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Principal overcharged client almost $300K

A Gold Coast principal who overcharged a client by almost $300,000 will be publicly reprimanded and have a condition imposed on her practising certificate for five years.

Shaye Elizabeth Chapman, sole practitioner at Bundall firm Shaye Chapman Lawyers, was investigated by the Legal Services Commission (LSC) after it received a referral from a costs assessor and a complaint from one of her clients.

The LSC then filed a discipline application citing one charge of charging excessive fees in relation to an estate matter handled by Ms Chapman between 2011 and 2014.

In a Queensland Civil and Administrative Tribunal decision made on 19 September and handed down yesterday, Ms Chapman’s behaviour was deemed to be professional misconduct and sanctions were imposed.

The estate matter involved a costs agreement which included terms that Ms Chapman would not charge professional fees until certain events transpired, but would issue regular invoices for disbursements.

Ms Chapman issued 24 invoices to the client, who paid the first 19, before Ms Chapman began proceedings to recover the remaining unpaid legal costs and interest. She did not progressively review her work-in-progress entries before issuing the invoices or beginning recovery proceedings.

Following an objection by the client, Ms Chapman was ordered to file and serve an itemised bill comprising all fees and charges. The bill claimed $693,301.02 for a total of 4664 items (with the amount actually sought $674,249.54).

After a District Court review in 2019, an eventual costs assessment was $384,695.22 – a difference of $289,554.32, or 42 per cent.

“The Tribunal accepts that the significant extent of, and the reasons for, the differential between the amount charged and the assessed amount in the current factual circumstances support a finding that the Respondent committed professional misconduct,” Justice Williams said.

In deciding on a penalty, Justice Williams considered factors including that Ms Chapman:

  • had been in practice for 11 to 12 years at the time of the conduct;
  • held an unrestricted principal practising certificate;
  • had no disciplinary history;
  • was solely responsible for the large sum overcharged;
  • had not sought to address the client’s concerns after issuing the invoices or beginning recovery proceedings;
  • made no offers of compromise during the costs assessment or review application; and
  • had not engaged in any rehabilitative professional development to address the cause of the complained conduct.

“The Respondent initially maintained to the Commission that she had not engaged in any wrong-doing, however did later admit unsatisfactory professional conduct after the commencement of the discipline application. Ultimately, the Respondent conceded that her conduct constituted professional misconduct,” he said.

He said Ms Chapman, via an affidavit, had stated she no longer accepted work on a deferred-fee basis and 95 per cent of her firm’s work was fixed-fee work; and that her failure to review work-in-progress entries “was an abnormality unique to the deferred fee arrangement”.

Justice Williams ordered that for five years, a condition be placed on any practising certificate issued to Ms Chapman that she must not accept any retainer on a deferred basis.

“The relevant risk here is the risk of the Respondent charging excessive fees as a result of the use of deferred retainers,” Justice Williams said.

“While the Respondent has indicated she no longer accepts retainers on a deferred fee basis, a condition on her practising certificate that she not accept retainers on a deferred fee basis would operate to protect the public from that risk.

“Further, the imposition of such a condition is transparent in that it allows members of the public to be fully informed of the condition should they undertake their own inquiries, and allows for compliance to be monitored.”

Ms Chapman was also ordered to complete a Queensland Law Society ethics course in relation to costs and billing, and to pay the LSC’s costs of the proceedings.

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