Stunning reply to complaint over law firms’ ‘profiteering’

THE statutory body that is supposed to regulate lawyers' conduct has failed to prosecute any breaches of advertising standards in more than a decade.

Consumer advocate Randall Hart has concerns about breaches of advertising rules in the legal industry, Picture: Kevin Farmer

THE statutory body set up to regulate lawyers' conduct has failed to prosecute any breaches of advertising standards in more than a decade, despite admitting advertising breaches of the Personal Injuries Proceedings Act are occurring more often than not.

The Legal Services Commission has also not fined any lawyers or legal firms for breaches of the PIPA since January 2014.

The reluctance of the LSC to fine or prosecute individuals and firms was revealed through a Right to Information request from Toowoomba law clerk Randall Hart.

Fed up with what he saw as an increase in advertising that breached the PIPA over the last two years, and an acceleration in the number or breaches in the last six months, Mr Hart lodged a complaint with the LSC in late May.

Personal injury services is big money, he said.

"If a person suffers whiplash injuries in a car accident and cannot work, some lawyers are estimating huge legal costs of $50,000 to $70,000 to handle a claim," Mr Hart said.

"That's why (firms) are spending thousands of dollars on advertising campaigns.

"If you spend $20,000 on an illegal advertising campaign for three months there is no consequence.

"A firm might receive 30 claims they otherwise would not get. If that occurs, they've added almost $900,000 to $1.5 million in revenue, unethically."

Consumer advocate Randall Hart has concerns about breaches of advertising rules in the legal industry, Picture: Kevin Farmer

In his complaint, which features more than 20 firms and their advertising, Mr Hart said a review of material he had secured two years previously showed "some law firms appear to be repeat offenders and breaches of PIPA are systemic".

"I cannot find any public record of action being taken against particular firms. It appears that the absence of any public action has emboldened other firms to adopt a similar approach," he wrote to the commission.

But it was the LSC's response which Mr Hart said was "remarkable".

The LSC's acting director of investigations Michael Roessler wrote back saying Mr Hart had sent a large amount of material about alleged advertising breaches, and that "the commission has limited resources to allocate to this issue at present".

"While the commission hopes to be able to deal with these matters in due course, as one of the main purposes of the Legal Profession Act is to provide for the protection of the consumers of legal services, the other regulatory functions of the commission, especially the investigation of complaints about legal practitioners, law practice employees and unlawful operators must be given priority over PIPA breaches," Mr Roessler wrote.

"That is not to say that breaches of PIPA are being ignored, however, as you would be aware, across the profession the advertising restrictions are being honoured more in the breach than in the observance."

The LSC's 2018/19 annual report showed it had received 52 undertakings from principals of law firms to amend their personal injury advertising to become compliant under the PIPA.

The 2017/18 report showed it had received 18 undertakings.

Previous annual reports made no mention of undertakings, but said between 2012/13 and 2016/17 reporting years, roughly 160 complaints led to advertising being made PIPA-compliant.

Mr Hart said the lack of fines and prosecutions meant more and more firms were disregarding the personal injury services advertising restrictions.

"The advertising restrictions are there to ensure the Queensland compensation schemes remain healthy and viable," he said.

"They aim to strike a balance to ensure injured Queenslanders have the best and fairest compensation scheme in the country.

"The abysmal conduct of many lawyers to flagrantly disregard the clearly set out laws puts the viability of the Queensland schemes at risk."

He said there seemed to be an "absence of long-term thinking" in the advertising breaches.

"Many lawyers are putting their profit margins ahead of the benefits and interests of the public, and the injured persons that rely on their support through difficult times in their lives.

"Aside from the benefits to the public of a viable compensation scheme, the current advertising standards of some lawyers has been described by some as 'bottom feeding' and 'grubby'.

"I think the conduct of lawyers when law firms are putting profit, and it's significant excessive profit, ahead of their clients, it has the potential to affect the public's confidence in the profession."

The LSC when contacted by The Chronicle said in a statement it considered each and every complaint within the constraints of the Legal Profession Act.

"The Act requires that we must first be satisfied that there is a reasonable likelihood of a finding of misconduct," the statement said.

"If that test is satisfied, then public interest considerations must be taken into account … There are many steps and considerations before a matter can be prosecuted and to date, there has not been any infringement of the PIPA legislation that has been in the public interest to prosecute."

Mr Hart said he had regularly been tagging the Queensland Law Society in social media advertising that breached the PIPA.

"Some firms just delete the comment … but some firms have changed their ad campaigns, which is pleasing," he said.

"It's disappointing that it's up to the individual to do something about it rather than there being a groundswell from the profession itself to ensure that its members are doing the right thing by the community."

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