Legal Practitioners (Miscellaneous) Amendment Bill

Introduction and First Reading

The Hon. V.A. CHAPMAN (Bragg—Deputy Premier, Attorney-General) (15:48): Obtained leave and introduced a bill for an act to amend the Legal Practitioners Act 1981. Read a first time.

Second Reading

The Hon. V.A. CHAPMAN (Bragg—Deputy Premier, Attorney-General) (15:48): I move:

That this bill be now read a second time.

The Legal Practitioners (Miscellaneous) Amendment Bill 2019 amends the Legal Practitioners Act 1981 and makes various amendments that improve the efficiency and operation of the Legal Profession Conduct Commissioner, as well as amendments to improve and preserve the ongoing viability of the Fidelity Fund.

As Attorney-General, I receive regular communication from the commissioner, Mr Greg May, around his work, themes within the profession and issues he is facing. This bill stems from the commissioner's work and experiences since 2014 in that role and seeks to streamline the commissioner's work for the legal community and clients.

The most complex amendments in this bill are the amendments that deal with the operation of the commissioner and the way in which charges are laid by the commissioner. The amendments centre on the time limits that apply to the commissioner laying charges against practitioners for misconduct and the ability for the commissioner to apply for an extension of time when necessary.

These amendments were requested by the commissioner after the Full Court of the Supreme Court, in the 2017 decision of Legal Profession Conduct Commissioner v Fittock [2017] SASCFC 169, held that an extension of time application is not an interlocutory matter and therefore must be heard by a three-member Legal Practitioners Disciplinary Tribunal rather than by a single member.

This decision has had a significant impact on the way the commissioner conducts matters and, if no legislative amendments are enacted, would greatly increase the expenses involved for every extension of time application. A number of improvements have been made to the provisions dealing with the extensions of time, along with the transitional provisions intended to mitigate the impacts of the decision made in Fittock.

The extension of time amendments do four things: firstly, the amendments allow for an extension of time application to be heard by a single member of the tribunal; secondly, the time for the commissioner to lay charges is extended from three to five years; thirdly, the time will now run from when the commissioner becomes aware of the conduct as opposed to when the conduct occurred and, as a result, it is hoped that fewer extension of time applications will need to be made by the commissioner; and fourthly, it will be made clear that an extension of time application can be heard at the same time as the merits of the matter.

The other amendment contained in the bill is the change to section 57A, which adjusts the levels of funding allocated from the interest that accrues in the moneys in the legal practitioners' trust accounts. Currently, the Legal Services Commission receives 50 per cent, the Fidelity Fund receives 40 per cent and the remaining 10 per cent goes to a person nominated by the Attorney-General. The only person currently nominated is the Law Foundation of South Australia (the Law Foundation), which therefore receives the entirety of the 10 per cent.

The amendment to section 57A is being undertaken as part of a range of measures to improve the ongoing viability of the Fidelity Fund. The Fidelity Fund is administered by the Law Society, with one of its primary purposes being reimbursing people who suffer financial loss arising from an act or omission that involves dishonesty and results in a default of a law practice. The Fidelity Fund is also used to support various other functions under section 57(4) of the act, such as the commissioner and the ethics and practice unit of the Law Society. Revenue into the Fidelity Fund consists mainly of statutory interest allocation, which represents interest accumulated on law practice trust accounts, a proportion of practising certificate fees and investment income.

Due to a number of factors, including a decrease in the investment income, and increases in expenditure for the purpose of regulating the profession, the ongoing viability of the Fidelity Fund is at risk. The amended provision reduces the portion allocated to the Law Foundation from 10 per cent to 5 per cent and allocates the remaining 5 per cent to the Fidelity Fund. The amendments to the extension of time provisions will also assist the future viability of the Fidelity Fund by preserving the resources of the commissioner and increasing his office's efficiency.

The bill also contains other minor amendments, including an amendment that clarifies that a law firm may list the details of historical wills on the Law Society's will register without the client's consent without breaching the confidentiality requirements so long as a good faith effort has been made to contact the client to seek permission. Again, I thank Commissioner Greg May for his work in this area and the important role he plays in regulating the standards of South Australia's legal profession by investigating complaints of any suspected misconduct by lawyers.

I commend the bill to members of the house. I am happy to seek leave to insert the explanation of clauses in Hansard without my reading it.

Leave not granted.

The Hon. V.A. CHAPMAN: Accordingly, I indicate as follows the explanation of clauses:

Part 1—Preliminary

1—Short title

2—Commencement

3—Amendment provisions

These clauses are formal.

Part 2—Amendment of Legal Practitioners Act 1981

4—Amendment of section 14AB—Certain matters to be reported by Society

This clause corrects an error in cross-referencing.

5—Amendment of section 57A—Payment of interest accruing on trust accounts

Section 57A requires financial institutions to pay interest that accrues on a trust account maintained by a legal practitioner to the Law Society. The Society is currently required to pay 50 per cent of the money to the Legal Services Commission or a community legal centre, 40 per cent to the Fidelity Fund and 10 per cent to a person nominated by the Attorney-General. Under the section as amended by this clause, the Society will be required to pay 45 per cent, rather than 40 per cent, of the interest to the Fidelity Fund. The remaining 5 per cent will, at the direction of the Attorney-General, be paid either to the Fidelity Fund or to a person or persons nominated by the Attorney-General.

6—Amendment of section 72—Functions

Section 72 currently permits the Legal Profession Conduct Commissioner to fix, and require the payment of, fees. Under the section as amended, the Commissioner will also be able to waive or refund fees.

7—Amendment of section 77N—Investigation of allegation of overcharging

Section 77N(7) provides that if the amount in dispute in an overcharging complaint is $10,000 or less, the Commissioner may make a determination as to whether there has been overcharging. This clause amends the section so that the Commissioner can make a determination as to overcharging if the disputed amount is $50,000 or less. The Commissioner cannot make a determination as to whether there has been overcharging unless there has been an assessment of the costs by a legal practitioner and the parties have been invited to make submissions on the assessment.

8—Amendment of section 80—Constitution and proceedings of Tribunal

Section 80 is amended by this clause to make it clear that—

the Legal Practitioners Disciplinary Tribunal may consist of only one member for the purposes of hearing extension of time applications; and

the Tribunal may hear and determine an application for an extension of time to lay a charge at the same time as it hears and determines proceedings relating to the charge.

9—Amendment of section 82—Inquiries

This clause amends section 82 so that a charge may be laid before the Tribunal within 5 years of the person laying the charge becoming aware of the conduct to which the charge relates. Currently, a charge must be laid within 3 years of the relevant conduct.

10—Insertion of section 95E

This clause inserts a new section.

95E—Wills register

Proposed section 95 provides that a legal practitioner does not breach a duty of confidentiality owed by the practitioner to a client for whom the practitioner has prepared a will merely by publishing on a wills register, without the client's consent, the name and date of birth of the client or the date of the will. This principle applies only if—

the will was made before the commencement of the new section; and

the practitioner has been unable to contact the client despite having taken reasonable steps to do so for the purpose of obtaining the client's consent to publication of the information.

11—Amendment of Schedule 1—Incorporated legal practices

The purpose of the amendment made by this clause is to clarify that the term 'approved form' in Schedule 1 means a form approved by the Supreme Court.

Schedule 1—Transitional provisions

1—Transitional provisions

The effect of the transitional provisions is as follows:

the amendment to section 77N of the Act made by clause 7, which broadens the Commissioner's capacity to make determinations in respect of overcharging, applies in relation to a complaint of overcharging received by the Commissioner after the commencement of the amendment irrespective of whether the final bill to which the complaint relates was delivered to the client before or after that commencement;

section 80 of the Act as amended by clause 8, which makes it clear that the Tribunal may consist of only one member when considering extension of time applications, applies to applications for extensions of time heard after the amendments commence irrespective of when the charges were laid or when the relevant conduct occurred;

section 82 of the Act as amended by clause 9 applies in relation to a charge laid before the Tribunal before the commencement of the amendment if the charge has not been finally determined and also to the laying of a charge after the commencement of the amendment irrespective of when the conduct to which the charge relates occurred.

Debate adjourned on motion of Mr Gee.

The Hon. A. KOUTSANTONIS: Point of order, Mr Speaker: I bring your attention to the state of the house.

A quorum having been formed: