Duties of Australian lawyers

In summary...

This article is aimed at those of our clients who are unfamiliar with the professional and ethical duties that bind Australian lawyers to their clients, or the benefits and safety nets available to clients of Australian lawyers. We will cover:

  • Lawyers’ professional duties;
  • Legal professional privilege, and confidentiality;
  • How trust accounts work;
  • Licensing requirements for Australian lawyers;
  • Situations where there is a conflict of interest; and
  • How to complain about or make claims against your lawyer.

Introduction

The Australian legal profession is highly regulated. Unlike many other industries, Australian lawyers:

  • must hold a valid practising licence (essentially a licence) that must be renewed annually;
  • owe an extensive duty of care to their clients;
  • are regulated by specific bodies set up to regulate lawyers;
  • must undertake training and education each year;
  • may operate trust accounts, which are heavily regulated;
  • must have compulsory insurance; and
  • may be ‘struck off’, or banned from legal practice, for breaching ethical or professional standards.

Currently, each Australian State and Territory has its own regulatory framework. This article deals with the Victorian regulations only, though the differences across Australia should be minor.

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Our professional duties

The lawyer-client relationship is a ‘fiduciary relationship’, where the client places confidence, good faith and trust in the lawyer, and as a result, the lawyer has enforceable legal obligations to act in the best interests of the client.

There are numerous aspects of this duty, and the most important are that a lawyer must:

  • act honestly and fairly;
  • act with due skill and diligence, reasonable promptness and courtesy;
  • maintain a client’s confidential information;
  • avoid conflicts of interest; and
  • follow a client’s lawful instructions.

This rules and many others have their roots in the common law, and are set out explicitly in the extensive Professional Conduct and Practice Rules.

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Confidentiality and privilege

Communications between lawyers and clients are generally covered by ‘legal professional privilege’. This means that they cannot be disclosed without the client’s consent, including in police or other regulatory investigations, and in court.

This is one of the most fundamental rules in the Australian legal system. The reasoning is that allowing clients to communicate openly with their lawyers, without fear of disclosing any of that information to third parties, allows lawyers to advise clients fully and properly in light of all the facts.

In addition, one of the most important duties owed by a lawyer is that of confidentiality. Confidential information given by a client to a lawyer also cannot be disclosed by a lawyer except in very exceptional circumstances.

In short, you should feel safe telling your lawyer everything that is relevant to the matter.

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Trust accounts

Lawyers can operate ‘trust accounts’ to hold clients’ funds for them. They are often used to:

  • hold deposits in property sales;
  • hold security payments in lease agreements or other transactions; and
  • give clients a way to transfer funds to a third party safely.

Lawyers can only deal with a person’s trust money in a way directed by that person.

Lawyers’ trust accounts are heavily regulated by the Legal Services Board, with heavy penalties including jail for failing to comply. They must be audited every year by an independent, specially qualified accountant. Before opening a trust account, lawyers must complete a specific trust accounting course, and obtain a relevant practising certificate.

The Legal Services Board also operates a ‘fidelity fund’, to compensate members of the public who have lost money or property that was held in a trust account as a result of a lawyer’s dishonest behaviour.

In short, you should feel very safe about depositing funds into a lawyer’s trust account.

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Licensing requirements

To be allowed to practice in Victoria, lawyers must be admitted to practice, and hold a current practising certificate.

Most commonly, lawyers admitted to practice must:

  • complete a Bachelor of Laws or equivalent at specific universities;
  • undertake a practical legal training course, which generally takes 6-12 months; and
  • provide a police report, to show lack of any dishonesty offence.

To maintain a practising certificate, lawyers must also:

  • show that they are fit and proper to practise law;
  • undertake at least 10 hours of continuing education each year; and
  • report all but the most trivial breaches of the law to the Legal Services Board.

Conditions may be placed on a practising certificate, such as the common condition that a relatively junior lawyer can only engage in supervised legal practice under the supervision of an experienced lawyer.

To check whether someone is authorised to practise law in Victoria, search the Legal Services Board online register.

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Conflicts of interest

Another fundamental duty of lawyers is to avoid conflicts of interest with their clients. This means:

  • we are heavily discouraged from acting on both sides of a transaction, including seemingly simple transactions between close family members. If there is any disagreement in future in one of these matters, we cannot act for either party, and both parties must find new lawyers;
  • we cannot act against former clients;
  • we cannot act where there is a chance that a client’s interests will conflict with our own; and
  • we must cease representing a client who intends to do something illegal, as there is a conflict with our duty to the courts and the law.

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Complaints

There are several ways you can deal with complaints against your lawyer.

For minor disputes, you could consider trying to sort it out with the lawyer directly, and failing that, approaching the Legal Services Commissioner to help deal with your complaint.

If you have suffered financial loss as a result of your lawyer, such as if you were given wrong advice, you can make a claim against your lawyer for compensation. All lawyers must hold compulsory insurance with the Legal Practitioner’ Liability Committee to cover these sorts of claims. The Committee or the Legal Services Commission can help resolve your issue.

If you have suffered loss of trust funds or property due to the dishonesty of a lawyer, you can also claim directly from the Legal Services Board’s fidelity fund.

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About the author

Kai Fu, competition and consumer lawyer, former Allens Linklaters senior associate

Kai is an experienced commercial lawyer, being a former senior associate in the Competition and Consumer law team at the top tier international law firm Allens Linklaters. He continues to consult for the Competition and Consumer law group.

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About this publication

Kai Legal publications provide general information, and are not legal advice. These are not complete summaries of the law, and only touch on select points and scenarios that may be relevant to our readers.

This fact sheet is current as of 17 March 2015.

© Kai Legal 2015