Ministerial Statement

LEGAL PRACTITIONERS (MISCELLANEOUS) AMENDMENT DRAFT BILL

The Hon. J.R. RAU (Enfield—Deputy Premier, Attorney-General, Minister for Planning, Minister for Business Services and Consumers) (15:20): I seek leave to make a ministerial statement.

Leave granted.

The Hon. J.R. RAU: I table the draft Legal Practitioners (Miscellaneous) Amendment Bill 2012, which would make substantial amendments to the Legal Practitioners Act 1981. The purpose of tabling this draft bill is to present it for public examination before it is finalised and formally introduced into parliament. The form of the bill tabled today is not necessarily final; rather I present the government's plans for comment. It may be that they can be improved. I hope those with suggestions for improvement will take this opportunity to express their views.

The bill does not attempt to reintroduce the whole of the 2007 Legal Profession Bill, which became deadlocked and lapsed. Events have moved on since then and a new national law is under development and supersedes the former national model. Although South Australia at this stage has no plans to introduce that national law, the government understands that the profession does not pursue the adoption of the 2007 model. Instead, this bill incorporates some aspects of the 2007 bill that are judged to still be relevant and helpful and also makes other novel amendments, notably to the system for discipline of legal practitioners.

Members will see that the bill is lengthy. I will outline some of its chief features. First, as to corporate structures for the practice of law, the bill would permit non-lawyers to become directors of a company legal practitioner provided they cannot make up a majority of the directors. I have not been persuaded to adopt for South Australia the provisions and use in other states that permit any company to sell legal services to the public together with any other services as long as least one lawyer is on the board. I remain to be convinced that legal professional independence can be sufficiently protected and the associated client protections can be properly delivered in that model. However, views differ on this and I am open to receive and consider submissions.

Second, there are extensive reforms to the disciplinary system. Using provisions that were proposed in the 2007 bill, this draft bill provides a new procedure for the court to deal with practitioners who pose an immediate risk to the public. The bill would repeal the present definitions of 'unsatisfactory conduct' and 'unprofessional conduct' and replace them with the nationally-agreed definitions of 'unsatisfactory professional conduct' and 'professional misconduct' in use in the other states. A key difference would be that conduct outside the lawyer's practise of the law and not amounting to an offence of a dishonest or infamous nature could amount to misconduct.

The bill would abolish the present Legal Practitioners Conduct Board and replace the board and its director with a new legal conduct commissioner. The commissioner will investigate and conciliate complaints as the board now does but will also have wider powers to impose lesser disciplinary sanctions directly without reference to the tribunal or the Supreme Court, and will be able to impose stronger sanctions with the consent of the practitioner. There may well be situations where, either because the matter is minor or because the practitioner consents, involvement of the tribunal or the court is not justified. Unreasonable refusal by a practitioner to consent to a proposed sanction is a matter that can be considered by the tribunal in ordering costs of the tribunal proceedings. The commissioner is also given the power to make binding determinations of disputed costs in some circumstances.

The bill would also create a new mentoring system whereby struggling practitioners could seek help confidentially through the society from a more senior practitioner before serious problems develop in the practice. Mentoring could also be used as disciplinary action, that is, a practitioner could be ordered to work with a mentor to overcome problems in the practice. Non-compliance with a mentoring agreement would itself be a disciplinary breach.

The bill proposes a new and detailed regime of mandatory cost disclosure by lawyers to their clients. This is a substantial consumer protective measure. The bill would rename the Guarantee Fund as a fidelity fund and would permit payments to be made on an interim basis in case of hardship where there is a reasonable prospect that the claim will ultimately be paid, but subject to a right of recovery if the claim in fact fails. The bill will also permit the fund to be applied to the management expenses of the board of examiners and the tribunal.

The 2007 bill foundered on a difference of views about access to the fund in the case where trust money goes missing from a legal practice. The present bill proposes a compromise that the government hopes may resolve this question. It proposes that a claimant need not pursue other recourse where a reasonably prudent self-funding litigant would not do so. That is based on the merits test used in the allocation of legal aid.

No change is proposed in the bill to the definition or the regulation of trust moneys. There may, however, be merit in a broader definition of trust money either for the purpose of disciplinary action or for the purpose of ensuring that all money that comes under a firm's control is properly accounted for. At the same time, there is no intention to make the fidelity fund the guarantor of a poor investment, nor to overlap the regime of this act with the regime regulating financial services licensees. I am open to receive comment on whether the present definition of trust money is the right one or how it should be amended.

Overall, this bill is intended to deliver increased protection for legal consumers and more effective sanctions against practitioners who act improperly. The bill will lie on the table for the next four weeks to enable interested parties to offer comment.