Two South Auckland lawyers, Mr J M Strong and Mr B R B Abraham, have entered into a settlement with the Commerce Commission after admitting they attempted to fix prices for conveyancing fees.
They threatened another lawyer that they would reduce their conveyancing fees until he agreed to increase his fees.
Commission Chairman Dr Alan Bollard said under the agreement Martin Strong and Brett Abraham admit that this action breached the Commerce Act. They have also agreed not to breach the Act in any other way and to the Commission publicising the settlement.
Mr Strong and Mr Abraham believed that the fees charged by the other lawyer were too low.
In July 1993 they approached that lawyer and told him that if he did not increase his fees they would reduce theirs to $100.00 per conveyancing transaction until he did increase his fees.
A fee of $100.00 was considerably less than the standard fee charged for conveyancing in South Auckland.
Following the visit to the other lawyer Mr Strong arranged for 25 cards to be published advertising that his firm would undertake conveyancing for a fee of $100.00. The cards were not distributed.
Mr Strong visited the other lawyer again and showed him one of the cards and again invited him to increase his fees. The lawyer did not increase his fees but did complain to the Commission.
Dr Bollard said the actions of Mr Strong and Mr Abraham were clearly aimed at reducing competition in conveyancing by trying to set minimum fees.
The Commission is concerned that solicitors and professional organisations generally recognise what is illegal collective behaviour and do not act in a way which reduces competition between their members. Such organisations must not act in a way that leads to price fixing between members.
The Commission was, therefore, also concerned that a meeting of South Auckland lawyers was held at the offices of Mr Strong and Mr Abraham to discuss the profitability of legal practice and the future of discounting conveyancing fees. Although a number of issues were discussed at the meeting no agreement was reached and the Commission has taken no action in relation to the meeting.
The Commerce Commission regards price fixing and any arrangement which leads to less competition in a market as serious breaches of the Commerce Act and will take whatever action is appropriate to stop them.
It will continue to monitor professional organisations to ensure that they do not act in an anti-competitive way.
