Avoiding complaints

Complaints can be time-consuming and distressing to deal with. We understand that complaints can’t always be avoided, but there are several things you can do to keep your relationship with your client positive and friendly.

Maintain a healthy relationship with your client

The following strategies can help you reduce the chances of a client making a complaint about you:

1. Communicate clearly. Use plain English, offer realistic timelines and update clients on your progress and their legal costs regularly. 
2. Be courteous. Show your clients courtesy and respect even when you’re busy and stressed. This can help prevent an already difficult situation becoming more hostile.
3. Be clear about fees, including disbursements and any additional costs. One of the most common client complaints is that the final bill was higher than they expected. If their legal matter will take longer or cost more than anticipated, let them know as soon as possible, explain why the costs will increase and keep a record of that conversation.
4. Keep detailed notes of every instruction and communication with both your client and other counsel. If anything changes, discuss the options with your client and keep a record of the conversation.

What to do if a client approaches you with a complaint

Be open to helping them resolve the issues before they escalate to a formal complaint. This will save you time and may also strengthen your relationship with your client. There are several ways you can do this including:

• Keep your feelings in check. We understand that it’s natural to be defensive but try to control your reaction. It’s inevitable that a client will be unhappy with your service at some point in time. This is often because clients don’t understand the legal process, they’re stressed, or they don’t understand what should be happening.
• Use the complaint as an opportunity to learn. Take time to understand what your client is concerned about and what they expect from you. This can help you find ways to improve your services.
• Listen to your client. Make sure you understand what your client is complaining about before reacting. Don’t respond immediately, particularly if you’re upset, but let your client know that you’ll look into the matter and tell them when you’ll get back to them.
• Find out what your client wants. You may be able to resolve their complaint quickly. If you’re prepared to offer them something different, you should let them know.
• Communicate clearly. Talk about the issue with your client using language that’s neutral and easy for them to understand. Be sure to explain what you can and can’t do.
• Talk to other people in your organisation about how you’ll deal with complaints. For example, you may agree that you shouldn’t deal with your own complaints and another lawyer should do this for you.
• If you’re a sole practitioner, join your local law association and find out what others do. You may also be able to help each other.
• Give your client information about making a complaint to us if the matter can’t be resolved.

What to do if someone makes a complaint about you

If someone does make a complaint about you, it’s important that you:

• make reasonable efforts to resolve their concerns;
• act on our instructions or requests within the timeframe we give you;
• give us any relevant information that we need to understand about the complaint;
• avoid doing anything that may cause further conflict between you and your client;
• contact us if you do not understand what we’re asking you to do; and
• let us know if you need personal support or more time to respond.

Resources for handling complaints

The Society of Consumer Affairs Professionals Australia (SOCAP) and the Australian Centre for Justice Innovation at Monash University have developed a complaints handling toolkit for small businesses. The toolkit provides a practical guide for complaint handling within small businesses and includes tips, tools and resources to help you deal with complaints.

You can also find more information about the types of complaints clients make about lawyers in our annual reports.

Amendment, suspension or cancellation by the Board

We have the power to amend, suspend or cancel practising certificates.  Each of the following is a ground for amending, suspending or cancelling your practising certificate:

• you failed to provide the required statement following a show cause event;
• you failed to comply with a requirement of Chapter 7 made in connection with an investigation of the show cause event concerned or has committed an offence under that Chapter in connection with any such investigation;
• we consider that you are no longer a fit and proper person;
• you are not, or no longer, covered by an approved insurance policy;
• you are engaging in legal practice that you are not entitled to engage in under the certificate (i.e. practising outside the conditions of the holder’s practising certificate).

In circumstances where we consider there are grounds to amend, suspend or cancel your practising certificate, we will issue a notice stating the proposed action, the grounds for the proposed action and the facts and circumstances that form the basis for our belief.

You will have a specified time to make written representations to us as to why the proposed action should not be taken and we will consider these representations before making our decision. However, where it is necessary in the public interest to immediately suspend a practising certificate, we may take this action with immediate effect. Persons subject to immediate suspension are entitled to provide written representations about the suspension. An immediate suspension will be in force until the earlier of the following:

• we make a formal determination in accordance with the usual amendment, suspension or cancellation procedure referred to above, or
• the expiration of 56 days.

If your practising certificate is suspended, you will be unable to practice during that period.

You can apply to the Victorian Civil and Administrative Tribunal for review of our decision to amend, suspend or cancel a practising certificate.

Complaints and disciplinary outcomes

We are also responsible for the receipt and handling of all complaints about lawyers in Victoria.  

Where the Commissioner initiates disciplinary proceedings against a lawyer, the case will usually be heard before the Victorian Civil and Administrative Tribunal. The decision made by VCAT, or any other relevant court, will generally be published on the Australian Legal Information Institute (AustLII) website.

Commissioner determinations

Cost disputes and service issues

The Commissioner has the power to make binding determinations in consumer matters where disputes over legal costs are below $23,865.

In situations where the disputing parties have reached a stalemate and cannot agree on what amount should be paid, the Commissioner has the power to determine what costs are fair and reasonable under the relevant circumstances. The Commissioner will generally first refer such matters for a costs review. The outcome of the costs review will often form the basis of what the Commissioner determines to be fair and reasonable legal costs.

Conduct issues

The Commissioner is also able to make a determination that a lawyer or law practice associate has engaged in unsatisfactory professional conduct. These determinations may result in the Commissioner ordering the lawyer or law practice to redo the work; apologise or undertake either counselling, supervision or further training. The Commissioner may also issue a the lawyer or law practice with a caution or a reprimand or order that compensation is paid (under certain circumstances).

Commissioner Determinations

All Determinations made by the Commissioner are now available via the Australasian Legal Information Institute (AustLII).

Commissioner initiated complaints

The Commissioner can initiate a complaint and commence an investigation into the conduct of a lawyer, even where a complaint has not been made by another person, or if a complaint has been withdrawn.These are called ‘Commissioner initiated complaints’. They were previously called ‘own motion investigations’.

This is an important power as it enables the Commissioner to investigate conduct that is improper or unsatisfactory where clients and/or witnesses may not be sufficiently aware of proper legal practices to raise a complaint. Conduct outside of legal practice may also be deemed inappropriate. Accordingly this is a significant consumer protection power.

Types of Commissioner initiated complaints

A Commissioner initiated complaint may be undertaken in any number of circumstances, including the following:

• where a disciplinary complaint is withdrawn and the Commissioner considers that the investigation should continue
• following receipt of a trust account investigation report
• following receipt of a referral by a Judge or Magistrate about a lawyer’s conduct in Court
• following identification of improper conduct of a lawyer in the media
• following identification of improper conduct in an investigation by the Commissioner into some other conduct; or
• following receipt of a report by another agency such as the Office of Public Prosecutions about a criminal prosecution of a lawyer.

There may be other occasions where the Commissioner is able to initiate a complaint.

Actions following an investigation

Following an investigation, the Commissioner has a range of powers.

Where the Commissioner is satisfied that the lawyer would be found guilty of unsatisfactory professional conduct by the Victorian Civil and Administrative Tribunal, the Commissioner may:

• order a caution or a reprimand;
• order an apology;
• order the lawyer or law practice associate to redo the legal work at no cost, or to reduce or waive the costs for that work
• order further training, education, counseling or supervision
• issue a fine up to $25,000
• recommend a condition be applied to the lawyer’s practising certificate
• bring charges against the lawyer before VCAT;

Where the Commissioner is satisfied that the lawyer would be found guilty of professional misconduct by VCAT, the Commissioner can bring charges against the lawyer before VCAT.

External examination FAQs

Read our frequently asked questions about the external examination process.

External examination requirements

Law practices and approved barristers’ clerks who operate trust accounts are required to keep trust records. These records must be examined by an external examiner (EE) each trust examination year. The trust examination year runs from 1 April – 31 March.

For the purposes of the examination, a law practice or approved clerk must provide the EE with their accounting or other records relating to the affairs of the practice or approved barristers' clerk, as well as any other information the EE reasonably requires. Penalties apply for failing to comply with these requirements.

EEs must provide end of trust year documentation to the Board by 31 May each year.

EEs, law practices and approved barristers' clerks will be contacted directly to inform them of the end of trust examination year requirements. The trust examination year requirements via LSB Online open in early April.

Resources for External Examiners

The Board has produced several resources to assist External Examiners when completing an external examination.

Visit the Resources for External Examiners page for frequently asked questions, and our Canaries in the Coal Mine video presentation providing guidance for completing external examinations.

Examination on ceasing to be authorised to receive trust money

Law practices and approved barristers' clerks who cease to be authorised to receive trust money must also have their trust records examined by an EE for any part of the trust examination year in which they were authorised to receive trust money. Law practices or approved barristers' clerks must also lodge examination reports for each trust examination year and any remaining period during which they continue to hold trust money. These reports must be lodged with the Board within 60 days after the end of the relevant examination period (See Rule 68(4) of the Legal Profession Uniform General Rules 2015).

The Act imposes heavy penalties for failing to comply with this requirement.

Approved trust accounting software

There are several trust accounting software packages available on the market. Before purchasing one of them, make sure it has the capacity to comply with the law.

A list of trust accounting software packages that have been examined and certified by the Trust Accounts Department of the NSW Law Society can be found on their website.

External examiner reporting

All parts of the annual trust examination reporting is conducted via LSB Online. Parts A and B are completed by the law practice. The External Examiner can then submit their report. If you are having any difficulties in submitting any part of the annual reporting, please contact edp@lsbc.vic.gov.au.

What is an external examiner?

An external examiner (EE) is a person who is qualified to be appointed to examine the trust records of a law practice or approved barristers’ clerk.

Who can be an EE?

The criteria that a person must meet before they may qualify to be appointed as an EE are specified in sections 155 – 156 of the Legal Profession Uniform Law (Victoria) and Rule 65 of the Legal Profession Uniform General Rules 2015. An EE must complete the Legal Services Council approved External Examiners trust course conducted by the Law Institute of Victoria or NSW Law Society as part of these qualification requirements, and be a member of an approved accounting body.

Appointing an EE

If a law practice or barristers’ clerk holds a trust account, they must appoint an EE to examine the records of that trust account annually. The appointment gives the EE statutory powers to examine their trust records and report those findings to us.

A law practice or barristers’ clerk must notify the Board of the appointment of their EE using the notification of appointment of External Examiner form within a month of receiving trust money (other than transit money). New EEs filling out the form must provide a copy of their completed EE course certificate.

Please note that it is the responsibility of the law practice or barristers’ clerk, not the EE, to lodge the appointment form with the Board.

A register of EEs qualified to examine the records of a law practice or barristers’ clerk is available on our website and updated monthly.

Termination or changing of an EE

A law practice or barristers clerk can terminate the appointment of an EE at any time with their consent or our prior approval. We may give approval if satisfied that it is reasonable in the circumstances for the practice or clerk to terminate the appointment. We may require the law practice or approved clerk to supply satisfactory evidence as to those circumstances, for example there are no outstanding fees to the EE. A law practice or barristers’ clerk must notify the Board of the termination of an EE within 7 days of the termination using the Request for approval of termination of External Examiner form.

An EE can terminate an appointment with the law practice or approved barristers’ clerk at any time by notifying that entity and us.

Annual Trust Examination reporting

All parts of the annual trust examination reporting is conducted via LSB Online. Parts A and B are completed by the law practice. The External Examiner can then submit their report. If you are having any difficulties in submitting any part of the annual reporting, please contact edp@lsbc.vic.gov.au.

External examiner enquiry form

If you are an external examiner looking to upload a trust account report, please log in to LSB Online. Visit our completing external examiners page for instructions on how to complete reports.

If you are an external examiner and have a query about any of the following issues, contact us via the EE enquiry form

• Registration as an external examiner
• Enquiring about an interstate accounting firm
• Clarify something on an examination report or end of trust year report
• Transfer an external examiner to a new entity
• Notify us of a change of your address or other details
• Issues with LSB Online

Go to EE enquiry form

External examiner newsletter

Our EE newsletter is sent to all external examiners who are registered with us. We use it to share important reminders, tips and resources that can help EEs work with law practices and meet their annual reporting obligations. Read the latest issue of the EE newsletter.

What is a statutory deposit account?

Law practices and approved clerks that are required to maintain a trust account in Victoria must deposit a specified amount of money with the Victorian Legal Services Board, out of any trust money that has been received by the law practice or approved clerk. The money is held by the Board and is repayable on demand.

The Board is required to maintain a statutory deposit account (SDA) into which it must deposit the monies. The account is maintained within the Public Purpose Fund held by the Board.

Opening a statutory deposit account

When the Board receives a notification of a new trust account, it will request Commonwealth Bank of Australia to open an SDA to be linked to the trust account of the law practice or approved clerk.

Depositing money into the SDA

A law practice or approved clerk that is required to maintain a trust account must deposit money into the SDA out of the trust money received by the law practice or approved clerk.

The amount required to be deposited is calculated by the Board for each quarter, in accordance with a formula detailed in section 79 of the Legal Profession Uniform Law Application Act 2014.

How to deposit

Online deposit

The easiest way to make the quarterly deposit is via our online portal LSB Online. You can only do this if you have completed the Direct Debit Request form and returned it to the Board. To make the transfer online, log in to LSB Online and follow the prompts.

Cheque deposit

1. Write out a cheque from your trust account payable to the ‘Victorian Legal Services Board – <name of your law practice> statutory deposit account’.
2. Hand your cheque to the Commonwealth Bank of Australia (there may be a fee if a deposit is made at any other bank). Ensuring you have written on the back of the cheque the SDA BSB and Account number.
3. The bank will give you a receipt of your deposit.
4. Your deposit will be credited to the SDA.
5. The Board will send you an email or post statement the following business day confirming the deposit and the total amount that you hold in the SDA.
6. Please contact the Board if you have not received an email or post statement by noon the following business day after your deposit.

Repayment by the Board

Amounts deposited with the Board into the SDA are repayable on demand to the practice’s or clerk’s trust account.

If an amount is repaid from the SDA to a law practice or an approved clerk and subsequently there is a sufficient amount in the practice’s or clerk’s trust account to cover the required deposit amount, the law practice or approved clerk must deposit the required deposit amount back with the Board.

How to withdraw from a statutory deposit account

You will be given your LSB Online login details and instructions for using the online service when you notify the Board of the opening of a new trust account. Please email edp@lsbc.vic.gov.au if you did not receive the login details. Only authorised users can withdraw funds from a statutory deposit account.

Withdrawals from the statutory deposit account must be made through LSB Online. All withdrawals must be made online.

Confirmation of transactions

After any statutory deposit or withdrawal is made, we will send a statement via email to the trust account holder the following business day confirming the total amount held in the SDA.

All trust account holders will receive SDA statements annually, regardless of whether a statutory deposit or withdrawal has been made.

Failure to adjust statutory deposit account

We monitor trust account balances and will advise a law practice or an approved clerk when an adjustment to the required deposit amount into the SDA is necessary.

If there is a particular reason why an additional deposit cannot be made (e.g. insufficient funds, unpresented cheques), a law practice or approved clerk must nonetheless obtain an exemption from the Board.

Failure by a law practice to deposit the required deposit amount may constitute unsatisfactory professional conduct or professional misconduct on the part of any principal of the law practice.

Exemptions from statutory deposit provisions

If you are unable to deposit the required deposit amount into the SDA, you may apply for an exemption by completing an online application through LSB Online.

Improvements to the application process have recently been made. It is now more user-friendly, providing clear guidance so that we get the information we need to make a prompt decision about an application.

Improvements include:

• In most cases a decision about the application will be provided immediately
• If a recalculation of the amount to be deposited is required, notification will occur immediately
• It’s expected 90 per cent of applications will be given an immediate response - meaning SDA obligations are completed in one session
• If an application needs to be assessed by a decision maker, that option is still available.

View the Board’s policy on statutory deposit account exemptions below.

Prevent cybercrime

Guiding information to assist law practices prevent and deal with cybercrime is available on our dedicated preventing cybercrime page. This covers common types of cybercrime, what you can do to protect your business and what you should do if you experience cybercrime. There is also detailed information on multi-factor authentication, considerations around insurance and links to other agencies who can help.

Managing trust money

A law practice or an approved clerk that receives trust money must maintain a general trust account in Victoria. Penalties apply for failing to comply.

This requirement does not apply in which only controlled money or transit money (or both) are received, except where it is received in the form of cash. The trust account must be established and maintained in accordance with the Uniform Law, Uniform Rules and applicable regulations. 

A law practice or approved clerk that receives trust money must maintain a general trust account. The trust account must be maintained in accordance with the Legal Profession Uniform Law, the Uniform General Rules and any applicable regulations.

Who can receive trust money?

A law practice must not receive trust money unless a principal or legal director holds a practising certificate authorising the receipt of trust money.

An approved clerk may also receive trust money for legal costs for one or more barristers.

The Board has released a Grant of Trust Authorisation policy outlining the skills, experience and competency criteria it requires before granting trust authorisation to applicants with an Australian practising certificate. Applications for a practicing certificate authorising receipt of trust money are made through LSB Online.

What is trust money?

Trust money for law practices

For a law practice, trust money means money entrusted to the law practice in the course of, or in connection with, legal services provided by the practice. It includes:

• money received for legal costs in advance of providing the services;
• controlled money received by the practice (i.e. money subject to written direction to deposit into an account controlled by the law practice other than the general trust account);
• transit money received by the practice (i.e. money received by a law practice subject to instructions to pay or deliver to a third party, other than an associate of the law practice); and
• money received by the law practice subject to a power exercisable by the practice or an associate of the practice, to deal with money for or on behalf of another person.

Trust money for approved clerks

For an approved clerk, trust money means money received by the approved clerk for the legal costs of a barrister in advance of the legal services to which those costs relate.

What isn't trust money?

Any money that is not trust money must not be deposited in a trust account. It also does not include the categories described below.

Money received for payment of invoices

Trust money does not include fees paid by a client for legal services, where the law practice has issued the client with a bill for those services

Money for financial services

Trust money does not include money that is entrusted to or held by a law practice for, or in connection with, financial services provided by the practice or an associate of the practice in circumstances where the practice or associate:

• is required to hold an Australian financial services licence covering the provision of the service (whether or not such a licence is held at any relevant time); or
• provides the service as a representative of another person who carries on a financial services business (whether or not the practice or associate is an authorised representative at any relevant time).

Money for managed investment schemes and mortgage financing

Trust money does not include money that is entrusted to or held by a law practice for, or in connection with, a managed investment scheme or mortgage financing undertaken by the practice

Money for investment purposes

Money that is entrusted to or held by a law practice for investment purposes is not trust money unless:

• the money was entrusted to or held by the practice in the ordinary course of legal practice, and primarily in connection with the provision of legal services to or at the direction of the client; and
• the investment is or is to be made in the ordinary course of legal practice, and for the ancillary purpose of maintaining or enhancing the value of the money or property pending the completion of the matter or further stages of the matter or pending payment or delivery of the money or property to or at the direction of the client.

The Board may also determine that money held by a law practice is or is not trust money if it considers there is doubt or a dispute about its status.

Trust money for approved clerks does not include

• money for barristers’ fees that have been invoiced;
• money directed to a third person such as a party in proceedings;
• money on loan or ‘parked’ by a solicitor; and
• mixed funds used to run a clerking business.

Information for foreign lawyers

Australian-registered foreign lawyers who practise foreign law in Victoria must comply with trust money and trust account requirements. The provisions relating to trust money and trust accounts apply to Australian-registered foreign lawyers in the same way as they apply to Australian legal practitioners. Foreign currency trust accounts are not available.