In an effort to bring the law into line, Victoria has clamped down on lawyers they perceive as bringing the profession down.
Victorian Legal Services Commissioner Fiona McLeay has issued a bulletin warning the state’s lawyers against engaging in unethical practices such as “claim farming” and “ambulance chasing” to obtain clients.
Giving lawyers a bad name
“This paints an appalling picture of how lawyers might appear to operate,” explained Ms McLeay. “The fact that the vast majority of lawyers don’t behave in this way will be lost on the public at large. It’s behaviour like this that gives other lawyers a bad name,” she added.
“As the legal regulator, we want consumers to be confident in the standards of behaviour that their lawyers will uphold.”
Lawyers directed to act ethically
The Commissioner has directed lawyers to ensure they operate within the boundaries of ethical conduct when trying to build up their clientele.
She has warned against “claim farming”, which is where a third party cold-calls people to encourage them to make a compensation claim and then sells the claims to law firms.
The Commissioner has advised that calls to prospective clients should only be made by professional staff who genuinely believe they can assist the particular person.
The warning against “ambulance chasing” – where a lawyer approaches an accident or trauma victim and urges them to initiate proceedings through their firm – comes in the wake of media reports that three separate law practices intruded on a dying woman’s hospital room with a view to persuading her to sign-up with them to initiate legal proceedings over the tragic accident.
Codes of conduct
Ms McLeay explains that professional conduct rules do not prohibit law firms from paying third parties to refer clients to them, provided the arrangement is fully disclosed and the client is aware they have no obligation to accept an invitation to act.
One of the issues of concern is the lack of disclosure – with suggestions that lawyers are not making prospective clients fully aware of third party arrangements.
The Commissioner says that any breach of conduct rules exposes lawyers to disciplinary action.
In New South Wales
New South Wales Law Society President Doug Humphreys has expressed the view that while claim farming is generally legal, it has the potential to bring the state’s legal profession into disrepute.
“An expected increase in harvesting via online platforms poses serious questions for governments, insurers and legal practitioners,” Mr Humphreys explains.
“We must question whether our professional ethics should permit financial gain where it results from the sale of private information by a third party or at the expense of potential intrusions on a client’s privacy, forceful sales tactics or undue influence”.
“Our relationships with our clients are sacrosanct, built on trust and transparency. Clients are often vulnerable and potentially open to oppression, undue influence or disadvantage. Our advice should never be influenced by relationships with third parties.”
“The Law Society will engage with stakeholders from the legal profession, regulators, government and insurance industry to investigate possible solutions to address the community’s concerns about claim farming.”
Law firm under the spotlight
There are allegations that law firm Slater and Gordon has engaged in claim farming to bolster its client base.
The ABC claims to have obtained “secret internal documents” that the firm is involved in a client referral scheme with at least four companies – telephone marketing firm PreLegal, private health insurer Medibank Private, car rental Compass Claims and online doctor appointment booking service HealthEngine.
Combined, these arrangements are said to have generated upwards of 800 personal injury cases for the firm from March 2016 and August 2017, yielding millions in legal fees.
While the firm has denied the allegations, the reports have created widespread criticism of lawyers generally.
Dollars over ethics
The reports have triggered dialogue about whether current codes of conduct and enforcement mechanisms are sufficient to deter unethical practices.
Many believe that firms who place dollars ahead of basic ethics and morals should not only be dissuaded against using such tactics, but brought to account for their actions through disciplinary measures.
Particular concerns have been expressed about personal injury law firms who seek to pressure and unduly influence traumatised individuals for financial gain, effectively impeding their right to make reasoned and informed decisions.
As one lawyer explains: “The major personal injury law firms and collaborating businesses have a significant advantage over the individual – many of whom are vulnerable – in terms of purchasing power.
“Any abuse that occurs, or skirting of ethical boundaries, disadvantages us all.
“Ethics is doing the right thing even when someone isn’t watching.”
In New South Wales, the Law Society has a search facility where members of the public can locate the right lawyer for their particular case. The Find a Lawyer page is an online directory of all NSW lawyers and law firms who currently hold a practising certificate, and users can refine searches in a number of ways, including searching for Accredited Specialists in a particular field of law.