As the regulator of the legal profession in Victoria, the Victorian Legal Services Board and Commissioner (VLSB+C) wants to remind lawyers of their professional and ethical obligations - and provide guidance on what good and bad practice looks like - when engaging with people who may be eligible for redress under statutory schemes.  

These schemes are designed to give supports to people who have been significantly harmed by government policy or within institutions, and are often time-limited. Examples include the National Redress Scheme, Victorian Redress for Historical Institutional Abuse and the Victorian Stolen Generations Reparation Package. 

In this guidance, VLSB+C also wants to make clear our position on lawyer involvement in ‘claim farming’ which is a practice that is raising significant concerns – particularly in the context of statutory redress schemes.  

‘Claim farming’ involves the collection of personal information about individuals who have suffered personal injuries and making unsolicited contact with them to encourage them to make a redress application or to commence litigation. Claim farmers may use unethical or high-pressure tactics to solicit claims, and on-sell them to a legal practice or claims management company. This conduct has, in recent years, been prohibited in New South Wales and Queensland, and draft legislation has been introduced in Western Australia and South Australia.  Provisions in the NSW and QLD legislation are specifically directed at the conduct of lawyers. While there is no equivalent legislation in place in Victoria, given the legislative prohibitions in other States, it is timely to remind lawyers practising or seeking to practise in Victoria of our expectations.

All lawyers have professional and ethical obligations in relation to their clients. For lawyers acting for individuals eligible for statutory redress, we want to particularly highlight:  

1. Your obligation to act in the best interests of your client: This includes providing information and advice to a client in a way they can understand, so that they can make a fully informed decision about their legal matter. To do this, you need to understand your client’s specific experience and communication needs, so that you can communicate in a way that meets those needs. This may involve asking the client how they need you to communicate or allowing extra time for your client to process complex information.  

   Understanding the impact of your client’s personal circumstances and tailoring your communication to their needs will help you provide more effective advice and better manage your client’s expectations through the legal process.  

2. Your duty to deliver legal services competently and diligently: This includes explaining the legal and other consequences of pursuing different legal avenues. In the context of statutory redress, it is particularly important to explore the potential financial benefit following successful litigation (balanced against its inherent risks) against the possibility that a redress application will be more straightforward but could pay less than successful civil litigation (and may preclude other future civil claims in relation to abuse that is within the scope of the scheme).  

   Competent and diligent service in the context of people eligible for redress also involves carrying out a careful assessment of your client’s particular experience. You might need to arrange a medico-legal assessment of the extent of their injury, and assess potential financial loss. This information can inform your assessment of the likely amount of any settlement or award, which is relevant to your client’s decision-making about whether to pursue redress or a civil claim. 

   Giving complete advice is fundamental to empowering your client to make an informed decision. 

3. Your obligation not to engage in conduct that is likely to bring the profession into disrepute, or that is dishonest: People eligible for statutory redress are likely to have experienced significant trauma. Dishonest, misleading or deceptive conduct to attract these (or any other individuals) as clients, and high-pressure tactics such as aggressive questioning, or repeated or harassing calls, is unacceptable.  

4. Your obligation to make sure that any advertising, marketing or promotion in connection with your legal practice is not false, misleading, deceptive, offensive or prohibited by law, or likely to mislead or deceive: Misrepresenting the process involved in receiving a payment under a redress scheme (e.g. by suggesting that legal services are required to make a redress application), or misrepresenting the likelihood of successful civil litigation or the amount of any likely award, is unethical.  

5. Your obligation to disclose any payment paid for third party referrals of clients: If you pay a third party (e.g. a claims management company) for client referrals, you must make sure your client understands you have paid for the referral. You should document this disclosure in writing. You should also take steps to make sure your client hasn’t been misled in any way by the third party, and that they understand they don’t need to go through a third party (or pay that third party) to access legal services. 

6. Your obligation to not seek instructions in a manner likely to oppress or harass a person who might be expected to be at a significant disadvantage at the time you seek those instructions: This could be because they have a history of trauma and may be significantly distressed by being unexpectedly approached or cold called without their consent about past events.  

Other legal and professional obligations we want to particularly highlight in the context of lawyers who engage with people eligible for statutory redress are: 

1. Your obligation to charge proportionate, ‘fair and reasonable’ legal costs: You can only charge legal costs that are fair and reasonable in all circumstances and are proportionate and reasonable in amount and how they’re incurred. You must take all reasonable steps to satisfy yourself that your client has understood and consented to the course of action and costs you’re proposing. You need to be clear about the likely fees and other costs involved in each legal avenue available to your client, and how these will affect any redress payment, settlement or award.   

2. Prohibitions against unconscionable conduct and misleading or deceptive conduct: The Australian Consumer Law, which forms Schedule 1 to the Competition and Consumer Act 2010 (Cth), contains general protections which create standards of business conduct, and specific protections which address identified forms of business conduct. The ACL applies to the supply of goods and services (including legal services), including prohibitions against unconscionable conduct and misleading or deceptive conduct. Some of the concerning behaviour we describe below, in the Bad practice section of this guidance, could arguably meet the threshold of this prohibited conduct. 

3. Privacy, direct marketing and anti-spam regulation: The National Privacy Principles govern the collection and use of personal information, and the Model Codes on Direct Marketing and legislation including the Spam Act 2003 (Cth) are relevant to direct marketing.    

As the regulator, we encourage lawyers to aim for good practice in their dealings with clients. In addition to complying with your professional, ethical and legal obligations (some of which are outlined above), we think it is good additional practice when working with potential statutory redress claimants to: 

1. Be trauma-informed: While maintaining your professional boundaries is critical to your ability to act in your client’s best interests, creating a supportive environment is also integral. If your client trusts you, is comfortable with you, and isn’t re-traumatised through their engagement with you, they’re more likely to share their experience and history and provide fulsome instructions. This enables you to give your client better legal advice and more effective representation.   

   You may find it useful to familiarise yourself with the non-legal support services that are available to particular client cohorts (e.g. social workers, case managers, financial counsellors) as you may wish to refer clients, or potential clients, to these services to support them through a legal process, or outside of it.  

   You may also find it helpful to undertake CPD that assists you to better understand the specific trauma impacts experienced by particular client groups (e.g. adult victim survivors of institutional child sexual abuse, or Stolen Generations), as relevant to your practice area. 

   For an introduction to trauma informed practice, see the With You Project Trauma-Informed Organisational Toolkit: With You Training produced by National Legal Aid and the Victorian Department of Justice and Community Safety resource Communicating with people with Trauma Related Disorders. 

2. Use Plain English: Give written advice about all your client’s legal options in plain language. It can be helpful to present the information in a diagram, as some people absorb complex information better this way. Presenting different options in a table may make it easier for your client to compare those options. 

3. Give your clients sufficient time to provide information and make a decision: When you meet or communicate with your client, allow enough time to make sure you each get the information you need from each other. This is critical to you determining your client’s capacity to understand your advice and their options. This in turn supports your client to be able to give informed and appropriate instructions, and helps you to work in their best interests.

The following types of conduct, which have been raised in the context of redress schemes, are capable of amounting to either unsatisfactory professional conduct or the more serious charge of professional misconduct. 

1. Obtaining personal information about a person in a vulnerable situation (e.g. a survivor of trauma) without their knowledge or consent in order to identify and cold call them to promote legal services: This is the case regardless of how the information about the person is obtained (i.e. by purchasing it from a third party, looking for it yourself or being given the personal information by an existing client). 

2. Putting your own financial interests ahead of your client’s, whether through the advice you give them about their legal rights and options (e.g. recommending a particular legal avenue that is likely to incur more legal costs than another, when it would not result in a greater award for the client), or through not being transparent about the likely financial outcome of their matter and the fees and other charges to be deducted from their settlement sum or award.  

3. Taking advantage of clients who, because of vulnerability (e.g. personal injury, abuse, trauma) or other circumstances, may be less likely to understand their legal rights and options, or less likely to understand a costs agreement and whether they’ve been over-charged.

4. Suggesting that your client requires your legal services (or legal advice generally) to apply for and get redress scheme compensation. 

5. Paying for or accepting referrals from a third party who has engaged in any of the unethical conduct described above, or who has misled people into believing they need an intermediary service to access redress or legal services: If you source a client by referral from a third party who you think isn’t being transparent with that person and/or is benefiting financially by referring that client to legal services, you should be clear with your client that they don’t need to work through an intermediary to access redress or legal services.    

6. Paying for client referrals from a third party and then charging the cost of that referral payment to your client as a disbursement.  

The reputation of the legal profession is fundamental to the public’s confidence in lawyers, and their willingness to engage and trust them. It’s incumbent on all lawyers who engage with people experiencing vulnerability – in this case people who may have suffered abuse in institutions or as a result of government policy – to uphold their professional and ethical obligations, and maintain public confidence in the integrity of the profession.