Warren Robinson is the sole principal in a Queensland legal firm, Robinson and Associates, Lawyers. There are also 2 employed solicitors at the firm, George and Katrina, and support staff including Mary, a receptionist / secretary and Wendy, a part-time bookkeeper.

Warren’s general account is in overdraft and the interest he is paying is really starting to bite into his preferred life style. The kids’ school fees are due soon and his wife has given him those accounts to pay. He is becoming increasingly concerned about his financial position but feels unable to discuss this with his wife.

Number of words: 1,000 Marks: 20%

QUESTIONS

The answers can be written in dot point. You will be marked for succinctness and clarity. The total word count should not exceed 1,000 words.

In respect of the scenarios below, please advise:

a. any legislation, regulation, professional rule or other standard that has been breached and the nature of the breach;
b. how the situation should have been handled; and
c. any steps that can be taken to remedy / mitigate where appropriate.
1. Warren is acting for Peter in the purchase of a house and Peter brings in a cheque payable to ‘Warren Robinson’ for $2,800 to cover costs and outlays. Warren pays the cheque into his general account.

Over the next week he tells Tina to draw three cheques from his general account to pay for various search fees.

2. The firm is acting for Susan in a personal injuries claim and George is handling that matter. George asks Susan to pay $1,200 into the trust account to cover the costs of medical reports. The following day, Tuesday 28th August, 2012, she brings in a personal cheque for $750 and gives it to Mary, the receptionist. Mary issues her with a trust account receipt from the trust account receipt book which is usually kept on her desk for easy access.

On Wednesday 29th August the firm receives an invoice in the sum of $940 from a doctor who has prepared a report for Susan. Mary sees the invoice, knows that Susan paid $750 the day before and writes out a trust account cheque which she takes to George for signing – which he does. Mary sends off the cheque to the doctor.

On Thursday 30th August, an invoice in the amount of $450 arrives for the physiotherapist’s report. This invoice goes through to Warren because George is in court that morning. Warren checks Susan’s trust account ledger and sees a balance of $1,200 so he writes out a trust account cheque for $450 and puts it in the mail.

On Friday 31st August, Wendy is in to do the books and finds that Susan’s account is overdrawn. She brings the matter to Warren’s attention.
3. Katrina is acting for David who is being sued by Yolanda over $3,000 Yolanda claims David borrowed from her. Katrina manages to settle the matter when David offers to pay $2,200.

Katrina asks David to bring in $2,600 to cover the agreed settlement figure and the estimated costs and outlays of Robinson and Assoc. The following day David sends a cheque for the requested amount and it is banked to the trust account.

A week later Katrina sends a trust account cheque for $2,200 to Yolanda’s solicitor and a bill to David for $443 – $425 for professional costs and $18.00 for identified outlays. The following day she transfers $400 to the general account from the trust account on that matter.
4. Warren has been acting for James, one of two former business partners in a dispute. James and his former partner, Lachlan, have sold some of the assets of their business to defray some of the business debts and it is agreed that the balance of these sale proceeds, $8,500, will be held in Warren’s trust account until the dispute is resolved. Lachlan’s solicitor has requested an undertaking from Warren regarding these monies and Warren has sent a letter stating: