Bills

Legal Practitioners (Miscellaneous) Amendment Bill

Second Reading

Adjourned debate on second reading (resumed on motion).

Mr PICTON (Kaurna) (15:36): It is my pleasure to rise and speak in relation to the Legal Practitioners (Miscellaneous) Amendment Bill and indicate that I am the lead speaker. The Clerks were anticipating that declaration. I also indicate that the opposition will be supporting the large majority of this bill that has been presented by the Attorney-General, but we will be opposing one clause, subject to further consultation, and reserving our position on the amendments that have been recently filed by the Attorney-General.

We have received advice that, if passed into law, clause 5 of this bill will change the formula set out at section 57A(2) of the act, which governs the allocation of the interest occurring on solicitor trust accounts (the funds). The practical effect of the amendment will be to reduce the amount paid to the Law Foundation of South Australia, made under section 57A(2)(c), from 10 per cent of the funds to only 5 per cent, with an option to reduce it to zero at the Attorney-General's discretion.

I understand that 10 per cent of the funds payable under section 57A(2)(c) of the act have been paid to the Law Foundation every year, since its inception in 1983. We understand that this equates to a cut of approximately $180,000 a year to the Law Foundation—around 16 per cent of their revenue—which likely means funding for JusticeNet through the Law Foundation will either no longer be forthcoming or will be greatly reduced.

For many years now, JusticeNet has operated in South Australia funding itself on the donations of other generous organisations and individuals. In opposition, the Liberal Party spoke fondly and in support of JusticeNet. The current Attorney-General, when she was shadow minister, talked at length about the good work that JusticeNet SA does to support those most in need. However, now that the member for Bragg is herself in government and herself the Attorney-General, strangely those sentiments have disappeared and the Liberal government are refusing to provide funding to JusticeNet.

Reports have consistently found that JusticeNet SA provides a real benefit to clients, lawyers and courts alike. According to JusticeNet SA's 2018 annual report, they generated over 7,000 hours of pro bono work that was completed, valued at more than $2.1 million. However, it is not only JusticeNet that will be impacted by cuts to the Law Foundation: it will also be organisations like the uni law clinics and many others that will be impacted. I know that the Attorney-General will claim that the cut to the Law Foundation will not impact on its ability to provide funding because it has other sources of funding.

However, there does appear to have been an impact on its ability to distribute funding. Advice has been received from the Law Foundation that it has made smaller grants across the board, not just to JusticeNet, because the foundation is mindful of the impending cut to its income as a result of this bill from the government. For example, the Law Foundation has granted just $20,000 to JusticeNet. The current position of the opposition is to oppose this clause; however, we will continue to consult with the legal fraternity and the community more broadly on this matter.

The government has filed amendments this week to clauses 8 and 9 of the bill, which amend sections 80 and 82 of the act. These amendments attempt to deal with an issue raised by the South Australian Bar Association, where the bill has a retrospective effect that extends the time in which a charge made against a lawyer or legal practitioner could be laid before the Legal Practitioners Disciplinary Tribunal.

The opposition does not intend to delay the bill today, but we reserve our position on the amendments until we have conducted further consultation and more fully considered the nature and effect of these amendments, and we will be considering them between the houses. I conclude by once again indicating that Labor will support the large majority of this bill but intends to oppose clause 5, subject to further consultation, and reserves our position on the amendments filed by the Attorney this week.

The Hon. V.A. CHAPMAN (Bragg—Deputy Premier, Attorney-General) (15:41): I indicate my appreciation for the contributions of the member for Heysen and the member for Kaurna, and in particular the at least partial support that has been provided from the opposition. I think it is fair to say that both areas of concern on their part, one relating to the interest distribution and, secondly, in relation to the retrospectivity arising out of the obligations for applications that are made out of time to the Legal Practitioners Disciplinary Tribunal, are qualified to be reserved at this stage pending consultation.

In respect of the first matter, can I outline to the house the following because I think it is important, when considering the question of distribution that is being amended here, that I do remind the members about the proposed amendments to section 57A of the Legal Practitioners Act as to the distribution or how moneys can be paid from the interest accrued from trust accounts.

To understand some background here, section 57A tells us that, in relation to the interest that is a accrued on trust accounts, the interest has to be paid to the Law Society, and then it makes provision as to how it is to be applied. I think I need to clarify this by saying that the principle underlying the payment of interest on trust accounts to the society is on the basis that, when individual clients of solicitors place money in their care in trust and the solicitor is obliged to pay those moneys into a trust account, there is interest that accumulates from that and that it would be obviously unreasonable for the financial institution holding the money to have the benefit of that interest.

So there has been now a longstanding provision that any interest on these moneys that are held in trust accounts have to be paid into a combined trust account interest benefit to the Law Society. Under section 57A, subject to some aspects of the bill that allow for the Attorney-General to have some powers of distribution, there is an application that instructs the society that they must deal with those moneys as follows: 50 per cent goes to the Legal Services Commission or other legal centres, 40 per cent goes to the Fidelity Fund, and 10 per cent gets paid to any person nominated by the Attorney-General, subject to conditions that may be imposed by the Attorney-General. So there is some flexibility there.

The member for Kaurna is quite correct in his assertion that for some decades now that 10 per cent has been applied to the Law Foundation of South Australia. They are an important institution headed by a chair that is frequently populated by a Supreme Court judge or other eminent people. I think members of parliament have always been represented. I think the member for Little Para is currently on the foundation board, but in any event it is a worthy organisation—

Mr Picton: Elizabeth.

The Hon. V.A. CHAPMAN: Elizabeth, I beg your pardon. It is a worthy organisation. It has an admirable charter and it provides support both academically and in the advancement of legal research and education and the like. Half goes to the Legal Services Commission—I do not think I need to explain to members that, along with community centres, it provides legal services frequently to people who are unable to avail themselves privately of services—40 per cent goes to the Fidelity Fund and 10 per cent goes to the Attorney-General to distribute in the manner I have just suggested.

I need to explain what has happened with the Fidelity Fund, which gets 40 per cent of this. The Fidelity Fund is basically a guarantee fund for legal practitioners. It is for the benefit of people who are the losers in respect of the misconduct or misappropriation by legal practitioners where there has been a negative detriment and who may not avail themselves or have access to alternate means of redress.

I will not go into all the details to qualify it, but, in short, this fund sits there to make sure that, if lawyers do the wrong thing and their clients miss out, or it has a negative impact on them, they have a capacity to be able to get some of their money back or some compensation for the misconduct or failings on behalf of the legal practitioner.

I think that is the primary responsibility of having the Fidelity Fund, but the law under the Legal Practitioners Act reminds me a bit of overextraction from the River Murray. Everyone wants a piece and over the years others have climbed on board to get a share and it has led to a circumstance where the bank account—the available resource—to help people who have been adversely affected by lawyers gets ever diminished because it is slowly being drawn down.

Whilst it has a balance sheet, if we continue to extract from it, as has occurred over recent years—and apparently it had been brought to the attention of the previous government but they had not done anything about it—we are going to end up with a situation where the money that goes into the Fidelity Fund, which is this 40 per cent distribution, is simply not going to be enough to arrest the loss. Potentially, a claim will come along and we will wipe out the fund, so there is a real and present danger if we do not do anything about this.

The amendment before the house is not necessarily designed to be a detriment to the Law Foundation. It is designed to ensure that we make extra provision for money to go into the Fidelity Fund, which frankly was an original and important purpose for having this fund in the first place as well as collecting the interest to ensure that we have that provision.

Just so that you appreciate the operation of the Fidelity Fund, under the act money is paid into the fund from the interest, as I have referred to. There are also certain circumstances in which the Law Society recovers costs or other money by virtue of other actions, and they can have an obligation to pay it in there. It also pays for the cost of any fee paid to the commissioner. The draw on the fund is, as I said, quite extensive and I want to explain that to the house.

All of these are worthy purposes and they are in need of funds in order to be funded. They have been added onto quite extensively, even in the time I have been in the parliament. Money in the Fidelity Fund may be applied to meet all the expenses incurred by the Legal Practitioners Education and Admission Council (LPEAC), the Board of Examiners, the Legal Practitioners Disciplinary Tribunal and the Legal Profession Conduct Commissioner and also the costs incurred by the Law Society in appointing a solicitor to appear in proceedings in which a person seeks admission.

In addition, it is to meet all the costs of investigating complaints under the act and disciplinary proceedings which relate to the work of the commission and the tribunal. It is also to meet all the costs of proceedings instituted by the commissioner for the adjudication of legal costs, the costs of prosecution of offences against this act and the costs consequent on the appointment of a supervisor or manager under this act. That relates to where a practitioner might have been arrested or unfit to continue to operate the practice, or they may have disappeared, and a manager needs to go in. The Law Society attends to that, so there are costs associated with that.

In addition to that, we have the costs of investigations or examination under schedule 2 of the act; the payment of any honoraria, approved by me as the Attorney-General, to members of LPEAC and the tribunal; the payment of the salaries and related expenses of the commissioner (currently Mr Greg May) and his or her staff; the legal costs payable by any person in relation to any action arising from an honest act or omission in the exercise or purported exercise of powers or functions under schedules 2 or 4; the payment of money towards the costs of an arrangement under part 3; the costs of processing claims under part 5 and of paying out those claims; defraying any management fee; and educational or publishing programs conducted for the benefit of legal practitioners or members of the public.

It is a very long list. There are a whole lot of people taking money out of this fund, which they are entitled to do under this act, and it is reducing the pool, just like the River Murray. I make this point and I hope it is clear to people: we cannot just do nothing. Because there is an important list of things that need to be provided for out of this fund, we need to ensure that one of its principal purposes takes priority. That is the basis upon which the government has reviewed this matter and considers that an increase from 40 per cent to 45 per cent of those moneys ought to be paid into the Fidelity Fund.

The other matter, which may be known to many in the profession but perhaps not as well known in the parliament, is that the Law Foundation, as important and impressive as their work is, also has a very significant accumulated reserve, and it continues to increase. I was actually surprised, in coming to office and examining this issue, to find that it is now over $7 million. It has a very large reserve—a growing reserve. The member for Kaurna offered in his contribution one of the reasons they have apparently diminished their payment to an organisation called JusticeNet. Quite frankly, it has a lot of other money that it can draw on if it wishes to apply towards worthy causes that it assesses are important to support.

I am not persuaded by the competing demands of the Law Foundation, which, as Attorney-General, remains my discretion to apply the funds to, by virtue of the reduction of the total pool going from 10 per cent to 5 per cent as a result of this proposal and therefore the consequential increase to the Fidelity Fund. I am not persuaded by the relative merits or plight of the Law Foundation relative to the Fidelity Fund. It is our view, on this side of the house, that the Fidelity Fund must take priority. That is what the purpose of this legislation started as. Others have joined in to seek a share, which I think must be a secondary recognition on the list of priorities.

Another matter I will touch on is the reference to JusticeNet and the claim that prior to coming into government, as the shadow attorney-general, I was complimentary of the good work of JusticeNet but that that has somehow or other changed. The 'sentiment disappeared' I think were the words used in relation to this organisation. For the benefit of members, JusticeNet is a three-person operation and its job is to coordinate the distribution of pro bono work to legal practitioners. It is a program that a large number of legal practitioners around the state sign up to and offer their staff and/or partners to undertake pro bono work.

They are really a sorting house for that distribution. They receive requests, they identify relevant or capable lawyers to undertake that work and they distribute it to them. For people who need to have representation, who cannot afford it through their own means or who may be ineligible for legal aid, this is an important service that is provided by lawyers and it needs to be coordinated. This is an important job. I do not in any way withdraw or diminish my accolades in relation to the work they do. I think they still do excellent work and they do very important work.

I attend their annual walk, which helps raise usually $50,000 plus a year, and I encourage others to do so. I am very proud of the fact that the state government has, via the Attorney-General's Department and in particular via the Crown Solicitor's Office, also been signed up to this service. We provide hundreds of thousands of dollars worth of pro bono work to help those who receive the benefit of this program.

A large amount of their work relates to commonwealth areas of responsibility, particularly migration matters. Not surprisingly, the commonwealth provide quite a significant amount of funds to JusticeNet. I think they are under a three-year provision of substantial moneys, in addition to other funds or benefits, such as what the state government gives them via free legal work to operate. I do not accept the member for Kaurna's statements and I do not detract from the work that is done by that agency.

Why the Law Foundation of South Australia has apparently reduced its contribution to JusticeNet is a matter for the Law Foundation. I cannot answer that. JusticeNet have $7 million and they could apply some of that if they really needed to. If there is a persuasive case to have further funds to support that organisation, I can only suggest that that be revisited by JusticeNet.

In relation to the second matter—the foreshadowed amendments to deal with the Legal Practitioners Disciplinary Tribunal, or applications to it, and in particular the commencement of the proceedings within certain time frames—members would be familiar with the fact that, when claims are made in a lot of legal arenas, there is a time limit within which the matter can be progressed.

There were two areas which the commissioner for legal practitioners presented to the government for consideration. One was as a result of a Supreme Court determination, which said that if you apply for an application and it is out of the time limit and you want leave to be able to proceed, it has to go before three members of the tribunal, not one, which had been the practice of operation. Apparently, six cases had all been approved and if one was invalid they needed to relitigate them.

The second thing was that it was a difficulty for the commissioner, who had a running of the time of that limit from the time of the alleged misconduct, as distinct from the time the complaint was made. The problem with that was, if the commissioner received the complaint at or near the time of the expiration of time, there were some difficulties in being able to progress the assessment of that matter, its investigation and dealing with it in the time required, which may culminate in a recommendation that it be referred to the tribunal or that charges be laid. Then there is another process, usually which comes back through my office, to approve that to happen. That was producing challenges also for the commissioner.

At first blush, the remedy which was provided in this bill, which had been sought by the commissioner, was to provide for the time for lodging of applications before the tribunal to run from the time that the complaint is made as distinct from the time of the misconduct. The second thing is to have made those applications for these to be before one member of the tribunal for leave out of time rather than having to require three to attend.

In addition to that, the effect which the drafting provided was that it would have the retrospective effect and capture not only the six cases that had been dealt with by one, one of which is still pending, but also some other cases for which there had not been an application lodged. The inequities in relation to retrospectivity had been then brought to our attention, firstly by the President of the Bar Association, Mr Mark Hoffmann QC, and otherwise with submissions from SABA, to point out the inequity of progressing with a reform which had this retrospective effect.

We have sat down with them. We have had some discussion about it. We have gone back to the commissioner and explained the difficulty in relation to progressing a law where this has been identified and clearly highlighted. Quite reasonably, we raised it. In fairness to the shadow attorney-general, I think he understands the concerns raised by the Bar Association and is sympathetic to that, so I would be very disappointed if, on further consideration of the matter, they do not accommodate these amendments that are foreshadowed that we will introduce in committee.

But I make this point: on the amendments that are foreshadowed, whilst we have provided some discussion with the shadow attorney-general on the matter, we appreciate that he may need some time to confer with his caucus to identify the position of the opposition, and obviously he will have that time in the course of the time between the houses. I make it quite clear that if any member requires further briefing or information in respect of this I am happy for it to be provided.

I also acknowledge that the Legal Practitioners Act is not something most people in South Australia sit down and read—most of them have probably never even seen it or care about it—but it is an important piece of legislation that deals with the profession and sets out all the regulations of the practice of the law. This is important for the safeguarding of the community generally. It has some fairly sophisticated structures, a significant number of protections, and imposes a number of obligations, which are largely carried out by the Law Society of South Australia and some by the Bar Association, those who are representatives of the independent bar and members thereof.

Otherwise, in the context of this discussion, it is very much in the ambit of the Legal Profession Conduct Commissioner, Mr Greg May. I am appreciative of his advice on where he sees improvement can be made to the process, balanced against the importance of not prejudicing people's rights in the transfer of a regime that is at one date interpreted by the judiciary to be applied as follows and then remedied retrospectively by legislation that has a significant adverse impact. We are not in the business of doing that. On our side we recognise that in those circumstances that needs to be tempered, and that is exactly what these amendments will do.

Again, I thank members for their contributions. I especially want to thank the member for Heysen. He always maintains a diligent interest in all matters legal, and I appreciate his advice in relation to a number of these matters as well as his contribution to the house. I look forward to the passage of the second reading and, if that occurs, moving into the committee stage.

Bill read a second time.

Mr PICTON: Deputy Speaker, I draw your attention to the state of the house.

A quorum having been formed:

Committee Stage

In committee.

Clause 1.

Mr PICTON: In relation to clause 1, I wonder if the Attorney can outline who she consulted with and provide a summary of their submissions, bearing in mind that she never reveals her government submissions, but particularly in terms of what the approach was by others and, in particular, the list of people she consulted with.

The Hon. V.A. CHAPMAN: As indicated in the contributions made earlier, firstly, the Legal Profession Conduct Commissioner, Mr Greg May; the Crown Solicitor's Office; the Chief Justice; the Chief Judge; the Chief Magistrate; the Law Society of South Australia; the South Australian Bar Association, and their president in particular; the Legal Services Commission; the Aboriginal Legal Rights Movement; the Law Foundation, which was also referred to in our discussions today; the South Australian Council of Community Legal Services; the South Australian Legal Assistance Forum; JusticeNet; Northern Community Legal Service; and one individual barrister who presented a submission to us.

I think the member has already indicated that the Bar Association has been quite vocal in relation to this area, but otherwise I am sure he can follow up with them. Unsurprisingly, I will simply confirm that we have progressed and are now amending the recommendations put to us by the Legal Profession Conduct Commissioner, Mr Greg May.

Clause passed.

Clauses 2 and 3 passed.

Clause 4.

Mr PICTON: Can the Attorney-General confirm that this amendment corrects a drafting error in the act, a reference to schedule 3, which should be a reference to schedule 2? Can she outline how this was picked up, who picked it up and how the error came about?

The Hon. V.A. CHAPMAN: Yes, it was a drafting error. I did not pick it up, so I assume it was during the course of the drafting process that it was identified.

Mr PICTON: Has there been any effect of this drafting error in the legislation?

The Hon. V.A. CHAPMAN: Not that I am aware of.

Clause passed.

Clause 5.

Mr PICTON: In relation to clause 5, and in particular in regard to new paragraphs (c)(i) and (c)(ii), what is the policy rationale behind the Attorney-General being given the discretion to pay no grants out?

The Hon. V.A. CHAPMAN: There is no policy resolution to pay no grants out. What is proposed by clause 5 is that the 40 per cent, which relates to the payment to the Fidelity Fund, will increase to 45 per cent for the reasons I have outlined. The remaining 5 per cent may, at my discretion, be also paid to the Fidelity Fund or be paid to persons nominated, which can allow for the continued payment to the Law Foundation or, as is currently the case, to any other person under the conditions that I as Attorney-General can direct. So really it just identifies the capacity to be able to prioritise to the Fidelity Fund if it is needed but otherwise leaves it as open as it has always been.

As the member has quite rightly pointed out, historically, since the early 1980s, that has been applied for the benefit of the foundation. As is now evident, we have a pressing problem with the Fidelity Fund, the principal beneficiary, if I can describe it as that, of the funds of the interest, and also the discretion that remains as to who might be the beneficiary.

I could repeat all the matters I raised in the third reading. I was trying to make it clear, as we went through, that there is a very significant draw on this money. Frankly, its principal purpose is to try to make sure that we do two things. One is to pay for people who are unfairly treated and do not have access to any remedy in that sense. Magarey Farlam was the last big draw on this fund, which may have been prior to the member coming into the parliament. I am not sure whether or not he is aware of it, but that was regarding a defalcation by an accountant in a legal firm. Very substantial moneys were misapplied and proceedings ensued. There was a large legacy of the misapplication of money and, accordingly, a lot of people suffered. There was a very big draw on the fund

At the time that occurred, which is probably close to 10 years ago, there was quite a lot of discussion here in the parliament about how we would review what was to happen in the Fidelity Fund. We changed the name of the legal practitioners guarantee fund, as I recall, and formed a new set of priorities as to what thresholds had to be achieved before one could get the benefit of the fund. There was quite a significant discussion with the Law Society of South Australia. The opposition, as we were at that time, had a number of conversations with the then government about how we might redraw the obligations and who could apply for funds from the statutory interest fund; so it was a big redraw.

As the relatively newly appointed Attorney-General when we came into office, it was clear to me that, as was apparently repeatedly presented to the former administration, a consequence of that was what I have described as the overextraction of money. Even without having other large claims, the pool was diminishing. That is clearly an unacceptable situation if in fact one of the principal purposes is to provide for those who have been hurt as a result of the failings of lawyers.

The second thing I do not think should be underestimated. I read out an extensive list of the costs and expenses relating to a number of different agencies, all of whom work hard to try to deal with complaints against lawyers, action against lawyers, and deregistering them or striking them off. There is also the taxing of bills, which involves going through and providing assessments on whether they have issued invoices for fair charges of their services.

All the things in the list that I read out earlier have a role in helping to minimise, ultimately, claims against the fund. That works on the principle that, if somebody is not doing the right thing as a legal practitioner and they are struck off or suspended from being able to practise, it will reduce the risk and help to minimise future claims against the funds in circumstances where someone might be incompetent—or worse, someone who has a more selfish motive of remuneration to themselves before they do what they are supposed to do. All these things have a constructive and important role.

We have a number of them now. One that draws quite a significant amount of money is the structure that was set up by the former government with the establishment of the Legal Professional Conduct Commissioner. I just want to get that right. They change them around a bit—sometimes they are the commissioner of something. His work, in light of the new structure that was set up, has quite a multilayered process in dealing with complaints about lawyers.

If I were to say it in its short version, it is to receive complaints, try to deal with them and conciliate on them. If they are not resolved or they are serious enough, they are referred to the tribunal, and/or, if a practitioner is already convicted of an offence, the matter is taken straight to the Supreme Court to have them struck off. I am summarising, but it is quite a comprehensive process.

I think that the member for West Torrens, for example, would remember the very extensive inquiry and debates we had in this house as a result of the Eugene McGee case, which related to a legal practitioner who had left the scene of a motor vehicle accident in which a cyclist lost his life. It was not reported in a timely manner to enable a blood test to be taken or an assessment made of the driver to determine whether he had imbibed any alcohol or drugs. I have summarised the case, but it was very well publicised at the time.

All sorts of assertions were made as to what the legal practitioner was expected to do and the standards he was expected to comply with. I think he was charged with driving without due care, or something of that nature, which was complained of in the public arena at the time as being an unacceptably low charge because of the seriousness of what had occurred. That complaint purportedly arose from the fact that he had escaped the scrutiny and testing for a level of alcohol for which he would face charges. A long and ugly scenario of litigation continued.

There were claimed inadequacies in the reference of matters such as this and the alleged conduct in that case of escaping even the obligation of the matter to go before the tribunal. A restructure was presented by the government of the day, the parliament considered it, we made these changes and we set up this structure, much of which was with our blessing as the then opposition. However, it has proven to be a structure that is pretty complex.

As I say, the objectives here today—not in clause 5, but in the rest of this bill—are to try to help streamline this so that we do not waste money in relation to how it applies and also to provide the procedural fairness that is necessary for a complaining party, which in this case is legal practitioners, if they are facing the threat of losing their right to earn a living as a legal practitioner.

I hope that makes it clear why it is so important that we address this issue, which was clearly looming and for which there did not seem to be any resolution by the previous government. I have viewed quite a lot of correspondence that had been forwarded by the Law Society, preceding presidents and the chief executive to try to alert the government of the day to the looming problem. We need to address this problem. Our government has taken action to address it, and this, to some degree, is helping to minimise the damage.

Accordingly, a priority has been identified for this Fidelity Fund in the hope that we can support its continued retention of a balance sufficient to meet what is anticipated—some small claims and, every now and then, some large claims—and we need to provide for it.

Mr PICTON: That was a very thorough answer from the Attorney. Back to section 57A(2)(c) and new paragraph (c) and subparagraphs (i) and (ii), my understanding is that the previous act said that 10 per cent would be paid by the Attorney to a nominated area, which always was the Law Foundation. It has now been reduced to 5 per cent, and that 5 per cent could either go to the Fidelity Fund, along with the other 45 per cent, or could be paid to people nominated by the Attorney-General, in the same way as the previous act talked about the Law Foundation.

It is open to the Attorney-General under this provision to say that that 5 per cent can go entirely to the Fidelity Fund and there could be no money going to the Law Foundation. Having that in mind, what is the process that the Attorney-General—if she is successful in having this law changed—would go through every year to make the determination whether 5 per cent, 4 per cent, 3 per cent, 2 per cent, 1 per cent or zero per cent would go to the Law Foundation as opposed to going to the Fidelity Fund? Is that an annual assessment that would be made, is it a weekly, or a quarterly assessment, and what are the criteria she would use in making that assessment?

The Hon. V.A. CHAPMAN: At this stage I have not turned my mind to how often it would be addressed or what criteria would be used. However, in light of the envelope of discussion with the Law Society and the issues that I have raised, that is, ensuring that the Fidelity Fund has sufficient moneys in it, and maintaining a commitment to the current and long-term recipient of funds, namely, the Law Foundation, it would be my expectation, if I can generalise, that the Law Foundation would continue to receive the 5 per cent and that, in the event there was a significant draw on the Fidelity Fund, which may never happen in my time here—we do not know yet; there might be two or three in one year—or if there was an event that caused the severe depletion of funds in the Fidelity Fund, then that would certainly trigger my attention. I am sure that it would be brought to my attention by the Law Society if that were to occur, or if there were a large claim looming in relation to that.

I am not sure, but I might even need to sign off for funds to be paid out of the Fidelity Fund. Anyway, do not take it as necessarily being required, but it would certainly be brought to my attention. with the position that I thought I had outlined fairly clearly, but which I will just briefly outline again, our priority is to ensure that the Fidelity Fund is not depleted to the extent it does not do what it is supposed to do. This has been a principal obligation in relation to this whole structure—to provide for those who, as I say, have suffered the penalty of incompetent or inappropriate or, indeed, illegal activity of their legal practitioners.

That said, it is relatively easy, I suggest, for me to accept at this point that by doing so and by giving the capacity to be able to allocate those funds to the Fidelity Fund, taking priority therefore of either all or whole of the 5 per cent that would otherwise be going to the Law Foundation, I am mindful of the fact that it has a very significant reserve of funds available to it to continue to provide the meritorious support to scholarships and organisations as it has done in the past.

Mr PICTON: In relation to that, has the Attorney-General either before or subsequent to the drafting of this undertaken modelling to determine that this is the right percentage of funding into the Fidelity Fund and that this would address the concerns that she has expressed in relation to how much money should go into that fund? Also, has she discussed with Justice Judy Hughes, the chair of the Law Foundation, and what has been the reaction of the Law Foundation to her proposals?

The Hon. V.A. CHAPMAN: Firstly, can I indicate that, as at 30 June last year, I am told that the fund was up to $8.1 million in the Law Foundation. It seems to be growing, even since my first briefing on it, but that was an estimate that had been given to me at the time. Yes, $8.1 million is what they had at 30 June 2018.

I think the first question was about the modelling used. The advice of the Chief Financial Officer of the Attorney-General's Department was sought after extensive submissions were presented by the Law Society, particularly from their financial people, on the capacity for the fund to weather a significant claim and the annual diminution of moneys. A graph was provided to me at the time to indicate the decline.

In 2012-13, it had a fund balance of $27.9 million; this is way after the Magarey Farlam and payout, I might say. In 2013-14, it had gone down to $27 million, so it dropped close to $1 million in that year. In 2014-15, it was down to $24.5 million; in 2015-16, it was $21.9 million; in 2016-17, it was down to $20.4 million; and then there was another significant drop in 2017-18 down to $18.3 million. It is dropping between $1 million and $2 million plus a year because it is receiving less into the fund than it is having to pay out, and that is obviously a concern.

This is just one more thing we had to sort out when we got into office, but I am disappointed that there appeared to be no direct action, other than to suggest that fees go up for lawyers. I think it is a matter that needed attention. The Law Society probably had it highest on their list of priorities for us to sort out. I then had a number of conversations, firstly, with the Legal Profession Conduct Commissioner because it was suggested that his agency had a significant ballooning of costs in recent years under the previous government and that this was not looking to become any better. That was considered.

Obviously, I also met with Her Honour Justice Hughes as the chair of the Law Foundation. In fact, my first contact with her about this matter was to ask her to be the chair when I became the Attorney-General. She had been recommended. I thought it was an excellent nomination and progressed her appointment. I thank her for taking on this responsibility. There are a number of other people on the board—as I said, I think the member for Elizabeth is still a member of that board—and I thank them, too, for the work they do. Basically, they are the keepers of the money, and they are husbanding it very well because, as I said, they are up to $8.1 million at the moment. At the rate they are going, they are going to have more than the Fidelity Fund.

It seems a bizarre situation, but it was one that was a real and pressing concern to the Law Society. I think that the commissioner, Mr May, has done everything he could to bring in a list of ways as to how he might modify his operations to minimise the expansion of the cost. He probably has the hardest cohort of complainants in South Australia because he has lawyers or people complaining about lawyers, and when lawyers are under attack, let me tell you, they get QCs and bring out all the armoury to protect their patch.

That is their professional entitlement. It is their ticket to work, it is their status in the community, it is the income stream they enjoy, etc., but they are in a privileged position, frankly, to have connections to be able to get representation, probably more than any other profession, so Mr May has a pretty tough job. He has reasonable—sometimes unreasonable—concerns and complaints raised usually by former clients who say that they have been overcharged, under-represented or had a complete klutz of a lawyer who failed to do X, Y and Z. He has to work through these things, remedy them if he can with a conciliatory approach, refer them to the tribunal or go off to the Supreme Court—all those things I referred to in detail earlier.

It is not an easy job, so I take my hat off to him, but I think everybody appreciated that, including Justice Hughes when I met with her to indicate the circumstances of the Fidelity Fund. I can say that she was not overjoyed about the prospect of an imminent reduction in the money allocated for her fund. In fairness to her, she had only recently been apprised of the financial circumstances of the fund of the foundation. I think it is fair to say that most of the people sitting around the room at the time we discussed this were a bit surprised at how high the balance was.

In any event, it can only be a commendation to the people who had previously managed this fund and its presumably successful investment and careful application of some of the funds. Some might say that perhaps they should have given out more to worthy organisations each year; they may not have received applications. I cannot pass any judgement on that, but I make this point: of course the foundation would love to keep having an income stream at 10 per cent of the interest in this fund, a share of the interest that goes into this fund. There are other real and present, imminent and pressing requirements. The government accepts that, the Law Society seeks it and the commissioner also supports it. As such, we are bringing it to the parliament for approval.

Clause passed.

Clause 6.

Mr PICTON: In relation to clause 6, I gather that the new power being provided here is the ability to waive the fees; is that right? Can you provide a list of the fees that this power would apply to?

The Hon. V.A. CHAPMAN: I am advised that the commissioner already has a power to have fees. This amendment sets out a threshold requirement, that is, the approval of the Attorney-General to fix and require the payment of fees. I am advised, and I can confirm from the discussions I had with the commissioner, that his only intention is to charge a fee for the lodgement of a complaint to his office. There is no intention to pay any others. Otherwise, you will see that the amendment also provides for the waiving of those fees where the commissioner considers appropriate.

Mr PICTON: Can the Attorney-General outline the circumstances in which a fee would be waived?

The Hon. V.A. CHAPMAN: I am advised that there are two circumstances where it is likely to be considered favourably. One is when the complaint is upheld and, secondly, presumably the impecunious state of the complainant.

Clause passed.

Clause 7.

Mr PICTON: I would like to ask a couple of general questions in relation to clause 7, and then I think the Attorney has an amendment. What is the policy rationale behind allowing the commissioner to require a complainant to pay the costs of an assessment under this section? What do you estimate reasonable costs might be?

The Hon. V.A. CHAPMAN: In relation to the latter issue first—that is, what are reasonable costs—obviously they will vary depending on what has been assessed and what the final outcome is. It may be that a reasonable cost might apply for an appearance by someone at the local Magistrates Court to do a guilty plea, as distinct from three months of litigation in relation to an estate dispute. It obviously depends on the nature of the case.

In this area, because overcharging is an area of dispute, not uncommonly, the member might be aware that certain scales of fees operate for solicitors and barristers, depending on the jurisdiction in which they have an application or who is responsible for it. Again, for example, there may be a rate per page for preparation of documents for proceedings—

The Hon. A. Koutsantonis interjecting:

The Hon. V.A. CHAPMAN: And the disbursements, as the member for West Torrens out of his place rightly points out, such as photocopying, for example. There is a rate that is set by the District Court, and there is a rate that is set if you have proceedings in the Supreme Court, the Magistrates Court, etc. The Federal Court and the Family Court also have their own scales in relation to that. They are set not as an obligatory amount that only can be charged.

There is also another layer of obligation that sets out the capacity to be able to recover at a rate provided certain things have gone through. That includes having a signed in writing costs agreement between the client and the legal practitioner at the commencement of the work. Obviously, notice of various things has to be given in that agreement. It is quite a complex process these days, but it is important so that the practitioner knows what they can charge and the prospective client knows what they are signing up to in the sense of what they will pay. Largely, there are still a number of legal processes that are based on time that is applied for certain levels of a solicitor's practice and experience.

There is similarly another scale for barristers. For the parliament's benefit, they are people who attend in court. Some are also solicitors, but there are those, like the member for Heysen, who are members of the bar, like myself, who accept briefs only from solicitors and then appear in court. They usually get paid on a daily rate, sometimes an hourly rate, sometimes a perusal rate for their briefs and material that is provided as exhibits and the like. I cannot ask the member for Heysen to go through the latest rates. In any event, he was excellent counsel, so he was obviously enjoying the fruits of a reasonable return. I think we need to be even more grateful for his coming into the parliament and giving his wise counsel to us for the benefit of our team.

It is a fairly complex process, and the charging or overcharging that is claimed by clients from time to time sometimes is because they are just cranky about losing their case or they feel that they were inadequately represented or poorly represented, or there was some mischief in the work that was done or failed to be done, and so they want to challenge what they have been charged. The process for that, which is the subject of this clause, is that an assessment sometimes needs to be done about what the cost is going to be for someone to sit down and do what we call a taxation of costs—that is, go through item by item the work that has allegedly been done—and work out whether they are acceptable for the purpose of a final amount, which is determined by what we call a taxation, being an amount that can then be certified to be paid.

That assessment process is something that takes a bit of time. There are experts around who do this on a regular basis, where they come in, look at the file and they can see that a certain amount of litigation, for example, has occurred. They can identify the level of estimate and say, 'To do that assessment, it is going to cost $2,500 to go through and detail what is a $25,000 legal bill.' The obligation here is that the complainant can be required to pay those reasonable costs of assessment, so that $2,500 that is assessed as being necessary to do the assessment for that whole exercise needs to be presented to the complainant, and there is an obligation to pay it for that process to start.

Bear in mind that complainants do not have to come to the Legal Profession Conduct Commissioner to get their bill paid. They can go to a court and go through that taxation process and get a declaration by a master of the court, for example, as to what they are obliged to pay. But they have to then pay somebody to do that exercise anyway and obviously go through the painstaking exercise of being in a court process to do that. So this process is offered and frequently availed by clients who are unhappy with the bill, or refusing to pay the bill, and there needs to be some enforcement of all or part of that account.

Whilst this is seen as an impost potentially on the complainant to have to pay up-front for that assessment to take place, their alternative is a very significant other litigation process which, to some degree, is exactly what everyone else has to do. If you have had plumbing done in your house, and you say it is not up to scratch and the plumber says, 'I want to be paid my $25,000,' there is a claim and cost claim which needs to be litigated to decide it. But the plumber says, 'Here are the pipes I used, here are the taps I used, here is the equipment, here are the invoices for the payment of them and here are my hours of labour,' and it is reasonably straightforward.

Legal bills are a little more complex because of the nature of how the charging occurs, so that is where we are at. I think it is an important service that is provided via the commissioner's office. I urge the members to support the clause.

Mr PICTON: Following that, I am wondering if the Attorney can outline exactly why in section 77N(7)(a) the Attorney has decided to replace the original provision of the amount in dispute in a complaint of overcharging as no more than $10,000 and replace that with $50,000? How was that amount reached as the determination?

The Hon. V.A. CHAPMAN: I am advised that this relates to the threshold of the dollar figure up to which the commissioner can make a binding determination in respect of a costs dispute. I would suggest that that is reasonable for two reasons. One is obviously that with the efflux of time and the expanding of jurisdiction to avail this process to complainants at a higher level is better for them because it gives them that option. They can still go to the court, if they wish, but this is an option that is available to them. I do not think there is anything further I can add but to suggest that that is a recommendation. I think the second part of the question was on whose recommendation? By the commissioner's.

Clause passed.

Clause 8.

Mr PICTON: I wonder if the Attorney can outline the policy rationale behind including applications for extensions of time. How much does the Attorney-General think this will either raise or save the government?

The Hon. V.A. CHAPMAN: The first part of the proposal is to make it clear that an application for extension of time is an interlocutory matter, which deals with the Fittock matter referred to in the debate and which currently says that these matters have to be heard before a tribunal comprising three members. If it is identified as an interlocutory matter, it can be heard by one tribunal member, which is to cure the ill of the cost of having a three-member tribunal for applications for extension of time.

I think the second matter allows for the tribunal, in its discretion, to hear and determine an application for extension of time when it hears and determines the proceedings in relation to the charge. In other words, it can do it all in one sitting. Quite often what happens in civil proceedings is that there is an application made for an extension out of time and then, if you are successful on that, everyone goes home and another listing is made for the hearing of the substantive case. My understanding is this will allow the tribunal to hear it all together, notwithstanding the fact that one of the parties at least is a lawyer and probably has an army of other lawyers representing them.

We do not want these things to be drawn out into an oppressively complex and expensive exercise when the complainant might be sitting there, with or without representation, just looking for some answers, for someone to decide whether the representation they have had was appropriate or adequate and whether they have been charged a reasonable amount.

Whilst we lawyers like to be particular and pedantic and all those other things, in this situation the consumer is often looking for relief and an adjudication that will resolve the matter. Coming back and forth to the proceedings on these matters is something they are not too impressed by, in my experience. Where possible we are trying to protect procedural fairness but also give them a streamlined process.

Clause passed.

Clause 9.

Mr PICTON: Similarly, can the Attorney-General outline the rationale behind limiting the application period to five years? Was this amendment requested by anybody in particular? What does she think the impact will be, and will it raise or save anything in particular?

The Hon. V.A. CHAPMAN: I am reminded and aptly advised of two things, and I think I have covered these in the address: first, to enable an inquiry to proceed by the commissioner within a five-year time limit from the time of the complaint to him, not from the time of the alleged conduct or misconduct that is being complained of; and the recommendation by the commissioner to adopt this wording and allow the five-year provision after the laying of the charge.

It is expected that there will be less requirement then to have extensions of time. If anything, it is giving a greater time for both the commissioner to deal with the matter and also for the complainant to have some redress on their complaint. I think the rest of it, as to charges being laid, is similar to what already applies, because I know that I still sign applications from time to time for charges to be laid in the tribunal.

Clause passed.

Clause 10.

Mr PICTON: Can the Attorney-General confirm that this amendment is to essentially allow large legal firms to lodge their wills with the Law Society's will register? How much additional funding would the Law Society expect to receive as a result of managing these additional wills? Was this something that came about because of a request from those large law firms, or did it come about because of a request from the Law Society or somebody else?

The Hon. V.A. CHAPMAN: I think the member is nearly right, but can I just clarify it. The position is that the Law Society does provide, and has for some time provided, a register service for the purposes of keeping a list of wills. To be clear, you do not just send all your wills down to the North Terrace office of the Law Society, dump them with them and say, 'You look after them.' It is a register as distinct from being a keeper of them.

We have a number of large law firms that practise across state jurisdictions. Thomson Greer is probably the biggest one in South Australia. I think they have 200 practitioners here in that firm, but it is a national entity. I just plucked them out; there is no disrespect in nominating them. For example, say they were to use this service, they might be in breach, according to the Law Society, of privacy laws at the commonwealth level, because they are a national organisation, if they publish the names on the register. To avoid that problem, the Law Society has asked us to make provision in this bill, and we have acceded to the same.

Clause passed.

Clause 11.

Mr PICTON: I wonder if the Attorney-General can outline what the rationale is of now defining in the act an 'approved form', meaning 'a form approved by the Supreme Court'? Is this addressing some sort of deficiency that there was in the legislation before, or is this something that was requested by the Supreme Court or another body? What is it trying to achieve?

The Hon. V.A. CHAPMAN: We are just going to get that for you, but it relates to incorporated legal practices, which in my time in the law have finally been allowed to happen. I am advised that it simply replicates the definition of what the 'approved form' is in the regulations but which now will be in the schedule because it is referred to in the schedule. It is not a new definition; it is simply replicating it for the purpose of ease of interpretation.

Clause passed.

Schedule 1.

The Hon. V.A. CHAPMAN: I move:

Amendment No 1 [DepPrem–1]—

Page 5, lines 1 to 8 [Schedule 1, clause 1(2)]—Delete subclause (2) and substitute:

(2) Section 80 of the Legal Practitioners Act 1981, as in force immediately before the commencement of section 8 of this Act, applies in relation to an application for an extension of time heard by the Legal Practitioners Disciplinary Tribunal after the commencement of the amendments made by that section if the charge or charges in relation to which the application is being made arise from a complaint made, or a direction from the Attorney-General or the Society received, or from an investigation by the Commissioner commenced on the Commissioner's own initiative, before that commencement.

Amendment No 2 [DepPrem–1]—

Page 5, lines 9 to 17 [Schedule 1, clause 1(3)]—Delete subclause (3) and substitute:

(3) Section 82(2a) of the Legal Practitioners Act 1981, as in force immediately before the commencement of section 9 of this Act, applies in relation to the laying of a charge before the Legal Practitioners Disciplinary Tribunal after the commencement of the amendment made by that section if the charge arises from a complaint made, or a direction from the Attorney-General or the Society received, or from an investigation by the Commissioner commenced on the Commissioner's own initiative, before that commencement.

I move both amendments because they have the same combined effect. These amendments have the same explanation attaching to both and therefore I will deal with the explanation of the amendments at the same time. The first amendment is to the traditional provision dealing with the amendment to section 80 of the Legal Practitioners Act. The amendment to section 80 expressly allows for an extension of time hearing to be heard by a single judge of the Legal Practitioners Disciplinary Tribunal.

The second amendment is to the transitional provision dealing with the amendments to section 82, which extend the time allowed to lay charges against a legal practitioner from three to five years, running from when the person laying the charge becomes aware of the conduct. The current transitional provisions made the operation of the amendments to section 80 and section 82 fully retrospective; that is, they would apply to both future and current complaints and charges that have already been laid. These amendments change the transitional operation of the amendment so that new sections 80 and 82 will apply only to complaints received, investigations commenced or charges laid after the commencement of the bill—so, prospective.

The amendments to the transitional provisions have been undertaken in response to feedback from members of the legal profession and the Bar Association. The government appreciates the desirability of certainty in relation to the law applying to current complaints and charges that have already been laid. These amendments allow the issues raised by the Legal Profession Conduct Commissioner, in relation to extensions of time and the time period, to lay charges to be addressed for the future but preserve the operation of the current Legal Practitioners Act for those matters already afoot, providing certainty for those practitioners who are the subject of current complaints and charges.

To be absolutely clear, the five applications that have already been made for an extension of time and granted by a single judge, but now fall foul of the determination in the Fittock case, will be reheard and dealt with under the three-tribunal member rule, and there is a six-six which is in the court. The process of how that is to be heard is likely to be the subject of the consideration of the judge in the Full Court of the Supreme Court in the sixth matter, and that will assist him, I am advised by the commissioner, in determining how he progresses some other cases about which he has received the particulars of the complaint but which he has not progressed, obviously in light of the flux of this circumstance that has arisen as a result of the decision.

In short, he will be required to deal with the matters which are already there or which relate to the complaint and conduct preceding now under the old act and with all the obligations that go with that. The relief and the new streamlined structure will relate to all new matters that are received and progressed to ensure that this new procedure now will be only prospective and not retrospective.

Mr PICTON: Following on from our second reading contribution, I rise to indicate that these amendments have been filed relatively late in the parliamentary process. These are matters about which, as the Attorney has outlined, concerns have been raised with her by the Bar Society and others in relation to the government's original drafting of legislation. This is something that we will take on notice and look at between the houses in terms of the opposition's position. We will consult with those particular stakeholders of relevance here before debate begins in the other place.

Amendments carried; schedule as amended passed.

Title passed.

Bill reported with amendment.

Third Reading

The Hon. V.A. CHAPMAN (Bragg—Deputy Premier, Attorney-General) (17:04): I move:

That this bill be now read a third time.

Bill read a third time and passed.

Mr PICTON: Mr Deputy Speaker, I draw your attention to the state of the house.

A quorum having been formed: