Saga of the struck-off Townsville solicitor ... Client sold to Trilby Misso, who smartly dumps and overcharges the hapless punter ... Press releases fly as law chain sent to the stipes for investigation ... "Because we care" ... Sir Terence O'Rort reports
On April 10, 2006 Colin Ireland suffered personal injury after an incident at a boat ramp.
Mr Ireland certainly did not have the luck of the Irish when he retained Townsville solicitor Paul Anthony Dempsey to act for him and to bring a claim for personal injuries. The client agreement was a no win-no fee speculative costs agreement common in personal injury litigation.
Dempsey has plied his trade under various incarnations, including Dempsey's Your Lawyers and Dempsey Solicitors.
Since Rhino Baker got put of his misery by the Court of Appeal (see my earlier report Crazed Rhino shot) the Dempstar has kept the Legal Practice Tribunal and the Court of Appeal busy.
We'll get back to Colin in a minute, but first some important background.
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Dempsey's problems seem to have begun in 1999 when he underwent a surgical examination by Dr Hack that left him in a bad state.
"His genitalia remained badly swollen, his voice and hearing deteriorated, his abdomen bloated markedly and his skin produced a strange crackling sound when touched."
The poor fellow's situation took a turn for the worse when he suffered what was described by Skoien DCJ as "faecal leaking and from frequent flatulence".
Dempsey: colorectal difficultiesDempsey received advice from three different colorectal surgeons that his injuries had been caused by negligent conduct by Dr Hack.
When Hack sent Dempsey a bill for the princely sum of $73.15 the solicitor wrote back saying, "In the circumstances, because of your negligence, I think you should pull it".
Dempsey instructed lawyers who issued a writ against Dr Hack within the relevant limitation period, but they were told not to serve the doctor.
Dempsey explained to Skoien DCJ he did this because of his prominence in personal injury litigation in Queensland and because he was understandably embarrassed about his incontinence:
"Having regard to the fact I am a prominent practitioner in personal injury litigation in the State of Queensland, I was anxious not to make a claim that might be regarded by my fellow practitioners, or by the Court, as unnecessary or frivolous…another important reason why I did not give my solicitors instructions to serve the proceedings is that I was acutely embarrassed about the nature of my injuries. Indeed, making my flatulence and faecal incontinence a matter of public record was something I wanted to avoid, unless it was absolutely necessary to do so."
Eldon: another victoryThe Dempstar failed to serve the claim within 12 months and applied for a renewal of the writ, which the registrar granted.
Dr Hack appealed the renewal and the Dempstar retained Lord Eldon, trading as Anthony J.H. Morris QC, to act on his behalf.
In a submission described by Skoien DCJ as "novel" Lord Eldon submitted that Dempsey's reluctance to sue, based largely on his hope of spontaneous physical improvement, should be applauded and encouraged rather than criticised.
Lord Eldon won the day and the court allowed the renewal of the writ.
Dr Hack appealed to the Court of Appeal but Lord Eldon triumphed, again, and the application for leave to appeal was dismissed (see Dempsey v Hack [2005] QCA 34).
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Chesterman J dealt harshly with Dempsey after the Legal Services Commissioner objected to Dempsey charging Katherine Wickham $33,000.00 professional fees out of a $95,000 settlement, when after deduction for GST, disbursements and interest on litigation loans, she received $14,102.39.
Chesterman: in family modeChesty was also upset that Dempsey had charged Mark Curlewis $82,000.00 professional fees out of settlement of $202,904.75, when after deduction for GST, disbursements and interest on litigation loans, he received $45,985.12.
Chesty J found that the solicitor had to give some of the dosh back but The Dempstar decided to challenge that in the Court of Appeal (see Legal Services Commissioner v Dempsey [2007] QSC 270).
McMurdo P, White J and Pat Keane dismissed the appeal and ordered that he pay the Bureau de Spank's costs (see Legal Services Commissioner v Dempsey [2008] QCA 122).
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Moving onto 2009 we find Justice Roz (Her Roziness) Atkinson and the other members of the Legal Practice Tribunal skewering Dempsey for a series of misdemeanors (see Legal Services Commissioner v Dempsey [2009] LPT 20).
Quite frankly, I think Her Roziness went too far in delivering a 48-page judgment against the Dempstar and space does not permit a full exposition of the majesty of HH's quill, however here are some highlights:
- Dempsey to client when explaining a client agreement: "My cost agreement is enclosed in duplicate, one copy for you to keep and one to be returned to me. It is a document designed by the government, so it's a classic government document which doesn't mean much to read."
- Dempsey to employed solicitor Ms Sinclair on her first day at work: "It's no secret in Townsville that I have a cash flow problem."
- Dempsey to client when explaining the need for her to take out a litigation loan: "Don't worry about it, I'm not going to take out more than I need to pay the bills on work that I've done. If there is any interest I'll bear that myself."
- Dempsey to client when requesting a change in the client agreement: "I don't 'pad' my fees, I never have and I never will. I am only doing this because there is advantage to me in it income tax wise, and there is no disadvantage to you at all."
- Dempsey to Mrs Dempsey, referring to a debt that required immediate payment: "I know that we are broke, but is there any way we can pay him."
In Legal Services Commissioner v Dempsey [2009] LPT 23 Roz crossed Dempsey off the list and, in response to a request for a 21-day stay of the decision to enable an orderly transition of the practice, she said:
"The tribunal was minded to order a stay of this order for 21-days to enable an orderly transition of the practice and to protect the interests of Mr Dempsey's existing clients.
However Mr Dempsey failed to be fully candid with the tribunal and further information relevant to the tribunal's determination was disclosed by Mr Dempsey's counsel after the further hearing with regard to penalty.
The tribunal has no confidence in a practitioner who has failed to be fully candid in these circumstances and so will not grant a stay. It would not be in the interests of his clients for a stay of the tribunal's orders to be granted."
Dempsey was not going to take that lying down and again Lord Eldon went into bat on his behalf before the Court of Appeal.
McMurdo P, Holmes JA and John Muir were not moved by his Lordship's blandishments (see Dempsey v Legal Services Commissioner [2010] QCA 197).
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What, I hear you cry, has the Dempstar's tribulations got to do with poor Mr Ireland?
This is where it gets even more fascinating.
When Dempsey was tossed off the jam roll he "sold" Ireland's file to Trilby Misso for "work" undertaken by him.
In relation to that, Duncan McMeekin J observed:
"Statements in the correspondence exchanged suggest that there may have been very little advantage to Mr Ireland from that work."
As they say at Trilby Misso (now part of the Slater & Gordon chain of law shops):
"The women and men who serve our clients believe in treating others as they expect to be treated themselves. We treat every client and every colleague with respect. However, when we are advocating for our clients, we fight hard for the best possible outcome."
Trilby Misso's website gets quite carried away: "We have a policy of seeking out individuals with naturally caring, empathetic personalities."
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Mr Ireland's Client Agreement only allowed Trilbys to terminate the retainer under certain circumstances, namely:
"We may terminate this agreement and cease to act for you if we become aware of any material that alters our opinion regarding the prospects of success of your claim ... If the agreement is terminated by you or us in accordance with the provisions of this agreement we are entitled to all outstanding professional costs and disbursements calculated in accordance with this agreement. We will also be entitled to retain your file until satisfactory arrangements are made for the payment of those professional costs and disbursements."
Tony Hanmer: chairman of Trilby MissoImagine Mr Ireland's surprise when in August last year Trilby Misso terminated the retainer because it decided that the claim was "too risky".
McMeekin J found there was no evidence that Trilbys had become aware of any new material that caused them to change their opinion and that the firm had simply changed its mind about its willingness to continue on the no win-no fee regime, based on the existing material.
Mr Ireland approached Macrossan & Amiet, which requested the delivery of his file, whereupon Trilbys presented a bill for $123,522.59 and said it would release the file for "immediate payment" of the bill.
Client care indeed.
A little later Trilby Misso offered to accept $35,000 "in full and final settlement of our fees and disbursements only".
Mr Ireland's new solicitors brought an application for delivery of the file, which was heard by Mc Meekin sitting in the Supreme Court at Mackay.
At the hearing Trilbys position softened somewhat. It conceded that the file should be delivered to the former client but only if suitable security was provided to secure their lien for the amount of the fees that they had paid the Dempstar.
McMeekin J: sent Trilbys to the Bureau de SpankMr Ireland contended that Trilby Misso were not owed any money and were not entitled to a lien over the file because it had repudiated the client agreement and had no present entitlement to the payment of any fees.
McMeekin found that a solicitor who only had a right to recover fees in a no win-no fee arrangement cannot gain a right to payment because they change their view about the prospects of success.
McMeekin J was unimpressed with Trilbys, saying:
"It is the solicitors who have by their unwarranted act placed the client in the invidious position of having the progress of his action stalled and of forcing him to seek further representation in order to progress it."
The court ordered the delivery of the file to Mr Ireland's new solicitors and ordered Trilby Misso to pay the poor punter's costs.
For good measure McMeekin referred the papers to the LSC plod to investigate whether there had been dishonest conduct in insisting upon immediate payment and whether the firm had a right to charge $123,000.
The judge said:
"There is one further matter that I should mention. The solicitors sought initially to impose a condition on the release of their file that was plainly not maintainable. To insist on immediate payment of monies in circumstances where none were chargeable is dishonest ... Nor is it only the fact of the demand that is of concern. The amount of the bill and certain items within it require some explanation. It may be that the solicitors can demonstrate that they had some honest belief that they had the right to charge $123,000.
Absent some explanation the impression is that an outrageous amount was demanded in an attempt to coerce the applicant into accepting an obligation to pay the lesser amount of costs when offered. I have received no argument on the point. I will refer the matter to the Legal Services Commissioner for further investigation."
That set the cat among the pigeons.
The judgment prompted Bruce Doyle, the president of the creaky old Queensland Law and Order Society to issue an urgent missive, saying this was "an isolated incident and that on the whole solicitors kept costs fair and just".
"Instances of gross, unfair overcharging were rare within the profession.
We have comprehensive legislation and regulations, as well as the Legal Services Commission, in place to protect consumers and support the profession.
Any instances of over-charging will not be tolerated but these are few and far between.
Solicitor-client relationships should be established at the outset with a costs agreement that provides both parties with detailed information of the anticipated costs in their legal matter.
In fact, this is part of our legislation - the Legal Profession Act 2007 dedicates some 42 pages containing 50 sections to the subject of costs disclosure and assessment.
The Queensland legal profession is dedicated to fairness and transparency in client costs."
Graeme McFadyen: CEO of Trilby MissoTrilby Misso also rushed into print:
"While we respect the court's decision, we do not agree with some of the findings about our conduct in this matter. This was a unique circumstance and unfortunately for us the full facts were not published. In our view there were reasonable grounds to discontinue our relationship with the client and since we had incurred significant costs running the claim, we sought to negotiate a sensible compromise on fees.
We assure our clients that we will continue to deliver the same quality of service on which we have built our reputation. We remain committed to employing our best efforts to resolve our clients' claims in a timely fashion and to achieve the best possible outcome."
As they say at Trilby Misso ... "because we care".
Sir Terence O'Rort reporting