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Court in the Act
2 July, 2008  
Knock down personal injury specials

The NSW Law Society wants lawyer advertising rules to be liberated, while keeping tight control of what constitutes “legal work”. As a recent Supreme Court judgment shows both restraints are locked in an awful embrace


imageLawyers’ advertising restrictions are in a state of dyspepsia following a judgment by NSW Supremo Justice Michael Adams on June 20.

See Council of the Law Society of NSW v Australian Injury Helpline Ltd.

At the same time the NSW Law Society is pressing Attorney General John Hatzistergos to liberalise the advertising regime, saying the current rules are inequitable and dotty.

In an effort to lend the insurance industry a helping hand personal injury lawyers are prevented from advertising, whereas family lawyers, commercial lawyers and various other species can giddily market.

However, the PI restrictions are all over the shop. Firms can declare themselves as “specialists in compensation” or “accredited personal injury specialists”; see Keddies website and Brydens website – motto: “When winning is everything”.

Apparently this does not “promote the availability or use of a solicitor to provide legal services”, i.e. the recovery of money.

If a rationale of the restriction is to dampen personal injury litigation, then why should family lawyers be allowed to rev up the divorce business?

The Law Society has drawn up proposed new guidelines for solicitors’ advertising, listing most areas of practice for inclusion (I don’t much like the inclusion of “defamation”) with the only requirements being that the spruiking should not be misleading or “vulgar”.

The society says:

“The fundamental guiding principle is that honesty, integrity and good taste should be maintained in all advertising.”

Who is going to be the Integrity & Taste Monitor?

* * *

Importantly, Adams struck down clause 34 of the Legal Profession Act regulations that prohibit personal injury advertising by third parties. He found this regulation ultra vires the Act.

Australian Injury Helpline Ltd acts as an intermediary, introducing injured customers to its panel of lawyers. The Law Society brought proceedings claiming it advertised legal services contrary to the regulations and engaged in legal practice when it was not a licensed legal practitioner.

The first claim was tossed out because the grizzled Adams found the regulations beyond power. He said that the width of the prohibition against third party advertisers was such that in a TV drama if one character said to another they should get a lawyer to make a personal injury claim, that would be an offence under the regs.

If personal injury was being discussed in a news or current affairs show and it was implied that lawyers are qualified to assist the injured, then that too could render the participants criminally liable.

“Many other examples of common, and hitherto regarded as entirely respectable, conduct is rendered criminal if the plain unqualified language of the regulation is applied.”

In APLA v Legal Services Commissioner, when deliberating on the constitutionality of the advertising restrictions, Michael Kirby in the High Court said:

“The regulation is not the delicate work of a master drafter, seeking by filigreed language to avoid any risks of overreach into constitutional areas where state angels might fear to tread… The regulation is, instead, a legal blunderbuss. It fires its shots at everything within range and beyond.”

In a small but moving triumph for freedom of expression Adams refused to grant an injunction against the contents of AIH’s website.

imageThere was, however, considerable malarky as to whether the company was representing itself as acting as a solicitor.

Like all good law societies the NSW body is keen to patrol and protect the borders of the reserved territory and, if possible, conquer hitherto unlawyered terrain.

AIH’s function was to gather the initial statements from injured customers and to decide whether to refer them to panel solicitors. The solicitors did the legal grunt work.

The law society unsuccessfully argued that the AIH “panel solicitors operating manual” showed that the company carried on legal practice.

There was also the “surrounding documentation” and the correspondence with enquirers, in which phrases were used such as, “there could be grounds for a compensation claim on your behalf”.

While having the “colour of a legal opinion” Adams thought that this particular letter did not actively give legal advice.

However, another of AIH’s letters was found to be in breach of section 15 of the Legal Profession Act:

“We confirm that we are prepared to provide you with advice and assistance in relation to this matter, completely FREE of charge.”

[snip]

“We can confirm that to supply you with a ‘considered’ view on these matters there will be NO CHARGE to you.”

Adams thought the ambiguities “are deliberate” and that AIH “wishes the client to think” that it might well be providing legal advice, even though it isn’t.

To even imply that advice would be given following a detailed assessment of the evidentiary material “is unarguably engaging in legal practice”.

The bearded Adams said:

“In my view, letters of [this] kind … are prohibited representations within the meaning of s.15 of the Act.”

It seems that new territories have been colonised.

Then there was strife with AIH’s tax invoice, which typically went to the solicitors dealing with clients under the referral scheme.

The tax invoice mentioned “general discussion regarding legal differences and options available”.

That was enough to sink them. Adams said:

“These claims are strongly indicative of undertaking legal work…

Moreover, I think that the correspondence shows that it considers that it is commercially advantageous, even if the representation is not directly made, to use language which is calculated to convey that impression to lay persons. It is clear that, at least indirectly, this conduct is undertaken for ‘fee, gain or reward’ within the meaning of s.14 of the Legal Profession Act.

Apparently the invoices are designed to be in this form to enable them more readily to be accepted as disbursements.

“I think the society’s point that there appears to be a manipulation of the cost recovery process is well taken.”

* * *

It’s all a bit rich. Anti-competitive advertising restrictions have linked arms with monopoly hugging concepts of “legal practice”.

Both should be sent to the panel beaters for reshaping. The Law Society basically wants the advertising restrictions scrapped – and quite right too.

The current artifice actually protects the existing big personal injury players and makes life harder for new entrants onto the field.

However, the liberalisation of personal injury advertising should not happen in isolation. It needs to be accompanied by liberation of the borderline functions that are monopolised as “legal practice”.

A lot of “legal work” is ever only touched by clerical people, but audaciously is billed at lawyer rates.

* * *

At least some are delighted with Adams’ decision. For instance, trade unions can now tell their members that their services include the provision of legal advice. Medical centres can more broadly advertise the same thing.

How revolutionary.

* * *

imageThe Law Society of NSW bravely is weathering the embarrassment of having a Keddies’ partner on its governing council, while the principle of the firm gets spanked for being a bit pushy with the “personal injury” ads.

Russell Keddie made an admission of professional misconduct to the Administrative Decisions Tribunal, which promptly fined him $10,000 for two grounds of naughty advertising, ordered a reprimand and costs against him.

The tribunal said in determining penalty it considered ...

“that the most significant feature of the solicitor’s conduct was his failure, despite being notified of the earlier complaints and being warned by the [Legal Services] Commissioner that he must take responsibility for complying with the advertising regulations, to take reasonable steps to ensure that his firm was not responsible for any further breaches of these regulations.”

After a complaint had been made Scott Roulstone, one of the three Keddies’ partners and a vice president of the Law Society, was involved in giving assurances to the LSC that the firm had amended its website and was in compliance with the regulations and the commission’s requests.

When it was discovered that offending material was still on the website Roulstone advised the LSC that “regrettably” none of the partners of Keddies had actually checked the site to see if the changes had been made.

Roulstone said the partners were “shocked” to find that it appeared that “we had removed one set of offending words and replaced them with another”.

It is understood that he is not the only personal injury lawyer on the LS council whose spruiking is of interest to the commissioner.


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