Legal Practitioners (Miscellaneous) Amendment Bill

Second Reading

The Hon. P. MALINAUSKAS (Minister for Police, Minister for Correctional Services, Minister for Emergency Services, Minister for Road Safety) (18:03): I move:

That this bill be now read a second time.

I seek leave to have the second reading explanation inserted in Hansard without my reading it.

Leave granted.

The Legal Practitioners (Miscellaneous) Amendment Bill 2016 seeks to amend the Legal Practitioners Act 1981 (the Act) to address concerns raised by the Law Society about the ability of incorporated legal practices to practise in partnership and concerns raised by the new Legal Profession Conduct Commissioner about the operation of Part 6 of the Act.

The Act was substantially amended on 1 July 2014 by the Legal Practitioners (Miscellaneous) Amendment Act 2013 (the Amendment Act). Among other things, the Amendment Act abolished the Legal Practitioners Conduct Board and established the new office of the Legal Profession Conduct Commissioner (the Commissioner) with expanded powers to deal with misconduct by legal practitioners. For example, the range of disciplinary sanctions that can be imposed without the practitioner's consent have been broadened and the Commissioner has the power to impose a range of lesser sanctions with the practitioner's consent reducing the need for recourse to the Legal Practitioners Disciplinary Tribunal. The Amendment Act also included a new Schedule 1 which regulates incorporated legal practices.

An incorporated legal practice is a corporation that engages in legal practice in South Australia. Schedule 1 regulates matters such as eligibility to be an incorporated legal practice, requirements for legal practitioner directors, obligations of such directors, professional indemnity insurance and auditing of incorporated legal practices.

Prior to 1 July 2014, section 25 of the Act permitted the Supreme Court to authorise a company practitioner to practise in partnership. In its position as delegate of the Supreme Court, the Law Society of South Australia had previously granted such authority and there are still legal practitioner companies practising in partnership with a group of individual practitioners.

As a result of Schedule 1, and other amendments, doubt has arisen as to whether or not the current wording of the legislation allows incorporated legal practices to practice the profession of the law in partnership with another incorporated legal practice or with an individual legal practitioner (i.e. a natural person). There is a view that, read as a whole, the amended Act does not permit an incorporated legal practice to engage in partnership with a legal practitioner or another incorporated legal practice.

This is an unintended consequence as it was never the Government's intention to prohibit incorporated legal practices from practising in this manner. The Bill therefore amends the Act to remove the sources of contrary implication that exist at present and to make it clear that an incorporated legal practice can practice in partnership with another incorporated legal practice or with an individual practitioner.

The remainder of the Bill makes a number of amendments to Part 6 of the Act, at the behest of the Commissioner, to address some operational concerns with the new complaints process and to help make the complaints process more efficient.

In accordance with the current provisions of the Act, the Commissioner is obliged to investigate any complaint that he receives. Although the Commissioner has the option of closing a complaint against (for example) a Tribunal member on one of the grounds set out in section 77C, the Commissioner still has to deal with the complaint, even where the complainant has been declared vexatious by the Supreme Court. This has a significant impact on the resources of the office, the Commissioner's time and funding requirements. Furthermore, if the complaint is about the Commissioner or a member of his staff, the Commissioner is obliged to delegate the complaint externally because of a conflict of interest.

To address these issues and to ensure that the Commissioner need only consider complaints that should properly come before him and are duly made, the Bill makes a number of amendments to Part 6 of the Act. The main changes to Part 6 of the Act are set out below.

New section 67AB provides that the disciplinary regime set out in Part 6 of the Act does not apply to the conduct of certain legal practitioners or former legal practitioners.

Clause 8 of the Bill amends section 77 of the Act to clarify that the Commissioner is not subject to section 17(1)(c)(ii) of the Public Sector (Honesty and Accountability) Act 1995 when making a delegation under section 77 because of a conflict of interest.

Section 77B of the Act will be amended to impose a time limit of 3 years for lodging a complaint, however, the amendment also gives the Commissioner a discretion to investigate complaints outside of that time limit. Any complaint lodged under section 77B will also have to contain particular information, such as the name of the complainant and a description of the alleged conduct that is the subject of the complaint.

The final amendment to section 77B addresses the issue of vexatious complainants. Under section 39 of the Supreme Court Act, the Court can, if satisfied that a person has persistently instituted vexatious proceedings, make an order prohibiting the person from instituting further proceedings without permission of the Court and/or make an order staying proceedings already instituted by that person. An order under this section either remains in force for a fixed period or it is ongoing until it is revoked.

Under the Act as amended, a complaint about the conduct of a legal practitioner or former legal practitioner may be made to the Commissioner under section 77B of the Act or it may be made directly to the Legal Practitioners Disciplinary Tribunal under section 82.

A person who has been declared to be vexatious by the Supreme Court would be prohibited from lodging a complaint with the Legal Practitioners Disciplinary Tribunal without the permission of the Court because the Tribunal is a 'prescribed court' for the purposes of section 39 of the Supreme Court Act. However, there is nothing in the Act currently to prevent a complainant who has been declared vexatious from continuously lodging complaints with the Commissioner, requiring the Commissioner to waste valuable time and resources in dealing with the complaint.

Proposed new subsection 77B(3b) provides that a person may not make a complaint to the Commissioner if the person is subject to an order under section 39 of the Supreme Court Act. A transitional provision will allow the Commissioner to close any complaints already lodged by a vexatious complainant.

Section 77K of the Act will be amended to clarify the nature of an appeal to the Tribunal against a determination of the Commissioner. It is clear that an appeal to the Supreme Court from the Tribunal is by way of a rehearing. Rule 286(1) of the Supreme Court Civil Rules 2006 provides that 'an appeal is by way of rehearing (unless the law under which the appeal is brought provides to the contrary)'. The position in relation to an appeal from a determination of the Commissioner to the Tribunal is less clear.

The amendment to section 77K provides that an appeal to the Tribunal will be way of a rehearing during which the Tribunal must, in reaching the correct or preferable decision, have regard to, and give appropriate weight to the determination of the Commissioner. The amendment also sets out the procedure on a rehearing which is to include an examination of the evidence or material before the Commissioner and a consideration of any further evidence or material that the Tribunal decides, in the circumstances of the case, to admit for the purposes of rehearing the matter.

Finally, the Bill makes two amendments to Division 6 Part 6 of the Act. Division 6 establishes the public Register of Disciplinary Action and sets out provisions regulating the publication of disciplinary action taken against legal practitioners by the Commissioner.

The first amendment inserts a new subparagraph into the definition of 'disciplinary action' in section 89B of the Act. In effect, new subparagraph (ab) means that the Commissioner will be able to publish on the Register of Disciplinary Action, the name of any legal practitioner who has had his or her practising certificate suspended by an order of the Supreme Court.

The second amendment gives the Commissioner the power to cause information about disciplinary action to be removed from the Register of Disciplinary Action in the circumstances prescribed by regulation (if any). This will provide some discretion for the Commissioner, after consideration of the need to protect consumers from rogue lawyers, to remove a practitioner's name from the Register after a period of time where the conduct is considered to be at the lower end of the scale.

I commend the Bill to Members.

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 5—Interpretation

This clause amends section 5 of the principal Act and inserts definitions that are consequential on the proposed amendments relating to incorporated legal practices.

5—Amendment of section 5A—Terms relating to associates and principals of law practices

This clause makes amendments to section 5A of the principal Act to expand the meaning of an associate of a law practice to include a legal practitioner who is a legal practitioner director in an incorporated legal practice that is a member of the law practice (in the case of a firm of incorporated legal practices or a firm of legal practitioners and incorporated legal practices).

6—Amendment of section 53—Duty to deposit trust money in combined trust account

This clause amends section 53(6) of the principal Act to extend the application of the provision to firms of incorporated legal practices or firms of legal practitioners and incorporated legal practices.

7—Insertion of section 67AB

This clause inserts proposed section 67AB into the principal Act.

67AB—Application of Part

Proposed section 67AB operates to ensure that Part 6 does not apply to the conduct of the various categories of legal practitioners or former legal practitioners specified.

8—Amendment of section 77—Delegation

This clause amends section 77 of the principal Act to provide that for the purposes of section 17(1)(c)(ii) of the Public Sector (Honesty and Accountability) Act 1995, delegation by the Commissioner of a function or power under this section because of a pecuniary or other personal interest that conflicts or may conflict with the Commissioner's duties does not constitute taking action in relation to the matter the subject of the delegation.

9—Amendment of section 77B—Investigations by Commissioner

This clause amends section 77B of the principal Act to specify certain matters that must be set out in a complaint. The clause inserts a provision to prevent a person from making a complaint who is subject to an order under section 39 of the Supreme Court Act 1935. A complaint must be made to the Commissioner within 3 years of the conduct that is the subject of the complaint or such longer period as the Commissioner may allow.

10—Amendment of section 77D—Notification of complaint to practitioner

This clause amends section 77D of the principal Act to ensure that the requirement to give notice under section 77D(1)(c) does not apply in relation to a determination not to investigate, or to close, a complaint.

11—Amendment of section 77H—Report on investigation

This clause amends section 77H of the principal Act so that the requirement for the Commissioner to pass on information or evidence to the Crown Solicitor in relation to a possible criminal offence is only mandatory in respect of information or evidence suggesting that a serious criminal offence has been committed.

12—Amendment of section 77K—Appeal against determination of Commissioner

This clause inserts proposed subsections (3a) to (3c) (inclusive). The proposed subsections set out that the Tribunal will, in exercising its review jurisdiction, examine the determination of the Commissioner by way of rehearing and set out the procedures to be followed on the rehearing.

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

This clause amends section 77N of the principal Act to extend the obligation to report or give notice of certain specified matters to the client to whom the bill that is the subject of the complaint of overcharging was delivered (if that client is not the complainant).

14—Amendment of section 84—Powers of Tribunal

This clause makes amendments to ensure that the power of the Tribunal to receive or adopt evidence taken by a court of any State extends to a court or tribunal of any State or the Commonwealth.

15—Amendment of section 89B—Definitions

This clause amends the definition of disciplinary action for the purposes of Part 6 Division 6 of the principal Act.

16—Amendment of section 89C—Register of Disciplinary Action

This clause amends section 89C of the principal Act to enable the Commissioner to remove information about disciplinary action from the Register of Disciplinary Action in circumstances prescribed by the regulations (if any).

17—Amendment of Schedule 1—Incorporated legal practices

This clause inserts new clauses 3A, 4A and 5A into Schedule 1. Proposed clause 3A states that subject to the principal Act, an incorporated legal practice may practise in partnership with another incorporated legal practice or a legal practitioner (or both). Proposed clauses 4A and 5A set out the notice required to be given by an incorporated legal practice according to the range of circumstances set out in the proposed clauses.

18—Amendment of Schedule 2—Trust money and trust accounts

This amendment is consequential on the proposed amendments relating to incorporated legal practices.

19—Amendment of Schedule 3—Costs disclosure and adjudication

This amendment is consequential on the proposed amendments relating to incorporated legal practices.

20—Amendment of Schedule 4—Investigatory powers

This amendment is consequential on the proposed amendments relating to incorporated legal practices.

21—Insertion of Schedule 5

This clause inserts Schedule 5 into the principal Act. The proposed Schedule establishes transitional arrangements relating to complaints made by persons who were, at the time of making the complaint, subject to an order under section 39 of the Supreme Court Act 1935.

Debate adjourned on motion of Hon. T.J. Stephens.