Administrative Decisions Tribunal New South Wales

• Medium Neutral Citation: Legal Services Commissioner v Keddie [2012] NSWADT 106
• Hearing dates: 30 April 2012
• Decision date: 04 June 2012
• Jurisdiction: Legal Services Division
• Before: The Hon Justice Haylen (Deputy President); N Isenberg, Judicial Member; C Bennett, Non-Judicial member

Decision

1. The conduct of Russell Walter Keddie in relation to charging Ms Meng grossly excessive costs is found to be professional misconduct.

2. The name of Russell Walter Keddie shall be removed from the local Roll of Practitioners.

3. A Local Practising Certificate shall not be issued to the practitioner, Russell Walter Keddie, before the expiration of five years following the date of this decision.

4.Russell Walter Keddie shall pay the costs of the Legal Services Commissioner.

• Catchwords: PROFESSIONAL MISCONDUCT - charging of grossly excessive fees - acceptance of overcharging - deficiencies in computerised costing system - failure of supervision by responsible partner
• Legislation Cited: Administrative Decisions Tribunal Act 1997; Evidence Act 1995; Legal Profession Act 1987; Legal Profession Act 2004
• Cases Cited: Coe v NSW Bar Association [2000] NSWCA 13; Kenedy v Council of Incorporated Law Institute of NSW (1939) 13 ALJ 563; Law Society of the Australian Capital Territory v Lardner [1998] ACT SC 24 at [104]; Legal Services Commissioner v Keddie [2008] NSWADT 185; Legal Services Commissioner v Scroope [2012] NSWADT 107; Nikolaidis v Legal Services Commissioner [2007] NSWCA 130; Re Veron; Ex Parte Law Society of New South Wales [1966] 1 NSWR 511; (1966) 84 WN (Pt 1) (NSW) 136; The Council of the NSW Bar Association v Meakes [2006] NSWCA 340; The Council of the New South Wales Bar Association v Timothy Meakes [2006] NSWCA 340; Veghelyi v The Law Society of New South Wales [1995] NSWCA 483
• Texts Cited: Riley Solicitors' Manual/Professional discipline/Chapter 35, Misconduct in practice/D; Misconduct in relation to fee charging, March 2012, LexisNexis Australia
• Category: Principal judgment
• Parties: Legal Services Commissioner (Applicant); Russell Walter Keddie (Respondent)
• Representation: Counsel; C Webster (Applicant); M Williams SC with J Morris of counsel (Respondent); Ms Muston (Applicant); Eakin McCaffrey Cox (Respondent)
• File Number(s): 092009

REASONS FOR DECISION

BACKGROUND

1 In May, 2009 the Legal Services Commissioner ("LSC") filed an Application for Original Decision in the Tribunal relying upon the disciplinary provisions of the Legal Profession Act 2004 ("the 2004 Act") naming the respondent as Russell Keddie. The particulars noted that, between October 2002 and December 2006, Russell Walter Keddie was a partner in the firm known successively as "Keddies", "Keddies Litigation Lawyers" or "Keddies, The Insurance Law Specialists" ("the firm"). It was further particularised that, between October 2002 and August 2007, Philip Scroope was an employee of the firm with an unrestricted Practising Certificate.

2 This Application arose in the following circumstances: in late September 2002, Ms Suang Ying Meng ("Ms Meng") was seriously injured in a motor vehicle accident and in October 2002 retained the firm to act for her in personal injury proceedings for the recovery of damages. Mr Scroope was said to have the day-to-day conduct of Ms Meng's matter. In December 2005, Ms Meng's matter was settled for $3, 525,000. On 21 December 2005, Mr Scroope provided Ms Meng with a narrative bill of costs totalling $819,694.77 comprising professional costs, including GST, in the sum of $557,831.82 and disbursements, including GST, in the sum of $261,862.95.

3 In relation to these costs billed to Ms Meng the LSC claimed, firstly, that there was overcharging in that: excessive amounts were charged for work performed:, charges were made representing work in excess of the work performed; there were charges for work which was not performed; and, there were charges for work undertaken and time spent on the file that included steps that were excessive and unnecessary. It was also alleged that there was over-servicing in Ms Meng's matter in that: work was undertaken and charged for by persons of inappropriate seniority or qualification; and, unnecessary work was undertaken in relation to the file. A further matter raised was that costs were misrepresented to Ms Meng in that: the narrative bill contained charges for work in excess of time spent and for which work was not done and the narrative bill duplicated charges for work performed in relation to the separate matters involving Ms Meng's husband and son. Lastly, it was alleged that there was a failure by Mr Keddie, jointly and separately with each of the other principals of the firm, to properly or adequately supervise the work done and charged with respect to Ms Meng's matter such that the total amount of the charges rendered to Ms Meng were grossly excessive amounts and were misrepresented to Ms Meng. Further, very detailed particulars were provided in relation to each of these nominated grounds described as "Common Particulars." These allegations were repeated in an Amended Application filed in August 2009 and further particulars were added. Most significant was an allegation that the narrative bill contained charges at professional rates (apparently for Mr Scroope) that were in fact performed by others in the office and that were also separately invoiced as a disbursement to a translation service, Baiyi Language Services.

4 The LSC sought the following orders from the Tribunal:

(1) An order that the disciplinary application concerning Mr Keddie be joined with the disciplinary applications against Mr Tony Barakat, Mr Scott Roulstone and Mr Philip Scroope.

(2) A finding that Mr Keddie was guilty of either professional misconduct or unsatisfactory professional conduct with respect to grounds 1, 2, 3 & 4.

(3) An order that Mr Keddie's name be removed from the Roll of Practitioners.

(4) In the alternative, an order that Mr Keddie be publicly reprimanded.

(5) Further and in the alternative, an order that Mr Keddie be fined.

(6) An order that Mr Keddie pay the costs of and incidental to the filing and hearing of the application.

(7) Such other orders as the Tribunal seems fit.

5 Although originating proceedings in the Tribunal made generally the same allegations against two other principals of the firm, those matters were withdrawn and the LSC proceeded only against Mr Keddie and Mr Scroope. In both cases there was considerable overlap in the detailed particulars.

6 Omitting more formal matters, Mr Keddie's Amended Reply filed in October 2010 stated as follows:

(c) From October 2022 until October 2006, the firm acted for Ms Meng in her personal injury proceedings for the recovery of damages in respect of an accident on 29 September 2002. The firm entered into a costs agreement with Ms Meng on 7 March 2003.

(d) From June 2005 until October 2006, the firm acted for Ms Meng's husband, Zeng Yong Wang ("Wang") in a claim for nervous shock (the "husband's claim"). The firm entered into a costs agreement with Wang on 29 September 2005.

(e) From June 2005 until October 2006, the firm acted for Ms Meng's son Yeu Chen (John) Wang ("John Wang") in a claim for nervous shock (the "son's claim"). The firm entered into a costs agreement with John Wang on 29 September 2005.

(f) On behalf of the firm Mr Philip Scroope, a senior and experienced solicitor who was an accredited personal injury specialist, had the day-today- conduct of Ms Meng's matter and the claims of her husband and son.

(g) The firm had a time recording system known as the "Locus System" which could be and was accessed by various of its employees. The system provided for employees of the firm to record work done on the matters by themselves or others by providing a brief description of that work and the time taken to do that work in units of six minutes as provided in each costs agreement.

(h) The Respondent's involvement in any of the matters referred to in the narrative bill was as follows:

Narrative bill page	Item
22	1067
22	1068
51	2022
110	2987
112	3023
114	3056

All other attendances for the Respondent entered into the Locus System and referred to in the narrative bill are errors, duplications and mistakes. The Respondent says that he did not make any entries into the Locus System. Save for item 2022 above, the other items are not referred to in the Amended Application for Original Decision.

(i) On 13 December 2005, Ms Meng informed Mr Scroope that she would bear the costs of the husband's claim and the son's claim. On this date Ms Meng's matter, the husband's claim and the son's claim were, on instructions, settled.

(j) On or about 13 December 2005, the Respondent asked Mr Scroope what was the total amount of work in progress recorded on the firm's time recording system. The Respondent does not recall the amount of work in progress as advised by Mr Scroope at the time. In reliance on what he was told by Mr Scroope, the Respondent instructed him to charge Ms Meng that amount and to ensure that all "leakage" was also accounted for. "Leakage" was a term used by the firm to identify work done by its employees on a matter but which they had not entered into the firm's recording system.

(k) On or about 21 December 2005, the narrative bill was prepared by Mr Philip Scroope or by other of the firm's employees on his instructions. He believed that it was prepared in accordance with the firm's standard procedures, that is, it was prepared on the basis of the costs agreements in each matter and by reference to the information contained in the time recording system and the file for Ms Meng's matter, the husband's claim and the son's claim. Mr Scroope handed the narrative bill to Mr Lee on behalf of Ms Meng on or about 21 December 2005.

(l) The narrative bill was 132 pages in length and contained approximately 1766 items.

(m) The Respondent accepts that in the course of the time recording of a lengthy matter and the preparation of a lengthy narrative bill, unintentional errors, duplications and mistakes were made which affected the total amount of costs and disbursements charged.

(n) Save for the Respondent's instructions referred to above, the Respondent had no other involvement in the preparation of or the issuing of the narrative bill.

(o) In or about October 2006, Ms Meng withdrew her instructions from the firm and appointed Mr Tony Chow who was then employed by Margiotta & Associates, Solicitors to as act her solicitor. Mr Chow was an employee of the firm during the conduct of Ms Meng's matter and her husband's claim and her son's claim. She instructed the firm to deliver her file to Mr Chow. After delivery of the file in or about May 2007, Mr Chow, on behalf of Ms Meng, engaged in discussions with the firm about the payment to the firm of legal costs and disbursements by Ms Meng.

(p) Mr Chow, on behalf of Ms Meng, asserted that the payment by her to the firm exceeded a sum which was fair and reasonable.

(q) In or about August 2007, the firm agreed with Mr Chow, on behalf of Ms Meng, to secure a refund of $180,000 contributed as to the sum of $150,000 by the firm and $30,000 by two third parties whom the firm retained to provide services to Ms Meng in her matter and the husband's claim and the son's claim. Mr Chow accepted the sum of $180,000 on her behalf, being a sum in respect of all claims made by Mr Chow on behalf of Ms Meng.

(r) In the event that the Tribunal determines that the fair and reasonable amount that Ms Meng should have been charged exceeds that which she has paid, even after the refund that is referred to above then the Respondent undertakes that he will make a further refund to Ms Meng for that amount.

Apart from the comments made regarding Ground 4, all the other allegations in relation to supervising were denied by Mr Keddie as were all other grounds in relation to overcharging, over-servicing and misrepresenting costs.

7 In relation to the Ground dealing with Mr Keddie's failure to supervise, he made the following reply:

(a) his name appeared on correspondence as alleged in the particulars;

(b) he undertook work in Ms Meng's matter some of which was charged;

(c) at the time the narrative bill was sent out:

(i) he was supervising partner on the Meng files;

(ii) it was standard practice for a senior solicitor to prepare and send out a narrative bill;

(iii) while he was not in the office at the time, he had no reason to doubt that it would be correct;

(iv) in relying on the standard practice he had in effect delegated the task of sending it out to Mr Scroope. He had, nevertheless, retained the capacity to give directions to the firm's staff about the content and amount of it prior to it being sent;

(v) the narrative bill contained mistakes, errors and duplications in the costs charged and the disbursements.

(d) Ms Meng had been overcharged, and

(e) that his failure to supervise the contents of and the quantification of the narrative bill constituted professional misconduct.

8 In June 2011, in contested proceedings, the Tribunal made an interlocutory order joining the four Applications for Original Decision for the purposes of hearing and ordering that the evidence in each matter be evidence in all matters, subject to any further objection that arose pursuant to the provisions of s 136 of the Evidence Act 1995. On the substantive hearing concerning Mr Keddie and Mr Scroope, the matters remained joined with the evidence in each matter being evidence in the other and no further objections were taken.

9 In preparation for the substantive hearing, each party filed substantial affidavits with the parties relying upon competing experts' assessment of the reasonable level of costs that might be assessed in relation to Ms Meng's matter, together with the cases involving her husband and son. Ms Meng's case was undoubtedly one involving complex issues having regard to the fact, amongst other matters, that the motor vehicle accident giving rise to the injuries occurred in South Australia while Ms Meng was visiting Australia on holidays and that the injuries rendered her a paraplegic. Ms Meng and a number of witnesses or potential witnesses were of Chinese origin and spoke little or no English, thus involving the use of translation services. The narrative bill first sent to Ms Meng covered a period of three years involving numerous attendances, including travel to China: that narrative bill detailed nearly 2000 attendance items and covered approximately 130 pages.

THE EVIDENCE

10 At the commencement of the substantive hearing counsel for the parties announced that, in each case, there was now a Statement of Agreed Facts relating to the overcharging of Ms Meng and that the matter could proceed with reliance on a significantly reduced number of affidavits and documents that would ultimately reduce the anticipated two-week hearing to one or two separate days of hearing.

11 In Mr Keddie's case the evidence was the Statement of Agreed Facts. In light of the joinder of the matters the evidence in Mr Scroope's case was also evidence in Mr Keddie's case. In Mr Scroope's case the evidence for the LSC was: a Statement of Agreed Facts; a second Amended Application for Original Decision and a second Amended Reply. Two affidavits from Mr Stephen Anthony Mark, Legal Services Commissioner, were also read. In Mr Scroope's case his affidavit dated 30 April 2012 was read. At the resumed hearing Mr Scroope relied upon a further affidavit and several affidavits providing character evidence. The narrative bill of 2005 was also tendered. There were no objections and no cross-examination on any of the affidavit material read in the proceedings. The Statement of Agreed Facts in Mr Keddie's matter appears as an annexure to this decision.

12 The Keddie Statement of Agreed Facts refers to a number of matters extensively dealt with in the material filed by the parties prior to hearing but not all of that material was tendered in evidence at the substantive hearing. In particular expert reports prepared by Ms Kerrie-Ann Rosati relied upon by the LSC were not read and expert reports prepared by Mr Gordon Albert Salier for the respondent were not read nor was any reliance placed upon a joint report prepared by both experts. Ms Rosati is a costs consultant and Mr Salier is a court appointed costs assessor. The experts had agreed that they were engaged in different tasks and the nature of their individual expertise resulted in them adopting a different approach to the tasks asked of them. During case management the Tribunal had been informed that there would be challenges to these expert reports and in particular that the legal representatives for Mr Keddie would challenge the whole of the reports prepared by Ms Rosati. As a direct result of the parties being able to agree on a Statement of Agreed Facts, it became unnecessary to rely upon the expert reports that had been filed and so no issue arose as to whether those reports could properly be received into evidence in the proceedings, either wholly or in part.

13 While the whole of the Statement of Agreed Facts in Mr Keddie's matter appears as an annexure to this Decision, it is appropriate to refer to a number of specific matters. It was agreed that, in late December 2005, Mr Scroope provided Ms Meng (through Mr Lee) with a reconciliation statement concerning the settlement monies of $3,525,000 and a narrative bill. The narrative bill was prepared "by or under the direction and control" of Mr Scroope and signed by him. The narrative bill contained charges totalling $819,694.77, including professional costs (plus GST) in the sum of $557,831.82 and disbursements in the sum of $261,862.95. The narrative bill did not identify the amounts charged by rate or time spent for each item of work or the persons who performed the work. It was conceded that the narrative bill contained "mistakes, errors and duplications" in the costs charged and the disbursements.

14 Mr Keddie stated that he did not know how the narrative bill was prepared and he was not present in the office at the time of its preparation. Mr Scroope had said that he followed the firm's practice of having his secretary prepare the narrative bill and in accordance with his general practice, he indicated the amounts to be recorded for costs. He confirmed that, shortly before the settlement of Ms Meng's matter, Mr Scroope had informed him of the amount recorded in the firm's time cost ledger at that date to which 25 per cent had been added. Mr Keddie accepted that information and required Mr Scroope to check for leakage. Under the reconciliation statement the net sum due to Ms Meng was $2,322,500.

15 Mr Keddie then described the circumstances in which an itemised bill was produced between December 2006 and March 2007 after Ms Meng had withdrawn her instructions and her new solicitors had requested an itemised bill in taxable form. The itemised invoice listed the items of work performed, ascribing item numbers to each item of work and attributing each item to a particular fee earner. Each item included the units of time spent on the matter and a dollar value for each item based on the fee earner's hourly rate and the units of time spent were then entered. Mr Keddie noted that Ms Rosati had compared the narrative bill and the itemised invoice and had produced two reports dated February 2009 and August 2009. Mr Keddie agreed that many of the matters raised by Ms Rosati were reasonable criticisms of what had occurred in the charging of Ms Meng's files.

16 Against the general background outlined above, the Keddie Statement of Agreed Facts contained the following:

53. Ms Meng was charged grossly excessive amounts of costs.

54. The Narrative Bill included charges for work which was not reasonably carried out or not carried out in a reasonable manner, and charges that were unfair or unreasonable for the work, as a result of the units of time recorded as spent or otherwise.

55. The Narrative Bill included duplicated charges which should not have been made, including charges for work done in relation to Ms Meng's husband and son's matters. The Respondent says the duplicated charges are identified in the Amended Tax Invoice and accepts they should not have been made.

...

60. Fair and reasonable professional costs for Ms Meng's matter, including the 25% uplift in accordance with the costs agreement, excluding GST, are agreed to be $273,595.63. Fair and reasonable professional costs for John Wang's and Zeng Wang's matters, including the 25% uplift in accordance with their separate costs agreements, excluding GST, are agreed to be $9,262.32 and $9,187.25 respectively. Total fair and reasonable professional costs for all three matters are agreed to be $292,045.19.

61. Bearing in mind the amount charged in December 2005 and deducted from Ms Meng's settlement, in respect of all three matters, there was an overcharge of $215,074.65.

62. Disputes regarding costs arose between Ms Meng and the firm which were settled on the basis of a deed, pursuant to which payments totalling $180,000 were made to Ms Meng in August 2007 as follows:

62.1 by the firm $150,000

62.2 counsel and an investigator, in total $ 30,000

62.3 in November 2011 by the firm $ 80,000

63. The Respondent has undertaken to the Tribunal and by letter dated 20 October 2010 to Ms Meng has undertaken to her, that if the Tribunal decides there is a different figure for costs and disbursements which Ms Meng has paid, the Respondent will refund that amount immediately with interest from 21 December 2005.

64. The Respondent has expressed his regret and has apologised to Ms Meng by his letter dated 20 October 2010.

65. The Respondent says that he did not supervise:

65.1 The entries in the narrative descriptions of the individual attendances and items of work represented to have been done in Ms Meng's matter and that of her husband and son;

65.2 The entries of the following disbursements in the Narrative Bill:

(a) the charge of $8,000 for Mr Marocchi's travel expenses to China;

(b) the charge of $2,461 in airfares for Mr Lee;

(c) the charge of $1,000 for travel expenses for Mr Lee other than an email from the Respondent to his personal assistant "Marg" dated 3 May 2005 directing the allocation "about $1,000" of the amount to Ms Meng's file;

(d) the entire charge of $77,000 for Baiyi when there were supporting invoices of $67,456.27.

65.3 The manner in which Ms Meng was charged in the Narrative Bill.

66. The Respondent accepts ultimate responsibility for any acts or omissions by Mr Scroope and all other staff with the carriage and conduct of Ms Meng's file and those of her husband and son.

67. The Respondent accepts that Ms Meng was overcharged. Ms Meng was charged grossly excessive amounts of costs as at [55] - [60].

68. The Respondent accepts that his conduct in paragraphs [65], [66] and [67] and (sic) constitutes professional misconduct.

17 Senior counsel for Mr Keddie also tendered a letter from solicitors acting for Mr Keddie directed to the Manager of the Membership Department of the Law Society of New South Wales dated 30 January 2012. In that letter the solicitors advised that they acted for Mr Keddie and that he had retired from practice on 9 December 2011 and did not intend to practice again. They were instructed that Mr Keddie wished to surrender his Practising Certificate for the years 2011 - 2012 which was enclosed and the Law Society was asked to note its records accordingly.

18 Having regard to the manner in which the case developed, it is necessary to have regard to aspects of Mr Scroope's evidence contained in his affidavit that was formally read in the substantive proceedings. Mr Scroope was admitted as a solicitor in New South Wales in June 1992 and held a Practising Certificate restricted to practising as an employed solicitor. In July 2000 he attained accreditation under the Law Society's Accredited Specialist Programme, being recognised as a Specialist in Personal Injury Law.

19 While the level of supervision experienced by Mr Scroope over his time with the firm varied he stated that, particularly since obtaining accreditation as a Specialist in Personal Injury Law in 2000, the level of his personal responsibility had increased while the level of supervision decreased. During the time he had carriage of Ms Meng's matter he had "a high level of personal responsibility."

20 A description was given of the introduction of computerised time recording for professional billing purposes, a system that was described by Mr Scroope as being "fairly elementary." In a busy practice there was said to be considerable pressure on employed solicitors and other fee earners to ensure, so far as possible, that all work that was properly chargeable was correctly captured and entered on the computer system so that it could be fully charged. This did not mean that there was pressure to make entries for work which was not properly chargeable but the partners were always concerned with the level of what was known as "leakage", being work which was chargeable but by reason of inadvertence or some other reason, was not captured on the computer system and might therefore be lost when it came time to complete a bill for professional services. Mr Scroope did not have a role in the charge-out rate under the firm's costing system - that was a matter for decision by the partners. Charge-out rates were allocated to Mr Scroope as an Accredited Specialist and for the more junior solicitors and other staff that may have been involved and who would generate billable times.

21 Costs disclosures and fee agreements for the firm were prepared from a precedent. On his instructions Mr Scroope's secretary prepared such documents and it was his practice to check them before they were sent out although very little checking was generally required as there was little or no variation in the letters. The charge-out rates were already set in the precedent. Prior to 2007 Mr Scroope did not recall ever receiving formal instructions or guidance as to any procedure within the firm to be adopted in relation to billing or time costing. He understood that the practice he had applied in is own matters was consistent with the practice of other solicitors within the firm.

22 Mr Scroope described the preparation of long form bills in his matters being in the nature of a "narrative bill", that is, carrying the date and a brief description of the work. Various secretaries prepared these and it had always been the practice within the firm for secretaries to prepare the bills, at least in a draft form. Mr Scroope regarded such preparation of bills as being well within the scope and ability of experienced secretaries and it was part of the responsibility of the solicitor having carriage of the matter to check and supervise the secretary's work. The approach he adopted to Ms Meng's matter reflected his usual practice. However, in Ms Meng's matter, as was his usual practice, Mr Scroope did not routinely thoroughly check individual time entries. He assumed such items had been entered correctly and confined his checking of the time costing records to looking for "leakage" and any significant anomalous entries. Where these matters were found, it was his practice to investigate and cause necessary corrections or adjustments to be made to the final bill. He did not recall the need for any significant changes being necessary.

23 Mr Scroope did not know the extent to which the secretary who had prepared the bill checked the entries in the time ledger before preparing the bill. He could not recall any occasion when a secretary had raised with him any errors in the entries on the time costing system and this did not occur in the Ms Meng matters. The firm's system did not call for close checking or verification of the correctness of entries on the system after they had been entered at the stage of his involvement. Closer scrutiny occurred when the preparation of itemised accounts was required and when that was necessary, the task would be performed by the firm's costing officer or it would be contracted out to cost consultants. It was not part of Mr Scroope's role in the firm to become involved in those matters. It was Mr Scroope's practice to check the accuracy of supporting tax invoices against time recorded on the ledger and the anticipated amounts to be paid for disbursements for items such as Medicare charges and Centrelink paybacks, especially prior to settlement and this occurred in Ms Meng's matter. Additional care was taken with those matters because, unlike professional costs where some flexibility was available at the discretion of the partners, disbursements and paybacks were fixed and it was important to establish the precise level of disbursements to ensure that the client would be advised of the net return on any settlement.

24 In Ms Meng's matter and in other matters handled by Mr Scroope, he had overseen the preparation of a draft bill shortly prior to the matter being set down for a settlement conference. He reported to the relevant supervising partner the amount of costs likely to be charged to the client and in Ms Meng's matter reported to Mr Keddie. The amount in Ms Meng's matter was the progressive total shown in the time cost ledger as at mid-December 2005. Mr Scroope understood that this reporting practice within the firm was designed to ensure that a decision was made at partner level that the fees to be charged were within a reasonable range being neither too high nor too low.

25 Prior to the settlement conference concerning Ms Meng's matter, Mr Scroope discussed the question of costs with Mr Keddie: Mr Keddie was informed of the figures for professional costs from the time cost ledger plus 25 per cent. Mr Scroope's best recollection was that Mr Keddie said words to the effect: "That sounds about right. Make sure you have picked up any leakage."

26 Mr Scroope said he never understood that it was part of his duties to go through the costs and disbursement records to check for accuracy or any errors except to ensure that all disbursements were paid and were brought into account, looking for significant leakage and observing any obvious errors or anomalies during this general inquiry. Ms Meng's matter was a large and complicated matter and many people had posted entries on the computer system. A great deal of time had been involved in Ms Meng's matter and there were a very large number of entries on the time cost records. Mr Scroope observed that, having regard to the pressure of work, it would have been "impossible" for him to conduct a thorough examination of all the entries on the system, necessarily involving the testing of entries against the files. In any event, he did not regard that as being part of his responsibility.

27 Mr Scroope, however, always understood that it was his responsibility to ensure that any entries which he made on the time cost system or were caused to be made by somebody on his behalf were in accordance with the fees agreement and were fair and reasonable and that the time recorded was correct and appropriate for the task. Mr Scroope stated that, other than in a general supervisory role and checking before billing as earlier described, it was not part of his responsibility to check on the entries in the system made by others. This was the responsibility of each person in the firm and they were to ensure that entries that they made were true and correct and in accordance with the costs agreement so that the amount of time entered was accurate and appropriate to the task being recorded.

28 The computer system in recording the various professional attendances was not determinative of the final fees to be paid by a client and these remained at the discretion of the partner having responsibility for the supervision of the matter. Where an itemised bill was required or when a bill was required to be prepared for assessment, further close analysis was required and Mr Scroope did not generally undertake that task. In those circumstances a costs clerk (Mr Ackroyd) undertook the task or an independent costs consultant was engaged under contract by the firm.

29 Mr Scroope described the particular computer costing system used by the firm in some detail. Every member of the firm's staff who worked on Ms Meng's matter was required to enter their chargeable time on the time recording system by posting entries on their own computers. The system, however, was not programmed to recognise the initials of all people who were working on a matter and recording their work and time for work. The system recognised the initials of each of the partners and Mr Scroope's initials as the "team leader" in relation to the matter but did not recognise initials of other persons who entered information. The practice in those circumstances was that the author of the entries would simply enter Mr Scroope's initials as the solicitor with the carriage of the matter so that the computer system would accept their entries. As a result there were numerous entries on the ledger attributable to Mr Scroope but were not made by him and did not relate to work performed by him.

30 During the examination of these records by Ms Rosati and dealing with the criticisms and queries raised, the difficulty faced by the firm was that there were no manually created time sheets that separately identified the person who had entered the information into the computer records. Mr Scroope was able to identify many entries that did not relate to work performed by him but he was not always able to identify who had performed that work. Since the complaint giving rise to these proceedings, Mr Scroope said he taken a much more active supervisory role in relation to these matters.

31 In relation to the preparation of the narrative bill, Mr Scroope accepted that he gave "inadequate attention to the detail of the bill." He said he relied excessively on the entries on the time costs ledger and the procedures for review by their accounts section and failed to give adequate attention to checking those entries before the bill was prepared. He accepted that this resulted in the bill sent to Ms Meng (and the members of her family) being an amount greater than should have been rendered. He was particularly embarrassed by his failure to note matters where entries in the nature of typographical errors produced incorrect figures "grossly in excess of what should have been charged."

32 In relation to his own entries he denied deliberately distorting, duplicating or fabricating entries or to craft entries to render fees that he believed were not properly charged or incurred. He had taken account of comments made by Ms Rosati and Mr Salier and had given serious thought to the correct approach to the rendering of charges and had taken advice on what were proper and improper practices. He accepted that there were matters in the bill sent to Ms Meng and to members of her family which should not have been included. Mr Scroope noted that the allocation of the time between the different matters was of particular concern to him as was the cumulative effect of charging for broken parts of minimum units and charging separately for multiple tasks performed at the same time.

33 Mr Scroope accepted the need for closer checking of charges and invoices rendered by those under his supervision. He believed that the failings revealed in this matter on his part were failings of "diligence and understanding" but were not part of any intention to deal unfairly with the client. At no time was he ever instructed or directed by any partner of the firm to increase the costs charged by inflating times, over-servicing, duplicating charges or by any other crafting of costing in a fashion which led to dishonest, unethical, unfair or unreasonable charging. He accepted that the level of charges rendered to Ms Meng and her family were "excessive" and that he must accept "a significant level of responsibility for that having occurred."

34 In Mr Scroope's second affidavit he stated that during the time he had carriage of the matters for Mrs Meng, her husband and her son, the value of his salary package was approximately $120,000 per annum, before tax, inclusive of benefits such as superannuation. His salary was not linked to the amount of his billings on behalf of the firm.

35 He continued to work at the firm on a full-time basis with a full caseload until the end of 2010. During that year the sale of the practice was negotiated and was sold. In December 2010, Mr Scroope was made redundant after being employed by the firm for over 12 years.

36 Unlike other solicitors then employed at the firm who were offered positions with the purchaser of the practice, Mr Scroope was not made any such offer. He believed, from what he had been told and what was reported to him, that the main reason for failing to receive an offer was the existence of these disciplinary proceedings. At no time in the past or at the point of sale was there any suggestion made to him about the quality of his work other than the matters relating to the overcharging in Ms Meng's matter. His contract did not provide for termination benefits other than accrued leave and long service leave and therefore he did not receive any form of redundancy nor was he given any opportunity to negotiate a package of that kind.

37 Mr Scroope said that, as a result, he lost the benefits of continuity of his employment, his job security, likely progression and potentially other benefits. For instance the purchaser of the practice had offered senior staff who continued in employment as an incident of the buyout, an opportunity to purchase shares. A deferred share option was made available in the sum of $200,000 for some staff at his level. He believed that he would have received the same or similar benefits if he had been able to take up employment with the purchaser.

38 In relation to Ms Meng's matter, Mr Scroope said he worked hard to give Ms Meng, her son and husband the best representation he could. He accepted that he diminished his contribution to her welfare by his failure on the matter of their costs. He spoke of Ms Meng being in an already tragic position then suffering further because of his own shortcomings as her legal representative and the person upon whom she did and was entitled to rely. That was a matter of "sincere personal regret" to Mr Scroope. He accepted that he had disappointed many people, including those whose feelings were very important to him. He accepted that his failings and the consequence of it, however unintended, had diminished the public standing of the legal profession. He had particular regrets in relation to the staff members of the Keddie's firm. He knew that their association with the firm as a result of the widespread publicity had tainted good staff members who had done nothing wrong.

39 Mr Scroope concluded his affidavit in the following terms:

Until the events giving rise to the present proceedings, I have never been the subject of any adverse finding in relation to my professional conduct. I believe the lessons of this experience have been well learned, and I can give an assurance to the Tribunal and to the profession through the Tribunal, assuming that I remain in the profession, that I will do all within my power to ensure that I do not, at any time in the future, conduct myself in a way which will call into question my professional and ethical conduct.

40 Mr Scroope gave sworn oral evidence in order for the members of the Tribunal to be able to clarify certain issues with him. Mr Scroope's attention was drawn to the May 2007 bill ("May bill") in taxable form that claimed in round terms $668,000 compared to the $557,000 claimed in the narrative bill dated December 2005. Mr Scroope said that the difference in those two bills arose from the requirement to review the file and identify any work that had not previously been identified and to ensure that the contemporaneous time recorded in the system was reflected in the May bill. The May 2007 bill was put together over a period of approximately five months although "sporadically." Mr Scroope spent approximately one week of his time in relation to the May bill. He said his involvement was limited to identifying the work that might have been missed in terms of properly billing the client and did not extend to other matters. He was being asked to review the file to ensure that all work was reflected in the bill but it was not his task to put that information into a final form of bill. Either Mr Ackroyd or Mr Keddie directed his limited task. The final task of bringing forth a bill in taxable form was left to the costing clerk and part of the accounts team.

41 During the investigations by the LSC deficiencies with the costs agreement had been raised, namely, that while they set out the hourly rates there was no estimate of the total fees for the matter. Mr Scroope agreed that there was no estimate of the total costs although halfway through the case such an estimate was given to Ms Meng and she was advised of the total due at the time of the settlement conference in 2005. He did not know why cost agreements in 2003 did not contain estimates but he could not recall if that was the usual practice in 2003. Mr Scroope accepted that he had a capacity to re-assess the total amount of the estimate as the matter progressed.

42 At the time the computerised costing system was introduced, a short time after instructions had been taken in Ms Meng's matter, there was no in-depth or formal education given to Mr Scroope about the use of the system. Prior to that the firm had been using handwritten sheets and no time costs records were kept at all. The costs clerk may not have been employed at that time but may have been employed shortly after the computer system was introduced: this person was not a costs assessor but was more accurately described as a costing clerk. Mr Scroope did not know why the computerised costs system was limited as to the people who could access it in their own name and make cost entries in the matter. At the time of Ms Meng's matter he did not know how other people could enter costs attendances using his initials. Staff at a lower level than Mr Scroope who were working on Ms Meng's matter would record the time they worked on their own computer regarding her matter and would then enter those times on the computerised costs system, as he understood it, using his initials as apparently they did not have individual access under the system in use.

43 It was not until late 2006 that he went back to the files and it had become apparent to him that his initials were on work done that was clearly administrative or clerical work where the rates were not his but were lower work rates. Mr Scroope did not have sufficient understanding of the system to know how the work entered by those beneath him in the firm's structure and entered on their computers might be retrieved for the purpose of recording their work in their name. He believed that information was probably saved somewhere in the accounts section. He did not believe he could directly access that information.

44 In his affidavit Mr Scroope had stated that, since the complaint was made to the LSC, he now took a more active supervisory role in dealing with costs. He stated that in 2007-2008, before the firm was sold, a number of procedures were introduced to ensure that billing was "more rigorously approached." He took it upon himself to routinely check through timesheets, in an ad hoc way, the work of his staff and those working under his supervision. Once every three or four weeks he would ask a staff member for their timesheets, print them off, check them and go through them together, look at the nature of the descriptions, how the work was recorded and the time claimed so that he had a better feel and understanding of how the individuals costed their time: each individual was different. This was conducted on an ongoing basis and he got a good feel for the way his permanent staff operated and then the approach may have relaxed a little once he was confident that the costings were being performed properly. At the billing stage he would take the material home and go through the bill before it could be sent out.

45 Since the complaint Mr Scroope had taken advice, especially as to what was proper. He said that this was a reference to ensuring that he attended more seminars directed to costing to ensure that he understood in greater detail the costs assessment system. He did not have any reason before this matter to question in any real sense the type of charges that had been made. That had never been called into question before although a few bills were prepared in assessable form and it was not part of his duties to be involved in those types of assessments. The bill would go to assessment, then through the assessment process and then it could come back to him. He now realised that billing and assessment of solicitor's files was a unique practice in its own right and he wanted to obtain knowledge about the system and review the processes for future dealings.

46 When he said it was not his duty to get involved in the detail of the bills that was not something that he had been directed not to be involved in but was the result of being in an extremely busy practice with time pressures where matters always required attention and so the task was left to others. He thought that was why the costing clerk was employed to assist in fielding questions that came up in day-to-day practice. When asked if he was not involved in the costing issues as a matter of responsibility then who had that responsibility, Mr Scroope replied that it was the responsibility of each individual although he had a responsibility in terms of ensuring that the bill was rendered in time. The system used was that the secretary would prepare the bill and he would check it and then give her details of relevant fees to be entered on the bill. Sometimes fees were reduced with the approval of a partner and there were times when fees were not reduced. In day-to-day entry of costs the responsibility for billing was most likely to be shared between individual practitioners in putting a draft bill in form. There was also a role for the accounts section and the costing clerk.

47 The approach of breaking down several tasks performed at the same time into separate costing units for each task was raised with Mr Scroope. Mr Scroope said that it was not his routine practice to break down tasks into multiple units for billing purposes and that he would not use that approach in the future but the computerised system had an introduction to various tasks that facilitated that approach. Mr Scroope did not know that approach was adopted or routinely adopted by others in the firm. He doubted that there was a system of adopting that approach but it was the nature of the computer system and the way it was recorded in the system. He was aware of an example of a number of photographs of outback terrain where a junior entered each item as a billable unit and that would tend to distort the time charged for that task.

48 There were no time targets imposed for earning remuneration although budgets were later introduced. Mr Scroope could not recall whether there were budgets at the time of Ms Meng's matter. Performance was measured by client satisfaction, turnover of work, work brought in and the assessment occurred in a general robust fashion. In 2005 there were no set daily hours required to be billed although, obviously, there was pressure to do as much work as possible but Mr Scroope could not recall if at that time there was an annual fees budget. Occasionally, but not annually, Mr Scroope received a bonus. Bonuses would take into account billings but there was no mathematical formula: it was discretionary and a bonus might be given as encouragement to staff. There was also an annual review for partners to appraise staff but he could not recall ever attending a review meeting with the expectation or knowledge of a mathematical formula for receiving a bonus. Any salary increase or bonus followed a performance review.

49 Staff were under considerable pressure from the partners to ensure that, as far as possible, all work that was properly chargeable was correctly captured and entered in the costs system and fully charged. That pressure came through professional meetings held every week where the diary for the week would be reviewed and an opportunity given to generally raise matters regarding the practice. At these meetings there was an opportunity for the partners to make it known that all available work should be billed, entered and recorded and the staff were constantly reminded to record the work otherwise a client would not receive a bill. Mr Scroope could not recall any particular example where there was scrutiny of his bills or individual solicitors placed under pressure to make sure that more time was being recorded but he had no doubt that there was scrutiny of the time being billed and that applied to everybody, including solicitors, clerks and secretaries. There were some costs seminars to inform the staff how to time cost.

50 Preparing a bill was a task initially performed by Mr Scroope's secretary. He would work out a set of figures, including statutory deductions that had to be identified precisely before the settlement of a matter and a document would generally be prepared by the secretary who would then go through the ledger and the file to identify the disbursements, check counsel's notes and that task was able to be performed by a competent senior secretary. The secretary would be aware of the time costs system records and the standing total for the work on the matter. Mr Scroope could assist in that task. When this task was completed, he was required to see a partner in order to have the bill approved and that was performed generally before the matter was resolved or settled and they could then attend the conference or give advice to the client in relation to the offer with all those details known.

51 As to how the accuracy of each bill was to be checked in terms of time entries, Mr Scroope said he relied on the individuals to accurately record their time entries in the first instance. Depending on the size of the matter, however, it simply would not be practical to undertake an assessment of those time entries at the time although his practice would be considerably different now. At the time of Ms Meng's matter he relied on the individual to enter time entries into the computer system. When asked who was responsible for checking the accuracy of the entries of others, Mr Scroope said there was an opportunity for this to occur if there was a request for an itemised bill and at that time the system allowed for the time sheets to be analysed, reviewed and checked carefully.

52 In terms of Ms Meng's bill he relied on the entries by those who made those entries. There was a real difficulty in identifying duplication or double entries that were referrable to a number of invoices and entries in the costs system and where all those matters had to be considered. The cross-checking of time sheets against invoices would be "particularly time consuming." Mr Scroope was of the view that aspects of duplication in Ms Meng's bill arose in quite unique circumstances where there were people whom he regarded as being on staff who provided certain services and there was also an external company providing translation services. Translation services were also being provided within the firm.

53 In relation to the computerised costing system, Mr Scroope said that at 2003 the system was not locked and a password was not necessary. He was unable to say whether that resulted in the system being accessible to anyone in the firm because he really did not know anything about the system. He still did not understand how it was possible for someone else to use his initials to enter costs on the computer system and he was unaware that junior staff were doing so. Mr Scroope had not investigated how that had occurred but it may well have arisen from the limited licence purchased by the firm restricting direct access to the costs system.

54 In his affidavit Mr Scroope spoke about coming to a realisation about his own conduct. He was asked what did he regard his conduct amounted to? In response Mr Scroope said that there was failure to take a deeper look at the time sheets, now looking back at the issue, not having the knowledge that he now had of how the system recorded the work, how the split unit system was used in billing and could distort the costings and how the operation of the uplift and the GST was handled in the system. They were failings for which he had personal responsibility. He said his responsibility was to ensure that the client would get "a great job" and a "proper bill" and that just did not happen in Ms Meng's matter.

55 In addition to Mr Scroope's two affidavits and oral evidence, seven affidavits were also relied upon that could be generally described as providing character evidence. Those affidavits came principally from barristers and solicitors who had come to know and work with Mr Scroope over a number of years. In addition, a Parish Priest provided an affidavit, who had known Mr Scroope for approximately 26 years, indeed going back to when they both worked at a Local Court. While all expressing a certain degree of shock that Mr Scroope had come to attention for disciplinary reasons, they all, in various ways, expressed confidence in his overall integrity and to his good standing within the profession. The role he played in the preparation of Ms Meng's bill of costs was regarded as inconsistent with his known professional practice and was regarded generally as being out of character. He was spoken of as being a sincere, reliable and compassionate person who brought integrity and a strong commitment to the law and social justice, especially in assisting claimants to justly recover compensation for injuries. Most expressed a concern at the effect of ongoing publicity upon Mr Scroope and his family. Those with social contact with Mr Scroope confirmed the same general sentiments.

SUBMISSIONS

56 The submissions for the LSC canvassed, briefly, the background and the fact that the matter now came before the Tribunal with the LSC relying on the Statement of Agreed Facts and no additional evidence. It was pointed out that it was now agreed that the total fair and reasonable professional costs for Ms Meng's matter, together with those of her husband and son, were $292,045.09. In December 2005 the narrative bill claimed professional costs of $507,119.84 plus GST. It was now agreed that there was an overcharge of $215,074.65.

57 It was noted that s 498(1)(b) of the 2004 Act provided that (without limiting the operation of ss 496 and 497 dealing with the statutory definitions of unsatisfactory professional conduct and professional misconduct) the charging of excessive legal fees in connection with the practice of law was capable of being unsatisfactory professional conduct or professional misconduct. The submission then canvassed two judgments of the Court of Appeal dealing with the constituent elements of overcharging. It was pointed out that in Veghelyi v The Law Society of New South Wales [1995] NSWCA 483, Mahoney JA had stated that gross overcharging as such may constitute professional misconduct without proving also that the solicitor was "guilty of fraud or the like." A solicitor was entitled to "fair and reasonable remuneration in the circumstances."

58 His Honour noted that the determination of what was fair and reasonable in a particular case required consideration of various factors noting the elements set out in s 208G of the Legal Profession Act 1987 ("the 1987 Act") (now to be compared with s 363 of the 2004 Act). Those factors were:

(a) the skill, labour and responsibility displayed on the part of the barrister or solicitor responsible for the matter;

(b) the complexity, novelty or difficulty of the matter;

(c) the quality of the work done and whether the level of expertise was appropriate to the nature of the work done;

(d) the place and the circumstances in which the legal services were provided;

(e) the time within which the work was required to be done; and

(f) the outcome of the matter.

59 Mahoney JA considered that those factors assisted in the determination both of what was fair and reasonable and what was grossly disproportionate. The quantification of costs, however, remained an exercise in judgment as to which minds may legitimately differ. Mahoney JA had stated that there were circumstances where, even though costs were calculated in accordance with the costs agreement, it would be, in total, unacceptably excessive. There were cases in the Tribunal that illustrated the point where the total of the fees charged, in his Honour's opinion, were far beyond what would ordinarily be reasonable for the work shown to have been done. Where the total of such fees was to be justified by the costs agreement, the inference would be either that the time taken was unacceptable or the rate specified in the costs agreement required justification.

60 In relation to the costs agreement held by Mr Veghelyi his Honour found there was nothing in the evidence to establish an agreement by the clients that, on the matter, their solicitor would spend and charge for "time far in excess of what ordinarily would be spent." It was submitted that, in the costs agreement relating to Ms Meng's matters, there were no special terms whereby Ms Meng agreed to the firm's solicitors and others spending time on her matter and charging for time in excess of the time ordinarily required for legal services to be provided to her.

61 Reference was then made to the judgment in Nikolaidis v Legal Services Commissioner [2007] NSWCA 130. This case considered the operation of s 208Q(2) of the 1987 Act. An issue on appeal was the challenge that the Tribunal had erred in finding that the solicitor had engaged in the deliberate charging of grossly excessive amounts of costs. It was held that s 208Q(2) contained two elements: the charging of grossly excessive amounts of costs and that such charging was deliberate. The majority concluded that the finding of professional misconduct by reason of deliberate charging of grossly excessive amounts of costs required a finding that the practitioner was personally implicated in the intentional charging of excessive costs. Another significant feature of this case was that the Tribunal had found that the solicitor had failed to supervise his office and although he had accepted that the bill was contentious, he did not take any action to check it before or after it was served. The "failure to exercise adequate supervision" element of the charge was rejected on appeal as the complaint did not allege either recklessness or lack of supervision. The majority of the Court held that the Legal Services Commissioner had not established that the solicitor was guilty of deliberating charging excessive amounts of costs: it was necessary to prove the practitioner was personally implicated in either knowingly overcharging or was reckless as to whether or not excessive costs had been charged. There was no evidence that the appellant knew that the amounts in the bill were excessive.

62 Against the background of those two judgments, it was submitted for the LSC that here there were admissions. Mr Keddie accepted that he had ultimate responsibility for the acts and omissions of Mr Scroope and all other staff with the carriage and conduct of Ms Meng's files and those of her husband and son and had accepted that Ms Meng was overcharged in that she was charged grossly excessive amounts of costs. Mr Keddie had also accepted that his conduct as described constituted professional misconduct.

63 Where there was a finding of professional misconduct or unsatisfactory professional conduct, the orders available to the Tribunal were primarily as set out in s 562(2) and (4) of the 2004 Act. Although s 562(2)(a) permitted the Tribunal to order that the name of the practitioner be removed from the Roll of Solicitors, an order of that nature was not sought by the LSC. Attention was drawn to the fact that a practitioner may be ordered to pay a fine under s 562(4)(a) and if there was a finding of professional misconduct, the maximum fine that may be imposed was $75,000 [see

s 562(7)(b)]. It was also open to the Tribunal to reprimand Mr Keddie. In relation to costs, where a practitioner was found to have engaged in unsatisfactory professional conduct or professional misconduct the Act required the Tribunal to make orders that the practitioner pay the costs of the proceedings unless satisfied that exceptional circumstances existed [see s 566(1)]. Having regard to those provisions the LSC sought orders that the respondent be fined, be publicly reprimanded and pay the costs of and incidental to the filing of the Application for Original Decision.

64 It was accepted that the nature of this jurisdiction was protective but also that orders provided a deterrent against the repetition of such conduct. It was therefore relevant that Mr Keddie had been previously found guilty of professional misconduct (see Legal Services Commissioner v Keddie [2008] NSWADT 185). That case concerned breaches of the Legal Profession Regulation 2002 governing advertising and limitations on references to personal injury services. Certain advertising by the firm had been found in breach of the Regulation and were admitted. The orders of the Tribunal were that Mr Keddie be publicly reprimanded and fined the sum of $10,000 together with costs.

65 While the submissions for the LSC accepted that a finding of the charging of grossly excessive costs was extremely serious, the seriousness of the admitted conduct in this case was said to necessitate an order for a reprimand. By operation of ss 576(e) and 577 of the 2004 Act such a reprimand must be published on the LSC's register of disciplinary action. In relation to a fine, it was submitted that step was appropriate given the deterrent effect of such an order. It was accepted that, having regard to Mr Keddie's history, the quantum of fine would be to the mid to lower end of the range having regard to the maximum fine available being $75,000. In addition, Mr Keddie had profited from the overcharging and had accepted that he alone of the partners was ultimately responsible for the acts and omissions of Mr Scroope and all other staff involved with Ms Meng's file and those of her husband and son.

66 The refunds made by the firm referred to in the Statement of Agreed Facts, together with Mr Keddie's undertaking to Ms Meng and the Tribunal (that he would pay any further amount with interest should the Tribunal find that such an amount above that already paid had been overcharged) could not negate the misconduct involved in that the firm had taken grossly excessive amounts for the firm's professional costs from Ms Meng's settlement.

67 Submissions for Mr Keddie focused on the fact that the solicitor had effectively entered a plea of guilty to the charges and had co-operated in considerably shortening the proceedings by adopting a Statement of Agreed Facts. There had been a live issue as to whether Ms Rosati's reports, relied upon by the LSC, were admissible but the agreements with Mr Keddie and Mr Scroope overcame those difficulties and allowed the matter to proceed on the Statement of Agreed Facts.

68 In addition, the detail provided by Mr Scroope in his affidavit showed that the costing system adopted by the firm was such that costing errors could be made and not readily picked up, especially in a large and busy practice. In that context it was important to understand that Mr Keddie "had extremely limited personal involvement" in Ms Meng's matter. When settlement was contemplated there was a brief discussion between Mr Keddie and Mr Scroope when Mr Keddie asked what was the figure for work in progress on the bill and when told the sum by Mr Scroope, Mr Keddie indicated that he thought that sounded about right but to check for leakages. That was an instruction to Mr Scroope to ensure that everything had been properly recorded and nothing had been missed. It was submitted that was the extent of Mr Keddie's personal involvement in the billing process. He now accepted that process was inappropriate at the time. Mr Scroope had years of experience and was an accredited professional in the field of personal injuries. He was not a novice in that field and Mr Keddie was entitled to rely upon the firm's professional staff. Mr Keddie was entitled to assume that the bill, when it was prepared, accurately recorded the services provided. The "striking feature" from the evidence was the "lack of personal culpability by Mr Keddie" in this particular case.

69 The system of recording attendances described by Mr Scroope drew attention to the fact that every person making entries on the computerised costs system was meant to take responsibility for their own entries and the accuracy of them. He had a practice whereby he provided information to his secretary regarding his costs and how they were then placed into the computerised system. Mr Scroope could not recall ever being told that there were errors in the time costing system. He acknowledged that there were "some defects in the system" but the system did not call for close checking or verification of the correctness of entries after they had been entered. The close scrutiny occurred if any when the preparation of an itemised bill was required and that was done by the costing officer or a costs consultant engaged for that purpose and it was part of Mr Scroope's role to be involved. It was, therefore, the deficiencies in this system that led to the overcharging but there was no evidence of moral turpitude being involved. Mr Keddie and Mr Scroope were taking responsibility by their "pleas." Their confessions were to be regarded at a higher level than acknowledging a simple honest mistake. In Mr Keddie's case it involved a self-imposed penalty of surrendering his Practising Certificate. In these ways, Mr Keddie recognised the extent of the defects in the system.

70 The penalty that Mr Keddie would suffer covered a number of factors. Apart from voluntarily surrendering his right to earn income and practice as a solicitor in the future, he was also to bear not only his own costs but the costs of the LSC and Mr Scroope. Senior counsel had been instructed that Mr Keddie's defence costs alone were in excess of $500,000 and when the costs of Mr Scroope and the LSC were added, there was a significant financial penalty to be borne by Mr Keddie. That financial penalty was far in excess of the maximum penalty that could be imposed under the 2004 Act and in those circumstances, this was not an appropriate case to impose a fine. The approach of the Court of Appeal in The Council of the NSW Bar Association v Meakes [2006] NSWCA 340 should be adopted and considering the totality of the matter, a fine would not be warranted.

71 The extent of Mr Keddie's plea was an acknowledgement that he failed to supervise the charging of what was otherwise the charging of grossly excessive costs. There was, however, no evidence that Mr Keddie ever saw the file disbursement ledger before the bill was prepared in December 2005 and there was an open inference that, if he had seen it and checked it carefully, he would have seen perhaps the errors of duplication that have now been admitted. The extent of his personal involvement in the file was extremely limited and there was no evidence of deliberate overcharging by him, no evidence that he concealed any untoward facts, nothing to indicate any reckless disregard of errors or any duplications brought about by his involvement. The circumstances of Mr Keddie's case, therefore, warranted a reprimand and the payment of the considerable costs involved in the case.

CONSIDERATION

72 In relation to the relevant statutory provisions, the Tribunal accepts the submissions for the LSC that s 498(1)(b) of the 2004 Act is the relevant provision in relation to Mr Keddie's matter. In short, that section provides, without limiting s 496 and s 497, the charging of excessive legal costs in connection with the practice of law is capable of being unsatisfactory professional conduct or professional misconduct. It might be noted that the 2004 Act, in this respect, is in materially different terms to the 1987 Act:

s 208Q(2) of the 1987 Act declared that the deliberate charging of grossly excessive amounts of costs was professional misconduct.

73 The circumstances where grossly excessive costs would constitute professional misconduct was considered by French J (as he then was) in De Pardo v Legal Practitioners Complaints Committee and anor (2000) 170 ALR 709. In considering the operation of disciplinary provisions governing the legal profession in the context of an inconsistency argument, his Honour stated:

[41] The Legal Practice Disciplinary Tribunal was established by the Legal Practitioners Act 1893 to serve the object of regulating the conduct of persons admitted as legal practitioners in the Supreme Court of Western Australia. Its jurisdiction includes the authority to inquire into and determine whether a practitioner has been guilty of illegal or unprofessional conduct or of neglect or undue delay in the course of the practice of the law: s 29A(1). The subject matter of unprofessional conduct falls within long standing but broadly stated criteria developed from observations of Lord Esher MR and Lopes LJ in Allinson v General Council of Medical Education and Registration [1894] 1 QB 750 about the concept of "infamous conduct in a professional respect" in s 29 of the Medical Act 21 and 22 Vict c 90. The definition drawn up by Lopes LJ was in the following terms:

If it is shown that a medical man, in the pursuit of his profession, has done something with regard to it which would be reasonably regarded as disgraceful or dishonourable by his professional brethren of good repute and competency, ...

It was not propounded as an exhaustive definition. It was applied to legal practitioners by Darling J in Re a Solicitor; Ex parte Law Society [1912] 1 KB 302. In 1927 the Full Court of the Supreme Court of South Australia took the view that this definition was too narrow in its application to "unprofessional conduct" within the meaning of the Law Society's Act 1915. In Re R - A Practitioner of the Supreme Court [1927] SASR 58 at 60, the court said:

In our view "unprofessional conduct" is not necessarily limited to conduct which is "disgraceful or dishonourable", in the ordinary sense of those terms. It includes, we think, conduct which may reasonably be held to violate, or to fall short of, to a substantial degree, the standard of professional conduct observed or approved of by members of the profession of good repute and competency.

See also in Re a Practitioner of the Supreme Court [1937] SASR 316 at 320, 322; Re Veron Ex parte Law Society of New South Wales (1966) 84 WN (Pt 1) (NSW) 136 at 143 and In the Matter of a Practitioner (1975) 12 SASR 166 at 170. The understanding of unprofessional conduct expressed by the Full Court of the South Australian Supreme Court was accepted and applied to the Legal

Practitioners Act 1893 (WA) by the Full Court of the Supreme Court of Western Australia in Re a Practitioner (SC(WA), Library No 4989, 18 July 1983, unreported). It has been applied also to the concept of unprofessional conduct as currently found in s 29A of the Legal Practitioners Act. In Kyle v Legal Practitioners Committee (1999) 21 WAR 56, Parker J (Ipp and Steytler JJ agreeing) said (at 71-2):

This court has long accepted and applied, in this context, the understanding of the notion of unprofessional conduct which was expressed by the Full Court of the South Australian Supreme Court in Re a Practitioner of the Supreme Court [1927] SASR 58: see, for example, Re a Practitioner (SC(WA), Library No 4989, 18 July 1983, unreported). It was usefully summarised (at 3) by the Full Court as conduct that would be reasonably regarded as disgraceful or dishonourable by practitioners of good repute and competence, or that, to a substantial degree, fell short of the standard of professional conduct observed or approved by members of the profession of good repute and competence.

As His Honour pointed out, the first limb of that summary included but was not confined to conduct occurring in the course of legal practice. The other limb necessarily related to conduct in the course of legal practice because of the reference to "professional conduct". The words were not to be taken as an exhaustive or codified statement but they did reveal the essence of the notion of unprofessional conduct.

[42] In applying the general concept of unprofessional conduct in disciplinary proceedings relating to legal practitioners, it is of importance to bear in mind their legislative purpose. As Mahoney JA pointed out in Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 441, disciplinary procedures and the orders made in the course of them are directed not to the punishment of the practitioner but to the protection of the public. That protection extends beyond protection against further default by the particular practitioner to protection against similar defaults by other practitioners. It will also involve the question whether the practitioner is a fit and proper person to be a practitioner of the court.

[43] The disciplining of members of the legal profession for departures from acceptable standards of professional conduct is a public protective function pursued in the public interest. That it may involve ancillary orders including a reduction in or refund of fees charged in a particular case does not change that character. Such orders may be likened, in some respects, to orders for restitution in criminal cases. Absent some express provision to the contrary, they do not displace civil processes between solicitors or counsel and their clients except to the extent that a reduction or refund would be credited against recoverable loss. They may offer an alternative to recovery processes. But they remain an incident of the essentially public purpose of the principal proceedings.

[44] The determination by a Disciplinary Tribunal of whether there has been gross overcharging constituting professional misconduct does not require it to rely upon taxation of costs by the relevant court or to undertake a taxation of costs on its own account. As the Court of Appeal in New South Wales said in Re Veron (at 142):

The court does not sit as taxing officers dealing with individual items of costs... We are guided by experience and a broad sense of what is reasonable and fair and not by any narrow approach to questions of mere overcharging.

Their Honours observed that it is not in every case where a solicitor agrees with a client a fee substantially larger than that which would be allowed on taxation that the solicitor is guilty of unprofessional conduct. It is a question of degree dependent upon the facts of the case (at 144). Accepting that there might be difficulties in some cases in drawing the line, they cited (at 144) the statement once quoted by Lord Simonds LC as "the answer of a great judge that, though he knew not when day ended and night began he knew that midday was day and midnight was night".

[45] A consideration of the relevance of disparity between the costs charged and those which were or would have been recovered on taxation appears in the judgment of Ipp J (Pidgeon and Franklyn JJ agreeing) in the Full Court of the Supreme Court of Western Australia in D'Alessandro v Legal Practitioners Complaints Committee (1995) 15 WAR 198. In a passage relied upon by counsel for De Pardo, Ipp J said (at 214):

The inquiry into what amounts to grossly excessive or unreasonable costs would ordinarily involve, first, a determination of what, in the particular circumstances, would be a reasonable sum to charge. The resolution of that question would often turn on multiple factors, including the amount at which the costs in question was or would likely be taxed, the difficulty of the case, the novelty or complexity of the legal issues presented, the experience of the practitioner, the quality of his or her work, the amount of time spent by the practitioner on the matter, the responsibility involved, the amount or value of the subject matter in issue, and any costs agreement that might have been entered into.

This passage makes plain, however, that the assessment of the practitioner's conduct in such a case is dependent on a range of relevant factors of which the discrepancy between costs charged and costs taxed is one. His Honour accepted that the tribunal was entitled to treat taxed costs as "the appropriate standard" and to determine by reference to it that the amount in fact charged was grossly excessive (at 220). In so saying, however, he noted that the taxed amount was "not necessarily the sole factor to be taken into account". Indeed in one of the counts against the practitioner in that case, the tribunal was found to be in error in assessing the reasonableness of the charge made by the practitioner "by reference only to the amount at which the bill of costs was in fact taxed" (at 223-4), there being a reasonably arguable, albeit wrong, basis upon which the practitioner could have justified the amount charged.

[46] There is a very clear difference in kind between the assessment by the taxing officer of a court of costs for taxation and the assessment by a disciplinary tribunal of whether there has been gross overcharging amounting to unprofessional conduct. The latter, even if it involves a notional taxation of costs as a relevant consideration is not concerned with the same subject matter and does not serve the same purposes as that with which a court is concerned in taxing a bill of costs.

74 Commentary in Riley Solicitors Manual Chapter 35 (see Gino Dal Pont, Riley Solicitors' Manual, LexisNexis Australia, Service 45, March 2012)

speaks of the degree and frequency of overcharging as being the principal inquiry in determining whether overcharging is misconduct: the conclusion of overcharging depends largely on the degree and frequency of the overcharging (Law Society of the Australian Capital Territory v Lardner [1998] ACTSC 24 at [104]). Riley then states:

In each case, the relevant inquiry is whether the lawyer has charged fees grossly exceeding those that would be charged by lawyers of good repute and competency (see R v Melvey (1966) 85 WN (Pt 1) NSW 289). Factors that inform this inquiry include the amount at which the costs in question was or would be likely be assessed, the difficulty of the case, the novelty or complexity of the legal issues, the experience of the lawyer, the quality of his or her work, the amount of time spent on the matter; the responsibility involved, the amount of value or value of the subject matter in issue, and any costs agreement that has been entered into (see D'Alessandro v Legal Practitioners Complaints Committee (1995) 15 WAR 198 at 214 per Ipp J). The charging of costs and disbursements when none are properly chargeable, coupled with an aggressive and remorseless pursuit of unsophisticated and inexperienced clients for fees conceivably owed, led the Queensland Court of Appeal in Legal Services Commissioner v Baker (No 2) [2006] 2 Qd R 249 to affirm the Disciplinary Tribunal's order that the solicitor in question be struck off from practice.

75 There are many other relevant statements to be found in the cases, including those referred to in submissions (such as Veghelyi and Nikolaidis) as well as the oft repeated passages from Re Veron; Ex Parte Law Society of New South Wales [1966] 1 NSWR 511; (1966) 84 WN (Pt 1) (NSW) 136 establishing that overcharging can be professional misconduct.

76 In Veghelyi, Mahoney JA said that it was now established that gross overcharging as such may constitute professional misconduct and in addition it was not necessary to prove that the lawyer was guilty of fraud. In reaching this conclusion his Honour cited the Full Court in Veron:

It has long been recognised that the charging of extortionate or grossly excessive costs by a solicitor may amount to professional misconduct.

Importantly, at p 6 his Honour spoke of the relevance of considering the reason why gross overcharging as such may be held to be professional misconduct, stating:

The Court has traditionally and for centuries exercised control over

"the excessive fees and other unnecessary demands" made by solicitors of the court: see, eg, Holdsworth's History of English Law, 2nd ed, Vol 6, 434; Vol 12, 56-62. Clients are, or may frequently be, in a vulnerable position vis-a-vis their solicitors; the presumption of undue influence is, I think, based at least in part

upon the fact that when making decisions clients ordinarily or at least frequently place trust in their solicitors. They ordinarily are not in a position to know without investigation what work must be done and what charges are fair and reasonable; they ordinarily assume that the solicitor will make only such charges.

Solicitors are, on the other hand, informed, or in a position to inform themselves, of what work may be required and what are fair and reasonable charges. They are, in that sense, in a position of advantage and trust is placed in them. Clients are entitled to be protected against the abuse of such an advantage. It is, I am inclined to think, the fact that that advantage has been misused which may, in a particular case, warrant what the solicitor does being categorised as professional misconduct. In noting that the practice of law and the resources available to firms have changed over the years.

At p 8 his Honour observed:

It is, in my opinion, to be recognised that where the costs are fair and reasonable will depend upon - or at least be affected by, facts such as the size of the solictior's firm, the resources enjoyed or available to be employed by it, the value which the lawyers place upon their skill and expertise, and the urgency of the client's requirements. What is fair and reasonable for a large firm may be, in the ordinary case, grossly excessive for a sole practitioner.

77 In a separate judgment, Priestly JA referred to the decision of the Tribunal and the citation of the judgment of Rich J in Kenedy v Council of Incorporated Law Institute of NSW (1939) 13 ALJ 563 that stated that professional misconduct in relation to a solicitor "need not fall within a legal definition of wrongdoing. It need not amount to an offence under the law. It is enough that it amounts to grave impropriety affecting his professional character and is indicative of a failure to either understand or practice precepts of honesty or fair dealing in relation to the courts, his clients or the public."

78 In The Council of the New South Wales Bar Association v Timothy Meakes [2006] NSWCA 340, the Bar Association appealed a finding of the Tribunal that certain overcharging by the barrister amounted to unsatisfactory professional conduct rather than professional misconduct. The Tribunal concluded that the percentage overcharge was in the order of 66 per cent and was satisfied that amount of overcharging represented "gross overcharging" and that finding was not challenged on appeal. At [39], Tobias JA noted the appellant's reliance on certain remarks made by Kirby P in The Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 422-433, namely:

Litigants look to this Court, ultimately, to protect them from over-charging by legal practitioners where this is so high as to constitute professional wrong doing. The courts of other Australian jurisdictions have begun to deal determinedly with gross over-charging by legal practitioners where this is proved to amount to professional misconduct ... No amount of costs agreements, pamphlets and discussion with vulnerable clients can excuse unnecessary over-servicing, excessive time charges and over-charging where it goes beyond the bounds of professional

propriety. Time charges have a distinct potential to result in overcharging ... I depart from this case with a real sense of disquiet that what may arguably be the most serious issue revealed by it may not have been fully considered in a way protective of the true standards of the legal profession and the legitimate expectations of the community.

79 At [85] his Honour spoke of the evidence permitting an inference that the respondent was grossly reckless in charging fees where he had no idea of the time spent on the provision of each service or whether they were justified or not. At its highest, the conduct was dishonest and at its lowest it was highly irresponsible and in his Honour's opinion, in either case it was conduct that in the circumstances would be reasonably regarded by barristers of good repute and competency as "disgraceful or dishonourable." In a separate judgment Basten JA referred to the protective purpose of disciplinary orders in the making of those orders in the public interest:

[113] The point sought to be made in the authorities is, no doubt, that the Court or Tribunal making an order in disciplinary proceedings must have squarely in mind the protective purpose of the order, in the public interest. That is not to say that the adverse (punitive) effect on the practitioner should be ignored; clearly no order should be made which has more serious consequences for the practitioner than is reasonably necessary in execution of the protective purpose.

[114] That being said, it may also be noted that the protective purpose may operate in different ways. First, by its direct effect upon the practitioner, the order will either remove that practitioner from membership of the profession (by disbarment or suspension) or will provide a deterrent against the repetition of such conduct (in the case of a fine or reprimand). There are also important but indirect effects to be considered. First, the order reminds other members of the profession of the public interest in the maintenance of high professional standards. Secondly and more specifically, it may give emphasis to the unacceptability of the kind of conduct involved in the disciplinary offence. Thirdly, by speaking to the public at large, it seeks to maintain confidence in the high standards of the profession. The underlying purpose is not self-aggrandisement on the part of the profession, but a recognition of the social value in the availability of the services provided to the public, combined with an understanding of the vulnerability of many who require such services.

80 In the present case, Mr Keddie has accepted that the charges in relation to Ms Meng's matter were grossly excessive and that his failure to supervise amounts to professional misconduct: he accepted that the narrative bill not only contained mistakes, errors and duplications but also included charges which should not have been made and charged for work that was not reasonably carried out or carried out in a reasonable manner and charges that were unfair or unreasonable for the work performed. Having considered the material before the Tribunal we conclude that Mr Keddie's admission was properly made and that he is guilty of professional misconduct. The parties have agreed that fair and reasonable professional costs for Ms Meng's matter (including the 25 per cent uplift under the costs agreement) together with the matters of Ms Meng's husband and son, totalling $292,045.19 plus GST has resulted in an overcharge of $215,074.65. As a result of the dispute raised concerning the costs, the firm has now repaid to Ms Meng $230,000 with a further $30,000 being repaid by counsel and an investigator. The Tribunal is comfortably satisfied that, in charging these amounts, Mr Keddie's conduct fell short of the standard of professional conduct observed or approved by members of the profession of good repute and competency: his conduct was such as to warrant it being regarded as "disgraceful or dishonourable conduct" as that term has been used in the authorities cited.

81 In reaching this view the Tribunal recognises that at no stage did the LSC particularise that the overcharging was deliberate or fraudulent. The evidence before the Tribunal demonstrates a flawed system of recording costs incurred in Ms Meng's matter in relation to which no particular person, apart from their own entries, was regarded as responsible for the accuracy of those entries. Mr Scroope did not regard himself as being responsible for costs entries made by others for work performed on Ms Meng's matter although he was the supervising solicitor in charge of the matter on a day-to-day basis. Mr Keddie, in fact, had little to do with the preparation of a proper bill of costs although he was supervising Mr Scroope. Mr Keddie was content, after three years, to be told of the entries appearing in the ledger and having regard to his knowledge of the matter, assess that figure as simply being "about right." He did direct Mr Scroope to check for leakage to ensure that all proper attendances were charged for and he could have just as easily directed that either Mr Scroope or the in-house cost consultant scrutinise the bill to ensure that it was accurate, appropriate and contained no errors. The evidence before the Tribunal suggests that, even on a cursory view of the very many attendances, it would be clear that there were errors and duplications. The Tribunal regards it as particularly concerning that there were instances when a number of different tasks performed at the same time were broken down into individual units for each task rather than costed for the time actually taken for all the tasks. This aspect was only briefly touched upon in Mr Scroope's evidence.

82 During submissions the Tribunal raised with senior counsel for Mr Keddie whether the evidence suggested a systemic problem with the method of recording costs charged by the firm. It is accepted that the Tribunal has only one case before it, yet senior counsel conceded that while there was no evidence of other cases suffering the difficulty or the same extent of the difficulty shown in Ms Meng's case, the system was such that there was a risk of the same problems arising in other cases handled by the firm. Those remarks are made against the background that it was an agreed fact that, between 2002 and 2007, the firm employed a "costs consultant", clearly a person able to assist in monitoring the costs recording system. This person was not just a "costs clerk" or "costs officer" as sometimes referred to in the evidence.

83 Having regard to the frequency of the excessive costs charged during the three years or so that the firm was handling this case before it was settled and what we consider the quite extraordinary amount of overcharging involved, the Tribunal is unable to accept the submissions for the LSC and Mr Keddie that an appropriate penalty is a reprimand with or without a fine and the payment of costs.

84 Although Mr Keddie in the Statement of Agreed Facts accepted "ultimate responsibility" for any acts or omissions of Mr Scroope and other staff engaged in the conduct of Ms Meng's file and accepted that his conduct constituted professional misconduct, the oral submissions made on his behalf did not clearly embrace that position. In the Statement of Agreed Facts, Mr Keddie said he did not know how the narrative bill had been prepared and in submissions it was said that he had an entirely limited personal involvement in the charging of the matter although he accepted that the process was inappropriate at the time. He asserted his entitlement to rely on Mr Scroope's standing as a very experienced solicitor and that approach was rolled up into a final flourish, asserting that a striking feature of the case was Mr Keddie's "lack of personal culpability." Further, in the Statement of Agreed Facts, Mr Keddie relied upon the opinion of Mr Salier as to what was fair and reasonable charges in all the circumstances: that conclusion would produce a figure significantly lower than the agreed amount of overcharging. Unfortunately, those submissions tended to detract from the position asserted in the Statement of Agreed Facts and leaves open the degree of responsibility actually accepted by Mr Keddie.

(As to Mr Scroope's role in this excessive charging, see the Tribunal's decision, Legal Services Commissioner v Scroope [2012] NSWADT 107)

85 In addition, Ms Meng was a vulnerable client, at least in one of the senses referred to by Mahoney JA in Veghelyi. It appears, as earlier observed, that Ms Meng had little or no English and the preparation of her case, including taking statements from other witnesses, involved the extensive use of translation services. Ms Meng had been seriously injured while on a holiday in South Australia and was therefore remote from her normal family support network. She had selected a solicitor in a country where she appeared to have few ties. She was very much in the position where she had to place trust in her solicitor and undoubtedly expected her solicitor to protect her interests at every level, including the charging of only appropriate costs for work actually performed.

86 In relation to Mr Keddie's prior history and the finding of professional misconduct made by the Tribunal in 2008, it is to be noted that matter did not relate to overcharging but concerned breaches of the 2005 Regulation regarding advertisements published on a Yellow Pages website. While the subject of those proceedings relates to quite different matters, there are observations contained in the Tribunal's decision that spoke adversely of Mr Keddie's attention to the systems used by the firm to advertise its services. The Tribunal concluded that the most significant feature of his conduct was Mr Keddie's failure to take reasonable steps to ensure that the firm was not responsible for any further breaches of the Regulation. There had been an earlier breach where the LSC had opted not to proceed further but where Mr Keddie had been warned that he must take responsibility for complying with the advertising Regulations. The Tribunal rejected submissions on his behalf that Mr Keddie's failure was "a rare oversight" or "mere inadvertence" where the conduct was found, at the very least, to involve "a substantial dereliction of duty and a high degree of negligence." It was noted that Mr Keddie may well have been a very busy practitioner, the manager of a law firm and comparatively inexpert in tracking material on the internet but the Tribunal stated that it would have been "quite easy" and not at all time consuming for him or one of his partners at his suggestion to instruct one of the more appropriately qualified people to carry out the necessary searches.

87 The Tribunal also thought it significant that the marketing manager who, although instructed to remove the offending phrases from the website, appeared not to have been instructed (even following notification to Mr Keddie of the earlier complaints) to check whether any other offending material existed. The Tribunal stated that the experience relating to unauthorised words appearing on its website should have prompted a review by the marketing manager of the contents of all Keddie's websites and if so directed, would have come across the "considerable quantity of offending material" found in the particulars. The Tribunal's finding of professional misconduct was based both on the relevant statutory provision and the broad common law criteria of conduct that would be regarded as "disgraceful and dishonourable" by fellow practitioners of good repute and competence.

88 The significance of this previous finding of professional misconduct that is of some relevance to the present proceedings is, firstly, the similarity of approach in attempting to play down the seriousness of the breach by relying on the size of the firm, how busy it was and how others were responsible for aspects of the system. There were echoes of that approach in the present matter although in different terms. In this case Mr Keddie and his partners were responsible for the computer system of costing adopted by the firm and for its use by both senior and junior solicitors and other fee earners. There was no clear line of responsibility for ensuring that the entries in the costs ledger and as finally charged were a correct and proper reflection of the work performed.

89 A system that allowed fee earners to record their work by description and time using Mr Scroope's initials had the obvious potential to result in charging at Mr Scroope's rates rather than the lower level of more junior employees. No system was adopted to overcome that potential problem and although there was an in-house costs consultant, when a large bill arising from a complex bill such as Ms Meng's was required to be calculated prior to settlement negotiations, there appears to be no reason why that facility should not have been utilised to ensure that the bill was accurate, free from the numerous errors found and overcharging demonstrated by Ms Meng's bill. As earlier observed, a simple direction to Mr Scroope to check for leakages could have also just as easily contained a direction to have the bill checked for accuracy. Mr Keddie's failure in relation to the system of costing and his failure to supervise Mr Scroope and other members of the firm entering costs on Ms Meng's bill, in the words of the Tribunal in 2008, "involves a substantial dereliction of duty and a high degree of negligence."

90 In Meakes, Tobias JA commented unfavourably on the failure of the barrister to give evidence in the proceedings thus leaving the Tribunal and the Court with a number of important yet unanswered issues. At [70] his Honour noted that in disciplinary proceedings it was accepted that the onus of proving misconduct lay with the party bringing the charges and that a practitioner was not required to give evidence but he observed that, in Coe v NSW Bar Association [2000] NSWCA 13, there was an expectation that legal practitioners "will mount the witness box to provide some explanation as to their conduct, rather than simply relying on evidence from the Bar table." His Honour noted that in Coe, Meagher JA, with Priestley JA in concurrence, repeated with approval observations made by the Tribunal in Coe that were regarded as apposite, namely:

In the circumstances where a prima facie [case] against a legal practitioner has been presented and where the practitioner wishes the Tribunal to accept an explanation as to how the conduct came about it is inappropriate and irregular for the legal practitioner to attempt to do so through submission from the Bar table. If he wishes the Tribunal to accept some explanation as to how the conduct came to take place then in our view he has an obligation to meet the situation by explanation on oath.

At [78] his Honour stated that the Tribunal should not have been required to speculate about the basis upon which the barrister charged the fees complained of.

91 The strengths of those comments of course apply with great force when the charges are resisted yet found to be made out. In the present proceedings Mr Keddie had filed an affidavit in circumstances where, in his Reply, he had accepted responsibility for the overcharging:- the issues raised were the extent of the overcharging and the reasonableness of some of the fees claimed. When the parties reached agreement on a Statement of Agreed Facts no other evidence was tendered on behalf of Mr Keddie. Unlike in Mr Scroope's case, no new or re-fashioned affidavit was filed to meet the changed circumstances.

92 It may well have been that the LSC was satisfied with the terms of the Statement of Agreed Facts and would not, in any event, have taken the opportunity to cross-examine if such an affidavit had been tendered. This approach to the matter, however, left the Tribunal with no opportunity to test the agreed facts, including the foundation and appropriateness of the agreed level of overcharging. There was no explanation from Mr Keddie, in his position as principal of the firm and managing partner, as to how the system of costing came to be implemented and why there was a limitation on those who could be identified accurately as fee earners in the accounting ledger. As earlier noted there was no opportunity to clarify with Mr Keddie all of the operative reasons for his withdrawal from practice and his undertaking not to seek to practise again. As observed by Tobias JA in Meakes, there were a number of issues of some significance to the Tribunal in this case that were unable to be dealt with or clarified.

93 There are mitigating factors that have already been mentioned: a substantial amount of money has been repaid to Ms Meng; Mr Keddie has undertaken to pay any further appropriate sum for repayment determined by the Tribunal; and, he has also voluntarily withdrawn from practice and has undertaken not to practise again. While this is a case where there is no evidence of deliberate overcharging (except perhaps the example of time spent on a number of matters being broken down and charged by units of time for each task rather than for the combined total of the various tasks undertaken at the same time) and no allegation of fraud or dishonesty, the conduct for which Mr Keddie has taken full responsibility represents a most serious breach and a major failure in complying with professional standards. Mr Keddie did not give evidence and so there was no opportunity for him to be cross-examined by the LSC or questioned by the Tribunal. It is entirely unknown to the Tribunal what his personal circumstances are or to assess the personal cost to him of foregoing the right to further practise in the future. Having regard to the seriousness of the breach, the protective nature of the jurisdiction and the role these penalties play in both educating the profession and deterring its members from similar conduct, the Tribunal concludes that it is appropriate in this case to remove Mr Keddie from the Roll pursuant to the provisions of

s 562(2)(a) and pursuant to sub-section (2)(c) to further order that a Local Practising Certificate not be issued to Mr Keddie before the expiration of five years from the date of this decision.

94 Having regard to the order proposed it is clear that the Tribunal concluded that a reprimand is an inadequate penalty in this case. Having regard to the considerable costs burdens that Mr Keddie has assumed, we are of the view that it is unnecessary in this case to impose a fine. There were no special circumstances claimed to exist in relation to the question of costs and therefore by operation of the 2004 Act, Mr Keddie shall pay the costs of and incidental to the filing of the Application for Original Decision as Amended.

95 One further matter should be mentioned before concluding this case. The Applications alleging the charging of excessive costs by Mr Keddie and Mr Scroope were filed in the Tribunal in mid-2009. The LSC relied upon a costs consultant's report dated February 2009 and two further reports filed subsequently and dated August 2009 and July 2010. The respondents relied upon a costs assessor's report filed in April 2010. A joint report was filed in September 2010. Replies to these initial Applications by both practitioners were filed in late February 2010. Pursuant to directions made by the Tribunal, Mr Keddie filed affidavit evidence in late October 2010 and Mr Scroope filed affidavits in late November 2010. Directions were given for the LSC to circulate draft Statements of Agreed Facts by the end of February 2011 with the practitioners to identify agreed facts and disputed facts by the end of March 2011.

96 The Original Application in each matter sought the joinder of all Applications (then numbering four in total). Joinder was opposed but directions to list that Application for determination were not sought until February and March 2011. The Tribunal heard argument on that Application in late May 2011 and allowed the joinder of the matters in early June 2011. There were other interlocutory applications. The matter was agreed to be ready for hearing in early October 2011 with estimates of a hearing up to three weeks in length. Ultimately, the Tribunal determined that a two-week hearing would be appropriate but to accommodate legal representatives who had long been engaged in the matter and to allow a Tribunal to be constituted, the hearing was set to commence in late April 2012.

97 Following a flurry of activity in the days immediately before the hearing was to commence, the parties were able to agree on a Statement of Agreed Facts in each matter. The hearing was reduced to two separate days, one essentially dealing with Mr Keddie and several days later a continuation of the hearing to complete Mr Scroope's matter.

98 The files in each matter disclose that they came before the Tribunal for directions on 16 occasions between July 2009 and October 2011. These were in addition to other interlocutory applications. Having regard to the fact that the matter was investigated at length by the LSC before Applications were lodged in the Tribunal, it is concerning that these matters have taken so long to reach a final hearing. The Tribunal does not seek to apportion blame for this delay but it can no longer be regarded as appropriate or in the public interest for even complex matters to take so long to be determined. In these cases the expert evidence was completed approximately 15 months after filing although the issues were well exposed through the investigation conducted by the LSC: yet, it took a further 18 months to reach a hearing.

99 In the Tribunal's Annual Reports attention has been drawn to the excessive delays experienced in being able to bring matters to a conclusion in the Legal Services Division of the Tribunal. It has been recognised that there are often legitimate reasons for delay: it is not unusual for matters to mark time because of external review processes, related criminal proceedings or because health issues (together with analysis and treatment) are regarded as being directly in issue in the alleged conduct. These legitimate reasons apart, there is no excuse for the routine failure to abide by directions made by the Tribunal for the prompt and effective disposition of matters. It is rare for a Reply to be filed within the 21 days required by the Administrative Decisions Tribunal Act 1997 - this should not be an extended process having regard to the fact that there has usually been a substantial investigation prior to the commencement of proceedings in the Tribunal and the fact that practitioners are normally well aware of the issues and the defences to be relied upon.

100 The disciplinary function of the Tribunal in the Legal Services Division requires the co-operation of the parties to effectively operate. In a different context, as referred to above, the Supreme Court has, from time-to-time, emphasised the obligations of practitioners to assist the Tribunal by the giving of evidence and in every sense, participating in the proceedings. The obligation to assist the Tribunal is not only limited to the giving of evidence and providing appropriate explanations for the conduct complained of but exists at the most basic level of complying with directions made by the Tribunal designed to bring about a speedy and efficient conclusion to proceedings.

ORDERS

101 The Tribunal makes the following orders:

1. The conduct of Russell Walter Keddie in relation to charging Ms Meng grossly excessive costs is found to be professional misconduct.

2. The name of Russell Walter Keddie shall be removed from the local Roll of Practitioners.

3. A Local Practising Certificate shall not be issued to the practitioner, Russell Walter Keddie, before the expiration of five years following the date of this decision.

3. Russell Walter Keddie shall pay the costs of the Legal Services Commissioner.

I hereby certify that this is a true and accurate record of the reasons for decision of the Administrative Decisions Tribunal.

Registrar

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Annexure

Decision last updated: 04 June 2012