
Here is the paradox. Again I refer you to:
Civil Justice Research Group, Melbourne Law School, University of Melbourne presents:
The Impact of Australian Consumer Law on Lawyers Monday 28 May, 2012
6pm – 7.45 Melbourne Law School.
Steve Ref Pg10-11-12
Consumer laws give consumer rights. The Legal Profession Act does not give consumer rights, that’s not its intention. So we have a completely different philosophical starting point.
The next thing I want to say is – and this might sound trite but I think it’s really important – the consumer laws deal with consumer rights. The Legal Profession Act deals with client protection. Clients and consumers are different beasts. They have different rights, they have different responsibilities, they have different definitions, they have different philosophical starting points and ending points. So that the legislation that we administer is not designed to give consumers virtually anything. That’s not it’s point. Its point – the point of the legislation is actually to protect society from unscrupulous lawyers who actually breach their ethical duties to such an extent that they should be struck off, fined, or otherwise dealt with. Again, this is just a skating over the top of so many areas.
So the next thing I wanted to talk about is some definitional problems. Those two purposes are so simplistically stated by me in a very short period of time could give rise to weeks of discussion. It’s really important that we engage in those weeks of discussion and I hope that one of the things that comes out of this is a desire to actually do a hell of a lot more research and a lot more exploration of those issues than we have time to do tonight. I was having a discussion with Rod Sims about six weeks ago about the decisions behind the ACCC, or what they considered their purpose to be. In part of our discussion he was making the statement that he felt that the ACCC was very good at civil prosecutions, but absolutely hopeless at criminal prosecution. They were really bad at dealing with anything to do with crime because they didn’t understand it.
I thought that was a very honest and very brave statement, and probably very true. I would say the same thing about us. I mean we are not criminal prosecutors. We are prosecutors to the Briginshaw standard not the criminal standard, and there’s a big difference. But what the really interesting thing was is they were defining unconscionable conduct, which is a term that’s very familiar with regulators in the legal role, completely different than the way we would define it. They were using a criminal standard. Now if there are two bodies that are dealing with the same area of law with such fundamentally different definitions – approaches to something as simple as unconscionable conduct, we have problems.
I think that that’s going to be one of the major issues here that need to be explored. It’s for one of the reasons that – as Michael said – we have worked in New South Wales, and I know Victoria is doing that now and Queensland already has, got a memorandum of understanding (MOU) with the Department of Fair Trading so that all complaints against lawyers will be referred to us. Now is that good for consumers? Possibly not. Because at the end of the day what we deal with is disciplinary actions, not benefits to consumers. So we have these different philosophical approaches that are fundamental and they’re not easily reconciled within our present legislation at all.
Why is a lawyer more protected than a plumber or whatever? The reason is, again, fiduciary relationship. We are a profession. As a profession we have a responsibility. The primary responsibility of the profession is to provide a service to the community. That’s why this concept of gross overcharging actually ends up being a disciplinary matter and not a matter of client rights.
So it’s not going to change anything and quite frankly, there’s almost no cases before our Fair Trading jurisdiction about lawyers anyway.
If you try to do a search for them they just don’t exist. Now whether or not that’s a good thing, or a bad thing, or a statement of the problem I can’t say. But what we really need to do is develop guidelines. John Briton’s developed some. We need to go much further than that. We need to start working out a definitional harmonisation between regulators. I include the ACCC, ASIC, and all the other regulators. We need to be together on this and we’re not. Regulators hardly ever even talk to one another, let alone try to harmonise their definition.
Elswhere, members of the panel made the following key observations.
So we settle lots of these matters. But it’s not a consumer right issue and it never has been
Because the learning in this area is that often consumers will not actually – it’s about giving consumers rights but it’s also about empowering regulators. Because of the imbalance in information, knowledge, expertise, resources, the learning is that consumers often won’t pursue complaints because they don’t have the capacity to do that. I would’ve thought that’s particularly pertinent in the relationship of solicitor client. Because if a client comes to a solicitor or a lawyer seeking legal advice, by definition they don’t have expertise in that area, so if their relationship with the lawyer goes wrong, they actually probably are unlikely to pursue legal remedies. Hence the role for the regulator.
As a consumer lawyer I’m surprised by your comments on itemised bills being against the interests of legal service consumers because one of the themes that underlies most consumer law is information, providing good quality information to consumers so they’re in the position to make good decisions. That disclosure – truth in consumer transaction is one of the biggest themes and considered consumers fears. So the fact that to ask for an itemised bill is against the interest of the consumer perhaps illustrates your point I think about the very different perspectives taken by regulation of profession, professional standards, and the consumer perspective which is actually information is fundamental.
But if the process is that all complaints against costs are referred to you, rather than dealt with through Consumer Affairs or its equivalent, then that issue – it’s just the point you’re making that that issue is never going to be dealt in…
I mean I think that the history of this, which is consistent with what Deborah says, is to try to hive off anything lawyers do and leave it in one box called lawyer regulation, and try not to muddy those waters. I think that’s been some – it’s what the decisions have kind of dealt with. Whether or not that’s right or wrong is another thing entirely but that seems to be what’s happened. I suspect that that will continue. However there are pressures around the world that are now being exerted on the legal profession and on all of the service delivery areas that are so huge. I don’t know how long it will last but I’m just not exactly sure where the first attack will come.
In the UK for example, the real issue has been ostensibly making legal services available to just anybody by Co Op law and a whole range of other types of legal processes. But one of the probably unintended consequences of that is to equate legal service delivery with nothing but cost. So you only look for the cheapest service, not the best, and certainly not the one that’s going to look after you the most important way. So there’s so many pressures that are now happening that a lot of what we’re talking about here, coming from different perspectives, need really to be thought very carefully through. I mean we really need to make sure that whatever we’re doing about giving consumers rights, which I think everybody in the room would totally agree is a very important thing to do, has to be carefully thought through.
Because without some of that thinking some of this overlap that I’m presently seeing in lots of regulation, which is why we strike MOUs, just to hold our breath for a while as we try to look around and see what the consequences might be. This is where we need research to jump in and a lot of this work needs to be done. Because it’s presently a big gap and a big hole. A lot of these questions I don’t think have answers. I’d love to be involved in all the discussions about where they might go.
The ACCC needs to consider the fact that the current mechanism for monitoring and preventing systemic abuse by legal practitioners of consumers of their services when dealing with inheritance matters denies consumers their “consumer rights”.
The Legal Services Commissioners in each state handle all consumer complaints against lawyers. All complaints received by any of the departments handling consumer complaints regarding goods and services have been directed to refer the complaints against lawyers to the various legal services commissioners, as you have done with my own complaint.
All complaints against lawyers are managed by legal services commissioners. Legal services commissioners operate under various legal professional acts which do not encompass the founding principal of Australian consumer law which is that consumers have rights.
Ref Trade Practices Act 1974.
2 Object of this Act
The object of this Act is to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection. The various legal professional acts have been formed with the view of regulating the behaviour of the legal profession and deal with how the legal profession behave when providing services. They do not encompass the philosophical component of consumer rights. In fact under the legal professional acts consumers have no rights; consumers become clients who are a different entity to consumers. The methods of determining misleading and deceptive conduct, unconscionable conduct or empowerment in a contract over a consumer are also different. This is why the ACCC never gets complaints against lawyers and therefore can say it is not aware of the systemic abuse by them of Australian consumers.
The current mechanism of referring consumer complaints against the legal profession to the legal services commissioners who operate under an act that does not recognise consumer rights, strips consumers of their consumer rights. That is a big problem. It creates a situation where consumers of legal services have been denied a right, a fundamental right, a right that has been ingrained into the Australian community over the past thirty nine years through the trade practices act.
Michael McGarvie the Victorian Legal Services Commissioner has stated that the ACCC and the various Legal Services Commissioners can exchange information (Ref pg 4 CJRG); Steve Marks, the N S W Legal Services Commissioner has admitted that the regulators only communicate on occasions. The ACCC needs to “Act” and request the relevant information from the various legal services commissioners. By obtaining and analysing the information in those files, the
ACCC would be able to see the areas of systemic abuse of Australian Families within Inheritance matters by lawyers would then be exposed and a remedy for this abuse could be actioned. The ACCC would be able to identify serial offenders in particular or in broad areas of law. The ACCC would be able to identify if the problem of consumer rights abuse by the legal profession crossed state boundaries and was restricted to certain firms or to certain areas of law. All of this information would assist Australian consumers of legal services and would identify the systemic abuse of Australian Consumers of legal services.
This would provide a significant overall benefit for consumers and businesses and would address conduct by the legal profession that raises national or international issues, involves significant consumer detriment or a blatant disregard of the law.
I trust you can see the dilemma for Australian consumers and the benefits to our nation that would flow from an investigation by the ACCC of any systemic abuse by the legal profession of our families when dealing in inheritance matters and will do everything within your power to assist and rightfully restore consumer rights to Australian consumers of legal services, particularly in the area of inheritance law.
The integrity and performance of our legal industry impacts on every aspect of Australian Consumer`s lives, including debt, divorce, disability and death. These areas of service provision by the legal profession impact on Australian families for ever. If the relationship between the consumers of legal services is detrimental to the consumer it can have intergenerational impacts on their family members. The current legal structure is denying consumers of legal services their given consumer rights and therefore is detrimental to Australian consumers of legal services at a systemic level.
I understand that the investigation I am seeking would be a very large undertaking by the ACCC. I believe however that these are compelling arguments for action that would be of great benefit to Australian families.
To the Minister for Trade and Competitiveness
Diarmuid Hannigan 236 Smith Street Collingwood. Victoria 3066 03 94195044 charada@mira,net Saturday 20th of April 2013
To the Minister for Trade and Competitiveness The Hon, Dr Craig Emerson MP
I am writing to you in your position as Minister for Trade and Competitiveness in order to alert you to a serious problem with regards to the methods currently being used to investigate consumer complaints against lawyers.
From my own reading of the situation it appears as if Consumers of legal services are stripped of their consumer rights when making complaints against lawyers because:
- The state bodies that operate Australian Consumer Law refer all complaints against lawyers to the various legal services commissioners in each state.
- These legal services commissioners operate under various legal services acts.
- These acts do not recognise consumer rights.
Thus the investigating bodies do not consider consumer rights as part of their investigative process which means they are denying consumers their consumer rights.
Since the legal profession deals in death, divorce, debt and disability that have an intergenerational impact upon families who are consumers of legal services I would have thought that it would be paramount that these peoples consumer rights remain intact when complaining against the service provision of lawyers.
Apart from having a detrimental impact upon many Australian families the current position leaves our most vulnerable, our elderly citizens completely unprotected against the practices of predatory lawyers and their law firms which is a form of elder abuse.
It is interesting to note that certain law firms have invested heavily in the area of aged care and involve themselves as representatives on various committees regarding elder abuse, retirement villages and even writing the standards for aged health care.
It is concerning that these organisations are not obligated to observe Australian Consumer Law and do not have any obligation to the consumer rights of their own customers. One may ask the question.
How is that such organizations are permitted to have such a close association with the aged care industry when their own practices are not obliged to observe Australian consumer law?
What is the ACCC doing to ensure that our elderly are protected and have their consumer rights acknowledged when being provided with legal services?
I have attached (ACCC response 2) which details the hole in the current mechanism with regards to consumer complaints against lawyers with the supporting attachments.
I trust you will take this matter up with the Attorney General and work to ensure Australian consumers of legal services are acknowledged their consumer rights by the legal profession and that the legal fraternity is bound by Australian consumer law so as to benefit all Australian consumers.
Radio National (The law report) ran a broadcast last week relating to changes in the south Australian method of dealing with legal complaints and draw your attention to the two comments that they have published on their web site.
Diarmuid Hannigan :
16 Apr 2013 6:49:40pm
If the ACCC where to investigate the legal profession for running a cartel, I wonder what they would discover.
Legal Services Commissioners operate under Legal Professional Acts. These acts do not incorporate consumer rights therefore when legal services commissioners investigate consumer complaints against lawyers consumers are denied their consumer rights.
The reason this hole has been created in the law is because the legal profession is self regulating and creates laws to suit itself which in my humble opinion exactly how a cartel operates.
Reply Alert moderator
- Mary Cotter :
18 Apr 2013 7:59:25pm
From both personal experience and reading their own statistics, the Legal Services Commission systems are indeed heavily biased towards the lawyers and against the consumer/client bringing the complaint. In the case I have been involved with, even after the corrupt lawyer was finally forced by circumstances to admit to a couple of the numerous serious complaints made against him,
the Victorian Legal Services Commissioner continued and continues to treat both myself and the former legal services consumer whom I assisted with his complaint as though we were a couple of evil-minded liars who invented the whole scenario. And of course presented his case before VCAT in the most positive light possible, asking for minimal punishment. And then the member hearing the case gave him far less punishment than the minimal suggestion made by the LSC – the whole process was biased, from the beginning right through to the end.
I look forward to hearing from you soon and if I can be of any further assistance I would be happy to oblige.
Dear Mr Hannigan
We received your emails of 20 April 2013, 1 June 2013 and 28 June 2013 to the Australian Competition and Consumer Commission (ACCC) about the dispute resolution mechanisms and regulation of the Australian legal profession. Your reference number for this matter is 407911.
Thank you for the further information you provided to us. The ACCC does not comment on its ongoing investigations so I cannot tell you if we will investigate your allegations. We will only contact you again if we need more information.
Please see our website for more information about the ACCC.
David Correspondence Officer
23 Marcus Clarke Street Canberra 2601 | www.accc.gov.au
T: 1300 302 502