All fit and proper at LawCover

Leading personal injury solicitor appointed to board of NSW LawCover ... Untested allegations of professional misconduct hang in the air ... APRA's fit and proper guidelines for directors of insurance companies ... Finding of "serious neglect" ... Implications for policyholders 

Multi-millionaire, Lotus-driving Sydney compo solicitor Robert Bryden has slipped his posterior onto a boardroom chair at the NSW Law Society's subsidiary insurance arm LawCover. 

The appointment was notified to ASIC on November 28. It's for a three year term attracting an annual retainer of $59,000 or almost $180,000 all up. 

One of the conditions is that Robert remain a councillor of the NSW Law Society, which shouldn't be too difficult as he's had that gig for the past nine years, even serving on the society's professional conduct committees. 

There is another condition - that board members be fit and proper types. Therein lies the rub. 

Bryden is contesting three professional misconduct complaints brought by the NSW Legal Services Commissioner. 

It might be more accurate to say that the allegations are being "hotly" contested. They have been rattling around since 2008 and already have been before the Administrative Decisions Tribunal, the Court of Appeal, the High Court and now back to the ADT. 

Some of the details are set out in the CA's findings in Hagipantelis v Legal Services Commissioner of NSW, where a top draw panel of Spigelman, Allsop and Handley were in the saddle.

The commissioner alleges the two partners of the compo factory, Bandeli Hagipantelis and Robert Bryden, are guilty of professional misconduct in that they breached the regulations restricting lawyer advertising for personal injury services. 

According to an earlier round in the ADT the allegations relate to claims on Brydens' web site asserting that the firm carried out "personal injury" work; that it had "a proven track record and vast experience in plaintiff litigation particularly personal injury litigation"; that Brydens' lawyers had worked on "personal injury cases"; that they "specialise in personal law"; that they practiced "personal injury law since 1988"; that they were "widely regarded as a leading advocate in protecting the rights of workers and gaining maximum compensation for people injured in industrial and work place accidents"; and they had "a large workers compensation practice and assist people from all over NSW who have been injured in industrial and work place accidents to protect their legal rights and gain maximum compensation". 

At one stage Brydens had flagged to consumers that it's win rate was 98 percent. 

Austlii research slows that of the 10 most recent cases before the Court of Appeal in which the firm was involved, it lost 40 percent of them. 

The Court of Appeal examined the relevant legal profession regulation (cl.24) and a similar clause in the Workplace Compensation Regulation to see whether they were ultra vires the Legal Profession Act, the Workplace Injury Management Act and the Workers Comp Act. 

The court also considered whether a conviction against a legal practitioner is required before the LSC can proceed and whether the case was tainted by double jeopardy because the commissioner is seeking findings of contravention of both the legal profession regs and the workers comp regs. 

There was great debate about whether "advertising" was encompassed within the scope of "marketing of legal services". 

Spigs, for the court, upheld the ADT's jurisdiction to proceed with the case on all counts.  

Seven months later Gummow and Hayden refused the special leave application, saying the CA got it right. 

It went back to the ADT for a substantive hearing and after further interlocutory skirmishing it was set down to commence on November 22, the very time Bryden's appointment to the LawCover board was in the process of being proposed and formalised. 

That date was vacated and the hearing is now set down for three days commencing on April 10. 

If the LSC is successful there will no doubt be a further appeal. If all avenues are ultimately exhausted before Bryden's term on the board expires in 2014, then the directors will have to mull the question of whether a finding of professional misconduct impacts on APRA's "fit and proper" person requirements for LawCover directors. 

According to the LawCover CEO Paul McGahen, the company's "fit and proper" policy "slavishly" follows APRA's guidelines.  

Determination of fitness and propriety involves a range of issues, including: 

"Whether the person has demonstrated a lack of willingness to comply with legal obligations, regulatory requirements or professional standards, or has been obstructive, misleading or untruthful in dealing with regulatory bodies or a court … has been reprimanded, disqualified or removed, by a professional or regulatory body in relation to matters relating to the person’s professional competence (where relevant to the role of the responsible officer), honesty, integrity or business conduct." 

McGahen told Justinian that LawCover's board needs to be satisfied that a person has "correct levels of fitness and propriety at the time of joining the board" and that if subsequent circumstances arise, "the board would be required to reconsider". 

APRA also requires annual assessment of relevant directors and managers of regulated insurance companies. 

About seven months before the Court of Appeal findings in the jurisdiction case, Beazley, McColl and Barrett in Kelly v Jowett, found that substantial appeal costs were incurred by a plaintiff in a family provisions case as a result of the "serious neglect" of Robert Bryden and his partner Bandeli Hagipantelus. 

The court ordered the two solicitors to personally pay the plaintiff's costs on an indemnity basis. 

Ruth McColl said: 

"I am of the view, accordingly, that Mr Jowett's costs of the substantive appeal were costs he incurred by Mr Bryden and Mr Hagipantelis' serious neglect in the conduct of the equity proceedings, as well as without reasonable cause in circumstances for which they were responsible, such as to warrant making an order that they indemnify Mr Jowett against the costs he has incurred in connection with that appeal."

Reg Barrett said: 

"Neither Mr Bryden nor Mr Hagipantelis acted to 'take control of the situation'. Neither sat down with the employed solicitor to get to the bottom of the matter. Neither took over the file and gave it his personal attention or arranged for another solicitor to do the necessary work. Mr Hagipantelis merely instructed the employee to comply with the outstanding directions of the court. Beyond that, the partners were content to leave attempts at correction of the employee's clear dereliction in the hands of a manager without legal qualifications whose unhelpful and inadequate response was to say to the employee, 'This file is your mess, clean it up'.

By their failure to act, the partners of the firm allowed to emerge the very situation they were duty bound to avoid, that is, one in which the clients' interests not only were left unprotected but came into conflict with their own.

The court should exercise its supervisory jurisdiction over legal practitioners by making against Mr Bryden and Mr Hagipantelis the orders proposed by McColl JA. To allow the matter to rest on an undertaking proffered by them would not sufficiently register the court's disapproval of their conduct." 

It is fascinating that a solicitor to whom an appeal count has applied the term "serious neglect" should be a director of an insurance company dealing with solicitors' serious neglect. 

Maybe first-hand experience in serious neglect is just what the LawCover boardroom needs. 

The Law Society in nominating Bryden to the insurance company's board would have been aware of this background. 

It might have been more appropriate for the Law Society, as the guardian of ethical rectitude, to have delayed Bryden's appointment until he had been cleared of the LSC's complaints. 

Of course, "fit & proper" is a requirement that is supposed to be part and parcel of being a lawyer, so it would also have implications for anyone on the Law Society council. 

We sought a response from Mr Bryden's office, without success.