Legal Profession

Published date01 December 2014
Date01 December 2014
AuthorLAI Yew Fei LLB (Hons) (National University of Singapore); Advocate and Solicitor (Singapore); Partner, Rajah & Tann Singapore LLP.
Citation(2014) 15 SAL Ann Rev 445

21.1 2014 saw a number of cases in relation to the legal profession, including cases in which lawyers entered into prohibited borrowing transactions, a case in which a lawyer forged various court documents and a case in which a lawyer was disciplined for various instances ofnon-attendance in court and non-compliance with court directions. There were also two cases which involved lawyers' improper conduct towards third parties and a case in which a lawyer who prematurely released court documents to the media was disciplined.

21.2 In 2014, We Also Saw The First Court Of Appeal Decision On The Ad Hoc Admission Of Foreign Senior Counsel Since The Ad Hoc Admission Regime Under The Legal Profession Act (cap 161, 2009 Rev Ed) (lpa) Was Amended With Effect From April 2012.

Solicitor Conducting Lobbying/networking Activities

21.3 The extent to which a solicitor is permitted to engage in activities other than providing legal services was explored in Law Society of Singapore v Ong Teck Ghee[2014] SGDT 7 (Ong Teck Ghee). In this case, the respondent solicitor used his firm to enter into an agreement(the Consultancy Agreement) with a Danish company (BN) and agreed to, inter alia, promote the sales of BN's smallpox vaccine, procure purchase of the vaccine by customers and conduct lobbying/networking activities for BN. The respondent would be paid commission according to the volume of sales he could generate from his efforts: at [6]. To raise funds to finance his activities under the Consultancy Agreement, the respondent approached various parties to invest in this project.

21.4 The Law Society put forward several charges against the respondent in relation to his lobbying and fund-raising activities. The first charge put forward by the Law Society was that the Consultancy Agreement detracted from or was incompatible with the profession of law, and the respondent had therefore contravened s 83(2)(i) of the LPA: at [29].

21.5 The disciplinary tribunal (DT) dismissed this charge. To satisfy s 83(2)(i), a trade or business must either be illegal or considered undesirable because it brings the profession of law into disrepute: at [31]. In this case, there was nothing illegal in the Consultancy Agreement: at [33]. The Consultancy Agreement also did not bring the profession into disrepute or detract from the honour and dignity of the Bar: at [36][37]. Further, the fact that the respondent's remuneration under the Consultancy Agreement was based on a percentage of the total sales did not cause the charge to be made out. Income in the form of a commission does not per se bring the profession into disrepute, and something more is needed: at [38].

21.6 The Law Society was also unable to make out the alternative first charge that the respondent engaged in corrupt activities which amounted to misconduct unbefitting an advocate and solicitor. Even though the respondent admitted that he had incurred substantial costs in entertaining and networking with government officials both in Singapore and overseas, the DT observed that the evidence did not show that the respondent had a corrupt intent, which required proof that he knew what he did was corrupt by the ordinary and objective standard: at [39][45].

21.7 The DT also declined to consider the Law Society's submission that the respondent was in a position of conflict of interests as he was both a legal adviser of BN and a contracting party to the Consultancy Agreement, since this submission had never been inquired into by the inquiry committee or raised in the Law Society's statement of case. To entertain this submission at the DT stage would be a breach of natural justice: at [53][55].

21.8 Finally, the DT dismissed the Law Society's submission that a law firm is solely for the practice of law or for the provision of legal services. The Law Society could not point to any law, regulation or ethics rule categorically prohibiting an advocate and solicitor from using his law firm to engage in activities other than the provision of legal services: at [56][68].

21.9 Even though the DT found that the charge against the respondent for conducting business which detracted from or was incompatible with the profession of law was not made out, the respondent was found to have entered into prohibited borrowing transactions and taken unfair advantage of a third party. These other charges will be discussed in more detail below.

Prohibited borrowing transactions

21.10 Solicitors should be extremely wary of taking loans from their clients. Such loans are prohibited by r 33 of the Legal Profession (Professional Conduct) Rules (Cap 161, R 1, 2010 Rev Ed) (Professional Conduct Rules) unless the solicitor can satisfy one of the exemptions in r 34 of the said Rules.

21.11 In Law Society of Singapore v Yap Bock Heng Christopher[2014] 4 SLR 877 (Yap Bock Heng Christopher), the respondent solicitor was acting for the complainant in respect of the latter's detention by the Indonesian police. The solicitor requested a loan from the complainant and promised to repay it within two weeks, and did not advise the complainant to obtain independent legal advice. The respondent failed to repay the loan when the loan was due, despite many inquiries aboutre payment. After a demand was made by the complainant's new lawyer, the respondent rendered to the complainant several bills, the total sum of which exceeded the loan. When the complainant applied for taxation, the respondent further inflated his claim for fees. At taxation, more than 80% of the costs claimed in the respondent's bills were taxed off.

21.12 The Court of Three Judges suspended the respondent for two years for entering into the prohibited borrowing transaction: at [46]. In particular, the court considered the following to be aggravating factors(at [42]):

(a) The respondent requested for the loan while the complainant was incarcerated in Indonesia, thereby placing tremendous psychological pressure on the complainant, making it difficult for the complainant to refuse to grant the loan.

(b) The respondent avoided contact with the complainant and the latter's sister for an extended period of time in order to avoid repayment.

(c) The respondent threatened the complainant and the latter's sister for chasing for repayment, and made good on that threat by issuing several bills which were significantly taxed down.

(d) The respondent had only repaid $700 of the $34,000 loan to the date of hearing.

21.13 As to when a court will impose a monetary penalty for a prohibited borrowing transaction, the court held that it is the overall gravity of the misconduct that determines whether a fine or a suspension should be imposed. The absence of dishonesty does not necessarily mean that the penalty should only be a fine: at [27]. The fact that the client suffered no loss as a result of a prohibited borrowing transaction is irrelevant to both liability and punishment. If the client is left worse off due to the solicitor's failure to repay the loan, that would be an aggravating factor: at [30].

21.14 The scope of the definition of client in r 32 of the Professional Conduct Rules was considered in Law Society of Singapore v Ong Teck Ghee[2014] SGDT 4, in which the respondent persuaded the complainant to invest in a project the respondent was involved in. The respondent had met the complainant in a social context. Subsequently, two loans were advanced by the complainant to the respondent.

21.15 It was not disputed that the loans were made to the respondent by the complainant without independent legal advice: at [37]. The main issue was whether the complainant was a client such that the loan was prohibited under r 33(a) of the Professional Conduct Rules. Limb (c) of the definition of client in r 32 of the Professional Conduct Rules includes any person seeking to invest money through an advocate and solicitor or approached by or on behalf of an advocate and solicitor for that purpose.

21.16 The DT held that the complainant was a client within the meaning of r 32 of the Professional Conduct Rules:

(a) Under r 32 of the Professional Conduct Rules, a client (for the purposes of r 33 of the Professional Conduct Rules)includes anyone who seeks to invest money through a solicitor, and anyone who is approached by a solicitor (or his agent) to invest money through that solicitor: at [49].

(b) For a person to be considered as a client under r 32,there is no additional requirement that the client approaches the solicitor to act in his capacity as a solicitor for the purposes of the investment, or that the solicitor approaches the client so that he may act as a solicitor for the purposes of the investment: at [50].

(c) Rule 32 applies regardless of whether there were any prior dealings between the client and the solicitor. It also applies where the client and the solicitor have a pre-existing friendship or familial relationship, or where the client is more astute about financial investments than the solicitor: at [55].

(d) The DT's interpretation of rr 3234 is consistent with the purpose of those rules, which is to impose safeguards in respect of the position of special influence occupied by a solicitor, in whom trust and confidence is naturally reposed: at [53][55].

21.17 On the facts, the complainant had either...

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