Lawyers acting on instructions is not a defense. They may claim to be “just acting on their client’s instructions,” following the directions given by the bank.

This doesn’t shield them from liability for fraudulent conduct, misleading representation, or other violations of Australian law.

Lawyers have a professional and ethical duty to act lawfully and ethically, even if they are representing a client. Just because the bank tells them stuff, doesn’t mean it’s true. Unsubstantiated numbers on a piece of paper mean nothing without verification.

Lawyers can’t simply hide behind the defense of “acting on instructions” if their actions involve illegal or unethical conduct, such as:

Lawyers Acting on Instructions

Here’s a breakdown of why the “acting on instructions” defense likely won’t absolve the lawyers of responsibility, and the potential legal consequences:

1. Professional Duty of Lawyers

Lawyers in Australia are governed by a strict ethical framework and professional obligations, which are designed to ensure they act in accordance with the law and in the best interest of their clients — but within the bounds of the law.

  • Lawyers Can’t Facilitate Fraud: Even if a lawyer is acting on a client’s instructions, they are not permitted to engage in or facilitate illegal conduct.This includes knowingly pursuing a false or unsubstantiated debt or making misleading claims.

    Lawyers have an obligation to verify the facts before taking legal action or making demands on behalf of a client.

    Lawyers can’t simply claim to be acting as a “conduit” for their client’s false claims if those claims are fraudulent or misleading.

  • Duty of Care to Third Parties: Lawyers also have a duty of care to third parties (i.e., those they are dealing with on behalf of a client).If the lawyer knows or ought to know that they’re making false claims or threats on behalf of their client, they may be liable for fraud, misleading conduct, or other offenses, regardless of their client’s instructions.
  • Professional Misconduct: If a lawyer knows or ought to know that they are facilitating illegal conduct (e.g., making false demands for payment), they could be engaging in professional misconduct.This can result in disciplinary action, including suspension or disbarment from practicing law, even if the lawyer was acting on client instructions.

2. Lawyers Instructions – Fraud and Deceptive Conduct?

  • Criminal Liability: If the lawyers make false claims about the existence of a debt or engage in other fraudulent conduct (e.g., threatening legal action based on a non-existent debt), they could be charged with fraud under the Criminal Code Act 1995 (Cth).The fact that the lawyer was “acting on instructions” doesn’t protect them from criminal liability if they’re aware that those instructions are leading to a fraudulent act.
  • Fraud by Deception (Section 134.1): If the lawyer is aware that the debt is unsubstantiated or fabricated but continues to demand payment or threaten legal action, they could be committing fraud by deception, regardless of whether they’re acting on their client’s instructions.
  • False or Misleading Representations (Section 29 of the Australian Consumer Law (ACL)): If the lawyer is making false claims (e.g., asserting a debt exists when it does not) or engaging in misleading conduct, they could be held liable under consumer protection laws, even if they’re acting at the client’s behest.The defense of “just following instructions” would not absolve them from these legal obligations.
  • Civil Liability: The recipient of these false demands could potentially sue the lawyers for damages resulting from the fraudulent or misleading conduct.This could include claims for emotional distress, reputational harm, or financial losses incurred from having to respond to false demands for payment.
  • Breach of the ACL: The lawyers’ actions could also constitute a breach of the Australian Consumer Law, particularly in relation to false or misleading representations (Sections 18 and 29) and unconscionable conduct (Section 20).Even if they’re following their client’s instructions, they may still be personally liable for these violations.

3. Liability for Unsubstantiated Debts and Threats of Legal Action

  • Unsubstantiated Debt Claims: If the lawyers are demanding payment for a debt that the client cannot substantiate, and especially if they continue demanding payment after being asked for proof of the debt, the lawyers could be complicit in extortion or fraudulent debt collection practices.
  • Threatening Legal Action: Lawyers can’t make threats of legal action without having a genuine legal basis for such action.If the lawyer threatens to initiate litigation based on a debt that doesn’t exist, they could be liable for misleading conduct, extortion, or abuse of legal process.
  • Legal Duty to Verify Information: Lawyers have a duty to ensure the legitimacy of their client’s claims before pursuing legal action or making claims on their behalf.If they make demands without verifying the debt or ignore requests for proof of the debt, this could be considered negligence, misrepresentation, or even fraud.

4. Lawyers Misconduct and Disciplinary Action

  • Legal Services Commission / Professional Body Complaints: Lawyers have ethical or professional standards, they’re subject to disciplinary action by legal regulatory bodies.

    E.g Legal Services Commission or the Law Society in their jurisdiction.

    Lawyers could face penalties for professional misconduct if they fail to meet the required standards of practice.

  • Conflict of Interest: Lawyers inconsistent with their professional obligations they could face disciplinary action. For example, they believe the debt is fictitious or unsubstantiated.Their duty to uphold the law and avoid facilitating illegal conduct outweighs their duty to simply follow a client’s instructions.

5. Lawyers Unconscionable Conduct and Extortion

  • Unconscionable Conduct: Lawyers continuing to pursue a non-existent debt or make threats of legal action without a legitimate basis. This could be considered unconscionable conduct under the Australian Consumer Law (ACL) (Section 20).Lawyers are acting on instructions, can be held liable for unfair or harsh practices exploiting the debtor’s weaknesses.
  • Extortion: Lawyers’ threatening to take legal action (e.g., garnishing wages or seizing assets) over unsubstantiated debts, could be extortion. That’s is a criminal offense.Following client’s instructions doesn’t provide a defense, if their conduct involves coercion or threats of harm without legal justification.

Lawyers Acting on Instructions – No Excuse

Acting on their clients’ instructions is no excuse if the lawyers’ conduct is illegal, unethical, or fraudulent.

Lawyers have an independent duty to ensure that they are not facilitating unlawful or fraudulent conduct. Lawyers making false claims about debts or threatening legal action without proof, are personally liable for:

  • Fraud under the Criminal Code.
  • Misleading or deceptive conduct under Australian Consumer Law.
  • Unconscionable conduct or extortion.
  • Professional misconduct leading to disciplinary action.

The “acting on instructions” defense doesn’t absolve lawyers’ liability if they’re engaging in fraudulent or unethical practices.

Lawyers remain accountable for ensuring their actions comply with legal and ethical standards, even if they’re following their client’s direction.