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Victorian State Government Ombudsman Slams Victoria’s Legal Regulator, the Office of the Legal Services Commissioner

… ☞☞☞ … Victorian State Government Ombudsman George Brouwer Reported to the Victorian Parliament that “My investigation identified a lack of understanding by staff of the Legal Services Commissioner … Case files lacked: * investigation plans * thorough and professional approaches to gathering evidence * follow-up on serious allegations * substantiating documents such as practitioners’ files * timely conclusions * verification of practitioners’ responses * reasons for decisions. I made 28 recommendations … to the Attorney-General … ☞☞☞ …

 

   On its “one-stop” pair of websites, the Victorian Legal Services Commissioner Michael McGarvie (who is also statutorily stapled under the Legal Profession Act 2004 as the Chief Executive Officer of the Victorian Legal Services Board), and apparently without any intent of irony or double-pun entendre, describes his and its role, role, roles as follows:

THE LEGAL SERVICES COMMISSIONER

 The one stop service gateway for the fair, independent and efficient handling of complaints about lawyers.

 Welcome to the website of the Legal Services Commissioner.

 The Legal Services Commissioner is an independent agency responsible for handling complaints about lawyers in Victoria. The Legal Services Commissioner was established on 12 December 2005 under the Legal Profession Act 2004


The Legal Services Commissioner works with the legal profession and consumers of legal services to improve standards and increase awareness of lawyers’ obligations to their clients.

THE LEGAL SERVICES BOARD The Legal Services Board is responsible for the regulation of the legal profession in Victoria. The Legal Services Board aims to ensure the effective regulation of the legal profession and the maintenance of professional standards. The Legal Services Board is an independent regulator that protects consumers and enhances the integrity of legal services in Victoria.

A case of “Curiouser and Curiouser”, or is it “Dumb and Dumber”?

With my dual professional qualifications and two decades professional experience as a regulatory lawyer and as a regulatory economist, I plumb quite firmly for the second title as being the most accurate to fit this shameful (non-) regulatory situation.

Just how badly, and just how far off the script does Victorian Legal Services Commissioner Michael McGarvie lever the dual statutory authorities (statutory authorities that are funded by the public and dominated to the brim with lawyers) that perform these bicephalous “one stop” statutory roles?

In layman’s terms, the lawyerocracy in Victoria prevailed on the crooked, lawyerocratic Brumby-Bracks-Hulls Labor Party administration in Victoria to undo the fine, pro-consumer and public interest regulatory reforms for the lawyering industry bravely wrought by the previous Kennett-Stockdale Liberal Party administration, brought off by Kennett and co against the stiffest of legal establishment interference.  Amongst many cave ins to the restoration of the lawyerocracy (bigger and badder than in the Kennett era)  was the shameful act of abolishing the consumer orientated (and lawyer hated) Victorian Legal Ombudsman Scheme, and replacing it with a sham legal regulator (copying the blueprints of the entrenched and enduring New South Wales Office of the Legal Services Commissioner and its two decades at the helm LSC Steve Mark) that runs a protection racket for the very “bad lawyers” mates in the industry, a sham regulatory outfit that it is supposed, according to its statutory papers and funding entitlements, to be disciplining down and out of the legal industry.  

And of course, using those same regulatory powers, arbitrarily, not just to protect the mates of the lawyerocracy but to go after the few brave and decent lawyers who speak up and expose the whole rotten entanglement of corruption.  

All of this is obvious to the naked eye now, given 8 years of watching the Legal Services Commissioner and his staff and their protectorate having run the standards of legal profession, professional skills, professional ethics and standards of professional judgement down to gutter levels – and having run the public image of lawyers all the way down to subterranean sewer levels, all the way back to where they were (lawyers images, not sewers), back in the days of Dickens, or Shakespeare.    

Of course, back in 2005 outgoing Victorian Legal Ombudsman Kate Hamond knew this was on the cards, and called it as she saw it (see below).  So did a few of the remaining respectable legal ethicists, mostly from the academic side of the industry (and the last remaining bastion of professionalism within the fallen fraternity of the law and those who profess it).  

Protect the friends, silence the victims, and especially silence the whistleblowers who threaten,  let alone dare, to break rank and blow whistle.  It’s a standard enough model of tyranny and oppression.  

Just how badly, and just how far off the script does Victorian Legal Services Commissioner Michael McGarvie and his willing, if not able, team of henchmen and henchwomen deviate?  

The following is the report card for the Office of the Legal Services Commissioner, handed out by the Victorian State Government Ombudsman, Mr George Brouwer, and recorded on the public record at pages 21 to 23 of his 2009 Annual Report to Parliament regarding the government failures of the Victorian Office of the Legal Services Commissioner.

Of particular concern to me during the year were instances of regulators failing to take action or not discharging their functions adequately to protect the public interest. There are a number of agencies I am investigating where similar issues have arisen. This matter is one of continuing concern.Legal Services Commissioner The Legal Profession Act 2004 established the office of the Legal Services Commissioner and lists its objectives, one of which is:to ensure that complaints against Australian legal practitioners and disputes between law practices or Australian legal practitioners and clients are dealt with in a timely and effective manner. (Section 6.3.2)The role of the Legal Services Commissioner is to protect both consumers of legal services and the public interest in the proper administration of justice. The Legal Services Commissioner has the power to address complaints made against Victorian legal practitioners to ensure that they acted within the confines of the law, with appropriate ethical standards and with deference to their professional position.The Legal Services Commissioner can receive complaints which relate to disputes about legal costs, claims of up to $25,000, or disciplinary matters. The legal system can be financially costly, and the law can be complex, with intricacies which many members of the public find difficult to navigate and understand. This can leave the public vulnerable to unscrupulous, negligent or unprofessional practices of legal practitioners.

Over the past year I received 95 complaints about the Legal Services Commissioner, which replaced the former Legal Ombudsman in December 2005. There were recurring themes in the complaints which pointed to a systemic failure by the Legal Services Commissioner to adequately undertake its statutory role. [emphasis added]

For example, complainants alleged that:

  • complaints were inadequately investigated or not investigated at all
  • there were significant delays – sometimes in excess of three years – in finalising complaints
  • documentation practices were poor and failed to provide complainants with information about the Legal Services Commissioner’s internal review process and external review mechanisms
  • investigations lacked procedural fairness.

The following case study highlights that the lack of appropriate review powers in place for the Legal Services Commissioner is still the case. It illustrates how this can result in injustice to complainants and allow practitioners to avoid detection and / or prosecution as a consequence of the current legislative framework[emphasis added]. I recommend that the Attorney General consider amending the Legal Profession Act 2004 to enable the Legal Services Commissioner to review its merits-based decisions where there have been deficiencies in its investigations or errors in its decisions.

I understand that this is being considered as part of the national reform of the Australian legal profession announced by the Council of Australian Governments.

Lack of appropriate review powers

The complainant required life saving medical treatment and so his legal practitioner referred him to a mortgage broker, who sourced a short-term loan. Because the complainant was overseas his brother signed the contract, which contained different terms and conditions from the original agreement.

When the complainant defaulted on the loan the mortgage company sued. In this case the legal practitioner, ,who formerly represented the complainant, also represented the mortgage company.

The complainant contacted the Legal Services Commissioner (LSC) and maintained that the legal practitioner had a conflict of interest. He also complained that the legal practitioner failed to follow his instructions and advise him properly. The LSC dismissed the complaint because of insufficient evidence.

I investigated the complaint and established that the LSC did not interview the complainant, his brother or the legal practitioner. Although the LSC requested documents from the practitioner, it failed to exercise its powers to obtain the documents when they were not supplied. Instead of gaining access to documents which may have provided evidence, the LSC relied solely on the legal practitioner’s assertions.

Outcome

I asked the LSC to seek legal advice on whether the case could be re-opened. The advice identified the solicitor acted for both financier and borrower contrary to rules 10.2 and 10.6 [Professional Conduct and Practice Rules 2000];that the solicitor ‘failed to protect his client’s interests’ and ‘acted in a potential conflict of interest.’

The deficiencies in the LSC investigation and errors in the final decision drew into question the merits of the decision[emphasis added]. However the legal advice indicated that the legality of the decision was not brought into question because the LSC had followed the legal procedures set out in its governing legislation, the Legal Profession Act 2004.

The advice concluded that the deficiencies in an LSC investigation or an error in its decision (which may have been caused by the deficiencies in its investigations) cannot be classed as a ‘legal’ error but is an error that goes to the merits of the complaint (‘merits’) error. A merits error does not give the LSC the power to re-open a discipline complaint. This is unsatisfactory [emphasis added]. I have recommended to the Attorney-General that he amend the Legal Profession Act 2004 to allow the LSC to re-open a case where there has been a merits error.

I note that since this recommendation the Council of Australian Governments (COAG) announced that it had devised a plan to achieve a national regulation for the Australian legal profession and any proposed changes to the Legal Profession Act (including complaint-handling and professional discipline) will be considered as part of this process.

I also conducted an own motion investigation into the Legal Services Commissioner and its decision-making process under section 14 of the Ombudsman Act because of the number of complaints I received. My investigation identified a lack of understanding by staff of the Legal Services Commissioner’s statutory powers and a restricted skills-set to conduct investigations. The Legal Services Commissioner’s investigators showed limited knowledge of the basic techniques of investigative processes. Case files lacked:

  • investigation plans
  • thorough and professional approaches to gathering evidence
  • follow-up on serious allegations
  • substantiating documents such as practitioners’ files
  • timely conclusions
  • verification of practitioners’ responses
  • reasons for decisions.

I made 28 recommendations to the Legal Services Commissioner and am pleased to note that it has taken steps to address a number of problems identified in my own motion investigation. I intend to review the Legal Services Commissioner’s implementation of my recommendations over the next year. I also referred the report of my investigation to the Attorney-General for his information, particularly in relation to the inability of the Legal Services Commissioner to re-open cases on the basis of merits [emphasis added].”

I bet the alarm bells are ringing.  

Not only did the Victorian Legal Services Commissioner’s Office get this slamming report from the Victorian State Government Ombudsman, but in the same year (late 2008 and Spring 2009) I had to twice take the Victorian Legal Services Commissioner to the Victorian Supreme Court, where the Office was slammed on both occasions, in virtually the same terms, for virtually the same absolute government failures (failures in ‘fact’ as a matter of ‘law’), slammed by two different Supreme Court Judges.

And three years later, the Office of the Victorian Legal Services Commissioner (under the stewardship of current Commissioner Michael McGarvie, the privileged younger son of a former Governor and Supreme Court Justice (and younger brother of QC Richard McGarvie (junior) the Chairman of the Victorian Bar’s Ethics Subcommittee) still refuses to comply (ie “acts in contempt of”) both those sets of Victorian Supreme Court rulings.

In future blogs I will recount some of the background stories, subsequent political developments and the deeper modern and ancient political truths behind the diplomatic double-speak in the choice words used by the Legal Services Commissioner, the Legal Services Board and in the State Government Ombudsman Victoria Report, to cover up and conceal the chronic governmental failings of this “one stop service gateway”.

The bottom line, why did the former Attorney-General Rob Hulls fail to act immediately to abolish the Legal Services Commissioner scheme, in the aftermath of this damning report card, and reinstate the previous Kennett Government’s genuinely independent (of lawyers) Legal Ombudsman Scheme?

And why, 18 months since it swept to office in October 2010, hasn’t the Victorian Baillieu-Clark administration moved to fix things back to the way they were until the Bracks-Brumby-Hulls administration recreated the evil monster (lawyers (not) policing lawyers) that the Kennett administration put a stop to when it created the Victorian Legal Ombudsman Scheme?

… to be continued …

James Johnson, Independent Federal Candidate for Lalor.

A Post-Script: For now, who better to ask than the unceremoniously under cut and dumped last Victorian Legal Ombudsman, ere Ombudswoman, Ms Kate Hamond? Here is some advanced reading to shine the spotlight on this dirty intersection (prime thoroughfare) of the dirty, barely-secret, Lawyerocracy that runs this State and Nation. How is this for a staunch and highly public exit interview from an obviously and remarkably good woman … click here.  An extraordinary piece of whistleblowing, I am sure you will agree. 

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