Bridgecorp’s Davidson damaged legal profession

WILLIAM MACE
Last updated 14:20 13/12/2012

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Former Bridgecorp chairman Bruce Davidson, who was convicted of issuing false statements to investors who lost more than $460 million, has also been found guilty of bringing the legal profession into disrepute.

Possible penalties for the charge include being struck off as a barrister, although a penalty hearing date has not yet been set.

A majority decision just published by the legal profession's disciplinary tribunal has found Davidson did not fulfil his duty as a director of Bridgecorp which therefore reflected badly on all lawyers.

Davidson traded on his reputation as a senior lawyer and a former councillor and president of the Auckland District Law Society, as well as councillor and vice-president of the New Zealand Law Society, the decision said.

"Mr Davidson was sold to readers of the [Bridgecorp] prospectuses as an experienced commercial lawyer with a distinguished career," said the Lawyers and Conveyancers Disciplinary Tribunal's decision.

"The clear implication of the biographical details was that the Chairman of Bridgecorp was a man investors could trust, someone on whom they could rely."

A majority of the tribunal said that "a reasonable person fully informed of the background of the offending" would link the fact that the leader of the failed company was an experienced commercial lawyer, and that the link "must tend to reflect on the reputation of the profession as a whole".

The tribunal quoted Davidson himself as saying: "My professional and commercial reputation has been greatly diminished, if not entirely destroyed."

Davidson pleaded guilty to the charges brought against him for his role in Bridgecorp but said it was his naivety and the trust he placed in the other directors of the company - Rod Petricevic, Rob Roest and Peter Steigrad - that was his downfall.

In October last year he was sentenced to nine months home detention and 200 hours community service on the 10 charges, and agreed to pay $500,000 in reparations.

However, Davidson defended the latest allegations at the tribunal, saying the convictions did not reflect on his fitness to practise law and denying that they brought the legal profession into disrepute.

A minority of the tribunal's members, which usually includes three lawyers and two lay people, sided with Davidson saying that while the reputation of public company directors may have been diminished it did not automatically translate that the legal profession would be brought into disrepute.

The tribunal said the case was "one of the most difficult" it had faced because the members had to assess Davidson's reputation from the viewpoint of a reasonable person who was informed of the circumstances surrounding the offences and convictions.

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The tribunal was unanimous that the conviction did not reflect on Davidson's fitness to practise law and it accepted that he was a competent lawyer who had never had a complaint made against him.

"To the contrary his integrity as a person and a legal practitioner was unquestioned," said the decision.

According to definitions set out by Justice Paul Heath, a majority of the tribunal considered that Davidson's offending should be categorised as "a major departure from the standard of care expected when a director performs a statutory duty" rather than "an innocent misrepresentation arising out of greater or lesser degrees of carelessness".

- BusinessDay.co.nz

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