LEGAL PROFESSION BILL

Committee Stage

In committee (resumed on motion).

(Continued from page 1081.)

Clauses 76 to 182 passed.

Clause 183.

Mrs REDMOND: I have picked that clause because it actually is the very first clause in the part dealing with the manner of legal practice, the rules for Australian legal practitioners and registered foreign lawyers. I am curious about what was in the minister's mind in terms of in what circumstances foreign lawyers would not be bound by the rules that apply to Australian registered legal practitioners.

The Hon. M.J. ATKINSON: The question is about Australian registered foreign lawyers who have that status because they are practising only foreign law. The default position, that is to say, if the bill becomes an act and comes into force and nothing further is done by the government about Australian registered foreign lawyers, they will be subject to the complaints and disciplinary regime, as other lawyers are. They will be subject to the professional conduct rules and to the rules about trust money. However, it is possible that their practice will be so remote from the concerns of the regulatory authorities that there is scope to exempt them, if that is thought necessary.

Mrs REDMOND: I do not want to delay the committee on this issue, but I am wondering whether the Attorney has any idea of what would comprise that sort of practice? I just have a concern about Australian registered foreign lawyers coming in, practising in this jurisdiction and there being any scope for them to be bound by other than the same rules as we who practise in this jurisdiction regularly. I do not know that we can take that any further.

Clause passed.

Clause 184 passed.

Clause 185.

Mr RAU: I have a question of the Attorney about division 3, which commences at clause 108 and goes through to 115, dealing with multidisciplinary partnerships. This seriously concerns me for a number of reasons, but I would just like to raise three. I realise some of these appear to be dealt with within the regulation-making powers already existing there.

The CHAIR: We are dealing with clause 185. Can you make your point relevant to clause 185?

Mr RAU: Yes, I will keep going. As I said, clause 185: the first question is the question of ethics and professional standards, where we have two groups who do not share the same ethical and professional standards coexisting, and the difficulty in making sure that those two different sets of rules and understandings are in some way accommodated without reducing the standard expected of legal practitioners. The second one is to bear in mind that, since the tort law reform legislation, we now no longer have joint and several liability in matters other than personal injuries. Therefore, it would be necessary for a potential claimant to sue each and every potential defendant. The complexities associated with that in a multidisciplinary practice may be considerable. Thirdly, there is the question of conflicts of interest and what I consider to be the nonsense of Chinese walls. Lastly, there is the question of adequate insurance. I think all those issues arise under the section that I am talking about.

The CHAIR: Attorney, is it possible for you to give a response within the meaning of clause 185?

Mr RAU: I wanted to express a concern about those matters. I trust that the regulations will enable the Attorney to address all of those matters comprehensively.

Clause 185 passed.

Clauses 186 to 237 passed.

Clause 238.

Mrs REDMOND: At this stage we have not filed although we have drawn up an amendment to this section. I anticipate that, in due course, we are likely to move in the other place to delete subsection (6) from this section. This is the statutory interest account. As I think I mentioned yesterday, every lawyer with a practising certificate and a trust account must do calculations and send a significant amount of the money that they hold in trust to the combined trust account where it is held. Clearly, that money cannot be used for any other purpose because it ultimately belongs to the clients whose money has been put into the trust account. Because it is combined and they can get good interest on it, that money earns interest, which is then paid into a separate account called the 'statutory interest account'. Subsection (6) seems to limit the amount. Once you have the statutory interest account it is then divided: five-eighths goes off to the Legal Services Commission, three-eighths goes to the guarantee fund. The guarantee fund is the fund from which defalcations can be repaid. This clause seems to limit the amount in that guarantee fund to effectively an amount equivalent to $7,500 per practitioner in the state. There is no apparent reason for that limit to be there, and I really question its purpose.

As it happens, I received a copy of a letter today. In it, the author, who is in fact writing to the Law Society, states:

When the scheme was introduced in 1969, enthusiastically supported by both sides of politics, the then Attorney-General said, 'It could take from between five to 10 years before the guarantee fund builds up to the desired limits. This is one reason why a limit on the total size of claims in each case is required—

and we will come to that in due course.

—but when the fund has reached its desired size, it will then be possible at a later stage to review the limit on claims.'

I will come back to that. Clearly, there was an expectation that there be a limit on claims. However, at the same time, when this was all put in place originally, we put a limit (which I think is artificially low) on the amount that is actually paid into the guarantee fund. That is where I think we are potentially going wrong. I indicate that we will in due course propose in all probability to remove that section so that there is not an artificial limit of saying, 'Well, we're just going to cap this guarantee fund.' There is more than enough money. I received this note during question time. The capital flowing into the combined trust account from the lawyers' general trust accounts in the 2006-07 year was $2,125,435, and the combined trust account balance this year was $52,933,159.

There is interest earned on that, obviously, and that interest has gone off in two different directions. There seems to be no reason why you would not say that there is no reason for having this incredibly low figure on the guarantee fund. There is absolutely no reason why, given that we have this money in the statutory interest account and if three-eighths is going to the guarantee fund, you would not then simply allow that to accumulate to a much more sensible level.

The Attorney has expressed to me the idea that the amendments that I am proposing (which we will come to a little later) in relation to payments from the guarantee fund would exhaust the guarantee fund and that that is why it is necessary to have the levy. We will come to that a little later also. The reality is that there would only be that need because of this clause artificially keeping the guarantee fund at an unnecessarily low figure. Even if you did not disrupt the proportion you pay to the Legal Services Commission and the guarantee fund, it is a fact that this then states that, once you get to that point of $7,500 per practitioner in the state, everything else has to go off to the Legal Services Commission or for some other purpose approved by the Attorney-General and society.

That is what creates an insufficient fund potentially, and there is no reason why we cannot simply allow that fund to grow bigger. What was set into the legislation in 1969 was never intended, according to this quote from the then attorney-general, to be the answer for all time. It was recognised at the time that these figures were in place for that time and for good reason, when you had very little money in the account. At the moment we have money in the account. We have put an artificially low limit on it—just historically that has come about. However, I indicate that, whilst I do not expect the Attorney to necessarily comment—he may wish to do so—we have had drawn an amendment to delete that clause and allow the guarantee fund to grow more appropriately in keeping with the 21st century.

Clause passed.

Clauses 239 to 269 passed.

Clause 270.

The Hon. M.J. ATKINSON: I move:

Page 139—

Line 5—Delete 'any' and substitute:

either

Line 7—Delete subparagraph (ii)

The government has learnt that it is common practice in refugee applications for the lawyer to agree to act on the basis that, if the application fails, there will be no charge, but if it succeeds, the lawyer will accept as full payment the costs awarded against the commonwealth. The government wishes this to remain possible. It is not concerned that this will apply to other applications under the Migration Act, apart from refugee applications.

Mrs REDMOND: I indicate that the opposition is content with that proposal.

Amendments carried; clause as amended passed.

Clause 271.

Mrs REDMOND: This involves the conditional costs agreements involving uplift fees. Again, the Attorney referred to it in his response to the second reading, but I do want to place on the record again my concern that, notwithstanding the provisions which will continue to apply in terms of people having a right to receive advice about likely costs and so on, the effect of this change to the uplift fees will be prejudicial to consumers compared to the current state of play in South Australia. The current state of play, of course, allows for what the Attorney referred to as double or nothing, but effectively it allows for you to take on a case on the basis of the payment of either nothing or just disbursements, but if you win, then you can charge up to double the Supreme Court rate. However, as I pointed out in my second reading contribution, this will allow a law firm which already charges four times the Supreme Court rate to enter into an agreement allowing them to charge (if they win) on a contingency basis up to five times the Supreme Court rate, or whatever their rate might be, up to 25 per cent in excess of what their normal fees would be. I do express my concern about the benefit of that clause in terms of legal consumers.

The Hon. M.J. ATKINSON: Cost agreements such as these have to be in writing and the principle of the bill is the client's informed consent.

Clause passed.

Clauses 272 to 300 passed.

Clause 301.

The Hon. M.J. ATKINSON: I move:

Page 155, after line 10—Insert:

(ga) the costs incurred by the society in carrying out its regulatory functions in respect of incorporated legal practices and multidisciplinary partnerships;

The Law Society will have new functions in regulating incorporated legal practices and multidisciplinary partnerships. The costs of carrying out these functions should come from the legal practitioners guarantee fund because the regulatory activity will largely consist of compliance audits. Provision in the bill dealing with the application of money in the guarantee fund is the same as the current section 57 of the Legal Practitioners Act, but did not contemplate these new business structures. Upon further consideration, it appeared that a specific provision is necessary to give the Law Society the money to carry out this important function.

Mrs REDMOND: I indicate that we have no problem with that proposal.

Amendment carried.

The Hon. M.J. ATKINSON: I move:

Page 155, after line 39—Insert:

(7) A court may not make an order requiring, or having the effect of requiring, the payment of costs from the guarantee fund.

This amendment is designed to ensure that a court cannot make a cost order directly against the legal practitioners guarantee fund. Elsewhere, the bill provides that the cost of an external intervener are recoverable from the law practice, with the rider that fees, costs and expenses not paid to the external intervener by the law practice are only then payable from the guarantee fund.

Mrs REDMOND: I indicate considerable disquiet about this proposal. It appears to me to be an attempt to avoid the consequences of the decision, first of all, of Justice Debelle in the Supreme Court, and subsequently the Full Court, in terms of costs and so on, but I have not had time to give it full consideration. At this stage, I will oppose the proposal. I will not be calling a division on it. However, I do indicate that it is being decided on very short notice on my part and that I will want to consider it further between the houses. Our position may change although I suspect that will be unlikely.

Amendment carried; clause as amended passed.

Clauses 302 to 312 passed.

Clause 313.

Mrs REDMOND: I move:

Page 161, line 10—

Delete 'all claims to which the notice relates is—'and substitute:

any particular claim to which the notice relates is 30 per cent.

This is one of the series of amendments the opposition is proposing in order to change the rules under which the guarantee fund currently operates. I will refer, again, to this letter from a former president of the Law Society to the Law Society. In the letter he speaks on behalf of himself and, I think, another former president. His letter states:

We remain gravely concerned at the plight of the victims of the misappropriations.

He goes on to talk about the various problems with the guarantee fund, and states:

We believe the guarantee fund provisions in the Legal Practitioners Act are outdated, often unworkable, often costly, often create unnecessary and unacceptable delay and frequently, as in this instance, aggravate rather than ameliorate financial distress.

He then goes on to point out that there are two main problems, and states:

Firstly, contrary to the position in some other states, here a victim of the defalcation is obliged to show there is no reasonable prospect of recovering the full amount of the loss. Effectively victims—often as in the Magarey Farlam matter—litigate their claims at considerable expense, risk and emotional distress inevitably for months, more usually for years.

The second problem he highlights is as follows:

...the cap of 5 per cent on the fund's moneys limiting the maximum payment for a specified series of fiduciary or professional defaults may very well mean in this case that victims may only recover something less than one quarter of their loss unless their litigation is eventually successful. We suggest that many members—

meaning members of the Law Society—

practitioners in this state would not know (a) of the existence of the cap on payments imposed by regulation, not by the act itself; and (b) that when the scheme was introduced in 1969—

and that is the bit I quoted before—

it was recognised that basically it could take from five to 10 years before there was sufficient money there to meet the claims. No review of the limit on claims has occurred; rather, the excess interest from the combined trust account has been disbursed for other purposes.

He talks about a range of things in this particular thing and, indeed, at the end of the letter to the Director of the Law Society, he states:

Finally, without distracting from the main objective of submitting these resolutions—

that is a resolution that has been received by the Law Society—

we would urge the meeting to go further and support the amendments to the Legal Profession Bill 2007 proposed by Isobel Redmond, the shadow attorney-general. The main thrust of those amendments is to:

remove the obligation on a victim of fraud to exhaust other remedies before claiming on the fund;

lift the cap on payments to 30 per cent of the fund in respect of any claim; and

provide in a transitional provision to enable claimants whose claims have not been finalised—

and, obviously, that includes the Magarey Farlam group—

under the existing act to take the benefit of the new provisions.

In essence, that is a reasonable summary of what my proposed amendments seek to do. I do not intend to call a division on everything, but I do expect that this proposed amendment will be lost in committee. I want to test the committee in relation to this issue simply because this is one of the key elements.

At the moment the clause provides that if a notice is published by the society, the maximum amount that may be applied towards satisfaction of all claims to which the notice relates is a certain amount, which, at the moment, is basically 5 per cent. We seek to change that 5 per cent in due course, but this first amendment simply seeks to make it clear that we do not want to lump everyone together, because what is happening with Magarey Farlam is that one of the arguments about how this will operate is to say that even though the Magarey Farlam defalcations occurred as a series of discrete events over a number of years before they were discovered in 2005, I think it was, until they were discovered, those events were going on.

However, the Law Society, on its interpretation of this legislation, is saying, 'Well, that is still one event and so all those claimants are restricted in total to the claim of 5 per cent,' and given that there is about $21 million in the fund that makes it about $1 million. They have lost $4.5 million, but that interpretation of the legislation means that they would recover from the guarantee fund only $1 million when, clearly, there is more than enough money in the guarantee fund to meet the claim in full. This is one of the key provisions which seeks to change that so it is clear that, instead of all claims to which the notice relates, we will now substitute the words 'any particular claim to which the notice relates' and increase the maximum from the 5 per cent at the moment to 30 per cent and put that not into regulation. We delete the reference to the regulation. We simply change the 5 per cent to 30 per cent and delete the reference to regulation. That is the meaning of this. It is probably the key to the proposed amendments that we are submitting.

As I said, when I have spoken to any number of legal practitioners over the last few weeks about this bill and about the situation with Magarey Farlam, they are largely unaware of these restrictions that currently inhibit the operation of the fund to provide a just and fair outcome for those who completely innocently have lost their money through a defalcation against a solicitor's trust account. As I said, I will test it with a division in due course if I am declared to be the loser of this, which I somehow suspect will happen in spite of the fact that there are more people voting for it. We will put that amendment. Those are the reasons for it. I will not divide on any of the others but I will still go through them.

The Hon. M.J. ATKINSON: This amendment alters the provision and sets a cap on fund claims. At present the total of all claims arising from one default or a series of defaults is subject to a cap of 5 per cent of the balance of the fund at last audit. For example, if the fund holds $20 million the cap on the particular group of claims would be $1 million altogether The bill proposes a similar rule except that the cap applies only if the Law Society advertises that it does. This amendment would propose a different rule, that is, the cap per claim would be 30 per cent of the fund balance. Thus, if there were three claims, it would have the effect that any three claimants—

Mrs Redmond: It would be 10 times what it is at the moment.

The Hon. M.J. ATKINSON: Of course, if we robbed the LPEAC, the Legal Services Commission and Legal Aid generally, we could do any number of things. If we rob the taxpayer we could do more. If there were three claims by three individuals, then 90 per cent of the balance of the fund would be available to meet them, if there were three claims to the maximum. If there were more than three claims then the society would need to use its powers under clause 330 to make part payments, postpone payments or impose a levy.

Of course, we find that the member for Heysen—herself a legal practitioner—is also moving an amendment so that legal practitioners do not have to pay the levy. How convenient! Under the bill, as under the present act, there are many other calls on the guarantee fund besides claims arising from defaults. The fund is applied to meet the expenses of regulatory institutions, such as the conduct board, the tribunal and the Legal Practitioners Education and Admissions Council, all of which serve consumer protection functions. It is also used to support Legal Aid and public legal education. That has been the case for many years and the former Liberal government made no move in eight years to change it. This amendment will put the funding of those institutions and purposes substantially at risk and the government will support the general interest over the demagoguery and rabblerousing of the member for Heysen.

The committee divided on the amendment:

AYES (13)

NOES (27)

PAIRS (4)

Majority of 14 for the noes.

Amendment thus negatived; clause passed.

Clauses 314 and 315 passed.

Clause 316.

The Hon. M.J. ATKINSON: I move:

Page 162—

Lines 6 and 7—Delete subclause (2)

Lines 16 and 17—Delete subclause (7)

These amendments bring the bill back into line with the national model when it comes to hardship payments. They effectively provide that the Law Society may, in its absolute discretion, make a hardship payment from the guarantee fund, even though the claimant is not entitled to recover from it because, in the opinion of the Law Society, he is likely to be paid from another source.

The government initially changed the model provisions because we thought that the second form of payment is not a payment of a claim, but prepayment of an amount expected to be recovered from somewhere else and, therefore, not a payment that the guarantee fund really ought to make. Instead, we opted to amend subtly the provision dealing with advance payments, which are possible where a claim on the guarantee fund is likely to be allowed, and provide that they can be made even if there is some prospect of recovery from another source. Bringing the bill back into line with the model provisions is a compromise position and will allow the Law Society to make a hardship payment (1) where a claim on the fund is likely to be allowed and also (2) at the absolute discretion of the society, where the payment is warranted owing to circumstances of hardship and the society is of the opinion that the person will be able to receive funds from another source entirely.

Mrs REDMOND: Whilst I may not have a problem with the essence of what is being put (and, again, these amendments have come up on very short notice), my concern with them is simply this. According to the information that was provided to me, clause 316 was a core non-uniform clause. Way back at the beginning of my comments on this bill (and it is a big bill; consisting of 515 clauses), it was explained that it had all come about because the Standing Committee of Attorneys-General had agreed to certain provisions to create this new model for national legal practice. What surprises me is that these amendments to this clause are being made to a clause that is identified, in the information that has been given to me, as core non-uniform; that is, the essence of the clause is central to the proposal that was come up with by the Standing Committee of Attorneys-General, but the wording of it can vary from state to state.

It surprises me for this reason: when my proposals about the changes to the guarantee fund were made public, the President of the Law Society wrote me a letter in which she was almost outraged that I had the temerity to suggest that I might want to change provisions that were, according to her, non-negotiable because they were core non-uniform. So, it puzzles me a little that the Attorney is now seeking to amend the provision in a way which disturbs something which, according to the Law Society, he had agreed was not going to be disturbed. In terms of the essence of it, I do not know that the deletion of subclause (7), for instance, makes any difference to the way one would read the act including the subsequent clause 323, so we will reserve our position on this. We will not oppose the proposed amendment at this stage but we will have a think about that and consider it between the houses.

The Hon. M.J. ATKINSON: I think the member for Heysen misunderstands. What we are doing is bringing it back to core non-uniform.

Mrs REDMOND: If that is the case, the information provided to me in the course of the briefing that I had was clearly not correct because it is identified in the 330-page email that was sent to me at 4.50 p.m. on the Friday before our last week of sitting as core non-uniform. I went through quite a lengthy process of figuring out which clauses were which and I have relied on that information. If the Attorney is saying that the information that was provided to me in the course of the briefing was incorrect, I am most disheartened to hear that.

Amendments carried; clause as amended passed.

Clause 317 and 318 passed.

Clause 319.

Mrs REDMOND: I move:

Page 163—

Lines 20 to 22—

Delete, from subclause (1), ‘unless the Society considers that special circumstances exist warranting a reduction in the amount of costs or warranting a determination that no amount should be paid for costs’

Line 26—

After ‘guarantee fund’, in subclause (3), insert:

on a party and party basis

In deleting the words in my amendment to this clause, it reads as follows:

If the Society wholly or partly allows a claim, the Society must order payment of the claimant’s reasonable costs involved in making and proving the claim.

It seemed to us that enough safeguards are there in the sense that the claim has to be wholly or partly allowed and that it can only be the reasonable legal costs; the claim must have been made and proven, and it seemed to us to be an unnecessary level of discretion to give to the Law Society to allow it to move away from that fundamental principle. So, we propose that those words at the end of that particular clause on the society’s need to pay the reasonable costs as well as the actually money back to the claimant be deleted. After all, we are talking about people who have basically had their money taken from a solicitor’s trust account. There should not be a safer place in the world to put your money.

They have had that money taken. It is to our mind just reasonable to say that not only do they get their money back, but also they get what reasonable costs they have incurred in getting it back. Hopefully, if our provisions ultimately get through, the costs will be a lot lower. Some people have already spent over $100,000 trying to get back their own money lost out of trust accounts. We are hoping that, with a bit of common sense, we will significantly and dramatically reduce the amount of costs that are used because, when we get to clause 321, the idea of being able to get the money from the fund in the first instance, then that will make the costs likely to be incurred by claimants so much smaller but, as I said, on this one we are seeking to simply say that if you get your claim (or part of it) then you get your reasonable legal costs paid in addition.

As to my second amendment to this clause, we are talking about costs on a party and party basis. I do not intend to go into a dissertation about the nature of costs but, essentially, they are the costs that would be allowed by the court based on the schedule of costs that are published in terms of the scheduled fees that solicitors can charge on the Supreme Court scale and so on. We have included those words after the word ‘guarantee fund’ at the end of the clause so that it reads that the costs are payable from the guarantee fund on a party and party basis to make that also abundantly clear.

The Hon. M.J. ATKINSON: This amendment would alter the rule proposed in the bill about the payment of a claimant’s costs. The bill proposes that, if the claim is wholly or partly allowed, the Law Society must also order payment of the reasonable legal costs unless special circumstances exist, warranting a reduction or non-payment of costs. The amendment proposes that, if the claim is allowed (either wholly or partly), then the costs must always be paid. In some cases of special circumstances warranting a reduction in or refusal of costs, it might be that the available funds are sufficient only to pay claims and not the costs. In that case, the amendment will result in the full payment of costs at the expense of the full payment of claims.

The costs, of course, will be payable to the lawyers concerned, so it prefers the interests of lawyers (and we have seen enough of that today) over that of claimants. In its current form the provision derives from the national model where the clause is core, non-uniform. That means that the substance should be adopted although the wording may differ. The provision, in the form in which it appears in the bill, is the same as that adopted in New South Wales, Victoria, Queensland, the Northern Territory and the Australian Capital territory. The government does not support the amendment.

Amendments negatived.

The Hon. M.J. ATKINSON: I would like to say, apropos of the now vanquished second leg of the amendment, that it would have amended the bill so that the costs payable to the claimant were calculated on a party and party basis. This means that the claimant does not get the whole of the costs incurred but rather such part of them as would be allowed as reasonable in a taxation or adjudication of costs between the claimant and the Law Society. It is usual in all litigious matters that the costs actually payable by the client to the solicitor are more than the cost recoverable from the other party. The bill simply says that the costs must be reasonable, and the government believes that is an adequate protection. This is the approach taken by the national model and adopted in other jurisdictions.

Clause passed.

Clause 320 passed.

Clause 321.

Mrs REDMOND: I move:

Page 164, lines 7 to 11—Delete paragraphs (c) and (d)

Again, this is at the heart of the amendments we propose. This clause deals with a reduction of claim because of other benefits and, in essence, it is the clause that has the effect of postponing people's entitlements pending their ability to get an entitlement from other sources. The opposition believes that the guarantee fund should be the claim of first resort, so that a person who has lost their money can go to the guarantee fund and get their money. Then the guarantee fund, having the subrogated rights of the claimant, can chase whomever it is.

This clause allows that if, in the opinion of the society, a person is likely to receive money from another source then they will not get it from the guarantee fund. We have no difficulty with (a) and (b) in the sense that we are not trying to get into a situation where someone can double dip by getting funds from elsewhere as well as claim from the guarantee fund; however, we do take the view that the guarantee fund should be the first resort, the first place from which the claimant gets their money. So we propose to delete subsections (c) and (d). The clause provides that a person is not entitled to recover from the guarantee fund any amount equal to amounts or to the value of other benefits:

(c) that (in the opinion of the society) are likely to be paid to or received by the person; or

(d) that (in the opinion of the society) might, but for neglect or failure on the person's part, have been paid or payable to or received or receivable by the person.

In both cases the words 'in the opinion of the society' appear in brackets so if, of course, the society were to form the view that you had the prospect of being able to recover from some other party then it would not allow you to receive that money from the guarantee fund. This is at the very heart of what we are seeking to do in our amendments.

The Hon. M.J. ATKINSON: This amendment would make the fund the first resort to claimants, even though they had other recourse, unless they had actually received or stood to receive funds from that other source. As a result, the cost of pursuing any other entitlements the claimants may have will fall on the fund rather than the claimants. This is a big departure from the present law and from the model bill. Under the present law a person cannot make a valid claim on the fund until other avenues have been exhausted. That is the effect of section 60, which permits a claim only where there is no other reasonable prospect of recovering the full amount of the loss. In other words, the fund is intended as a backup for claimants who have no enforceable legal entitlements to recover their losses. That has been the law since 1981. The first recourse should be the wrong-doer; the fund is the backup for when there is no reasonable prospect of recovering the money from those who should, by rights, pay.

The national model takes the same approach. The provisions sought to be amended here are core, non-uniform provisions of the model that has been adopted in New South Wales, Victoria, Queensland, the Northern Territory and the Australian Capital Territory. If anything, the national model is more generous than the present law because the claim can be made despite the likelihood of recovery from other sources. The Law Society accepts the claim and then forms a view on whether it is likely that other benefits will be paid or received or whether, but for the claimant's failure to take action, other payments might be received.

If the Law Society is persuaded that there is no likelihood of recovery then it may pay the claim. The proposed amendment would go further; transferring a substantial new cost to the fund—that is, the cost of litigation to pursue the wrong-doers. Eventually some of that cost will be recoverable from the wrong-doers or their insurers, although it will probably not be recovered in full; certainly, there will be a delay of months or years between the date of payment of the claim and the date of recovery of the costs from the litigation on the subrogated rights.

The only new source of income proposed for the fund under this bill is a levy on legal practitioners, so one could have assumed that the member contemplates that that is how the gap will be bridged.

Mrs Redmond interjecting:

The Hon. M.J. ATKINSON: No, she interjects. That is right; the member for Heysen is not just the fairy godmother for claimants, she is the fairy godmother for lawyers as well. So, it takes us back to the 1950s and the old Liberal cry, when the then Labor opposition has sought election to the government, 'Where's the money coming from?' That is what the member for Heysen does not answer. How convenient. The member for Heysen has only ever had the pleasure, the leisure, of being in opposition and it shows in her litigating.

Ms CHAPMAN: I rise on a point of order. That is the most offensive statement by the Attorney-General to any member of the house, to make a personal reflection on the practising capacity of one of the members of the house. It was a poor reflection and I would ask him to withdraw it.

The CHAIR: There is no point of order.

The Hon. M.J. ATKINSON: I meant her legislating—sorry.

Members interjecting:

The Hon. M.J. ATKINSON: An error on my part—in her legislating.

The CHAIR: Attorney, are you continuing your remarks?

The Hon. M.J. ATKINSON: The government is—

Mrs Redmond interjecting:

The Hon. M.J. ATKINSON: That is very kind of the member for Heysen to say.

An honourable member interjecting:

The Hon. M.J. ATKINSON: It has not died, it has a representative in the Victorian parliament. The state government is pledged to the national model. Where a provision is core non-uniform there is room for some change in the wording, but not for a complete reversal of the policy. Having signed the inter-governmental agreement, as all Attorney-Generals did, I am bound to use my best endeavours to see that the substance of the core non-uniform provision is retained, even though there may be changes to the detail of the wording. The government does not, and should not, support this amendment.

Mr RAU: I have listened very carefully to the remarks of both of the speakers before. On the negative side for the Attorney, I am utterly unimpressed with what some national talkfest has agreed to, as I have frequently said to this place. So, that is the poorest of his arguments. However, I think the fundamental flaw with the member for Heysen's point is this: why is it that a particular class of aggrieved litigants, namely those who have lost money because of the defalcation of a legal practitioner, should be in the privileged position over and above small business people, over and above people who have accidents at work, over and above people who have accidents in a motor vehicle and over and above people who have commercial disputes with other individuals, why is it that that one particular tiny sub-class of individuals who feel themselves to be aggrieved, and quite possibly are, as in the case of the defalcation with the particular trust account that has been mentioned here a number of times, why is it that those individuals, and only those individuals, should have the Rolls Royce ride straight into a, 'No questions asked, here's your cheque, thank you very much, goodbye' solution to their problem? That is the problem, I think, with respect, with the proposition that is being advanced by the honourable member.

If the honourable member was arguing about the nuance as to whether a fund of last resort or a fund which is accessible, when the applicant to the fund has satisfied the fund managers, that there is no prudent self-funded litigant who would pursue the matter any further, that might be a different matter. But that is not what is being put up. What is being put up is that this fund is like an open cheque: all you have to do is wander up and say, 'Look, I had my money in Magarey's trust account. It's now gone. QED. Give me the money.'

Mrs Redmond interjecting:

Mr RAU: Yes, I know. But, member for Heysen, the point is that there are people out there who put moneys on deposit with mortgage brokers. They think the money is safe with the mortgage broker and, surprise, surprise, it disappears. There are people who put their moneys on account with various businesses which offer them all sorts of inducements to place their funds—they are usually a high interest rate, which should ring an alarm bell—and surprise, surprise, the building company collapses. We see the tragedy of all these pensioners sitting in a room with the cameras panning around their faces, you know, with the tissues out. Do those people have a Rolls Royce ride straight into a cheque book? No, they do not. What about all the people who have accidents at work? What about all the people who have accidents in their motor vehicles?

The problem is that a person who loses money is in a bad situation, and they have my total sympathy, particularly if that money is stripped from them by fraud or some form of deception or misconduct—they have my total sympathy. But if they have a reasonable course of action which they themselves can undertake I do not see why they should be not required to undertake that reasonable course of action. If, however, the course of action that they are being invited to take is so speculative and so ridiculous that no prudent self-funding litigant would ever contemplate it, that may be a different matter, but that is not the question in issue.

Mrs REDMOND: I cannot let that comment go without a response. I am surprised at the member for Enfield because he surely, of all people in this place, although he did practise as a barrister rather than a solicitor and therefore might not know about the word 'trust', but a trust account is not like placing money into any other investment. In fact, the very reason for establishing the guarantee fund, as the name might suggest, was to guarantee people against just this potential happening. So, there is just no way that you should be saying these people are just sliding in. For a start, they still have to prove their claim. They do not just slide in and say, 'Here I am. I want money.' This is their money, and the fact is, as I have already explained, that this guarantee fund has come from clients' money.

We are not able to keep it in our own trust accounts as a protection against this very circumstance, where most of the money has to be hived off downtown into the combined trust account. Most people who should be entitled to interest on that money, as a notional, theoretical prospect, would be pretty calm, I imagine, about the idea of, 'All right, you are not going to get interest on your money that is in trust in a solicitor's trust account, because that money will be used to create a fund to protect you against this sort of situation.' That is why they are in a particularly different situation. As well as that, I refer to other areas such as the travel compensation fund, and a whole range of other funds that are specifically set up to ensure that it is common in a number of areas of work for people to have recourse to a particular fund set up to protect people dealing with a particular profession, so that if there is a defalcation, as there has been in the past and no doubt will be in the future, by solicitors or people dealing with money in those trust funds, then they can get access to it.

All I am saying is that it is unreasonable. Surely, the situation that some of the people have found themselves in already, spending over $100,000 trying to retrieve their own money, and still facing, according to the letter I got today, at least two or three years more before they even get to court, is just unreasonable. Most practitioners in this state believe that if there is a defalcation it will be met pretty promptly from the guarantee fund, and so it should be. Hence, the need for this amendment.

Amendment negatived.

The Hon. I.F. EVANS: Now that the member for Heysen's amendment is lost, I wish to take up the point made by the member for Enfield. The Attorney-General has some knowledge of this. I am surprised, given the passion that the member for Enfield has for the prudent self-funded litigant, that the government has not brought forward this bill in the form argued by the member for Enfield. I emphasise that the Liberal Party has just lost an amendment that was seeking to make it fairer for the litigant. A retreat position for the government is the member for Enfield's position. The Economic and Finance Committee looked at the question of the agents indemnity fund, and made a report to this parliament that the government should look at adopting the position in relation to prudent self-funded litigants. The Attorney might well remember how we eventually defeated the Attorney's position in not adopting a piece of legislation with the land agents indemnity fund.

I know it is not this bill, but the principle is essentially the same. There was an industry guarantee fund to help people out in the case of crime or fraud. That case was Growdens, of course, and we ended up agreeing to pay $13 million, I think, out of that fund. There were suicides by people who had spent their last dollar chasing ridiculous rabbits down burrows that were never going to deliver them a cent. The agents indemnity fund under the real estate legislation is essentially a fund of last resort. The Economic and Finance Committee looked at it, and said, 'This is ridiculous.' There were people who lost hundreds of thousands of dollars, some of them pensioners—it was the only investment that they had. The fund—'the fund' being us as legislators—expects them to spend their last dollar chasing ridiculous rabbits down burrows that will not deliver a cent. That is why the Economic and Finance Committee reached a position and said, 'Well, if the Commissioner for Consumer Affairs thinks that a prudent self-funded litigant wouldn't chase that rabbit down, then neither should the fund expect it, and therefore the payout can be made.'

Given that the member for Heysen's amendment has not been adopted—unfortunately—a retreat position for the government would be to look at whether this fund should adopt exactly what the member for Enfield has outlined—the government has had three years to look at this principle—and whether this fund, indeed, all indemnity funds under the various respective acts. should adopt the principle of what a prudent self-funded litigant would do. Having lived through the Growdens experience—and I fought it for six years against my own government and against this government—I had three attorneys-general tell me that it would not and could not be paid out. Eventually, common sense saw through.

The Hon. M.J. Atkinson interjecting:

The Hon. I.F. EVANS: No. I know that the Attorney sat with Allan Samm, and I know what he told Allan Samm, who has since passed away. I know what other members told people who lost their livelihoods out of that investment. If we can make life simpler for people who have lost money by adopting the member for Heysen's amendment—which I think we should adopt—why not adopt the position of a prudent self-funded litigant? Why would the parliament ask anyone who has lost money to do anything other than what a prudent self-funded litigant would do? When you ask yourself that question, why would we as a parliament, with people having lost money and coming into the parliament asking what is the law in relation to this? Why would the law ask of those people anything other than: what would a prudent self-funded litigant do? When you ask yourself that question, the answer is, 'Of course that's what we should ask them to do: nothing more, nothing less.'

I support the member for Heysen's position. But, having lost that amendment, the retreat position for the government, if it cannot bring itself to support the member for Heysen's amendment, is the exact position laid out by the member for Enfield. I encourage the government to look at the member for Heysen's amendment and adopt that between houses. If it is not prepared to do that, then it should go and draft something that takes up the member for Enfield's position, because it is a little bit better than what is in the current legislation. It is not as good as what the member for Heysen suggests, but it is better than what is in the current provision.

Mr HANNA: My position has been that, first, the fund should pay out and, secondly, then seek redress from the person defalcating, but if that is not the position of the committee on this occasion, then I think what has been suggested by the member for Enfield and the member for Davenport is a sensible compromise, and I hope the government will look at that between the houses.

The Hon. M.J. ATKINSON: I move:

Page 164, after line 12—Insert:

(2) The society may, at its absolute discretion, pay to a person the whole or part of an amount referred to in subsection (1)(c) if satisfied that payment is warranted to alleviate hardship, but nothing in this subsection affects section 323.

I earlier articulated the argument for this amendment.

Mrs REDMOND: I will make a brief comment because at least this seems to be a slight improvement on what is there at the moment. At least, as I understand it, what the Attorney is adding on to the end of the clause dealing with the reduction of claims because of other benefits is that the society may pay to a person the whole or part of an amount referred to in subsection (1)(c) (which is likely to be received from somewhere else), if satisfied the payment is warranted to alleviate hardship. I indicate that we will support the amendment.

Amendment carried; clause as amended passed.

Clause 322.

Mrs REDMOND: I move:

Page 164, lines 22 to 24—Delete subclause (3)

This amendment proposes to delete subclause (3). In essence, I guess people are aware that what happens with subrogation is that, if you do have a successful claim against the fund, then the fund has the right to pursue on your behalf the wrongdoer or wrongdoers against whom you might have had an action. The same policy applies in respect of insurance policies generally; that is, when you make a claim against your insurance company, they pay you and your rights are subrogated to them and they can then pursue whoever caused the damage which you have suffered and for which they have paid. Again it is part of this overall scheme. We are seeking to remove subclause (3). Subclause (1) says that the rights are subrogated to the society.

We are seeking to say that subclause (1) does not apply to a right or remedy against an associate if, had the associate been a claimant in respect of the default, the claim would not be disallowable on any of the grounds set out in subclause 317(3). Clause 317(3) deals with the society being able to wholly or partly disallow a claim if a claimant was involved in or was in some way responsible for the claim, or, because of their negligence, contributed in some way to the claim. We are seeking to delete that, but again it is part of this overall scheme, So, all our proposed amendments are interrelated. Again, whilst I expect to lose it in this place, it is one of the series that we will continue to pursue.

The Hon. M.J. ATKINSON: The bill following the model would permit an innocent associate to claim on the fund for the loss of his money and would protect him from subrogated action by the Law Society. The amendment proposes to remove that provision so that a subrogated right can be exercised against an innocent partner. Again this is a departure from the model. The provision as it stands in the bill has been adopted interstate. The government is bound to oppose any amendments that make a substantial change to the operation of the core non-uniform provisions of the model and, indeed, when I go to the Standing Committee of Attorneys-General, the commonwealth Attorney-General (Hon. Philip Ruddock) is always talking about uniformity. If only he could see the member for Heysen in operation.

Amendment negatived; clause passed.

Clauses 323 to 325 passed.

Clause 326.

Mrs REDMOND: I move:

Page 165—Lines 35 to 38—Delete subclause (3)

Page 166—Lines 1 to 3—Delete subclause (3)

This is still part of the same scheme. We seek to delete subclause (3), which provides that, on an appeal under this section—that is, an appeal to the Supreme Court against a decision in relation to a claim—the appellant must establish that the whole or part of the amount sought to be recovered from the guarantee fund is not reasonably available from other sources, unless the society waives that requirement. Clearly, it is part of this idea that we say that it should not be up to the claimant to have to establish that. The rights will be subrogated in favour of the society. They can pursue whomever they think is appropriate, but it is unnecessary, cumbersome and unfair to expect claimants to have to go through a further legal process in relation to proving that they cannot get the money elsewhere.

Amendments negatived.

The Hon. M.J. ATKINSON: I move:

Page 166, lines 4 to 6—Delete subclause (4)

This is a technical amendment removing a redundant clause. The Law Society has pointed out that clause 328 of the bill will achieve the same outcome by admitting evidence against a practitioner about an act for omission giving rise to a claim despite the practitioner not being a party to the proceedings.

Mrs REDMOND: I simply make the comment that, after all the consideration by the standing committees of attorneys-general for five years in reaching this proposed model set of clauses, it surprises me that, by the time we are in committee, we find that a technical inconsistency is going to be removed. However, I make no objection to it.

Amendment carried; clause as amended passed.

Clause 327.

Mrs REDMOND: I move:

Page 166, lines 25 to 31—Delete subclause (3)

Effectively I have spoken on this issue. In fact, it is the same amendment as was proposed to clause 326, which sought to delete certain words from the section dealing with appeals against decisions on the claim. Effectively, clause 327 seeks to delete those same words against appeals against failures to determine the claim. It is a slightly separate circumstance we are dealing with. I do move the amendment but I recognise that it will fail.

Amendment negatived; clause passed.

Clauses 328 and 329 passed.

Clause 330.

Ms CHAPMAN: This bill, which has the general support of the opposition, is essentially to repeal the Legal Practitioners Act 1981. I note with some disappointment that, after the extensive work and contribution by our lead speaker, the member for Heysen, the government has failed to recognise the benefit of the amendments to deal with the Magarey Farlam case. It seems to me a commonsense resolution of a very difficult matter, which has absorbed considerable time and money of those who have become victims under that defalcation; and, indeed, the time and money of the judiciary and legal practitioners, as well as portions of that fund in terms of dealing with those most difficult matters. I am disappointed to note that. However, I speak on this clause because the area of some explanation I would seek from the government relates to this somewhat more innovative addition as to how the legislation is proposed to deal with the circumstance when there are insufficient funds in the guarantee fund to meet its purpose.

It is proposed under this clause that, in circumstances where the Law Society is of the opinion that there is likely to be insufficient funds, the society may do one of a number of things. The one I wish to address is the imposition of a levy under section 331. The proposal under that clause is to impose on each legal practitioner a levy payable to the society on account of the guarantee fund. I raise the fact that a number of meetings were held during the consultation period on this bill, and the Law Society gave advice and presented submissions. I think that the Law Society undertook a considerable amount of work. Margaret Kelly, President of the Law Society, met with opposition members, including our leader, the shadow attorney-general and me, to run through a number of the contributions.

The Hon. M.J. Atkinson interjecting:

Ms CHAPMAN: I am sure that she met with the Attorney also. The Law Society raised a number of issues which appear in the final draft of the bill. I think the government appropriately accepted a number of its submissions, and as a result of that effort we will have a better bill and legislation. One matter on which the society appears to be completely silent is the introduction of this proposed levy on legal practitioners relative to the current legislation.

The Hon. M.J. Atkinson interjecting:

Ms CHAPMAN: This did not apply. This is a completely new idea to introduce some kind of discretion on the Law Society to impose a levy on legal practitioners. The bill was introduced to the parliament and debate commenced last month. As a member of the SA Bar Association—which I disclose—within two days of the draft bill being sent to the chair of the SA Bar Association I received a copy of a letter which was sent to the association inviting it to make recommendations in relation to the bill. The bill and the explanatory memoranda was distributed to members of the Bar Association. I think it was very good that the government invited the Bar Association to make a contribution. I note that the association made a very substantial submission on an earlier draft bill and presented an extensive written submission in relation to costs agreements, billing and the standards proposed under this legislation, and made some comment adverse to the draft (as it was) in relation to the fears of the profession—all of which seems to have been ignored completely. Whilst the Law Society seems to be able to ensure there were significant worthwhile amendments, the submission by the SA Bar Association seems to have been completely ignored.

However, the Attorney-General issued the draft bill. A couple of days later he tabled it in the parliament and, of course, we got on with the debate. What became clear was that no-one had given consideration to the major stakeholders in relation to the new provision of the levy. I can see no reference to it in the debate to date, other than by the member for Heysen who raised the question yesterday. I am asking the Attorney-General to explain how he understands this is to apply and what justification there is for imposing it. The guarantee fund is resourced largely from interest earned from trust account funds that are held by solicitors, some of which is directed to the benefit of the Legal Services Commission and Legal Aid and a portion of which is invested in this fund to cover circumstances where there are acts of dishonesty, fraud, or the like, by a legal practitioner.

I ask the Attorney-General to explain why it is that in relation to such a fund—which is currently funded by the interest earned on money from members of the public who are clients of legal practitioners—not enough money is earned on the investment in the trust account, which, otherwise and historically, has gone to the bank. The bank has got the benefit of that money in the past, but, since the introduction of this fund and the distribution of moneys to it, that fund, which would otherwise be in the pocket of the bank, would fund this. Why is it proposed that, if there is not enough of that money, that a group within the public—namely, legal practitioners themselves—should be the resource on which this fund is supplemented.

I have not understood any causal link. There is no obligation for solicitors to pay for the defalcation of a colleague down the street who might be acting dishonestly or fraudulently in relation to trust account funds. Why suddenly under this legislation is there an expectation that law-abiding lawyers—who happen to have the same academic and practice qualifications as the person who acted dishonestly—should be paying in a circumstance where, at the discretion of the Law Society, they are called upon to do so. I seek an answer to that question. I do not know any other profession, business or trade in which the colleagues have to pay for the bad guy.

Mrs Redmond: They have insurance.

Ms CHAPMAN: They have insurance when someone is negligent. There is a criminal process upon which they can rely in criminal injuries compensation for victims of crime (if it is personal injury). They have the right to sue. If a plumber dishonestly puts faulty parts into a house, the place gets flooded and someone gets injured, then the good plumbers out there who put the correct parts in someone's house are not called upon to put money into a fund.

The Hon. M.J. Atkinson: You would think the insurance would pay.

Ms CHAPMAN: It may. As the Attorney-General says, you would think their insurance would pay. In those circumstances the good plumbers are not called upon to write out a cheque at the request of the plumbers association to put into a fund to pay for the bad guy. I do not know of any other industry, trade or profession where there is that expectation. I ask the Attorney-General to clarify why it is that the good legal practitioners—or legal practitioners at all—should be called upon in those circumstances. When considering that I ask the Attorney-General for some clarity as to whom this will apply.

I have read the definition clause. I am sure that the member for Heysen has a much clearer understanding of how this all applies in relation to interstate qualifications, and that is good; however, when it comes to the application of the levy being imposed on each local legal practitioner, I would like it to be made absolutely clear by the Attorney that he means not only solicitors in practice and solicitors who might have a trust account, but that it also includes barristers, judges, persons who are not practising but are registered and have a practising certificate and are undertaking other careers, or whether it is to include, at the same level, someone who is a new graduate from the university and is employed and on a limited income, or whether it is the Attorney-General or someone in a major firm who has a very significant income.

If there is to be some discretion on behalf of the Law Society, if it is to impose this levy, is there to be some guideline as to who is to be exempt? In the event that the terms of the act are applied, how will it happen, and how will it be effected? How will it be implemented in relation to whether a person is in a sole practice or a large practice, or whether they are employed or not? And what about the poor local legal practitioner who might be registered and unemployed and have no income?

The reason I ask these questions (and I think we need some explanation from the Attorney-General in this answer) is because we know of at least one circumstance in New Zealand where this levy has applied and has been implemented and, in its Law Society equivalent, cast an imposition on legal practitioners there as a result of a defalcation of, I think, over $10,000 per practitioner. I do not know any other details of that. Both the member for Heysen and I have been informed of some of the details of that case—and there may have been good reason for its implementation. However, I would like to know who will have to pay, how it will apply and, in the first instance, why legal practitioners should suddenly be picking up this responsibility.

When I inquired of representatives of the Bar Association with respect to their view on this, they had not really had an opportunity to even consider it. They obtained the bill, and they had that invitation, but they certainly wanted some clarity. Individual counsel to whom I have spoken were completely unaware of it, and were concerned to have these questions answered by the Attorney-General. The Law Society (and, in particular, the President, Margaret Kelly) indicated to me that the Law Society had given some consideration to this matter—it had not been the subject of any submission or any written material, but it had been brought to her attention. To summarise the position as she explained it to me, she had mentioned it to the Attorney, and she understood that the Attorney simply would not consider that this should be a matter upon which the responsibility should be spread amongst the general public—the taxpayers; that that is something that the Attorney-General simply will not entertain and that, therefore, it is the position of the government that it should be imposed on all of us—meaning (to use the general term) legal practitioners.

I do not think that is a good enough excuse. I have no doubt that it is the explanation, as Ms Kelly has presented, but I do not think that is sufficient reason or justification for allowing such a revolutionary piece of legislation to go through without some further clarification and explanation. Can the Attorney explain how the situation applies in other states? I understand that there may be one or other of the states that has this provision and, if they do, how is it to apply? There does not seem to be any clarity about whether this is a core, uniform, non-uniform, or the other combination. It does not seem to be identified as one or other that would invite a response from the Attorney to say, 'Look, we have really just put this in because this is fitting in with the general model code, and we have not taken it any further. There has been much discussion at a national level and, therefore, it is a good reason.' I will be very interested to hear the Attorney-General's explanation. I did look for whether there was, perhaps, some new found extension—

The Hon. M.J. ATKINSON: Madam, I rise on a point of order. I understood that contributions in committee were confined to 15 minutes.

The CHAIR: In general, they are confined to 15 minutes. I ask the deputy leader to wind up.

Ms CHAPMAN: Initially, I had thought that the levy may be applied to a larger and broader use of funds. Perhaps we are going to be called upon as a profession to assist with some capital fund for the rebuilding of the Supreme Court, or some other useful purpose, which the government, for whatever reason, has failed to address. So, I was looking to see whether there might have been some other sort of meritorious benefit to this fund. However, I note that it appears that the definition clauses have not changed, and that it is still confined very purposely to the fund. I seek some of those answers.

The Hon. M.J. ATKINSON: I am advised that there are comparable provisions in equivalent legislation in other jurisdictions, and I will obtain that information for the member. It is true that the Law Society did not make a submission to me on this point, probably because it does not have the chutzpah of the member for Bragg to propose to hoover up, in three instalments, the entire guarantee fund, then, to top it all off, having laid bare the guarantee fund, give lawyers benefit of clergy about the losses. Guess what (for readers of Hansard)? The members for Heysen and Bragg are lawyers! Surprise, surprise.

The member for Bragg asked who was likely to pay this levy: well, on the face of it, everyone who has a practising certificate—and that will include our barristers, but not the Attorney-General or judges. Of course, this is not necessarily going to happen; it would require a resolution of the Law Society, and the clause gives the council of the Law Society authority to differentiate between categories of lawyer. Frankly, I think all these points have been made by the member for Heysen earlier in the debate; they were made more succinctly and they were made better.

Mrs REDMOND: I cannot let this opportunity pass. I was going to stop at clause 331 to talk about levies, but as it has been opened for discussion at 330 (which refers to these levies) I think it will save time if I made some comments now. I agree with the member for Bragg that there is no basis for saying that lawyers who have done nothing wrong should, for some reason, have to bear the brunt of the defalcation by someone else in practice somewhere. The Attorney keeps responding to that by saying that the opposition's proposed amendments will deplete the fund, but the reality is that this fund would not be depleted if we deleted subclause (6) from clause 238 and thus allowed the fund to grow as it should.

As I have previously said, the money is really notionally clients' money, and at the moment private clients' money is going off to fund the Legal Services Commission. Now, five-eighths of the money is going there; if the guarantee fund was running low (which it would not be if the government turned on the tap and let the money flow through as it was meant to) why would you then not divert some of that money? I would even be prepared to consider a levy provision if there were that potential, after consideration of other options. However, to say that this levy is in there—which is no part of the national model being proposed anyway, it does not classify as any of that—is very concerning and, whilst we have not moved to remove that provision, I indicate that we may well do so in the other house.

Clause passed.

The Hon. M.J. ATKINSON: I move:

That the sitting of the house be extended beyond 18:00.

Motion carried.

Clauses 331 to 466 passed.

Clause 467.

Mrs REDMOND: This is the section that deals with the Law Society. As I read this bill, it seemed to me that the Law Society would have a considerably expanded role simply in terms of the necessity of managing multi-disciplinary and incorporated legal practices. Its role as a regulatory authority under this bill seems to inherently mean that it will have a somewhat larger part to play, and I ask the Attorney whether he is aware of any indication or suggestion regarding to what level the Law Society might expand in the foreseeable future.

The Hon. M.J. ATKINSON: I have no comment on that matter.

Clause passed.

Clauses 468 to 515 passed.

Schedule 1.

Mrs REDMOND: I move:

Clause 13(1)(b), page 253, lines 14 to 17—Delete paragraph (b) and substitute:

(b) a claim in respect of a default (within the meaning of that part) occurring before the commencement of this clause if the claim had not been determined under part 5 of the repealed act before the commencement of this clause.

This is the last of the series of amendments, and seeks to put a new provision, clause 13(1)(b), into schedule 1, which contains the transitional provisions. It is, in essence, to ensure that the Magarey Farlam claimants (although we have not actually used the name Magarey Farlam in the provision), and basically anyone else who has a claim afoot at the present time, should be dealt with under the new regime that we are proposing in the amendments that have already been moved and so far defeated in this place.

The only intention of this particular amendment—which adds in the words 'a claim in respect of a default within the meaning of that part occurring before the commencement of this clause, if the claim had not been determined under part 5 of the repealed act before the commencement of this clause'—is to ensure that in addition to making these changes to the guarantee fund and the way it operates for the future, we make it very clear that any claim afoot that has not been satisfied, and that would clearly involve the Magarey Farlam claimants, would be dealt with under the new regime which we propose. That is the essence of the last amendment.

The Hon. M.J. ATKINSON: This amendment would alter the transitional provisions so that any pending claims that have not been determined by the time the new law starts will become claims under the new law. That would mean that, if the earlier amendment making the fund a first resort succeeds, these claimants would have the benefit of that provision and would not need to pursue any other remedies. Other claimants whose matters have been completed would not have this benefit. All through my time in parliament with the attorney-general of blessed memory we heard how dreadful retrospective or retroactive legislation was, but now it is not so bad, especially if it suits the opposition's purposes. Presumably the claims affected by this provision will need to be started all over again and any time limits that formerly applied to them will have to be overcome. A fairer approach would be to treat all transitional claimants the same as the bill proposes to do. The government, therefore, opposes the amendment.

Amendment negatived; schedule passed.

Title passed.

Bill reported with amendment.

Third Reading

Bill read a third time and passed.