Legal Practitioners (Disciplinary Matters and Fidelity Fund) Amendment Bill

Second Reading

The Hon. J.K. SZAKACS (Cheltenham—Minister for Trade and Investment, Minister for Industry, Innovation and Science, Minister for Local Government, Minister for Veterans' Affairs) (21:52): I move:

That this bill now be read s second time.

Today, I introduce the Legal Practitioners (Disciplinary Matters and Fidelity Fund) Amendment Bill 2025. The bill makes three key changes. First, it amends the Legal Practitioners Act 1981 to transfer the functions of the Legal Practitioners Disciplinary Tribunal to the South Australian Civil and Administrative Tribunal; second, it enhances and clarifies the powers of the Legal Professional Conduct Commissioner; and third, it increases the cap on the Fidelity Fund under the Legal Practitioners Act 1981.

I will address each issue in turn. First, the Legal Practitioners Disciplinary Tribunal: the Legal Practitioners Disciplinary Tribunal is established under the Legal Practitioners Act 1981. The tribunal is an independent body which hears allegations of unsatisfactory professional or professional misconduct made in relation to legal practitioners. The tribunal also reviews certain disciplinary decisions made against legal practitioners by the Legal Professional Conduct Commissioner.

The Legal Practitioners Disciplinary Tribunal consists of 15 members appointed by the Governor on the nomination of the Chief Justice, ten of whom are legal practitioners practising as solicitors or barristers in South Australia. The remaining five are required to be persons who are not legal practitioners but who are familiar with the nature of the legal system and legal practice.

The Legal Practitioners Disciplinary Tribunal does important work in ensuring the South Australian legal profession maintains rigorous standards of professional conduct. The government thanks the presiding member of the tribunal, Ms Maurine Pyke KC and all those current and past members for their work in this important body.

However, the government believes it is timely to transfer the functions of the Legal Practitioners Disciplinary Tribunal to SACAT. Already SACAT deals with the disciplinary matters for a range of other professions including medical and other health practitioners, under the health practitioners regulations.

This transfer will improve the efficiency of tribunal proceedings, make use of the existing facilities and processes of the SACAT and further strengthen the SACAT's role as a one-stop shop for such matters. The transfer is intended to address concerns about growing backlogs of Legal Practitioners Disciplinary Tribunal cases, with pending decisions dating back several years. The backlog is largely attributed to difficulties in securing the availability of the legal practitioner members to hear matters. They are not full-time tribunal members and they have their own busy legal practices to work around.

Most other interstate generalist civil and administrative tribunals already have a disciplinary jurisdiction in respect of legal practitioners. In amending the Legal Practitioners Act to transfer the functions of the tribunal to SACAT, the bill takes the approach of removing provisions governing tribunal practice and procedures that are no longer required because equivalent provisions are contained in the South Australian Civil and Administrative Tribunal Act 2013.

The bill is also drafted to ensure that SACAT's powers and procedures in dealing with legal practitioner disciplinary matters are consistent to the greatest extent appropriate with SACAT's existing powers and procedures for dealing with disciplinary matters relating to other occupations. The transitional provisions in the bill provide for a two-year run-off period for the Legal Practitioners Disciplinary Tribunal to complete any part-heard matter, after which any residual matters would need to be transferred to SACAT.

The bill also contains a number of amendments to the Legal Practitioners Act to expand the disciplinary powers of the Legal Profession Conduct Commissioner in certain areas that the commissioner has found wanting in past investigations. These amendments are:

to broaden the commissioner's disciplinary powers in respect of former legal practitioners (including those who may have been struck off the Supreme Court roll) beyond a power to impose a fine to include a power to reprimand, to order the former practitioner to apologise and/or to pay the costs of having work the subject of an investigation redone and/or the costs of having the former practitioners files and records examined;

to expand the Legal Profession Conduct Commissioner's power to require the production of documents under Schedule 4 of the Legal Practitioners Act to include documents held by people other than the legal practitioner, or legal practice, under investigation;

to empower the commissioner to require a legal practitioner to undergo a medical or psychological health assessment if the commissioner reasonably believes, because of a notification or for any other reason, that the practitioner may have an impairment. The bill will also consequently enable the commissioner to apply to the Supreme Court for orders requiring a health assessment or suspending or cancelling a legal practitioner's practising certificate if the practitioner fails to comply with the commissioner's requirement to undergo the health assessment or to undertake treatment for an identified impairment.

Members interjecting:

The Hon. J.K. SZAKACS: Did you hear me? Did you hear me talk about the KCs? That part? I like that part. Another amendment in the bill will address a possible risk arising from a recent South Australian Supreme Court (Court of Appeal) Decision in Legal Profession Conduct Commissioner v A Practitioner that could have allowed the Commissioner's disciplinary regime under part 6 division 2 of the Legal Practitioners Act to be bypassed and for complaints to be lodged directly with SACAT.

The amendment makes it clear that the commissioner's disciplinary regime is to be invoked before lodging a complaint with SACAT. However, the amendment ensures that the commissioner still has the power to lay a charge directly to SACAT in special circumstances. An example of this could include where the commissioner considers there is evidence of practitioner misconduct sufficient to be tested in formal proceedings before SACAT but not sufficient for the commissioner to be satisfied of what conduct did occur and whether it can be adequately dealt with by the commissioner's disciplinary powers.

The bill will also increase the maximum fines that can be imposed by the commissioner in exercise of the commissioner's disciplinary powers, with a commensurate increase in the maximum fines that may be imposed by SACAT in disciplinary proceedings under the Legal Practitioners Act.

Finally, the opportunity is taken to include in this bill an amendment to increase the cap on the Legal Practitioners Fidelity Fund. The Law Society of South Australia administers the Fidelity Fund, with oversight by the Attorney-General. Income paid into the Fidelity Fund includes a proportion of practising certificate fee revenue and interest from the combined legal practices' trust account.

Part 4 of the Legal Practitioners Act sets out the purposes for which the Fidelity Fund may be used, which includes compensating clients who have suffered a financial loss as a consequence of default by a legal practitioner and funding investigation of complaints and disciplinary action against legal practitioners. No payment may be made from the Fidelity Fund without the authorisation of the Attorney-General.

The balance of the Fidelity Fund is capped, with excess funds over the cap directed to the Legal Services Commission, or as otherwise agreed by the Law Society and the Attorney-General. In practice, the Fidelity Fund is predominantly used to fund the work of the Legal Profession Conduct Commissioner and the Law Society Ethics and Practice Unit, as well as the Legal Practitioners Disciplinary Tribunal.

These expenditures, combined with low interest rates, caused the Fidelity Fund balance to decline over a period between 2014 and 2022. That decline gave rise to concerns about the viability of the fund. Various measures were introduced to address these concerns, including the imposition of a financial levy on the legal profession itself to bring the fund back into a surplus.

With a significant percentage of its revenue historically generated by interest, the Fidelity Fund is particularly vulnerable to low-interest rate environments. The increases in official interest rates in more recent years have led to significant Fidelity Fund growth. The current Fidelity Fund cap was reached in early 2025 for the first time since the 2009-10 financial year. There is now a growing accumulation of excess funds. Increasing the cap will support the ongoing viability of the Fidelity Fund by ensuring investment returns can produce enough revenue to reduce the fund's vulnerability to interest rate fluctuations. I commend the bill to members and seek leave to have the explanation of clauses inserted in Hansard without my reading it.

Leave granted.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

These clauses are formal.

Part 2—Amendment of Legal Practitioners Act 1981

3—Amendment of section 5—Interpretation

This clause inserts and amends various definitions for the purposes of the measure.

4—Insertion of section 20AL

This clause inserts new section 20AL as follows:

20AL—Court may require practitioner to undergo assessment etc

Proposed section 20AL empowers the Supreme Court to make an order requiring a legal practitioner to undergo a health assessment, undertake treatment, receive counselling or participate in a program of supervised treatment or rehabilitation designed to address behavioural problems, substance abuse or mental impairment. If the practitioner refuses or fails to comply with such an order, the Court may make an order suspending or cancelling their practising certificate.

5—Amendment of section 23AA—Employment of disqualified person

This clause deletes subsection (6), which sets out how the Legal Practitioners Disciplinary Tribunal is to be constituted for the purposes of a hearing under the section, as proposed section 78 sets out how SACAT is to be constituted for proceedings under the Act. The clause also updates internal cross-references.

6—Amendment of section 56—Statutory interest account

This clause amends subsection (6), which sets out the method for calculating the cap on funds that may be retained in the Fidelity Fund, to provide that, if at any time the amount of the Fidelity Fund exceeds an amount calculated by multiplying $11,500 by the number of legal practitioners who held practising certificates on the last preceding 30 June, the Society must hold the excess in the statutory interest account.

7—Amendment of heading to Part 6

This clause makes a consequential change to the heading of Part 6.

8—Amendment of section 67B—Application of Part

This clause amends section 67B to provide that Part 6 does not apply to the conduct of a member of SACAT (who is a legal practitioner or former legal practitioner) acting in their capacity as a member of SACAT insofar as they are exercising a function under the principal Act.

9—Amendment of section 72—Functions

This amendment is consequential.

10—Insertion of Part 6 Division 2 Subdivision 1A

This clause inserts new Subdivision 1A as follows:

Subdivision 1A—Assessment of fitness to practise

77AA—Commissioner may require practitioner to undergo assessment etc

Proposed section 77AA empowers the Commissioner to, in specified circumstances, require a legal practitioner to undergo a health assessment by a medical practitioner or psychologist. A medical practitioner or psychologist may, for the purposes of conducting a health assessment under the proposed section, require the legal practitioner to provide information reasonably required, and to attend at a specified time and place, for the purposes of the assessment. The proposed section sets out the actions the Commissioner must take, and the orders the Commissioner may make with the consent of the legal practitioner, following the receipt of a report of the health assessment from the medical practitioner or psychologist. If a legal practitioner refuses to comply with a requirement of the Commissioner or refuses to consent to an order of the Commissioner, the Commissioner may apply to the Supreme Court for an order under section 20AL or 20AD.

11—Amendment of section 77J—Powers of Commissioner to deal with certain unsatisfactory professional conduct or professional misconduct

This clause amends subsections (1) and (2) to increase the maximum fines the Commissioner may order a legal practitioner pay in certain circumstances if satisfied that there is evidence of unsatisfactory professional conduct or professional misconduct by the practitioner. In addition, the clause amends subsection (3) to expand the Commissioner's powers following an investigation into a former legal practitioner's unsatisfactory professional conduct or professional misconduct. The clause also makes various amendments to update terminology.

12—Repeal of section 77K

Section 77K is repealed.

13—Amendment of section 77L—Commissioner must lay charge in certain circumstances

14—Amendment of section 77M—Commissioner to provide reasons

15—Amendment of section 77O—Commissioner may conciliate complaints

These amendments are consequential.

16—Insertion of Part 6 Division 2 Subdivision 6

This clause inserts new Subdivision 6 as follows:

Subdivision 6—Review of certain decisions by Tribunal

77P—Review of certain decisions by Tribunal

Proposed section 77P confers SACAT with jurisdiction to deal with matters consisting of the review of specified decisions of the Commissioner.

17—Substitution of Part 6 Division 3

This clause substitutes Division 3 as follows:

Division 3—Constitution of Tribunal

78—Constitution of Tribunal

Proposed section 78 sets out how SACAT will be constituted for proceedings under the Act and requires SACAT to establish panels of assessors.

18—Insertion of sections 79, 80 and 81

This clause inserts new sections 79, 80 and 81 as follows:

79—Complaints

Proposed section 79 allows the Attorney-General, the Commissioner or the Society to lodge a complaint alleging unsatisfactory professional conduct or professional misconduct on the part of a legal practitioner or former legal practitioner with SACAT. The Commissioner may not lodge a complaint under the proposed section unless they are satisfied that, in the circumstances of the case, special reasons exist that justify the lodgement, or they have investigated the conduct of the practitioner to whom the complaint relates and are satisfied that there is evidence of unsatisfactory professional conduct or professional misconduct by the practitioner and that the conduct cannot be adequately dealt with under section 77J. Except in specified circumstances, a complaint may not be lodged more than 5 years after the day on which the person lodging the complaint became aware of the conduct to which the complaint relates.

80—Hearing by Tribunal

Proposed section 80 requires SACAT to, on the lodging of a complaint, conduct a hearing for the purpose of determining whether the matters alleged in the complaint constitute grounds for disciplinary action. The proposed section also sets out specific powers SACAT may exercise during the hearing of a complaint.

81—Disciplinary action

Proposed section 81 sets out the orders SACAT may make on the hearing of a complaint and sets out the actions SACAT must take following the determination of proceedings under the proposed section.

19—Repeal of section 82

Section 82 is repealed.

20—Amendment of section 83—Notice of inquiry

These amendments are consequential.

21—Repeal of section 84

Section 84 is repealed.

22—Amendment of section 84A—Proceedings to be generally in public

This clause amends section 84A to provide that, except where the South Australian Civil and Administrative Tribunal Act 2013 provides otherwise, proceedings before SACAT under Part 6 Division 4 must be heard in public. The deletion of subsection (2) and the amendment of subsection (3) are consequential.

23—Amendment of section 85—Costs

This clause deletes subsections (3) and (4) as the enforcement of monetary orders made by SACAT is dealt with by section 89 of the South Australian Civil and Administrative Tribunal Act 2013. The clause also makes various consequential amendments.

24—Substitution of section 86

This clause substitutes section 86 as follows:

86—No internal review by Tribunal of decision under Division etc

Proposed section 86 provides that a decision of SACAT under this Division cannot be the subject of an application for internal review and disapplies section 71(2a) of the South Australian Civil and Administrative Tribunal Act 2013 in relation to an appeal against such a decision.

25—Repeal of sections 87 and 88

Sections 87 and 88 are repealed.

26—Amendment of section 89—Proceedings before Supreme Court

27—Amendment of section 90AD—Dealing with matter following referral or request by regulatory authority in participating State

These amendments are consequential.

28—Amendment of section 90A—Annual reports

This clause makes a consequential amendment and inserts a new subsection (4) which provides that an annual report of SACAT under section 90A may be combined with a report of SACAT under section 92 of the South Australian Civil and Administrative Tribunal Act 2013 provided that the reports relate to the same period.

29—Amendment of Schedule 1—Incorporated legal practices

This clause amends Schedule 1 clause 18 by deleting subclause (6), which sets out how the Legal Practitioners Disciplinary Tribunal is to be constituted for the purposes of a hearing under the clause, as proposed section 78 sets out how SACAT is to be constituted for proceedings under the Act. The clause also updates internal cross-references.

30—Amendment of Schedule 3—Costs disclosure and adjudication

This amendment is consequential.

31—Amendment of Schedule 4—Investigatory powers

This clause amends Schedule 4 to allow an investigator to require any person who has or has had control of documents or information that may be relevant to a complaint investigation in relation to a legal practitioner or former legal practitioner to produce or provide a copy of the documents or information.

Schedule 1—Related amendments and transitional provisions

Part 1—Amendment of Notaries Public Act 2016

1—Amendment of section 8—Investigations, inquiries and disciplinary proceedings

This clause makes a related amendment to the Act specified to replace a reference to the Legal Practitioners Disciplinary Tribunal with a reference to SACAT.

Part 2—Transitional provisions

2—Transitional provisions

This clause sets out transitional provisions in relation to the transfer of jurisdiction from the Legal Practitioners Disciplinary Tribunal to SACAT. The effect of the provisions is that any proceedings before the Legal Practitioners Disciplinary Tribunal in relation to which evidence has already been taken will continue before that Tribunal. Any proceedings in relation to which evidence has not been taken will be transferred to SACAT. Any proceedings which have continued before the Legal Practitioners Disciplinary Tribunal as a result of this clause that are not completed immediately before the day occurring 2 years after commencement of this clause will be transferred to SACAT.

Mr TEAGUE (Heysen—Deputy Leader of the Opposition) (22:01): I rise to indicate I am the lead speaker for the opposition and I indicate the opposition's support for the bill. Starting where the minister left off in relation to the Fidelity Fund, we have just heard the minister rehearse the government speech. As has been so often the case in this parliament, the house is on notice of debate in another place by the time it comes here. Sometimes that has been years in between, but on this occasion it is just a few months ago.

I recognise the work of the Attorney-General in another place in working together with the profession towards these amendments. The final paragraph of the government speech refers to the challenges that the Fidelity Fund faced in a low-interest environment. That was something I was acutely aware of in what I describe as the nanosecond during which I was responsible for those relevant powers and functions of the Attorney-General.

It has been long known that the Fidelity Fund has had a challenge to ensure that it is sustained. The amendments with regard to the Fidelity Fund will assist it in doing so. As is well known, the bill enhances the powers of the Legal Profession Conduct Commissioner in a variety of ways. I think perhaps the most consequential practical change of the bill is the move from the Legal Practitioners Disciplinary Tribunal to SACAT in terms of dealing with disciplinary matters in the profession.

It has to be said that there has been not much but some feedback about this particular change, which is a substantial one. The response that I have had from the Law Society in the course of considering this is that it really deals with it as a practical matter. The Legal Practitioners Disciplinary Tribunal was difficult to convene as a practical matter. It has proved over time that that has led to delay, and the first draft of this bill was not all that attractive because it did not include the sort of guarantee that the profession needed that the SACAT would be properly constituted when it was going to hear disciplinary tribunal matters.

There have been amendments to ensure that it is properly constituted. As a result, the bill in that respect has the Law Society's support. I will just refer, for members' reference, to the Law Society's submission that it has published, dated 28 October 2025. Let there be no difficulty about interpretation of the Law Society's view. That submission provides:

The Legal Practitioners (Disciplinary Matters and Fidelity Fund) Amendment Bill…proposes significant reforms to the regulation of the legal profession, including:

1. An increase in the cap of the Legal Practitioners' Fidelity Fund, which is used to fund the regulatory framework of the profession;

2. The transfer of the jurisdiction of the Legal Practitioners Disciplinary Tribunal…to the South Australian Civil and Administrative Tribunal…and

3. Expanding the powers of the Legal Profession Conduct Commissioner...

The proposed reforms have previously been considered by the Law Society’s Executive, Council, and Ethics and Practice Committee.

The Society strongly supports the increase in the cap of the Fidelity Fund, which will ensure its long-term viability.

The Society also supports measures that will more efficiently deal with disciplinary matters and enhance public confidence in the legal profession. The Society had previously made a number of observations in respect of the proposed reforms, including with respect to:

the introduction of new health assessment powers;

the new penalty regime; and

appointments to the Tribunal for legal disciplinary matters.

It goes on to address those matters in some more detail, including the matter of transfer to the SACAT. In so doing, it fleshes out its support for the changes. I might put it just in the practical sense that it is: that might rise no higher—and I do not think it needs to—than the Law Society having been satisfied that it is worth a try so far as those moves from the Legal Practitioners Disciplinary Tribunal to the SACAT. It is worth a try.

We ought to keep a close eye on how that works in practice. Of course, the Law Society's important role in providing feedback, including via its relevant committees, will continue to be of importance. It should be a matter of central consideration to the government. With those words, I indicate again the opposition's support for the bill and commend it to the house.

The Hon. J.K. SZAKACS (Cheltenham—Minister for Trade and Investment, Minister for Industry, Innovation and Science, Minister for Local Government, Minister for Veterans' Affairs) (22:07): I thank the member for his contribution and commend the bill to the house.

Bill read a second time.

Committee Stage

In committee.

Clauses 1 to 9 passed.

Clause 10.

The Hon. J.K. SZAKACS: I move:

That clause 10, which is printed in erased type, be inserted in the bill.

Mr TEAGUE: I just invite the minister to put on the record the nature of the amendment so the committee has that in Hansard at a convenient point.

The Hon. J.K. SZAKACS: The clause is with respect to a commissioner who may require a practitioner to undergo an assessment.

Clause inserted.

Remaining clauses (11 to 31), schedule and long title passed.

Bill reported with amendment.

Third Reading

The Hon. J.K. SZAKACS (Cheltenham—Minister for Trade and Investment, Minister for Industry, Innovation and Science, Minister for Local Government, Minister for Veterans' Affairs) (22:10): I move:

That this bill be now read a third time.

Bill read a third time and passed.