Legal Services Commissioner v Keddie [2008] NSWADT 185

CITATION: Legal Services Commissioner v Keddie [2008] NSWADT 185

DIVISION: Legal Services Division

APPLICANT Legal Services Commissioner PARTIES: RESPONDENT Russell Walter Keddie

FILE NUMBER: 072045

HEARING DATES: 30 April 2008

SUBMISSIONS CLOSED: 30 April 2008

DATE OF DECISION: 25 June 2008

BEFORE: Chesterman M - ADCJ (Deputy President); Riordan M - Judicial Member; Hayes E - Non Judicial Member

CATCHWORDS: Solicitor – disciplinary application

MATTER FOR DECISION: Principal matter

Legal Profession Act 1987 Legal Profession Act 2004 LEGISLATION CITED : Legal Profession Regulation 2002 Legal Profession Regulation 2005 Workers Compensation Regulation 2003

CASES CITED: APLA Ltd v Legal Services Commissioner (NSW) [2005] HCA 44 Legal Services Commissioner v Malouf [2007] NSWADT 215

APPLICANT L Muston, solicitor REPRESENTATION: RESPONDENT P Mahony SC, barrister with Y Cachia, barrister

1. The Respondent is guilty of professional misconduct in respect of each of the two grounds of complaint ORDERS: 2. The Respondent is publicly reprimanded 3. The Respondent is ordered to pay a fine in the sum of $10,000 within 3 months 4. The Respondent to pay the costs of the Applicant of and incidental to this application, as agreed or assessed.

REASONS FOR DECISION The disciplinary application and supporting evidence 1 In these proceedings, the issue to be resolved by the Tribunal is the nature and scale of the penalty or penalties to be imposed on a solicitor for breaching regulations restricting advertising by legal practitioners. 2 In a disciplinary application, the Legal Services Commissioner sought an order that the Respondent, Russell Walter Keddie ('the Solicitor'), be found by the Tribunal to have committed professional misconduct, on account of having caused to be published material advertising the legal services provided by the firm, called Keddies Litigation Lawyers ('Keddies'), of which he was a partner. 3 The Commissioner also sought orders that the Solicitor be fined, publicly reprimanded and ordered to pay the Commissioner's costs. 4 The Solicitor was admitted as a solicitor of the Supreme Court on 18 May 1976. At all material times he has been a legal practitioner to whom the legislation relevant to these proceedings has applied. 5 This application was filed on 3 December 2007. It was founded on two complaints made by the Commissioner, on 20 May 2005 and 8 June 2005 respectively. These dates preceded the commencement of the Legal Profession Act 2004 ('the LP Act 2004'), which was on 1 October 2005. 6 By virtue of clause 16 of Schedule 9 to this Act, the complaints are therefore governed by the Legal Profession Act 1987 ('the LP Act 1987'), except in relation to these proceedings in the Tribunal. These proceedings are governed by Chapter 4 of the LP Act 2004, subject to the proviso that the Tribunal 'may not make any determination or order of a disciplinary nature' against the Solicitor that is 'more onerous than could have been made' under the LP Act 1987. 7 The disciplinary application set out two Grounds, in both of which it was alleged that the Solicitor had acted in breach of Part 14 of the Legal Profession Regulation 2002 (hereafter 'the advertising regulations'). The Legal Profession Regulation 2002 has been repealed since the dates of the alleged breaches. Provisions comparable to those in Part 14 now appear in Division 2 of Part 5 of the Legal Profession Regulation 2005. 8 In each of the two Grounds it was also alleged that the Solicitor had acted in breach of provisions within Part 18 of the Workers Compensation Regulation 2003. But Ms Muston, who appeared in these proceedings for the Commissioner, conceded that the references to these provisions were otiose. 9 In the Particulars to Ground 1, it was alleged that on a website entitled Yellow Pages Online (www.yellowpages.com.au), accessed on 19 May 2005, the Solicitor caused to be published advertisements which breached the advertising regulations by including the following phrases: 'Personal injury', 'Workers Compensation', 'Public liability' and 'Accredited specialists in personal injury law'. 10 It was alleged that these phrases appeared on three web pages headed 'Solicitors', relating respectively to the offices of Keddies in Sydney (Goulburn Street), Redfern and Ashfield, and also on a web page headed 'personal injury', relating to the office in Ashfield. 11 In the Particulars to Ground 2, it was alleged that on the website of Keddies (www.keddies.com.au), accessed on 19 May 2005, the Solicitor caused to be published advertisements which breached the advertising regulations by including a number of phrases at different locations in the website. 12 The locations identified were (a) the first page of the website, which was the firm's home page; (b) within a section headed 'our people', three pages relating respectively to each of the three partners of Keddies (the Solicitor, Mr Tony Barakat and Mr Scott Roulstone); (c) a section headed 'about us'; (d) a section headed 'contact us'; and (e) within a section headed 'meet our team: legal team', a number of pages describing each one of 26 solicitors employed by Keddies. 13 The phrases referred to in the Particulars to Ground 2 included the following: 'accident victims', 'Personal injury law', 'Workers Compensation', 'Public liability', 'Occupiers liability', 'Catastrophic motor vehicle accident cases', 'Medical and professional claims' and several phrases referring to well-known events causing personal injury or property damage and affecting significant numbers of people (for example, 'Glenbrook Trains Disaster', 'Waterfall Trains Disaster' and 'Helensburgh fires'). Read in context, all of them suggested that Keddies, or a partner or employee of Keddies, provided legal services relating to personal injury claims. 14 It is not necessary to set out in full all the phrases quoted in the Particulars to Ground 2. It is sufficient to provide the following outline: 1. On the home page, the phrase 'accident victims' appeared. 2. In the section headed 'about us', the phrase 'represented on the Personal Injury Section of the Specialist Accredited Board of the Law Society of NSW' appeared. 3. In the section headed 'contact us', the phrase 'Injured or suffering trauma' appeared. 4. At each of the other identified locations on the website, at least one of the phrases described in the preceding paragraph, and in some instances as many as six or seven, appeared as part of a description of the range of legal services which the relevant partner or employed solicitor provided for clients of Keddies. 15 In support of the disciplinary application, the Commissioner tendered an affidavit sworn by him on 30 November 2007. Various matters stated in this affidavit are outlined below. The Solicitor's reply filed and supporting evidence 16 In a reply filed on 24 January 2008, the Solicitor admitted the allegations contained in both of the Grounds and the associated Particulars and that his breaches of the advertising regulations constituted professional misconduct. 17 In further answer to the disciplinary application, the Solicitor stated that he relied on various matters set out in letters from Keddies to the Commissioner, copies of which were annexed to the Commissioner's affidavit. 18 The evidence tendered by the Solicitor comprised an affidavit sworn by him on 28 February 2008 and seven affidavits constituting testimonials in his favour. 19 The content of these affidavits, so far as relevant to the Tribunal's decision, is outlined below. Relevant legislation 20 The LP Act 1987 provided in section 38JA(1) for regulations to be made 'with respect to regulating or prohibiting conduct, by any person that relates to the marketing of legal services', including advertising by a solicitor and advertising by any person of services connected with personal injury. Section 38JA(9)(b) stated that contravention by a barrister or solicitor of any regulation under the section, but only if the regulation declared the contravention to be professional misconduct. 21 These provisions and the accompanying regulations operated by way of exception to a statement in section 38J(1) of the LP Act 1987 permitting barristers and solicitors to advertise in any way they thought fit. 22 The advertising regulations were inserted by way of amendment to the Legal Profession Regulation 2002 during 2003. They commenced on 23 May 2003. 23 The provision within the advertising regulations that the Solicitor admitted to having breached was clause 139(1). Clause 139 stated: 139 Restriction on advertising personal injury services (1) A barrister or solicitor must not publish or cause or permit to be published an advertisement that promotes the availability or use of a barrister or solicitor to provide legal services if the advertisement includes any reference to or depiction of any of the following: (a) personal injury, (b) any circumstance in which personal injury might occur, or any activity, event or circumstance that suggests or could suggest the possibility of personal injury, or any connection to or association with personal injury or a cause of personal injury, (c) a personal injury legal service (that is, any legal service that relates to recovery of money, or any entitlement to recover money, in respect of personal injury). Maximum penalty: 10 penalty units. (2) A contravention of this clause by a barrister or solicitor is declared to be professional misconduct. (3) … 24 Clause 138 provided: 138 Definitions In this Part: advertisement means any communication of information (whether by means of writing, or any still or moving visual image or message or audible message, or any combination of them) that advertises or otherwise promotes a product or service, whether or not that is its purpose or only purpose and whether or not that is its only effect. personal injury includes pre-natal injury, impairment of a person's physical or mental condition, and disease. publish means: (a) publish in a newspaper, magazine, journal, periodical, directory or other printed publication, or (b) disseminate by means of the exhibition or broadcast of a photograph, slide, film, video recording, audio recording or other recording of images or sound, either as a public exhibition or broadcast or as an exhibition or broadcast to persons attending a place for the purpose of receiving professional advice, treatment or assistance, or (c) broadcast by radio or television, or (d) display on an Internet website or otherwise publicly disseminate by means of the Internet, or (e) publicly exhibit in, on, over or under any building, vehicle or place or in the air in view of persons in or on any street or public place, or (f) display on any document (including a business card or letterhead) gratuitously sent or gratuitously delivered to any person or thrown or left on any premises or on any vehicle, or (g) display on any document provided to a person as a receipt or record in respect of a transaction or bet. solicitor includes the following: (a) a partnership of which a solicitor is a member (but only if the business of the partnership includes business of a kind ordinarily conducted by a solicitor), (b) a solicitor corporation, (c) an incorporated legal practice. 25 Clause 140A created various exceptions to the operation of clause 139. One of these (in subparagraph (b)) exempted the publication of advertisements to any person on the premises of a place of business of the barrister or solicitor concerned, so long as the advertisement could not be seen from outside these premises. 26 Clause 140B stated: For the purposes of this Part, evidence that a person who is an employee of a barrister or solicitor, or a person otherwise exercising functions in the barrister's or solicitor's practice, published or caused to be published an advertisement is evidence (in the absence of evidence to the contrary) that the barrister or solicitor caused or permitted the publication of the advertisement. 27 Under section 562 of the LP Act 2004, if the Tribunal is satisfied that a legal practitioner has engaged in professional misconduct, the orders that it may make include a reprimand and the imposition of a fine. Under section 562(7), the maximum amount that may be ordered to be paid 'by way of fines by any one Australian legal practitioner in connection with the Tribunal's findings about a complaint' is $75,000 'in the case of professional misconduct'. But for reasons outlined above at [5 – 6], any fine that may be imposed in these proceedings must not exceed the limit stipulated in the LP Act 1987. Under section 171C(1)(d) of this Act, this limit, in cases of professional misconduct, was set at $50,000. 28 Under section 566(1) of the LP Act 2004, when the Tribunal has made a finding of professional misconduct against an Australian legal practitioner, it must make a costs order against him or her, unless it is 'satisfied that exceptional circumstances exist'. The Tribunal's rulings on professional misconduct and on costs 29 Having reviewed the material referred to in the Particulars to both Grounds in the application, the Tribunal is satisfied that the Solicitor's admission of professional misconduct was properly made. Later in this judgment, reference is made to the specific basis on which this finding of professional misconduct on his part is made. 30 No opposition was raised to the Commissioner's claim for costs. There being no evidence of 'exceptional circumstances', the Tribunal's orders include an order for costs against the Solicitor. Evidence relating to penalty 31 As already stated, the orders that the Commissioner sought by way of penalty were a public reprimand and a fine. 32 In his written submissions on behalf of the Solicitor, Mr Mahony SC stated that the Solicitor 'acknowledges the inevitability of' a reprimand, but maintained that no financial penalty was warranted. 33 The earlier complaints. An important component of the Commissioner's case on penalty was evidence, contained in his affidavit, that about six months before the complaints leading to these proceedings were made, the Solicitor had published advertisements in breach of the advertising regulations. Having discovered this during November 2004, the Commissioner had initiated two complaints on 3 December 2004. 34 In the course of investigating these complaints ('the earlier complaints'), officers employed by the Commissioner engaged in discussion and correspondence with the Solicitor and the other two partners of Keddies. Ultimately, in circumstances now to be outlined, the Commissioner determined on 23 March 2005 that the complaints should be dismissed. 35 The first of the earlier complaints related to the use of six phrases, similar to those mentioned in the Particulars in these proceedings, in a section headed 'What We Do' in the website of Keddies. 36 Following discussions and correspondence between representatives of Keddies and of the Commissioner, Keddies removed this section from the website. Mr Roulstone advised to this effect in a letter dated 17 December 2004. 37 In a letter to Keddies dated 24 January 2005, however, the Commissioner advised that certain other phrases on the website – for example, 'Catastrophic injuries, we fight for you' and 'We are a law firm who specialises in representing people who have been injured' – appeared to contravene the advertising regulations. 38 At the request of Mr Roulstone, the marketing manager of Keddies, Ms Kim Kelloway, instructed their website consultants, a firm called United Notions, to delete the phrases indicated. On 11 February 2005, Mr Roulstone wrote to the Commissioner stating that this had been done. 39 In a letter dated 16 February 2005 to the Solicitor, the Commissioner acknowledged Mr Roulstone's letter of 11 February, adding 'Thank you for your cooperation in this matter'. 40 In this letter, the Commissioner also advised that, in conformity with section 155 of the LP Act 1987, it still remained for him to determine whether, in view of the apparent past breaches of the advertising regulations by publications on Keddies' website, there was a reasonable likelihood that the Solicitor would be found guilty by the Tribunal of professional misconduct or unsatisfactory professional conduct. The Commissioner invited submissions on this matter before 11 March 2005, but it appears that none were sent to him. 41 In a further letter dated 23 March 2005 to the Solicitor, the Commissioner advised that after considering all the material available to him, he had decided to dismiss the complaint under section 155(4) of the LP Act 1987. He indicated that he had taken into account the fact that the Solicitor had complied with requests, made after the initial complaint, to remove offending material from the website. 42 This letter from the Commissioner included the following passage: Of course, I expect that in the future you will be especially vigilant in ensuring that your website and all your other advertising material comply with the Regulations. As you are aware, solicitors must take responsibility for ensuring that their businesses comply with all applicable laws, and cannot simply assume, in the absence of any contrary indication from the regulators, such compliance. 43 The second of the earlier complaints related to advertisements contained in brochures of the firm that it distributed at a number of medical centres. 44 In his letter of 17 December 2004 to the Commissioner, Mr Roulstone advised that these were all centres at which the firm carried on business from time to time at the request of the centre's manager. Accordingly, he stated, Keddies believed that distribution of the brochures fell within one of the exceptions in the advertising regulations. 45 In his letter of 24 January 2005, the Commissioner agreed that distribution of the brochures fell within clause 140A(b) of these regulations (as to which, see [25] above). He pointed out that none of the advertising conducted by Keddies at these medical centres was permitted to be seen from outside the premises and that Keddies should inform the Law Society of the names and addresses of the medical centres concerned. 46 In a letter dated 4 February 2005 to the Commissioner, Mr Roulstone wrote that Keddies would 'take particular care' to observe these stipulations. 47 In his letter of 23 March 2005 to the Solicitor, described above at [41 – 42], the Commissioner advised that after considering all the material available to him, he had decided to dismiss the second of the earlier complaints under section 155(4) of the LP Act 1987. He indicated that he had taken into account these undertakings that Keddies had provided. 48 Evidence relating to Ground 1. Ground 1 of the disciplinary application was based on four complaints dated 20 May 2005. They related respectively to the inclusion of offending phrases in advertisements relating to Keddies at four locations in Yellow Pages Online (see above at [9 – 10]). The Commissioner communicated these complaints to the Solicitor in a letter dated 8 June 2005. 49 Following a meeting on 15 June 2005 between representatives of the Commissioner and of Keddies, Mr Roulstone set out Keddies' response to the complaints in a letter dated 23 June 2005 to the Commissioner. He indicated that the firm had been advertising with Yellow Pages for more than ten years and that Yellow Pages had introduced online advertising, as an addition to print advertising, in 2000. However, the partners of the firm were never aware of this online facility. The firm's marketing manager, Ms Kelloway, became aware of it in November 2004 when a client indicated that the firm's telephone number was wrongly printed in the Yellow Pages Locality Guide. Having reviewed the online facility, she 'made numerous attempts' commencing in November 2004 to close it down. On 14 June 2005, Yellow Pages advised that all advertisements for the firm dating back to 2000 had been removed. 50 It is convenient to record here an indication by Ms Muston during the hearing that the Commissioner did not take any issue with this delay in removing these advertisements from Yellow Pages Online, since it was not a matter over which Keddies had any control. 51 In a letter dated 17 January 2006 to Mr Barakat and Mr Roulstone, the Commissioner gave advice as to the requirements of section 155 of the LP Act 1987, in terms similar to those summarised at [40] above, and sought submissions in response by 17 February 2006. This letter referred to the matters raised in Ground 2 as well as Ground 1. 52 In a response dated 10 February 2006, Mr Roulstone reiterated the account of events relating to Ground 1 that he had given in his letter of 23 June 2005. He added that it was 'remiss of the partners and firm management not to introduce systems so as to check as to the existence of any offending advertisement directly subsequent to the introduction of the Regulation in 2002 (sic)'. He indicated, however, that since the online facility was billed 'on a yearly basis together with the normal Yellow Pages', none of the partners was aware of it at any stage 'during the currency of the Yellow Pages Online website'. Later in the letter he stated that none of the partners or senior managers was aware of the 'ongoing nature of Yellow Pages Online subsequent to the promulgation of the Regulation'. It followed, he said, that the Tribunal would not make a finding of 'wilful or reckless conduct', but only that there had been a 'minor oversight', and that accordingly the Commissioner should dismiss the complaints under section 155(4) of the LP Act 1987. 53 In a document headed 'Record of Decision' and dated 30 November 2007, however, the Commissioner set out his finding that there was a reasonable likelihood that the Solicitor would be found guilty by the Tribunal of professional misconduct or unsatisfactory professional conduct in respect of the matters subsequently set out and particularised in Ground 1 of the application to the Tribunal. 54 Evidence relating to Ground 2. Ground 2 was based on a complaint dated 8 June 2005. It related to material published on Keddies' website (see above at [11 – 14]). The Commissioner communicated the complaint to the Solicitor in a letter dated 8 June 2005. Following the meeting on 15 June 2005, Mr Roulstone set out Keddies' response to the complaint in his letter of 23 June 2005 to the Commissioner. 55 With reference to the presence of the phrase 'accident victims' on the home page, Mr Roulstone conveyed the following information. Before he notified the Commissioner in his letter of 11 February 2005 (see [38] above) that the phrases on the website identified in the earlier complaints and the correspondence relating to them had been deleted, Ms Kelloway had advised him that these deletions had been effected by United Notions. He then said that 'regrettably' none of the partners of Keddies had entered the website to check this, nor had they checked the website between receiving notice of the complaint of 8 June 2005 and the meeting on 15 June. When, following the meeting, they did check the website, they were 'shocked' to find that it appeared that 'we had removed one set of offending words and replaced them with another'. They had never authorised the substitution of the phrase 'accident victims' for the phrases that had been deleted. They had previously supplied United Notions with copies of the relevant provisions of the advertising regulations. They had now terminated the services of United Notions. 56 As to the phrases appearing in the other locations on the website (see the list at [12] above), Mr Roulstone pointed out that none of them was mentioned by the Commissioner in the earlier complaints or the correspondence relating to those complaints. He then referred, however, to the Commissioner's observations in his letters of 23 March and 8 June 2005 that the responsibility lay on solicitors to ensure compliance with 'applicable laws' and that they could not 'simply assume, in the absence of any contrary indication from the regulators, such compliance'. He indicated that the partners, incorrectly assuming that in early February 2005 the website complied with the advertising regulations, did not enter it so as to check its wording thoroughly. He concluded by saying that in the period between December 2004 and February 2004 the partners had formed the view that the website 'had been extensively considered by your Office'. 57 It is convenient to record here that during the hearing of this application Ms Muston conceded that during the period when the earlier complaints were initiated and investigated the Commissioner had not conducted any scrutiny of these locations on the firm's website. There was accordingly no allegation by the Commissioner that the offending phrases at these locations had been added subsequently. 58 In his reply dated 10 February 2006 to the Commissioner's letter of 17 January 2006 to Mr Barakat and Mr Roulstone (see [51 – 52] above), Mr Roulstone restated what he had said in his letter of 23 June 2005 regarding the phrases particularised in Ground 2. He also said: It would appear to us that the most offensive aspect of the 8 June 2005 complaint involves the wording "accident victims" on the first page of the website … Simply, the offending words "accident victims" were inserted by United Notions without our knowledge or consent. 59 Mr Roulstone maintained in this letter that 'there had not been wilful and reckless conduct by the partners to show disregard to the Regulation'. Instead there had been 'co-operation and progress in relation to the amendments on the website, albeit inadvertence in overlooking the personnel section of the website'. Accordingly, he contended, the Commissioner should dismiss the complaint under section 155(4) of the LP Act 1987. 60 In the 'Record of Decision' dated 30 November 2007, however, the Commissioner set out his finding that there was a reasonable likelihood that the Solicitor would be found guilty by the Tribunal of professional misconduct or unsatisfactory professional conduct in respect of the matters subsequently set out and particularised in Ground 2 of the application to the Tribunal. 61 Evidence in mitigation. In his affidavit, the Solicitor described how the personnel in Keddies had increased from two solicitors and five staff in 1985 to 33 professional and 82 support staff in 2005. He described the procedures adopted for mentoring staff members and assessing their performance and ensuring that a wide range of races and cultures were represented. He also stated that the firm had specialised in 'plaintiff personal injury law' and had faced 'serious cashflow problems' in recent years due to changes in this area of law, but had come through this period with a 'streamlined firm and a working partnership that is stronger than ever'. He added that since 2000 the quality management systems of the firm had been accredited under the Best Practice Program developed by the Law Society of New South Wales. 62 The Solicitor also stated in his affidavit that he accepted responsibility for the firm's advertising. He confirmed that the matters stated in the correspondence that has just been outlined were correct as far as he was aware, adding that 'the withdrawal of this advertising has not impacted on the firm'. 63 The Solicitor's affidavit also outlined correspondence during February and March 2007 between Keddies and the Law Society regarding possible names that the firm could use without breaching the current equivalent of the advertising regulations. The Law Society had initially indicated that according to an opinion from senior counsel there would be no problem with the name 'Keddies – the Accident Lawyers'. Relying on this advice, the firm had spent about $20,000 adopting new corporate materials such as signage and letterhead. But subsequently the Law Society, following advice from the Commissioner that an expanded list of offending words and expressions would soon be published on the Commissioner's website, indicated that this name was now considered to be in breach. In consequence, the firm had had to spend a further $18,000 rearranging its corporate materials. 64 Finally, the Solicitor in his affidavit expressed his regret for having breached the advertising regulations and apologised for the fact that on account of the institution of these proceedings in the Tribunal his conduct had brought him and his profession into disrepute. 65 The remaining seven affidavits tendered by the Solicitor were sworn by legal practitioners or (in one instance) by a partner of a chartered accountancy firm. In each of them, it was stated that the nature of these proceedings for professional misconduct had been made known to the deponent. The deponents all expressed the opinion that the Solicitor maintained high ethical standards in his professional life. They commended him for having established a legal practice that was well managed (including particularly in the area of staff development) and was highly regarded within the legal profession for its integrity and professionalism. In two of these affidavits, sworn by senior partners of Sydney law firms, the view was expressed that the Solicitor's breaches of the advertising regulations occurred when there was significant uncertainty within the legal profession as to their range of operation. The view was also expressed that the Solicitor would be most unlikely to re-offend. The Tribunal's earlier decision on the advertising regulations 66 The submissions on behalf of both parties referred at a number of points to an earlier decision of the Tribunal, Legal Services Commissioner v Malouf [2007] NSWADT 215. This is the only decision that the Tribunal has made so far in proceedings for professional misconduct based on failure to comply with the advertising regulations or their current equivalent in the Legal Profession Regulation 2005. It is convenient here to summarise relevant aspects of it. 67 The disciplinary application in that case was based on five complaints, made by the Commissioner between 10 September 2003 and 23 February 2005. The application alleged that the respondent solicitor had displayed material, in breach of the advertising regulations, in five distinct locations. These were as follows: the website of the firm of which he was a partner; Yellow Pages Online; signage at the premises at which he practised; a printed version of the Yellow Pages; and a newspaper, the Central Coast Express. As in the present case, the material used non-complying phrases, such as 'injury compensation lawyers', in describing the range of legal services offered by the firm. 68 The respondent admitted each of the grounds and the Tribunal made a finding of professional conduct. It appears from paragraphs [100 – 101] of its decision, which refer at the outset to the respondent's obligation to assess the requirements of the advertising regulations and to comply with them to the best of his ability, that the Tribunal made this finding both under common law principles and under clause 139(2) of the regulations. These two paragraphs stated: 100 In failing to act in accordance with that obligation, the respondent demonstrated a lack of due diligence and professional competency. He demonstrated a degree of disgraceful and dishonourable conduct, which, albeit falling towards the lower end of the scale, would, in the opinion of the Tribunal, be so regarded by the majority of his peers. 101 For those reasons, and in compliance with the provisions of cl.139(2), the Tribunal finds the respondent guilty of professional misconduct in relation to each of the five grounds of complaint. 69 As in the present proceedings, the sole issue in contest was as to the order or orders by way of penalty that the Tribunal should make. 70 There was evidence of some delay on the respondent's part in causing the offending advertisements to be removed. The Tribunal accepted that in some instances (notably the advertisements in the printed version of the Yellow Pages) this delay was unavoidable, but recorded a finding (at [79] and [93]) that there was some delay in rectification. There was also some evidence, mentioned by the Tribunal at [72] and [75], that the respondent viewed the advertising regulations as 'repugnant' on account of the restrictions that they placed on his freedom to advertise. 71 The arguments advanced on the respondent's behalf included a submission that at the relevant time he was in a difficult position because proceedings in the High Court seeking a declaration that the advertising regulations were invalid on constitutional grounds had been heard but not yet determined. The High Court's majority decision, upholding the validity of the regulations, was delivered on 1 September 2005 (APLA Ltd v Legal Services Commissioner (NSW) [2005] HCA 44). 72 In its judgment at [58 – 61], the Tribunal quoted various passages from one of the majority judgments (Gleeson CJ and Heydon J) and from the dissenting judgments of McHugh J and Kirby J. At [63], it observed: While the Tribunal accepts that the passage of this legislation caused considerable disquiet among some members of the profession, the respondent included, that disquiet does not excuse a practitioner from complying with the legislation once it has been proclaimed. That is so, even if there is a High Court challenge. 73 In reaching its conclusion as to the appropriate penalty, the Tribunal said at [102]: On the issue of penalty, there is merit in the submissions of Mr Bellanto QC, for the respondent, that having regard to the serious misconduct generally associated with a finding of professional misconduct, these matters fall at the lower end of the scale. The Tribunal hastens to say, however, that it is not the fact that they are breaches of the subject regulations that cause them to fall at that point in the scale. Rather, it is the circumstances of those breaches, and the context in which the Tribunal must now determine an appropriate penalty, taking into account the steps the respondent has taken to comply with the legislation, together with his admissions. The Tribunal can readily perceive of circumstances in which deliberate and persistent flouting of the legislation would place contravention higher in the scale of professional misconduct. 74 At [109], the Tribunal observed: There is no dispute that the respondent must be reprimanded. The only issue is whether or not a fine should also be imposed upon him. 75 At [110], it summarised in the following terms the findings on which it based its decision regarding penalties: 1. The respondent is a man of previous good character who gave truthful evidence. His credibility and good character are relevant to the issue of imposition of penalty. 2. His plea of guilty must be taken as indication of remorse. 3. While there was no precedent to guide him in determining the permissible parameters of advertising in compliance with the legislation, the terms of that legislation were not difficult of interpretation for an experienced solicitor. 4. The respondent was in large part motivated by the desire to maintain the profitability of his practice. 5. There is no evidence that the subject advertising increased profits. That does not reduce his culpability because it is his motive at the time of transgressing that is relevant. 6. There is no evidence of harm to the public. 7. The respondent's response to complaints was coloured by his subjective views concerning the legislation and his concern that strict compliance would adversely affect profits. At the same time, however, the respondent genuinely sought to negotiate with the applicant and the Society with a view to arriving at a form of advertising that would comply with the legislation while meeting the respondent's concerns regarding a potential reduction in profits. 8. The necessity for personal deterrence and rehabilitation is minimal. The current proceedings undoubtedly have caused the respondent to comply with the legislation. Having regard to his evidence, the Tribunal is satisfied that he will not in the future deliberately breach the law relating to advertising. 9. There is an issue of general deterrence. Members of the profession must understand that breaches of the regulations will lead to findings of professional misconduct with the possibility of being removed from the roll, or otherwise dealt with severely.10. At the time of placing these advertisements the respondent was, on his own admission, at the very least, aware of the possibility that they were in contravention of the legislation. Given the nature of the legislation, and his extensive legal experience, the Tribunal regards it as more probable than not that he "probably" was aware they were in contravention of the regulations. 11. He was aware of the consequences of a finding that he was in breach of the legislation. He chose to take that risk. 12. The respondent acknowledged sole responsibility for the advertising. 76 Having referred at [111] to the fact that a number of character references had been tendered in support of the respondent and at [113] to 'his right to a reduction in penalty when full admissions have been made', the Tribunal concluded that in addition to a reprimand the respondent should be fined $4,000 in respect of each of the five complaints. It also ordered him to pay the Commissioner's costs. 77 It is convenient to note here that the Tribunal, at [52], reproduced the provisions regarding penalty contained in section 562 of the LP Act 2004, including the stipulation in subsection (7) that the maximum amount that may be imposed as a fine for professional misconduct. As pointed out above at [27], however, the maximum amount permitted under the provision that was in fact applicable in Malouf and is also applicable in these proceedings – namely, section 171C(1)(d) of the LP Act 1987 – was $50,000. 78 In addition, the version of clause 139(1) of the advertising regulations that the Tribunal quoted (at [28]) stipulated 200 penalty units as the maximum penalty for breach. However, at all times (except under one of the five complaints) when the respondent was in breach, the maximum penalty was only 10 penalty units. The same applies to the breaches committed by the Solicitor in these proceedings. The amendment to clause 139(1) increasing this criminal penalty from 10 to 200 penalty units did not commence until 1 July 2005. The parties' submissions on penalty 79 The Commissioner's submissions. Ms Muston argued that on the question of penalty these proceedings should be treated as indistinguishable from those in Malouf and that the Tribunal, in addition to reprimanding the Solicitor, should therefore impose a fine of $4,000, or some comparable figure, with respect to each of the two Grounds of the disciplinary application. 80 In line with the Tribunal's description of the respondent's conduct in Malouf at [100], Ms Muston contended that the Solicitor's conduct in this case was 'disgraceful and dishonourable', though 'falling towards the lower end of the scale'. 81 She argued that, despite the attention paid in two of the testimonials for the Solicitor to uncertainty about the advertising regulations within the legal profession, the Tribunal in Malouf, having devoted some attention to the impact of the High Court proceedings in APLA Ltd v Legal Services Commissioner, had made the following observations at [73]: In the view of the Tribunal, the legislation, absent any question of constitutionality, and related issues, is not difficult of interpretation. It is clearly designed to be highly restrictive of the rights of legal professionals to advertise a particular class of services. The underlying legislative intent cannot have been a matter of doubt to anyone practising in the relevant field. 82 Ms Muston referred to a paragraph in Malouf (paragraph [89]) listing in summary form five factors that the Commissioner in that case claimed to be relevant to the Tribunal's decision on penalty. These were as follows: 'profit motive', 'calculated risk taking', 'persistence in contravention in the face of warnings', 'contravention across a variety of media' and 'delay in rectification'. She argued that in the present case all except the last of these factors were present. 83 With reference specifically to the factor of 'profit motive', she contended that, as the Tribunal in Malouf in fact stated at [85], this matter fell to be ascertained at the time when the advertisements were published and 'as common sense must dictate, the purpose of the advertising was to attract new clients, and thus, was for financial gain'. 84 Ms Muston explained her submission regarding 'calculated risk taking' as being that the Solicitor's failure to check the content of the firm's advertising in Yellow Pages Online and on its website, even after the earlier complaints had been made known to him, amounted to recklessness, not merely negligence. In this sense, his conduct was 'calculated'. 85 She claimed also that the Solicitor's breaches of the advertising regulations must be characterised as 'persistent' because they occurred (a) when the regulations had been in force for about two years and (b) after the Commissioner, in the course of correspondence relating to the earlier complaints, had explicitly warned him more than once about the necessity of complying with them. 86 In submissions in reply, Ms Muston contested a submission by Mr Mahony that since the advertising regulations stipulated at the relevant time that the maximum penalty for breach of clause 139(1) was only 10 penalty units (representing a fine of $1,100), they must be taken to have implied that a fine should not be imposed at all under the LP Act, or that any fine imposed must be at such a low level that it would have no useful deterrent or rehabilitative effect. Ms Muston's argument in response was that this aspect of the regulations was of no relevance and that the relevant maximum penalty was the maximum fine stipulated in section 171C(1)(d) of the LP Act, that is $50,000. 87 In reply, Ms Muston also argued, contrary to a submission by Mr Mahony, that there should not be a reduction in penalty on account of the delay between the Commissioner's indication to the Solicitor, in February 2006, that he believed these proceedings to be justified and their commencement in December 2007. The justification for this delay, she submitted, was that the Commissioner considered it appropriate to await the Tribunal's decision in Malouf. That decision was not delivered until 18 September 2007. 88 The Solicitor's submissions. In contending that no fine should be imposed, Mr Mahony argued that the only element of fault that could be attributed to the Solicitor was, to quote from Mr Mahony's written submissions, 'a lack of due diligence' or 'a rare oversight or inadvertence including a failure to check the firm's website'. This oversight should be viewed in the light of acknowledged success in maintaining high management standards. Neither the Solicitor nor the other two partners in Keddies could be said to have engaged in wilful or reckless conduct. Accordingly, the Solicitor's failure to comply with the advertising regulations, while amounting to professional misconduct, was 'at the very lowest end of the scale'. 89 Much of the content of Mr Mahony's accompanying submissions may usefully be summarised by reference to the list of twelve matters taken into account by the Tribunal in Malouf (see paragraph [110] of its judgment, reproduced above at [75]). Mr Mahony submitted as follows: (1) that the Solicitor was a person of good character and of good repute within the legal profession, and had made significant contributions to the profession; (2) that he had shown remorse; (3) that in contrast to the situation in Malouf, there was no evidence that the Solicitor regarded the advertising regulations as 'repugnant' and until the High Court's decision in the APLA case, which came after the complaints made in this case, there was indeed confusion within the legal profession regarding their operation; (4) that there was no evidence of a profit motive; (5) that there was no evidence that the advertisements led to an increase in Keddies' profits; (6) that there was no evidence of harm to the public; (7) that at all times the Solicitor and other partners of Keddies had sought to comply promptly with the Commissioner's requests regarding the firm's advertising; (8) that since the Tribunal could be satisfied that the Solicitor would not re-offend, there was no need for personal deterrence; (9) that by virtue of arguments stemming from the small scale of the maximum penalty stipulated at the relevant time by clause 139(1) of the regulations (see [86] above), no fine that could properly be imposed could have any useful effect by way of general deterrence; (10) that in contrast to the situation in Malouf, since none of the partners in Keddies knew of the online facility of Yellow Pages or consulted the firm's website until June 2005, the Solicitor was unaware of the existence of the offending material; (11) that, again in contrast to the situation in Malouf, it therefore could not be said that the Solicitor chose to take a risk; and (12) that the Solicitor acknowledged sole responsibility for the advertising. 90 With reference particularly to items (10) and (11) in this list, Mr Mahony argued that the Solicitor and his partners should be excused for their ignorance of the existence of an online facility of Yellow Pages and of the material contained on the firm's website. The reasons that he advanced were that, as senior members of the firm, they were less familiar than their junior colleagues with online facilities and they were heavily pressed by their responsibilities in managing a large and busy firm. He conceded, however, that the Solicitor knew that the website contained material about himself, his partners and each of the 26 solicitors employed by the firm. 91 In response to a suggestion by a member of the Tribunal panel that the Solicitor could easily have asked an employee of the firm who was better able to check its online advertising to ensure that the advertising regulations were not breached, Mr Mahony replied that 'in a perfect world' that was undoubtedly true, but that the demands placed on the Solicitor in managing a large firm with several offices were indisputably heavy. 92 On the matter of delay in bringing these proceedings (see [87] above), Mr Mahony's submission was since the Solicitor had suffered through having this matter hanging over his head for a substantial period of time, the delay should be taken into account in his favour. The Tribunal's conclusions 93 The Tribunal, when determining what penalty to impose, considers that the most significant feature of the Solicitor's conduct was his failure, despite being notified of the earlier complaints and being warned the Commissioner that he must take responsibility for complying with the advertising regulations, to take reasonable steps to ensure that his firm was not responsible for any further breaches of these regulations. 94 The Tribunal does not accept Mr Mahony's descriptions of this failure by the Solicitor as 'a rare oversight' or mere 'inadvertence'. If not 'calculated' or 'reckless' (these being the epithets used by Ms Muston), it did at the very least involve a substantial dereliction of duty and a high degree of negligence. 95 The Solicitor may well have been, as Mr Mahony submitted, a very busy practitioner, the manager of a large firm and comparatively inexpert in tracking down material on the internet. But it would have been quite easy and not at all time-consuming for him (or one of his partners, at his suggestion) to instruct one or more appropriately qualified employees to (a) carry out the necessary searches, (b) report back regarding the content of the firm's advertisements and (c) ensure that any necessary amendments to them were then effected. 96 This simple step could and should have been taken as soon as the Solicitor was notified, during December 2004, of the earlier complaints. Another occasion when it should have been taken was when the Commissioner advised him, late in January 2005, that offending material not mentioned in these complaints still remained on the firm's website. Yet another occasion was when he received the Commissioner's letter of 23 March 2005 notifying him of the dismissal of the complaints. This letter contained a strong warning, quoted above at [42], that the responsibility of ensuring that his firm's advertising complied with the advertising regulations rested upon him. 97 It is relevant here to take account of the evidence regarding the role played by Ms Kelloway, the marketing manager of Keddies. She instructed United Notions to remove from the firm's website the offending phrases that the Commissioner identified in his letter of 24 January 2005 (see [37 – 38] above). Having discovered during November 2004 that material about Keddies was displayed on Yellow Pages Online, she endeavoured to have it removed, finally succeeding at some time before 14 June 2005 (see [49]). The reason why she sought and obtained the removal of all the advertising material, not merely the offending phrases, was not stated. It would appear that she did not tell the partners about this online facility, since Mr Roulstone stated in his letter of 10 February 2006 to the Commissioner that none of the partners was aware of the online facility at any stage 'during the currency of the Yellow Pages Online website' (see [52]). 98 This evidence suggests strongly that although Ms Kelloway received and carried out specific instructions to bring about the removal of offending material that the Commissioner had identified, she was never instructed, even in the period following notification to the Solicitor of the earlier complaints, to check whether any other offending material existed. As Ms Muston conceded (see [50]), an instruction of this nature may not have caused the offending material (particularised in Ground 1) on Yellow Pages Online to have been removed more speedily, since this was not a matter over which Keddies had any control. But it would have prompted a review by Ms Kelloway of all the contents of Keddies' website, in the course of which she would have come across the considerable quantity of offending material particularised in Ground 2 and would, in all probability, have notified the partners of its existence. 99 Although, as Mr Mahony submitted, the Solicitor, in contrast to the respondent in Legal Services Commissioner v Malouf [2007] NSWADT 215, did not admit to viewing the advertising regulations as 'repugnant' and did not choose to 'take a risk', the conduct of these two practitioners was similar in that their breaches of the regulations were not just 'oversights', attributable to 'mere inadvertence'. Their level of culpability was materially greater than these terms indicate. 100 By virtue of these matters, the Tribunal's finding of professional misconduct, recorded above at [29], is based both on the relevant statutory provision (clause 139(2) of the advertising regulations) and on the broad common law criterion of conduct that would be regarded as 'disgraceful and dishonourable' by fellow-practitioners of good repute and competence. Within the latter context, the Solicitor's behaviour should be characterised, as Ms Muston suggested, as conduct 'falling towards the lower end of the scale'. 101 The Tribunal also considers, as did the Tribunal Panel in Malouf, that a reprimand, even when accompanied by a costs order, is an insufficient penalty. If the only penalty imposed in this case was a reprimand, it might suggest to legal practitioners that clearly careless breaches of the regulations, when there had been no prior warnings from the Commissioner or any other relevant authority and there was no other basis for attributing fault, might not attract even a reprimand by way of penalty, even though under clause 139(1) they would undoubtedly constitute professional misconduct. 102 The Tribunal takes into account the various mitigating factors put forward by Mr Mahony, notably the matters stated in the testimonials tendered in the Solicitor's favour and the impact on him of the delay in bringing these proceedings to a conclusion. It does not, however, accept Mr Mahony's argument that because at the relevant time the maximum criminal penalty provided for a breach of clause 139(1) was a fine only $1,100, a fine imposed under section 171C(1)(d) should not be significantly greater. 103 Having regard to all the circumstances, the Tribunal considers a fine of $5,000 in respect of each of the two Grounds of the disciplinary application is an appropriate penalty in addition to a reprimand. As stated above at [30], it also orders the Solicitor pay the Commissioner's costs, as agreed or assessed.