Who were Dover’s expert compliance lawyers?
Annual detailed compliance reviews
Every year Dover engaged external and independent lawyers to review its procedures and processes. Dover used a different consultant each year. The reviews were wide ranging and there was no limit on where the adviser would go.
In 2016 Dover’s compliance processes including the Client Protection Policy was reviewed by Holley Nethercote and iMac Legal. Dover instructed Holley Nethercote and they engaged iMac Legal to complete the review and draft the final report for them. Both firms promote themselves as expert in AFSL law. In 2017 Dover’s compliance processes including the Client Protection Policy was reviewed in detail by Sophie Grace, a Sydney based law firm that claims expertise in AFSL compliance. From August 2016 on each Dover statement of advice was reviewed by McMasters Lo Andrawis, a law firm owned by two former Dover employees, Simon Lo and Mina Andrawis. Terry McMaster is not a direct or indirect owner.
You can learn more about Holley Nethercote, iMac Legal, Sophie Grace Compliance and Legal and MLA Lawyers here:
ASIC was fully informed of these reviews. Dover gave them to ASIC even though they were probably subject to legal professional privilege. ASIC read the 18 March 2016 Holley Nethercote report but dismissed it as incompetent in December 2016, without telling Dover.
Each consultant lawyer was a financial services law specialist
Each of the law firms were engaged because of their experience and expertise in financial services law and because of their knowledge of compliance practices at other AFSLs. Clients expect more of lawyers who promote themselves as experienced experts. So do the courts.
Its common sense: lawyers who possess and/or possess higher skills owe a higher duty. Their bar is raised.
The leading statement comes from the Full Federal Court in Yates Property Corporation v Boland :
“When a firm, whether large or small, has developed a particular expertise in some area of the law it is difficult to see why as a matter of principle the standard of care in accordance with which that a firm should carry out its professional work should be judged by reference to the standard of care of an ordinary practitioner. Indeed there is every reason to think that this should not be the case. Not too long ago a client would utilise the services of one particular firm of solicitors for whatever legal work that client required from time to time. Nowadays that client will look for advice from a firm that is expert in that area of the law that is of concern to the client. He may even use two or three firms in one matter where that matter involves discrete areas of the law and one firm is not expert in all of those areas.
When a client retains a firm that is or professes to be specially experienced in a discrete branch of the law that client is entitled to expect that the standard of care with which his retainer will be performed is consistent with the expertise that the firm has or professes to have. Such a client would no doubt be justifiably dismayed if he was told that the firm that he has retained because of its experience is only required to act in accordance with the standards laid down for a solicitor who has only a general or even only a little knowledge of the law that is to be applied to the facts of the client’s case.
Thus, the content of the standard of care that is to be owed by a solicitor to his client under the general law should not be confined to the standard of care and skill that is possessed by a person of ordinary competence exercising the same calling. The standard should reflect the fact that within any one calling practitioners have or profess to have varying degrees of expertise. The standard of care and skill required of such a person must bear some relationship to that expertise. In the case of a solicitor who is an expert in a particular branch of the law the requirement should be that the solicitor must carry out his retainer as would a reasonably competent solicitor who is an expert in that particular area of the law. That is the manner in which the content of the duty of care that is owed by a specialist medical practitioner has been described. See Rogers v Whitaker (1992) 175 CLR 479 at 483 where the High Court described the standard as “that of the ordinary skilled person exercising and professing to have that special skill, in this case the skill of an ophthalmic surgeon specialising in corneal and anterior segment surgery.” There is no reason in principle why the standard of care of a solicitor having special skill should not be regarded in the same way.”
The possession or profession of special expertise or experience
Thus lawyers who possess or profess expertise in a specialist area are subject to a higher duty of care than other lawyers. In the circumstances it seems each of Sophie Grace, Holley Nethercote, iMac Legal and MLA Lawyers are on the face of it liable to Dover.
The professions and possessions of Imac Legal
The founders of Holley Nethercote, Grant Holley and Tim Nethercote, profess to possess a particular skill: preventative law, ie the skill of making sure their AFSL clients get things right the first time to avoid conflict and the adverse consequences that follow from conflict.
Can we be sure the consultant lawyers addressed the CPP issue?
In Sophie Grace’s case the position is red inked and graphically clear:
In Holley Nethercote and iMac Legal’s case the position is less graphic but just as clear. Their 2016 report sprinkled with paragraphs like this:
Was it foreseeable that ASIC would force Dover to close?
Daniel Ziffer, the ABC’s Business Reporter, quoted compliance expert Helen Bird as saying so. This is an extract from an article Daniel wrote on Thursday 13 June 2019.
You can view the original interview here: Link to Daniel Ziffer’s interview of Helen Bird
Extract showing Sophie Grace Compliance Lawyers handwritten suggested alterations to the Client Protection Policy. This was part of their June 2017 compliance review