A private dispute between lawyers has once again spilled into the courts via one solicitor’s “inflammatory” complaint of the other side’s conduct to the Law Society of the ACT, which included serious allegations of blackmail.

Despite being initially removed from the jam roll for failing the “fit and proper person” test, the appellant solicitor was ultimately successful in his appeal to the Full Court of the ACT Supreme Court, which renewed his practicing certificate in an anonymised judgment.

The initial complaint to the Law Society was made in the context of Federal Court litigation between Law Firm A, and one of its former employees, who was suing his previous employer on the basis of racial discrimination. Mr Y represented Law Firm A, and the appellant, a solicitor of Law Firm B, represented the former employee.

As part of settlement negotiations, both sides raised allegations of impropriety, including fraudulent conduct by the former employee, and a systemic practice of overcharging clients by Firm A more generally, which would constitute serious breaches of professional practice laws.

Fearing a class action, in a settlement offer, Firm A sought to quell this threat by negotiating suppression clauses, alongside a clause that Firm B agree not to act against Firm A on behalf of its former clients.

This second proposition was picked up by the appellant, who drafted two further settlement offers, both of which included a $3.5 million buyout of Firm B’s ability to run a class action against Firm A.

Before settlement could be reached, in May 2024 Mr Y raised various allegations of impropriety by the appellant, including claims of blackmail, both in the Federal Court proceedings and to the Law Society.

The latter complaint extended over 197 pages (annexures included) and was described by the Court as having an “inflammatory and argumentative tone”. Mr Y further neglected to mention that the settlement proposal originated with Firm A itself.

Upon investigation of the complaint and after considerable delay, the Law Society in December 2024 decided not to renew the appellant’s practice certificate.

The ACT Full Court disagreed in a de novo hearing, as in the whole of the circumstances, the conduct was not enough to demonstrate unfitness.

Among the instances of improper conduct found by the Court includes breach of fiduciary duties in making the settlement offers due to a conflict of interest.

The Law Society further submitted that the settlement offers are incompatible with the role of a lawyer, as they allow “the wealthy and powerful in society to limit or restrict the provision of legal services to the weaker and more vulnerable”.

The Court refused to accept that argument, noting that potential clients may simply seek representation from another solicitor and that solicitors may assist the broader community in other ways via pro bono work.

However, such clauses were found to be nonetheless improper because they use a solicitor’s skills purely for personal gain, rather than the pursuit of law and justice.

A further issue was that the offers were made directly to a partner, Mr X of Firm A via a barrister who agreed to act in a personal capacity as an intermediary between the parties. This means the appellant was additionally in breach of Rule 33 of the Solicitors Conduct Rules.

Mitigating factors in favour of the appellant included that the negotiations were at an early stage, no binding offer was made, the appellant recognised the need to acquire further advice, and that his motivations were ultimately client-focused.

The appellant further cooperated with the initial investigation of the Law Society and made appropriate concessions, giving the Court confidence in his fitness to maintain his practicing certificate going forward.

The Court further noted that the nature of the litigation was “bitter” and “high stakes”, and that the circumstances were “unusual” and unlikely to be repeated.

It was additionally relevant that the Law Society did not discipline any other lawyer involved in the dealings, such as the partner from Firm A who proposed the class action protection, or Mr Y who made a complaint without disclosing that it was his client’s proposal that formed part of the complaint.

Whilst the case provides a clear answer for the appellant’s fitness for practice, questions regarding the serious allegations of overcharging remain highly concerning.

LP7 v Law Society (ACT)