Administrative Decisions Tribunal New South Wales Medium Neutral Citation: Legal Services Commissioner v Scroope [2012] NSWADT 107 Hearing dates: 10 May 2012 Decision date: 04 June 2012 Jurisdiction: Legal Services Division Before: The Hon Justice Haylen (Deputy President) N Isenberg, Judicial Member C Bennett, Non-Judicial member Decision: (1) That the conduct of the legal practitioner, Philip Scroope, in the preparation of the narrative bill of costs resulting in the charging of Ms Meng of grossly excessive costs, constitutes professional misconduct within the meaning of the Legal Professional Act 2004. (2) The legal practitioner, Philip Scroope, is reprimanded. (3) The practitioner, Philip Scroope, is fined the sum of $5,000. That sum is to be paid within 28 days of the date of this decision. (4) The legal practitioner, Philip Scroope, shall pay the costs of the LSC. Catchwords: PROFESSIONAL MISCONDUCT - charging of grossly excessive fees - acceptance of overcharging by firm - deficiencies in computerised costing system - senior solicitor accredited in personal injury work - high level of personal responsibility for file where grossly excessive costs charged - failure of supervision by responsible partner. Legislation Cited: Evidence Act 1995 Legal Profession (Amendment ) Bill Legal Profession (Amendment) Act 1987, No 263 of 1987 Legal Profession Act 2004 Cases Cited: D'Alessandro v Legal Practitioners Complaints Committee (1995) 15 WAR 198 De Pardo v Legal Practioners Complaints Committee and anor [2000] 170 ALR 709 Kenedy v Council of Incorporated Law Institute of NSW(1939) 13 ALJ 563 Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 Legal Services Commissioner v Keddie [2012] NSWADT 106 Nikolaidis v Legal Services Commissioner [2007] NSWCA 130 Re R - A Practitioner of the Supreme Court [1927] SASR 58 The Council of the Law Society of New South Wales v Doherty [2010] NSWCA 177 Veghelyi v The Law Society of New South Wales [1995] NSWCA 483 Category: Principal judgment Parties: Legal Services Commissioner (Applicant) Philip Scroope (Respondent) Representation: Counsel C Webster (Applicant) J Ireland QC with T Lynch (Respondent) L Muston (Applicant) T A Williams (Respondent) File Number(s): 092010 REASONS FOR DECISION BACKGROUND 1In December 2005 Philip James Scroope was employed by Keddies Lawyers ("the firm"), being an accredited specialist in personal injury law. Mr Scroope commenced employment with the firm in early 1998 and had worked continuously in the area of personal injury. In July 2002 he obtained accreditation from the Law Society's Accredited Specialist Programme. From approximately 2000, Mr Scroope's level of personal responsibility for matters within the firm had increased and the level of supervision had decreased. 2In late September 2002, Ms Suang Ying Meng ("Ms Meng") was seriously injured in a motor vehicle accident and in October 2002 retained the firm to act for her in personal injury proceedings for the recovery of damages. Mr Scroope was said to have the day-to-day conduct of Ms Meng's matter. In December 2005, Ms Meng's matter was settled for $3, 525,000. On 21 December 2005, Mr Scroope provided Ms Meng with a narrative bill of costs totalling $819,694.77 comprising professional costs, including GST, in the sum of $557,831.82 and disbursements, including GST, in the sum of $261,862.95. 3In January 2007 solicitors acting for Ms Meng contacted the Legal Services Commissioner ("LSC") requesting assistance in obtaining the transfer of Ms Meng's file and an itemised bill of costs from the firm then known as Keddies, the Insurance Law Specialist Pty Ltd. In March 2007 the LSC began to treat the matter as an investigation on the basis that it involved issues of unsatisfactory professional conduct or professional misconduct. In late May 2009 the LSC resolved, pursuant to s 537(2) of the Legal Profession Act 2004 ("the 2004 Act"), that there was a reasonable likelihood that Mr Scroope, together with the partners of the firm, would be found guilty of professional misconduct and that the matter should be referred to the Tribunal. 4An Application for Original Decision was duly filed by the LSC in the Tribunal in May 2009. In relation to the costs billed to Ms Meng the LSC claimed, firstly, that there was overcharging in that: excessive amounts were charged for work performed; charges were made representing work in excess of the work performed; there were charges for work which was not performed; and, there was a charge for work undertaken and time spent on the file that included steps that were excessive and unnecessary. It was also alleged that there was over-servicing in Ms Meng's matter in that: work was undertaken and charged for by persons of inappropriate seniority or qualification and unnecessary work was undertaken in relation to the file. A further matter raised was that costs were misrepresented to Ms Meng in that: the narrative bill contained charges for work in excess of time spent and for which work was not done and the narrative bill duplicated charges for work performed in relation to the separate matters involving Ms Meng's husband and son. Lastly, it was alleged that there was a failure by Mr Keddie, jointly and separately with each of the other principals of the firm, to properly or adequately supervise the work done and charged with respect to Ms Meng's matter such that the total amounts of the charges rendered to Ms Meng were grossly excessive amounts and were misrepresented to Ms Meng. Further, very detailed particulars were provided in relation to each of these nominated grounds. 5The LSC sought the following orders from the Tribunal: (1)An order that the disciplinary application concerning Mr Scroope be joined with the disciplinary applications against Mr Keddie, Mr Tony Barakat and Mr Scott Roulstone. (2)A finding that Mr Scroope was guilty of either professional misconduct or unsatisfactory professional conduct with respect to grounds 1, 2, 3 & 4. (3)An order that Mr Scroope's name be removed from the Roll of Practitioners. (4)In the alternative, an order that Mr Scroope be publicly reprimanded. (5)Further and in the alternative, an order that Mr Scroope be fined. (6)An order that Mr Scroope pay the costs of and incidental to the filing and hearing of the application. (7)Such other orders as the Tribunal seems fit. 6Although originating proceedings in the Tribunal made generally the same allegations against two other principals of the firm, those matters were withdrawn and the LSC proceeded only against Mr Keddie and Mr Scroope. In both cases there was considerable overlap in the detailed particulars. 7In June 2011, in contested proceedings, the Tribunal made an interlocutory order joining the four Applications for Original Decision for the purposes of hearing and ordering that the evidence in each matter be evidence in all matters, subject to any further objection that arose pursuant to the provisions of s 136 of the Evidence Act 1995. On the substantive hearing concerning Mr Scroope and Mr Keddie, the matters remained joined with the evidence in each matter being evidence in the other and no further objections were taken. 8In preparation for the substantive hearing, each party filed substantial affidavits with the parties relying upon competing experts' assessment of the reasonable level of costs that might be assessed in relation to Ms Meng's matter, together with the cases involving her husband and son. Ms Meng's case was undoubtedly one involving complex issues having regard to the fact, amongst other matters, that the motor vehicle accident giving rise to the injuries occurred in South Australia while Ms Meng was visiting Australia on holidays and that the injuries rendered her a paraplegic. Ms Meng and a number of witnesses or potential witnesses were of Chinese origin and spoke little or no English, thus involving the services of translation services. The narrative bill first sent to Ms Meng covered a period of three years involving numerous attendances, including travel to China: that narrative bill detailed nearly 2000 attendance items and covered approximately 130 pages THE EVIDENCE 9At the commencement of the substantive hearing counsel for the parties announced that, in each case, there was now a Statement of Agreed Facts relating to the overcharging of Ms Meng and that the matter could proceed with reliance on a significantly reduced number of affidavits and documents that would ultimately reduce the anticipated two-week hearing to one or two separate days of hearing. The Statement of Agreed Facts in Mr Scroope's matter is an annexure to this decision. 10In Mr Scroope's case counsel for the LSC tendered a second Amended Application for Original Decision carrying that day's date together with Mr Scroope's Reply to the Second Amended Application for Original Decision also dated 30 April 2012. The second Amended Application for Original Decision repeated the orders sought in the Original Application but the grounds for application, including particulars were reduced to the following matters: GROUND 1 Over-charging In a personal injuries matter for Ms Shuang Ying Meng, date of accident 29 September 2002 ("Ms Meng's matter") the Respondent, by his conduct in respect of the preparation of the narrative bill provided to and paid by Ms Meng, permitted Ms Meng to be charged by the firm Keddies grossly excessive amounts of costs in that: (a) Ms Meng was charged excessive amounts for work performed; (b) Ms Meng was charged amounts representing work in excess of the work performed; (c) Ms Meng was charged for work which was not performed; (d) Ms Meng was charged for work undertaken and time spent on her file which included steps which were excessive and unnecessary. GROUND 2 - Over servicing In Ms Meng's matter: (a) Work was undertaken, and charged for, by persons of inappropriate seniority or qualification; (b) Unnecessary work was undertaken. GROUND 3 - Misrepresenting costs The narrative bill in Ms Meng's matter misrepresented costs to Ms Meng in that: (a) The narrative bill contains charges for work in excess of time spent and for work which was not done. (b) The narrative bill contains duplicated charges for work performed in relation to Yue Chen ("John") Wang's matter and Zeng Yong Wang's matter. (c) The narrative bill contains charges at professional rates apparently for the fee earner PJS (Mr Scroope) for work performed by Mr Lee and/or Ms Liu, which work was also invoiced by Baiyi Language Services which invoices were charged as disbursements. Particular 3.1 In entering into a costs agreement with the firm, Ms Meng was led to believe that she would be charged costs on the basis of time properly spent on her matter at the rates set out in the costs agreement. Particular 3.2 Charges for work done in excess of time actually spent and for work which was not done constitute misrepresentations about costs. Particular 3.5 The narrative bill states that costs were transferred to Ms Meng's file from her husband's and son's matters. Particular 3.6 The amount transferred in relation to John Wang's matter is stated to be $21, 500. 69 (page 115). Particular 3.7 The amount transferred in relation to Zeng Yong Wang's matter is stated to be $26, 128. 58 (page 122). Particular 3.8 The earlier pages of the narrative bill contains duplicated narratives for the same apparently transferred work, which can only be identified by a close, item-by-item, analysis of the bills. 11The second Amended Application for Original Decision contained substantially revised grounds and particulars. The Reply from Mr Scroope was in the following terms: (a) admits Ground 1; (b) in respect of Ground 2 admits that the practice known as Keddies (the "Firm") by its Memorandum of Costs and Disbursements dated 21 December 2009 (sic) (the "Narrative Bill") for a total of $819, 694. 77 (including GST) charged for: (i) work undertaken by persons of inappropriate seniority or qualification; and (ii) work undertaken unnecessarily; and (c) admits Ground 3. 2. The Respondent further admits and says that at all relevant times: (a) He was a solicitor employed by the Firm. (b) He was the solicitor principally responsible for the day to day carriage of the work undertaken by the Firm on behalf of Ms Meng and after June 2005 until December 2005 similarly responsible for the work undertaken for Zen Yong Wang ("Wang") and Yue Chen Wang ("John"). At all times he was an employed solicitor answerable to, and subject to, the supervision and direction of the partners of the Firm. (c) He was the person having the principal day to day responsibility for the preparation of the Narrative Bill. (d) The Narrative Bill when issued to Ms Meng contained errors including some items of duplication, some items of work being charged at the incorrect rate having regard to the terms of the fee agreement between the Firm and Ms Meng and Wang and John. The Respondent was not aware of those errors when the Narrative Bill was prepared. (e) In the discharge of his duties as an employed solicitor in preparing or supervising the preparation by others of the Narrative Bill, he did not check carefully the accuracy of the entries of the time ledger from which it was derived (the "Time Ledger"). (f) He was an accredited specialist in personal injury law. (g) In the result of the failings and errors admitted were such that the amount sought to be charged by the Narrative Bill was in excess of the amount of which the Firm was properly entitled to charge in accordance with the fee agreement between the Firm and the respective clients. 3. The Respondent further says that: (a) In the preparation of the Narrative Bill the Respondent relied on the Time Ledger, and the entries in the Time Ledger which he believed to be accurate, fair and reasonable and in accordance with the costs agreements. He also relied on the systems in place within the firm for the recording of work done and the preparation of bills. (b) The Respondent now knows and accepts that the system was flawed and that the Time Ledger contained a number of incorrect entries, some attributable to human error and some attributable to system failings. 12In Mr Scroope's matter the evidence relied upon by the LSC was the Agreed Statement of Facts, the second Amended Application for Original Decision, Mr Scroope's Reply to the second Amended Application for Original Decision and a copy of the narrative bill prepared under Mr Scroope's supervision and handed to Ms Meng in December 2005. In his case, Mr Scroope relied upon an affidavit prepared just prior to the commencement of the hearing and dated 30 April 2012. Mr Scroope also relied upon a further affidavit addressing his personal circumstances and providing details about the way in which these proceedings had affected his professional life. In addition, Mr Scroope relied upon affidavits from seven members of the community and the legal profession that spoke of his character, citizenship and his standing in the community. 13In Mr Scroope's first affidavit he dealt with his involvement with Ms Meng's matters and his practice in relation to recording and having prepared bills of costs. While the level of supervision experienced by Mr Scroope over his time with the firm varied he stated that, particularly since obtaining accreditation as a Specialist in Personal Injury Law in 2000, the level of his personal responsibility had increased while the level of supervision decreased. During the time he had carriage of Ms Meng's matter he had "a high level of personal responsibility." 14A description was given of the introduction of computerised time recording for professional billing purposes, a system that was described by Mr Scroope as being "fairly elementary." In a busy practice there was said to be considerable pressure on employed solicitors and other fee earners to ensure, so far as possible, that all work that was properly chargeable was correctly captured and entered on the computer system so that it could be fully charged. This did not mean that there was pressure to make entries for work which was not properly chargeable but the partners were always concerned with the level of what was known as "leakage", being work which was chargeable but by reason of inadvertence or some other reason, was not captured onto the computer system and might therefore be lost when it came time to complete a bill for professional services. Mr Scroope did not have a role in the charge-out rate under the firm's costing system - that was a matter for decision by the partners. Charge-out rates were allocated to Mr Scroope as an Accredited Specialist and for the more junior solicitors and other staff that may have been involved and who would generate billable times. 15Costs disclosures and fee agreements for the firm were prepared from a precedent. On his instructions Mr Scroope's secretary prepared such documents and it was his practice to check them before they were sent out although very little checking was generally required as there was little or no variation in the letters. The charge-out rates were already set in the precedent. Prior to 2007 Mr Scroope did not recall ever receiving formal instructions or guidance as to any procedure within the firm to be adopted in relation to billing or time costing. He understood that the practice he had applied in is own matters was consistent with the practice of other solicitors within the firm. 16Mr Scroope described the preparation of long form bills in his matters being in the nature of a "narrative bill", that is, carrying the date and a brief description of the work. Various secretaries prepared these and it had always been the practice within the firm for secretaries to prepare the bills, at least in a draft form. Mr Scroope regarded such preparation of bills as being well within the scope and ability of experienced secretaries and it was part of the responsibility of the solicitor having carriage of the matter to check and supervise the secretary's work. The approach he adopted to Ms Meng's matter reflected his usual practice. However, in Ms Meng's matter, as was his usual practice, Mr Scroope did not routinely thoroughly check the individual time entries. He assumed such items had been entered correctly and confined his checking of the time costing records to looking for "leakage" and any significant anomalous entries. Where these matters were found, it was his practice to investigate and cause necessary corrections or adjustments to be made to the final bill. He did not recall the need for any significant changes being necessary. 17Mr Scroope did not know the extent to which the secretary who had prepared the bill checked the entries in the time ledger before preparing the bill. He could not recall any occasion when a secretary had raised with him any errors in the entries on the time costing system and this did not occur in the Ms Meng matters. The firm's system did not call for close checking or verification of the correctness of entries on the system after they had been entered at the stage of his involvement. Closer scrutiny occurred when the preparation of itemised accounts was required and when that was necessary, the task would be performed by the firm's costing officer or it would be contracted out to cost consultants. It was not part of Mr Scroope's role in the firm to become involved in those matters. It was Mr Scroope's practice to check the accuracy of supporting tax invoices against time recorded on the ledger and the anticipated amounts to be paid for disbursements for items such as Medicare charges and Centrelink paybacks, especially prior to settlement and this occurred in Ms Meng's matter. Additional care was taken with those matters because, unlike professional costs where some flexibility was available at the discretion of the partners, disbursements and paybacks were fixed and it was important to establish the precise level of disbursements to ensure that the client would be advised of the net return on any settlement. 18In Ms Meng's matter and in other matters handled by Mr Scroope, he had overseen the preparation of a draft bill shortly prior to the matter being set down for a settlement conference. He reported to the relevant supervising partner the amount of costs likely to be charged to the client and in Ms Meng's matter reported to Mr Keddie. The amount in Ms Meng's matter was the progressive total shown in the time cost ledger as at mid-December 2005. Mr Scroope understood that this reporting practice within the firm was designed to ensure that a decision was made at partner level that the fees to be charged were within a reasonable range being neither too high nor too low. 19Prior to the settlement conference concerning Ms Meng's matter, Mr Scroope discussed the question of costs with Mr Keddie: Mr Keddie was informed of the figures for professional costs from the time cost ledger plus 25 per cent. Mr Scroope's best recollection was that Mr Keddie said words to the effect: "That sounds about right. Make sure you have picked up any leakage." 20Mr Scroope said he never understood that it was part of his duties to go through the costs and disbursement records to check for accuracy or any errors except to ensure that all disbursements were paid and were brought into account, looking for significant leakage and observing any obvious errors or anomalies during this general inquiry. Ms Meng's matter was a large and complicated matter and many people had posted entries onto the computer system. A great deal of time had been involved in Ms Meng's matter and there were a very large number of entries on the time cost records. Mr Scroope observed that, having regard to the pressure of work, it would have been "impossible" for him to conduct a thorough examination of all the entries on the system, necessarily involving the testing of entries against the files. In any event, he did not regard that as being part of his responsibility. 21Mr Scroope, however, always understood that it was his responsibility to ensure that any entries which he made on the time cost system or were caused to be made by somebody on his behalf were in accordance with the fees agreement and were fair and reasonable and that the time recorded was correct and appropriate for the task. Mr Scroope stated that, other than in a general supervisory role and checking before billing as earlier described, it was not part of his responsibility to check on the entries in the system made by others. This was the responsibility of each person in the firm and they were to ensure that entries that they made were true and correct and in accordance with the costs agreement so that the amount of time entered was accurate and appropriate to the task being recorded. 22The computer system in recording the various professional attendances was not determinative of the final fees to be paid by a client and these remained at the discretion of the partner having responsibility for the supervision of the matter. Where an itemised bill was required or when a bill was required to be prepared for assessment, further close analysis was required and Mr Scroope did not generally undertake that task. In those circumstances a costs clerk undertook the task or an independent costs consultant was engaged under contract by the firm. 23Mr Scroope described the particular computer costing system used by the firm in some detail. Every member of the firm's staff who worked on Ms Meng's matter was required to enter their chargeable time on the time recording system by posting entries on their own computers. The system, however, was not programmed to recognise the initials of all people who were working on a matter and recording their work and time for work. The system recognised the initials of each of the partners and Mr Scroope's initials as the "team leader" in relation to the matter but did not recognise initials of other persons who entered information. The practice in those circumstances was that the author of the entries would simply enter Mr Scroope's initials as the solicitor with the carriage of the matter so that the computer system would accept their entries. As a result there were numerous entries on the ledger attributable to Mr Scroope but were not made by him and did not relate to work performed by him. 24During the examination of these records by Ms Rosati for the LSC and dealing with the criticisms and queries raised, the difficulty faced by the firm was that there were no manually created time sheets that separately identified the person who had entered the information into the computer records. Mr Scroope was able to identify many entries that did not relate to work performed by him but he was not always able to identify who had performed that work. Since the complaint giving rise to these proceedings, Mr Scroope said he now takes a much more active supervisory role in relation to these matters. 25In relation to the preparation of the narrative bill, Mr Scroope accepted that he gave "inadequate attention to the detail of the bill." He said he relied excessively on the entries on the time costs ledger and the procedures for review by their accounts section and failed to give adequate attention to checking those entries before the bill was prepared. He accepted that this resulted in the bill sent to Ms Meng (and the members of her family) being an amount greater than should have been rendered. He was particularly embarrassed by his failure to note matters where entries in the nature of typographical errors produced incorrect figures "grossly in excess of what should have been charged." 26In relation to his own entries he denied deliberately distorting, duplicating or fabricating entries or to craft entries to render fees that he believed were not properly charged or incurred. He had taken account of comments made by Ms Rosati and Mr Salier (a cost assesor engaged by the firm to give expert evidence in the proceedings) and had given serious thought to the correct approach to the rendering of charges and had taken advice on what were proper and improper practices. He accepted that there were matters in the bill sent to Ms Meng and to members of her family which should not have been included. Mr Scroope noted that the allocation of the time between the different matters was of particular concern to him as was the cumulative effect of charging for broken parts of minimum units and charging separately for multiple tasks performed at the same time. 27Mr Scroope accepted the need for closer checking of charges and invoices rendered by those under his supervision. He believed that the failings revealed in this matter on his part were failings of "diligence and understanding" but were not part of any intention to deal unfairly with the client. At no time was he ever instructed or directed by any partner of the firm to increase the costs charged by inflating times, over-servicing, duplicating charges or by any other crafting of costing in a fashion which led to dishonest, unethical, unfair or unreasonable charging. He accepted that the level of charges rendered to Ms Meng and her family were "excessive" and that he must accept "a significant level of responsibility for that having occurred." 28In Mr Scroope's second affidavit he stated that, during the period he had carriage of the matters for Mrs Meng, her husband and her son, the value of his salary package was approximately $120,000 per annum, before tax, inclusive of benefits such as superannuation. His salary was not linked to the amount of his billings on behalf of the firm. 29He continued to work at the firm on a full-time basis with a full caseload until the end of 2010. During that year the sale of the practice was negotiated and was sold. In December 2010, Mr Scroope was made redundant after being employed by the firm for over 12 years. 30Unlike other solicitors then employed at the firm who were offered positions with the purchaser of the practice, Mr Scroope was not made any such offer. He believed, from what he had been told and what was reported to him, that the main reason for failing to receive an offer was the existence of these disciplinary proceedings. At no time in the past or at the point of sale was there any suggestion made to him about the quality of his work other than the matters relating to the overcharging in Ms Meng's matter. His contract did not provide for termination benefits other than accrued leave and long service leave and therefore he did not receive any form of redundancy nor was he given any opportunity to negotiate a package of that kind. 31Mr Scroope said that, as a result, he lost the benefits of continuity of his employment, his job security, likely progression and potentially other benefits. For instance the purchaser of the practice had offered senior staff who continued in employment as an incident of the buyout, an opportunity to purchase shares. A deferred share option was made available in the sum of $200,000 for some staff at his level. He believed that he would have received the same or similar benefits if he had been able to take up employment with the purchaser. 32From the beginning of 2011, while entitled to practice as a sole practitioner, Mr Scroope decided to work as a consultant. This work had been run-off work from his former employing firm. Mr Scroope noted that, at the firm, he held a full Practising Certificate limited to practice as an employee but now, in order to practice as a consultant, it was necessary for him to obtain a full and unrestricted Practising Certificate with the attendant costs of certification and compliance fees and the costs of professional indemnity insurance. Previously, the firm paid those expenses. 33He had not advertised and had made no direct approaches to other firms seeking employment as a solicitor. He took advice on these matters from several colleagues within the profession all of who counselled him to wait until these disciplinary proceedings were concluded. He had not been approached with any offers of employment and he anticipated that, as a consequence of his conduct, these disciplinary proceedings and the attendant publicity, there would be difficulty in securing employment in the near future. 34As to personal matters, he noted that it was now over four years since the investigation by the LSC had commenced and how this period in his life had caused him great embarrassment and great personal distress. He was aware that his wider family had been caused embarrassment and distress, particularly due to the publicity of the allegations that occurred prior to the filing of the Application for Original Decision: that publicity continued. 35Over this lengthy period with these disciplinary proceedings hanging over him, he had a great deal of time to reflect on what had happened. The realisation about his conduct, the existence of these proceedings and the embarrassment and disappointment affecting his family caused a degree of withdrawal from family, friends and colleagues and he regretted that loss. He regarded himself as more self-doubting and felt the loss of professional and personal self-confidence. He believed that many friends and colleagues in the profession have a diminished regard for him. Nevertheless, people he approached willingly provided him with references and that surprised him. He accepted that his failure to apply himself diligently to ensure that the Meng matter was properly billed (meaning all matters claimed for work were properly justified and that the charges were fair and reasonable) represented a failure to adhere to the standards reasonably to be expected of members of the legal profession. He felt profoundly the impact of realising and accepting his failures. 36Mr Scroope spoke of widespread publicity contained in the daily papers over a period of time and how his own involvement in the matter had received considerable focus. In some articles he was referred to as "the hapless Mr Scroope." 37From 1998 to mid-2008 Mr Scroope had provided pro bono legal services at the Inner City Legal Centre approximately once every four to six weeks in addition to occasional attendances at the Redfern Legal Centre. From approximately mid-2008 he was no longer rostered to attend the Inner City Legal Centre and had been informed that his removal from the roster was a decision in reaction to articles in the newspaper. In the past two years he had received several emails from strangers containing negative statements about him personally and his conduct and were often abusive and sometimes very abusive in nature. Mr Scroope regarded them as resulting from the widespread publicity he had received. He described negative reactions from numerous people who were in social contact with him and how, as a consequence, he now enjoyed limited social activities and was very reluctant to be drawn into conversations that might disclose his professional history. A large amount of the public criticism of him by name was now on the Internet and he expected that those criticisms and articles would remain on the Internet indefinitely. He expected to continue to receive criticism and possibly experience other adverse effects for some time because of their ready accessibility. He was aware that prospective clients, prospective employers, other members of the profession and the public at large often searched the Internet for background on the professional standing of legal representatives. 38In relation to Ms Meng's matter, Mr Scroope said he worked hard to give Ms Meng, her son and husband the best representation he could. He accepted that he diminished his contribution to her welfare by his failure on the matter of their costs. He spoke of Ms Meng being in an already tragic position then suffering further because of his own shortcomings as her legal representative and the person upon whom she did and was entitled to rely. That was a matter of "sincere personal regret" to Mr Scroope. He accepted that he had disappointed many people, including those whose feelings were very important to him. He accepted that his failings and their consequence, however unintended, had diminished the public standing of the legal profession. He had particular regrets in relation to the staff members of the Keddie's firm. He knew that their association with the firm as a result of the widespread publicity had tainted good staff members who had done nothing wrong. 39Mr Scroope concluded his affidavit in the following terms: Until the events giving rise to the present proceedings, I have never been the subject of any adverse finding in relation to my professional conduct. I believe the lessons of this experience have been well learned, and I can give an assurance to the Tribunal and to the profession through the Tribunal, assuming that I remain in the profession, that I will do all within my power to ensure that I do not, at any time in the future, conduct myself in a way which will call into question my professional and ethical conduct. 40Mr Scroope gave sworn oral evidence in order for the members of the Tribunal to be able to clarify certain issues with him. Mr Scroope's attention was drawn to the May 2007 bill ("May bill") in taxable form that claimed in round terms $668,000 compared to the $557,000 claimed in the narrative bill dated December 2005. Mr Scroope said that the difference in those two bills arose from the requirement to review the file and identify any work that had not previously been identified and to ensure that the contemporaneous time recorded in the system was reflected in the May bill. The May 2007 bill was put together over a period of approximately five months although "sporadically." Mr Scroope spent approximately one week in total of his time in relation to the May bill. He said his involvement was limited to identifying the work that might have been missed in terms of properly billing the client and did not extend to other matters. He was asked to review the file to ensure that all work was reflected in the bill but it was not his task to put that information into a final form of bill. Either Mr Ackroyd (Costs clerk) or Mr Keddie directed his limited task. The final task of bringing forth a bill in taxable form was left to the costing clerk and part of the accounts team. 41During the investigations by the LSC deficiencies with the costs agreement had been raised, namely, that while they set out the hourly rates there was no estimate of the total fees for the matter. Mr Scroope agreed that there was no estimate of the total costs although halfway through the case such an estimate was given to Ms Meng and she was advised of the total due at the time of the settlement conference in 2005. He did not know why cost agreements in 2003 did not contain estimates but he could not recall if that was the usual practice in 2003. Mr Scroope accepted that he had a capacity to re-assess the total amount of the estimate as the matter progressed. 42At the time the computerised costing system was introduced, a short time after instructions had been taken in Ms Meng's matter, there was no in-depth or formal education given to Mr Scroope about the use of the system. Prior to that the firm had been using handwritten sheets and no time costs records were kept at all. The costs clerk may not have been employed at that time but may have been employed shortly after the computer system was introduced: this person was not a cost assessor but was more accurately described as a costing clerk. Mr Scroope did not know why the computerised costs system was limited as to the people who could access it in their own name and make cost entries in the matter. At the time of Ms Meng's matter he did not know how other people could enter costs attendances using his initials. Staff at a lower level than Mr Scroope who were working on Ms Meng's matter would record the time they worked on their own computer regarding her matter and would then enter those times on the computerised costs system, as he understood it, using his initials as apparently they did not have individual access under the system in use. 43It was not until late 2006 when he went back to the files that it had become apparent to him that his initials were on work performed that was clearly administrative or clerical work where the rates were not his but were lower work rates. Mr Scroope did not have sufficient understanding of the system to know how the work entered by those beneath him in the firm's structure and entered on their computers might be retrieved for the purpose of recording their work in their name. He believed that information was probably saved somewhere in the accounts section. He did not believe he could directly access that information. 44In his affidavit Mr Scroope had stated that, since the complaint was made to the LSC, he now took a more active supervisory role in dealing with costs. He stated that in 2007-2008, before the firm was sold, a number of procedures were introduced to ensure that billing was "more rigorously approached." He took it upon himself to routinely check (in an ad hoc way) through timesheets for the work of his staff and those working under his supervision. Once every three or four weeks he would ask a staff member for their timesheets, print them off, check them and go through them together, look at the nature of the descriptions, how the work was recorded and the time claimed so that he had a better feel and understanding of how the individuals costed their time: each individual was different. This was conducted on an ongoing basis and he got a good feel for the way his permanent staff operated and then the approach may have relaxed a little once he was confident that the costings were being performed properly. At the billing stage he would take the material home and go through the bill before it could be sent out. 45Since the complaint Mr Scroope had taken advice, especially as to what was proper. He said that this was a reference to ensuring that he attended more seminars directed to costing to ensure that he understood in greater detail the costs assessment system. He did not have any reason before this matter to question in any real sense the type of charges that had been made. That had never been called into question before although a few bills were prepared in assessable form and it was not part of his duties to be involved in those types of assessments. The bill would go to assessment, then through the assessment process and then it could come back to him. He now realised that billing an assessment of solicitor's files was a unique practice in its own right and he wanted to obtain knowledge about the system and review the processes for future dealings. 46When he said it was not his duty to get involved in the detail of the bills that was not something that he had been directed not to be involved in but was the result of being in an extremely busy practice with time pressures where matters always required attention and so the task was left to others. He thought that was why the costing clerk was employed to assist in fielding questions that came up in day-to-day practice. When asked if he was not involved in the costing issues as a matter of responsibility then who had that responsibility, Mr Scroope replied that it was the responsibility of each individual although he had a responsibility in terms of ensuring that the bill was rendered in time. The system used was that the secretary would prepare the bill and he would check it and then give her details of relevant fees to be entered on the bill. Sometimes fees were reduced with the approval of a partner and there were times when fees were not reduced. In day-to-day entry of costs the responsibility for billing was most likely to be shared between individual practitioners in putting a draft bill in form. There was also a role for the accounts section and the costing clerk. 47The approach of breaking down several tasks performed at the same time into separate costing units for each task was also raised with Mr Scroope. Mr Scroope said that it was not his routine practice to break down tasks into multiple units for billing purposes and that he would not use that approach in the future but the computerised system had an introduction to various tasks that facilitated that approach. Mr Scroope did not how that approach was adopted or routinely adopted by others in the firm. He doubted that there was a system of adopting that approach but it was the nature of the computer system and the way it was recorded in the system. He was aware of an example of a number of photographs of outback terrain where a junior entered each item as a billable unit and that would tend to distort the time charged for that task. 48There were no time targets imposed for earning remuneration although at a later time budgets were introduced. Mr Scroope could not recall whether there were budgets at the time of Ms Meng's matter. Performance was measured by client satisfaction, turnover of work, work brought in and the assessment occurred in a general, robust fashion. In 2005 there were no set daily hours required to be billed although obviously, there was pressure to do as much work as possible but Mr Scroope could not recall if at that time there was an annual fees budget. Occasionally but not annually Mr Scroope received a bonus. Bonuses would take into account billings but there was no mathematical formula, it was discretionary and a bonus might be given as encouragement to staff. There was also an annual review for partners to appraise staff but he could not recall ever attending a review meeting with the expectation or knowledge of a mathematical formula for receiving a bonus. Any salary increase or bonus followed a performance review. 49Staff were under considerable pressure from the partners to ensure that, as far as possible, all work that was properly chargeable was correctly captured and entered in the costs system and fully charged. That pressure came through professional meetings held every week where the diary for the week would be reviewed and an opportunity given to generally raise matters regarding the practice. At these meetings there was an opportunity for the partners to make it known that all available work should be billed, entered and recorded and the staff were constantly reminded to record the work otherwise a client would not receive a bill. Mr Scroope could not recall any particular example where there was scrutiny of his bills or those of individual solicitors, with pressure to make sure that more time was being recorded but he had no doubt that there was scrutiny of the time being billed and that applied to everybody, including solicitors, clerks and secretaries. There were some costs seminars to inform the staff how to time cost for billing purposes. 50The preparation of a bill was a task initially performed by Mr Scroope's secretary. He would work out a set of figures, including statutory deductions that had to be identified precisely before the settlement of a matter. A document would generally be prepared by the secretary who would then go through the ledger and the file to identify the disbursements, check counsel's notes and that task was able to be performed by a competent senior secretary. The secretary would be aware of the time costs system records and the standing total for the work on the matter. Mr Scroope could assist in that task. When this task was completed, he was required to see a partner in order to have the bill approved and that was performed generally before the matter was resolved or settled and they could then attend the conference or give advice to the client in relation to the offer with all those details known. 51As to how the accuracy of each bill was to be checked in terms of time entries, Mr Scroope said he relied on the individuals to accurately record their time entries in the first instance. Depending on the size of the matter, however, it simply would not be practical to undertaken an assessment of those time entries at the time although his practice would be considerably different now. At the time of Ms Meng's matter he relied on the individual to enter time entries into the computer system. When asked who was responsible for checking the accuracy of the entries of others, Mr Scroope said there was an opportunity for this to occur if there was a request for an itemised bill and at that time the system allowed for the time sheets to be analysed, reviewed and checked carefully. 52In terms of Ms Meng's bill Mr Scroope relied on the entries by those who made the entries. There was a real difficulty in identifying duplication or double entries that were referrable to a number of invoices and entries in the costs system and where all those matters had to be considered. The cross-checking of time sheets against invoices would be "particularly time consuming." Mr Scroope was of the view that aspects of duplication in Ms Meng's bill arose in quite unique circumstances where there were people whom he regarded as being on staff who provided certain services and there was also an external company providing translation services. Translation services were also being provided within the firm. 53In relation to the computerised costing system, Mr Scroope said that at 2003 the system was not locked and a password was not necessary. He was unable to say whether that resulted in the system being accessible to anyone in the firm because he really did not know anything about the system. He still did not understand how it was possible for someone else to use his initials to enter costs on the computer system and he was unaware that junior staff were doing so. Mr Scroope had not investigated how that had occurred but it may well have arisen from the limited licence purchased by the firm restricting direct access to the costs system. 54In his affidavit Mr Scroope spoke about coming to a realisation about his own conduct. He was asked what did he regard his conduct amounted to? In response Mr Scroope said that there was a failure to take a deeper look at the time sheets, now looking back at the issue, not having the knowledge that he now had of how the system recorded the work, how the split unit system was used in billing and could distort the costings and how the operation of the uplift and the GST was handled in the system. They were failings for which he had personal responsibility. He said his responsibility was to ensure that the client would get "a great job" and a "proper bill" and that just did not happen in Ms Meng's matter. 55In addition to Mr Scroope's two affidavits and oral evidence, seven affidavits were also relied upon that could be generally described as providing character evidence. Those affidavits came principally from barristers and solicitors who had come to know and work with Mr Scroope over a number of years. In addition, a Parish Priest provided an affidavit who had known Mr Scroope for approximately 26 years, indeed going back to when they both worked at a Local Court.. While all expressing a certain degree of shock that Mr Scroope had come to attention for disciplinary reasons, they all, in various ways, expressed confidence in his overall integrity and spoke of his good standing within the profession. The role he played in the preparation of Ms Meng's bill of costs was regarded as inconsistent with his known professional practice and was regarded generally as being out of character. He was spoken of as being a sincere, reliable and compassionate person who brought integrity and a strong commitment to the law and social justice, especially in assisting claimants to justly recover compensation for their injuries. Most expressed a concern at the effect of ongoing publicity upon Mr Scroope and his family. Those with social contact with Mr Scroope confirmed the same general sentiments. 56While the whole of the Statement of Agreed Facts in Mr Keddie's case appears as an annexure to the Decision in his matter (see Legal Services Commissioner v Keddie [2012] NSWADT 106) it is appropriate to refer to a number of specific matters. It was agreed that, in late December 2005, Mr Scroope provided Ms Meng (through Mr Lee) with a reconciliation statement concerning the settlement monies of $3,525,000 and a narrative bill. The narrative bill was prepared "by or under the direction and control" of Mr Scroope and signed by him. The narrative bill contained charges totalling $819,694.77, including professional costs (plus GST) in the sum of $557,831.82 and disbursements in the sum of $261,862.95. The narrative bill did not identify the amounts charged by rate or time spent for each item of work or the persons who performed the work. It was conceded that the narrative bill contained "mistakes, errors and duplications" in the costs charged and the disbursements. 57Mr Keddie stated that he did not know how the narrative bill was prepared and he was not present in the office at the time of its preparation. Mr Scroope had said that he followed the firm's practice of having his secretary prepare the narrative bill and in accordance with his general practice, he indicated the amounts to be recorded for costs. He confirmed that, shortly before the settlement of Ms Meng's matter, Mr Scroope had informed him of the amount recorded in the firm's time cost ledger at that date to which 25 per cent had been added. Mr Keddie accepted that information and required Mr Scroope to check for leakage. Under the reconciliation statement the net sum due to Ms Meng was $2,322,500. 58Mr Keddie then described the circumstances in which an itemised bill was produced between December 2006 and March 2007 after Ms Meng had withdrawn her instructions and her new solicitors had requested an itemised bill in taxable form. The itemised invoice listed the items of work performed, ascribing item numbers to each item of work and attributing each item to a particular fee earner. Each item included the units of time spent on the matter and a dollar value for each item based on the fee earner's hourly rate and the units of time spent were then entered. Mr Keddie noted that Ms Rosati had compared the narrative bill and the itemised invoice and had produced two reports dated February 2009 and August 2009. Mr Keddie agreed that many of the matters raised by Ms Rosati were reasonable criticisms of what had occurred in the charging of Ms Meng's files. 59Against the general background outlined above, the Keddie Statement of Agreed Facts then contains the following: 53. Ms Meng was charged grossly excessive amounts of costs. 54. The Narrative Bill included charges for work which was not reasonably carried out or not carried out in a reasonable manner, and charges that were unfair or unreasonable for the work, as a result of the units of time recorded as spent or otherwise. 55. The Narrative Bill included duplicated charges which should not have been made, including charges for work done in relation to Ms Meng's husband and son's matters. The Respondent says the duplicated charges are identified in the Amended Tax Invoice and accepts they should not have been made. ... 60. Fair and reasonable professional costs for Ms Meng's matter, including the 25% uplift in accordance with the costs agreement, excluding GST, are agreed to be $273,595.63. Fair and reasonable professional costs for John Wang's and Zeng Wang's matters, including the 25% uplift in accordance with their separate costs agreements, excluding GST, are agreed to be $9,262.32 and $9,187.25 respectively. Total fair and reasonable professional costs for all three matters are agreed to be $292,045.19. 61. Bearing in mind the amount charged in December 2005 and deducted from Ms Meng's settlement, in respect of all three matters, there was an overcharge of $215,074.65. 62. Disputes regarding costs arose between Ms Meng and the firm which were settled on the basis of a deed, pursuant to which payments totalling $180,000 were made to Ms Meng in August 2007 as follows: 62.1 by the firm $150,000 62.2 counsel and an investigator, in total $ 30,000 62.3 in November 2011 by the firm $ 80,000 63. The Respondent has undertaken to the Tribunal and by letter dated 20 October 2010 to Ms Meng has undertaken to her, that if the Tribunal decides there is a different figure for costs and disbursements which Ms Meng has paid, the Respondent will refund that amount immediately with interest from 21 December 2005. 64. The Respondent has expressed his regret and has apologised to Ms Meng by his letter dated 20 October 2010. 65. The Respondent says that he did not supervise: 65.1 The entries in the narrative descriptions of the individual attendances and items of work represented to have been done in Ms Meng's matter and that of her husband and son; 65.2 The entries of the following disbursements in the Narrative Bill: (a) the charge of $8,000 for Mr Marocchi's travel expenses to China; (b) the charge of $2,461 in airfares for Mr Lee; (c) the charge of $1,000 for travel expenses for Mr Lee other than an email from the Respondent to his personal assistant "Marg" dated 3 May 2005 directing the allocation "about $1,000" of the amount to Ms Meng's file; (d) the entire charge of $77,000 for Baiyi when there were supporting invoices of $67,456.27. 65.3 The manner in which Ms Meng was charged in the Narrative Bill. 66. The Respondent accepts ultimate responsibility for any acts or omissions by Mr Scroope and all other staff with the carriage and conduct of Ms Meng's file and those of her husband and son. 67. The Respondent accepts that Ms Meng was overcharged. Ms Meng was charged grossly excessive amounts of costs as at [55] - [60]. 68. The Respondent accepts that his conduct in paragraphs [65], [66] and [67] and constitutes professional misconduct. SUBMISSIONS 60The submissions for the LSC followed the same pattern as the submissions made in Mr Keddie's matter. The same authorities were referred to in relation to what constituted gross overcharging (namely, Veghelyi v The Law Society of New South Wales [1995] NSWCA 483 and Nikolaidis v Legal Services Commissioner [2007] NSWCA 130). The LSC had agreed with the firm what were fair and reasonable costs for the matter and that resulted in Ms Meng being overcharged the sum of $215,074.65. It was then noted that Mr Scroope had admitted that his conduct in respect of the preparation of the narrative bill constituted unsatisfactory professional conduct. Unsatisfactory professional conduct was defined in s 496 of the Legal Profession Act 2004 ("the 2004 Act") as to include: Conduct of an Australian legal practitioner occurring in connection within a practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner. That definition was compared with the definition of professional misconduct defined in s 497(1)(a) to include: Unsatisfactory professional conduct of an Australian legal practitioner, where the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence ... 61The concept of unsatisfactory professional conduct was introduced by the Legal Profession (Amendment ) Bill that later became the Legal Profession (Amendment) Act 1987, No 263 of 1987. In the second reading speech the Attorney General described the purpose of the provision as remedying an inadequacy in the common law definition of professional misconduct that did not allow disciplinary action in respect of conduct of lawyers falling short of serious professional misconduct such as delay and negligence even though the clients involved may have been substantially disadvantaged by the conduct of the practitioner. 62The LSC submitted that in this case there should be a finding of unsatisfactory professional misconduct made by the Tribunal in relation to Mr Scroope's involvement in the overcharging of Ms Meng. An order was not sought that Mr Scroope's name be removed from the Roll of Practitioners. However, this was a case where it would be appropriate to impose a fine and to reprimand the practitioner. Those findings would require the payment of costs by Mr Scroope pursuant to the provisions of s 566(1) of the 2004 Act unless the Tribunal found that exceptional circumstances existed to make some other order. It was pointed out that, where a finding of professional misconduct was made, the maximum fine that may be imposed was $75,000 (s 562(7)(b)) while in respect of unsatisfactory professional conduct, the maximum fine was $10,000 (s 562(7)(a)). 63The submission for the LSC then focused upon Mr Scroope's admitted conduct in respect of the preparation of the narrative bill that permitted the firm to grossly overcharge Ms Meng. Mr Scroope had submitted the figure later appearing in the narrative bill to Mr Keddie with a large total figure for professional costs with no suggestion for any reduction. It was submitted that Mr Scroope's conduct in this connection relevantly included the following matters: (a) he was an experienced lawyer, a senior associate with the firm and an accredited specialist in personal injury law; (b) he had a high level of responsibility in the day-to-day conduct of all three Meng matters; (c) he oversaw preparation of a bill prior to and in preparation for the settlement conference; (d) he put forward for approval a figure for the costs to be charged to Ms Meng without suggesting any reduction in the amount shown on the time cost ledger. 64In relation to subsequent refunds made by the firm to Ms Meng, the LSC submitted that those refunds could not negate the misconduct involved in Ms Meng being charged "grossly excessive amounts" for the firm's professional costs in relation to the settlement proceedings. Mr Scroope knew that these costs were to be taken from Ms Meng's settlement. The seriousness of this admitted conduct necessitated an order for public reprimand and by virtue of the operation of s 576(e) and s 577 of the 2004 Act, such a reprimand must be published on the Commissioner's Register of Disciplinary Action. A fine was appropriate in this case because of the seriousness of the conduct and the deterrent effect of such an order. Mr Scroope had a clear record and thus it was not suggested that the quantum of the fine would be other than at the lower end of the range having regard to the fact that the maximum fine to be imposed for unsatisfactory professional conduct was $10.000. 65At the conclusion of submissions the Tribunal sought assistance as to the precise scope of the conduct that the LSC had accepted that amounted to unsatisfactory professional conduct on the part of Mr Scroope. In particular, having heard senior counsel for Mr Scroope, the Tribunal wished to be informed whether the LSC accepted that, although the case against Mr Scroope may have started as a case of actual overcharging, it now accepted the position that it was Mr Scroope's lack of attention to the bill as variously described that was the real issue rather than actual overcharging by Mr Scroope. Counsel for the LSC responded as follows: In the technical sense in which charging has been used in the cases, they have, as Mr Ireland rightly said, all involved principals. Certainly Nikolaidis adopts the principles as one of the points of distinction there. The Court of Appeal found that there had not been a case run as to recklessness and failure of supervision in the sense of a personal involvement by that principal in billing. What the amended application does not do is to charge personally that Mr Scroope, in that technical sense, undertook the charging. It says that he had a degree of involvement, which is explained in the statement of facts and in his affidavit, in the preparation of the bill based on the time costing ledgers. I will add, though this is referred to in [57] of my written outline, that he had access to the time costing ledger. He refers in his affidavit in [41] and [43] to that checking which he did undertake of the time costing ledgers which was the source of the information which made its way into the narrative bill with respect to the description of the work in the form in which it appears in exhibit D and in the total which he does say he paid attention to and the totals which appear ultimately in the amount of professional costs in the bill. The case put in the second amended application is one that refers to his involvement in the preparation of the bill based on what is in the time costing ledgers and to that extent, yes, I do accept what is said on behalf of Mr Scroope that it is not the same case that was originally put in the application filed at the time that the three (other) applications were filed. 66Senior counsel for Mr Scroope pointed out that the proceedings had commenced as separate proceedings against Mr Scroope and three principals of the firm with common particulars pleaded in each matter. That approach had overlooked the important factor that it was the partners in the firm that had charged these fees and Mr Scroope was not a principal. He was, therefore, not overcharging "in the orthodox sense that one sees in the Nikolaidis case or any other cases." This case was said to be unique and that the notion of overcharging was attributed to an employee rather than a principal. 67As the matter developed, two Applications against principals of the firm were withdrawn leaving Mr Keddie as the responsible partner in relation to Ms Meng's matter and Mr Scroope as the solicitor who had carriage of the matter. The revision of the Application for Original Decision against Mr Scroope was produced on the first morning of the hearing following discussions that occurred during the previous week where matters had developed quite quickly in that short period. What was recognised in the Amended Application was that Mr Scroope was not one of the persons overcharging. Mr Scroope's offence and shortcomings in this case were to be measured by his participation in what was submitted to be a "poor system." The introduction of the computer costing system sometime before 2005 placed Mr Scroope in an office environment which in many senses took out of his direct knowledge everything that was happening on Ms Meng's file. 68Noting that both the present Chief Justice and the previous Chief Justice had entered the public domain in commenting upon the problems of professional costing based upon units of time, senior counsel for Mr Scroope submitted: There is particularly room for error in a case where the system is not well invigilated. In this case for reasons that are not entirely clear it seems that the firm for example wasn't prepared to pay a full set of licenses. That was the Locus system that lead to what might be called the shortcut whereby persons under Mr Scroope could function in the system on a matter that he was involved in where they did work by attributing the work they had done to his initials. That, stepping back from it, is quite an alarming system to be allowed in operation one might think but nevertheless it was there and all of those facts were in fact not known to Mr Scroope in February 2005. So in essence we are submitting this was a system which had significant flaws in it. 69It was accepted that the preparation of the narrative bill was an important step: not only did it establish the costs and disbursements for the firm but more importantly, the client was being provided with accurate information as to costs and disbursements in the context of whether or not to accept a settlement offer. The narrative bill was in a "unsatisfactory form" if a person was to check it. Under the firm's system it did not attribute any particular items either in terms of time or in terms of costs or charges or even in terms of the individual who performed the task. This was the unsatisfactory system of the firm with which Mr Scroope had to work although he did accept responsibility for the shortcomings of the task that he did perform. Because of the system, Mr Scroope was ill equipped to calculate those costs. There were obvious problems, in the course of a busy day and other tasks performed, to conduct some type of check of the bill that would throw up obvious problems. It was, however, accepted that Mr Scroope's error was not to instigate such an investigation on the material that was before him. 70A major problem with the system was that, if there was an entry that was incorrect, everybody treated it as being correct and it was unclear who had the responsibility to ensure that the costing record was accurate and to monitor it to cure any errors. The system had "an enormous potential to do an injustice to clients." Senior counsel submitted that Mr Scroope, if not a pawn, at least was a rook in the game: he was not the king and he was not the queen in carrying out responsibilities for these significant errors and significant problems. He did not present, however, in the Tribunal as a victim in this system. He was part of the organisation where there was obviously a culture of performance in the firm. That would not be unique to this firm but it would be wrong to say that in this case, there was a pre-occupation with performance or billings related to bonuses. Mr Scroope did not receive a yearly bonus but there was an annual performance review. The Tribunal would not find that Mr Scroope was embarking on any kind of cynical exercise of overcharging "in the loose sense." 71Mr Scroope's participation in the firm's system and the consequences of his error had been enormous. He had been involved in the proceedings before the Tribunal for a number of years under the shadow of a claim that, amongst other orders, he might be struck from the Roll of Solicitors. It was only on the first day of the hearing that it was agreed that the LSC would only seek a finding of unsatisfactory professional conduct, together with a reprimand, a fine and the payment of costs. 72Senior counsel for Mr Scroope urged "a less stringent result" than that proposed by the LSC. It was accepted that a reprimand should be imposed and that would result in the vindication of the concern relating to the firm's system and its negligent shortcomings and Mr Scroope's role in the overcharging. Firstly, a reprimand would satisfy the need for public denunciation of being part of a system and a firm where these types of serious costing problems occurred and secondly, it left Mr Scroope a much-chastened person and one who could be treated as having learned his personal lesson through the disciplinary system. The imposition of a fine in addition, however, would serve no useful purpose as the major objects of the disciplinary regime would already be satisfied by the reprimand. A fine, in all the circumstances, would not be an appropriate or fair outcome having regard to the availability of a somewhat sympathetic assessment of Mr Scroope's plight in operating within this flawed system in use at the firm. 73In relation to costs, senior counsel began to develop an argument as to why special circumstances existed in this case such that Mr Scroope should not bear the burden of costs. During that submission, however, the Tribunal reminded senior counsel that in Mr Keddie's case a submission had been made in the context of resisting the imposition of a fine, that Mr Keddie would bear a very significant financial burden by paying not only his costs but also Mr Scroope's costs. That submission has been recorded and dealt with in Mr Keddie's decision and the Tribunal has acted upon that basis. It appears, therefore, that no issue of exceptional circumstances arise in relation to an order for costs in Mr Scroope's case. CONSIDERATION 74As earlier indicated the flurry of activity immediately prior to the first day of hearing that ultimately led to the matter proceeding by way of a Statement of Agreed Facts and an Amended Application and Amended Reply, left the Tribunal during the hearing in a quandary about the precise conduct in relation to Ms Meng's matter that had been accepted by the LSC and Mr Scroope. The clarification provided by counsel for both parties accepted that Mr Scroope did not charge the fees contained in the narrative bill in the "technical" sense because the fees were charged and could only be charged by the firm. Indeed, Mr Keddie was advised of the amount of those professional fees and based upon his experience, including his experience of Ms Meng's matter, concluded that they were appropriate: in his role as managing partner and the supervisor of Ms Meng's file and therefore of Mr Scroope, in a "technical" sense it was accepted that Mr Keddie, having that responsibility, charged the fees that were later admitted as amounting to "grossly excessive" fees. The Amended Application and Amended Reply were designed to reflect that position and represented, to some extent, a refinement of the case brought by the LSC against Mr Scroope, to the extent that it was not alleged that he, in any capacity, actually charged the fees contained in the narrative bill or had some personal interest in the level of those fees. The Tribunal deals with the case as brought by the contesting parties although in certain circumstances the Tribunal is at liberty, based on the evidence before it, of taking a different view as to the relative seriousness of the matter and may reject contentions to the contrary propounded by the parties. In proceeding to deal with this matter on the basis proposed by the parties (being something more limited in nature than proposed in the Original Application), the Tribunal should not be taken as accepting the proposition that an employed solicitor could never be found to have charged grossly excessive or excessive fees. 75Although the case for the LSC proceeded on a more limited basis than originally raised, nevertheless, reference was again made to authorities dealing with overcharging and the seriousness of such conduct. The reference to those authorities, of course, remained relevant because in Mr Scroope's case the focus was upon the role he played in bringing into existence the narrative bill that claimed grossly excessive professional costs. 76In the Tribunal's decision in relation to Mr Keddie (Legal Services Commissioner v Keddie [2012] ADT 106) a number of authorities were cited dealing with the principles and the proper approach when dealing with overcharging by a legal practitioner and also dealing generally with the concept of professional misconduct. Those authorities are not set out in detail again but the following statements of the law are relevant to the determination of Mr Scroope's matter: (a) in De Pardo v Legal Practitioners Complaints Committee and anor [2000] 170 ALR 709, French J at [41] referred to the following extract from the Full Court of the Supreme Court of South Australia in Re R - A Practitioner of the Supreme Court [1927] SASR 58 at 60 as follows: In our view "unprofessional conduct" is not necessarily limited to conduct which is "disgraceful or dishonourable", in the ordinary sense of those terms. It includes, we think, conduct which may reasonably be held to violate, or to fall short of, to a substantial degree, the standard of professional conduct observed or approved of by members of the profession of good repute and competency. (b) At [42] French J referred to the judgment of Mahoney JA in Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 441 for the following proposition: ... disciplinary procedures and the orders made in the course of them are directed not to the punishment of the practitioner but to the protection of the public. That protection extends beyond protection against further default by the particular practitioner to protection against similar defaults by other practitioners. It will also involve the question whether the practitioner is a fit and proper person to be a practitioner of the court. (c) At [45] his Honour cited a passage from the judgment of Ipp J speaking for the Full Court of the Supreme Court of Western Australia in D'Alessandro v Legal Practitioners Complaints Committee (1995) 15 WAR 198, upon which his Honour then commented as follows: ... This passage makes plain, however, that the assessment of the practitioner's conduct in such a case is dependent on a range of relevant factors of which the discrepancy between costs charged and costs taxed is one. His Honour accepted that the tribunal was entitled to treat taxed costs as "the appropriate standard" and to determine by reference to it that the amount in fact charged was grossly excessive ... In so saying, however, he noted that the taxed amount was "not necessarily the sole factor to be taken into account". (d) In The Law Society of the Australian Capital Territory v Larnder [1998] ACTSC 24 it was held that the conclusion of overcharging depended largely upon the degree and frequency of the overcharging. (e) In Veghelyi, Mahoney JA stated that it was now established that gross overcharging as such may constitute professional misconduct and it was not necessary, in addition, to prove that the lawyer was guilty of fraud. (f) In Kenedy v Council of Incorporated Law Institute of NSW (1939) 13 ALJ 563, Rich J stated that professional misconduct in relation to a solicitor "need not fall within a legal definition of wrong doing. It need not amount to an offence under the law. It is enough that it amounts to grave impropriety affecting his professional character as an indicative of a failure to either understand or practice precepts of honesty or fair dealing in relation to the courts, his clients or the public." 77Having regard to these authorities, how is Mr Scroope's conduct to be categorised in relation to the gross overcharging that took place in relation to Ms Meng's matter? In essence the case for Mr Scroope was that, although a personal injury specialist by accreditation, he was no more than an employed solicitor, having no control over the computerised costing system adopted by the firm. He had only a rudimentary knowledge of the computer system and received little assistance in understanding it. When the computer system was introduced there was no employed cost assessor to assist him with the new system but a person more accurately described as a costing clerk. He had no knowledge of the capacity of other solicitors and employees to enter costs items on the computer system using his initials. He had adopted the usual practice of having a narrative bill prepared by his secretary in accordance with the firm's practice and had no reason to believe that any entries were inaccurate in any way. He had informed Mr Keddie of the professional fees appearing in the ledger prior to the settlement conference and Mr Keddie had regarded them as reasonable having regard to the nature of the case. He now accepted that he should have paid closer attention to the narrative bill and ensured that it was accurate although his evidence was that was never part of his responsibility. 78Mr Scroope's description of the operation of the firm is usefully compared with the facts agreed to by Mr Keddie. In late December 2006 it was noted that Mr Scroope handed to Ms Meng's representative a reconciliation statement setting out the settlement monies, together with a detailed narrative bill: the narrative bill was prepared by or under the direction and control of Mr Scroope and was signed by him. The narrative bill did not identify the amounts charged by rate or time spent for the individual items of work set out or the persons who performed the work. The narrative bill contained mistakes, errors and duplications in the costs charged and the disbursements. Mr Keddie did not know how the narrative bill was prepared and was not present in the office at the time of its preparation. He noted that Mr Scroope said that he followed the firm's practice of having his secretary prepare the narrative bill and in accordance with his general practice, he indicated the amount to be recorded for costs. In mid-December 20065 shortly before the settlement conference, Mr Scroope informed Mr Keddie of the amount recorded in the firm's time cost ledger in Ms Meng's matter to which he added 25 per cent uplift. Mr Keddie accepted that information and required Mr Scroope to check for leakage. 79In relation to the matters of Ms Meng's husband and son, Mr Keddie noted that the early pages of the narrative bill contained duplicated narratives for the same apparently transferred work (being work transferred to Ms Meng's account with her consent). 80In relation to the itemised bill, Mr Keddie said that Mr Scroope reviewed the file between December 2006 and March 2007. He then reviewed the file and time costing records with Mr Ackroyd (the firm's costs consultant) over a period of two days to identify attendances obvious from the file but which had not been entered at the time work was done, being in that category referred to as leakages. Notes were made and given to the accounts department for additional entries in the time records. Mr Ackroyd provided an unsigned itemised bill to Ms Meng's new solicitors: that itemised bill was signed by Mr Scroope in late May 2007. 81Mr Keddie said an amended tax invoice using the May 2007 invoice was prepared by Mr Scroope. After initial work performed by Mr Scroope, Mr Keddie, Mr Roulstone and Mr Barakat assisted Mr Scroope to continue with the preparation of the amended tax invoice in December 2009. This occurred over two days and then intermittently over the following two days. Mr Keddie asked Mr Scroope to explain the work that had been done, located documents in the file, read them and where he could, he expanded the information contained in the May tax invoice. The amended tax invoice identified duplications, mistakes and errors in the costs charged in the narrative bill. 82In the Statement of Agreed Facts Mr Keddie said he did not supervise the entries in the narrative description of the individual attendances and items of work said to have been performed in Ms Meng's matter and that of her husband and son. Mr Keddie accepted "ultimate responsibility" for any acts or omissions by Mr Scroope and all other staff with carriage and conduct of Ms Meng's file. 83In oral submissions for Mr Keddie emphasis was placed on the fact that this was a large and busy practice where the firm's costing system allowed errors that could not be easily picked up. It was stated that Mr Keddie had extremely limited personal involvement in Ms Meng's matter and there was only a brief discussion between Mr Keddie and Mr Scroope when settlement was contemplated during which Mr Keddie had been told of the figure of the work in progress on the bill. His instruction to Mr Scroope to check the bill for leakages was an instruction to Mr Scroope that he ensure that items had been properly recorded and nothing had been missed and that was the extent of Mr Keddie's personal involvement in the billing process. While accepting that process was inappropriate at the time, it was submitted that Mr Scroope had years of experience and was an accredited professional in the field of personal injury. He was not a novice in that field and Mr Keddie was entitled to rely upon the firm's professional staff, including Mr Scroope. Mr Keddie was entitled to assume that the bill, when prepared, accurately recorded the services provided. The striking feature of Mr Keddie's case was said to be the lack of his personal culpability. 84In summary the cases before the Tribunal have Mr Keddie accepting overall responsibility for what had occurred in relation to Ms Meng's matter and the overcharging in it but declaring his lack of personal involvement and knowledge of the matter and his entitlement to rely upon Mr Scroope to prepare an accurate bill of costs in a matter in which he had day-to-day supervision and in an area of law in which he was an accredited specialist. On the other hand Mr Scroope presses the Tribunal with the view that it was mostly the fault of the firm's computerised costing system of which he had very limited knowledge, no real training of the system and no understanding of the capacity of other people to make entries under his name in the costs ledger. By proceeding on the limited basis of a Statement of Agreed Facts and having no affidavit or oral evidence from Mr Keddie or Mr Ackroyd, the Tribunal is left in the unsatisfactory position of not being able to examine closely the assertions about the firm's system for recording costs and the level of responsibility within the firm expected of an accredited specialist with supervision of a matter, the role of the costs consultant and the use that might be made of the accounts department. 85There were certain unsatisfactory aspects of Mr Scroope's evidence in that he appeared to downplay the level of expertise available to him in performing his role as supervisor of Ms Meng's matter on a day-to-day basis. When questioned about the availability of the costs consultant to assist him in understanding the computerised costs system and assisting in the preparation of an accurate bill of costs, especially one as large as Ms Meng's matter, Mr Scroope, firstly, doubted whether there was an employed person performing such a role until the later stages of Ms Meng's matter and secondly, suggested that the person on staff was more a "costs clerk", thus suggesting that only a low level of assistance was available to him. In both the Statement of Agreed Facts before the Tribunal, however, it is common ground that between October 2002 and August 2007, Mr Ackroyd was employed by the firm as a "costs consultant." In his evidence Mr Scroope said he had not seen a job description or list of duties of the firm's costs consultant but in a letter from the firm dated 7 May 2009 addressed to the LSC, such a document was provided showing that the role of the costs consultant was to assist with the timely collection of the firm's costs. The person was required to have experience with New South Wales litigating costing regimes and amongst other matters was to possess computer skills, time management, communication and an ability to work in a team. The personal qualities required that the person be "responsible", with a "strong work ethic", "honest" with a common sense approach and sound judgement. In relation to this position the firm's letter stated: Fee earners requiring costing advice contacted Charles Ackroyd to discuss the preparation of the bills and the negotiation of the costs. Mostly Charles prepared itemised bills, although at times instructed costs consultants. Charles had been in his role at Keddies since November 2000. 86Mr Scroope also tended to downplay his involvement in the preparation of the 2007 bill in response to a request for an itemised bill from the new solicitors acting for Ms Meng. It is to be remembered that, not only did Mr Scroope have day-to-day control of the Meng matter, he was responsible for delivering the narrative bill and prepared and signed it. It was that bill that was being questioned by Ms Meng's new solicitors and it is difficult to see a person better placed than Mr Scroope to analyse the narrative bill to ensure that it was accurate in every respect. Indeed, at the end of the review process in 2007 approximately $100,000 was added to the narrative bill but Mr Scroope denied a role in that calculation saying that he had been directed only to look at what the firm referred to as leakages and nothing else. In Mr Keddie's Statement of Agreed Facts he stated that, in 2007, Mr Scroope reviewed the file over a period between December 2006 and March 2007 and then reviewed the file and the time costing records with Mr Ackroyd over a period of two days to identify attendances obvious from the file but not entered. Notes were made and given to the accounts department for additional entries to be made to the time record. Mr Scroope signed this itemised bill: the tone of Mr Keddie's statement suggests a greater role for Mr Scroope in reviewing the narrative bill. It seems extraordinary that having this involvement in preparing the itemised bill that Mr Scroope had no role in ensuring that the narrative bill he had supervised, prepared and signed was indeed accurate. There was no evidence to suggest that Mr Keddie had any role apart from a brief period during 2007 in relation to this itemised bill. Mr Ackroyd was not called to give evidence. 87Although, perhaps of lesser significance, there were other less than satisfactory aspects of Mr Scroope's evidence: (a) he stated that under the computerised costing system, there were no manual or paper checks available to verify entries on the costs ledger but other fee earners did enter work they performed on their own computers and then entered that work on the costs ledger using Mr Scroope's initials. No check, however, was made of the personal computer records of these fee earners to check the accuracy of entries on the costs ledger; (b) while stating that he had no understanding of the computerised costs system, Mr Scroope gave detailed evidence of how it worked; (c) in his first affidavit he stated that, because of work pressures, detailed checking on entries in the costs ledger were "impossible" but later accepted that he had changed his approach and was now able to closely check costs entries. Indeed, after the complaint had been raised by Ms Meng the firm altered its costing system; (d) he gave the impression that a senior secretary, unassisted, would prepare a bill of costs from the costs register based on the level of fees provided by Mr Scroope. Later in his evidence he stated that he could and on occasions did assist the senior secretary with the task of preparing a bill of costs. No indication was given of the circumstances that would lead Mr Scroope to provide such assistance. 88In the Tribunal's decision concerning Mr Keddie, reference was made to the vulnerability of Ms Meng - those comments are equally applicable to Mr Scroope, if not more so. In his evidence Mr Scroope accepted that Ms Meng had relied upon him in the carriage of her matter and that he had failed her and the trust she had placed in him. The Tribunal adopts in these proceedings the following observations made in Mr Keddie's case: Ms Meng was a vulnerable client, at least in one of the senses referred to by Marhoney JA in Veghelyi. It appears, as earlier observed, that Ms Meng had little or no English and the preparation of her case, including taking statements from other witnesses, involved the extensive use of translation services. Ms Meng had been seriously injured while on a holiday in South Australia and was therefore remote from her normal family support network. She had selected a solicitor in a country where she appeared to have few ties. She was very much in the position where she had to place trust in her solicitor and undoubtedly expected her solicitor to protect her interests at every level, including the charging of only appropriate costs for work actually performed. 89Aside from these unsatisfactory aspects of the evidence and the manner in which the matter proceeded, there is an agreement that Ms Meng was overcharged in the sum of $215,000 in relation to a professional costs bill claiming $558,000. That level of overcharging is correctly accepted by the parties to be grossly excessive. Mr Scroope's Reply to the Second Amended Application admitted that there was overcharging and in relation to overservicing, admitted that there was work undertaken by persons of inappropriate seniority or qualification and unnecessary work was undertaken. He admitted that there was a misrepresentation of costs. In his evidence he accepted that he had a high or significant level of responsibility in relation to Ms Meng's matter - indeed, he was the "team leader and the supervisor with day-to-day management of her file." Having regard to the size and these various elements of the overcharging, it is difficult to understand how, at least, some of the entries in the narrative bill upon examination by Mr Scroope did not reveal themselves as being inappropriate and warranting further consideration even if he regarded his task as looking merely for leakage. The amount of the overcharging, overservicing and misrepresentation suggests that there were many entries in the narrative bill that were inaccurate, or wrong. 90While Mr Scroope has accepted that, in supervising the narrative, he did not carefully check the accuracies of the entries in the time ledger, the Tribunal is of the opinion that Mr Scroope's conduct in the preparation of the narrative bill was so lacking in professional competence and diligence that it amounts to professional misconduct. The Tribunal so concludes. The level and frequency of the overcharging during a period of three years and the charging of fees at a level considered by the Tribunal to be quite extraordinary requires such a finding. That approach also derives support from the underlying purpose of disciplinary orders, namely, the protection of the public, the general deterrent effect of such orders and the need to remind the profession of the obligation to strive to maintain high professional standards. 91Having determined Mr Scroope's conduct warrants a finding of professional misconduct, it is necessary for the Tribunal to consider what consequential or additional orders should be made. It does not follow that, as a consequence of a finding of professional misconduct, the practitioner should be struck from the Roll. That proposition, in the context of a finding of misappropriation, was rejected by the Court of Appeal in The Council of the Law Society of New South Wales v Doherty [2010] NSWCA 177. The Court, in that case, confirmed that it was open to the Tribunal to say that a case was less serious than the usual or ordinary case. Mr Scroope's case arises in somewhat unusual circumstances: although he had the day-to-day control and supervision of Ms Meng's matter, the ultimate responsibility for the matter within the firm was in the hands of Mr Keddie and the Tribunal has accepted submissions to that effect. Importantly, Mr Keddie has accepted "ultimate responsibility" for the acts and omissions of Mr Scroope. It is likely that many of the errors in the narrative bill prepared by Mr Scroope's secretary and signed by him were at least, in part, attributable to the inappropriate computerised costing system operated by the firm. There is no evidence in the present matter suggesting that Mr Scroope had a personal interest or financially benefited in what was ultimately agreed to be the grossly excessive charging of Ms Meng. 92Affidavits relied on by Mr Scroope showed that members of the profession, both counsel and solicitors as well as community leaders, held Mr Scroope in some regard and spoke of his usual diligence, competence and integrity. The Tribunal had the opportunity of observing Mr Scroope in the witness box: he did not present as a person who would usually be other than cautious and prudent. Having regard to his undertaking to the Tribunal regarding his future conduct, we are satisfied, in all the circumstances, that it is unlikely that Mr Scroope will offend in this way again and that he has learned a very hard and grave lesson. The Tribunal, therefore, concludes that the appropriate consequential and additional orders that should be made in his case are that Mr Scroope be reprimanded and pay a fine of $5,000. Bearing in mind the position taken by Mr Keddie as to his responsibility for Mr Sroope's costs there are no exceptional circumstances that would stand in the way of an order that Mr Scroope pay the costs of the LSC. ORDERS 93Having regard to the above matters the Tribunal makes the following orders: (1) That the conduct of the legal practitioner, Philip Scroope, in the preparation of the narrative bill of costs resulting in the charging of Ms Meng of grossly excessive costs, constitutes professional misconduct within the meaning of the Legal Professional Act 2004. (2) The legal practitioner, Philip Scroope, is reprimanded. (3) The practitioner, Philip Scroope, is fined the sum of $5,000. That sum is to be paid within 28 days of the date of this decision. (4) The legal practitioner, Philip Scroope, shall pay the costs of the LSC. I hereby certify that this is a true and accurate record of the reasons for decision of the Administrative Decisions Tribunal. Registrar ********** Annexure DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 04 June 2012