Legal Practitioners (Foreign Lawyers and Other Matters) Amendment Bill

Second Reading

The Hon. R.I. LUCAS (Treasurer) (12:42): I move:

That this bill be now read a second time.

l seek leave to have the second reading explanation inserted into Hansard without my reading it.

The PRESIDENT: Is leave granted?

Honourable members: No.

The PRESIDENT: Leave is not granted.

The Hon. R.I. LUCAS: The bill I introduce this morning is the Legal Practitioners (Foreign Lawyers and Other Matters) Amendment Bill 2019, which amends the Legal Practitioners Act 1981. The main amendments in the bill insert provisions to regulate the practice of foreign law by foreign lawyers in South Australia and to provide for their local registration and regulation.

The foreign lawyers amendments originated from a request made by the presidents of the Law Society of South Australia, the South Australian Bar Association and the Law Council of Australia to amend the Legal Practitioners Act to include provisions for the registration and regulation of foreign lawyers practising foreign law in South Australia. South Australia is currently the only jurisdiction not to have these provisions in its legislation to regulate the legal profession.

The last round of major amendments to the Legal Practitioners Act came into force on 1 July 2014. The changes included abolishing the Legal Practitioner's Conduct Board and establishing the new office of the Legal Profession Conduct Commissioner, with expanded powers to deal with misconduct by legal practitioners. Four new schedules were also inserted into the Legal Practitioners Act to deal with incorporated legal practices, trust money and trust accounts, costs disclosure and adjudication and investigatory powers. These schedules were based on the legal profession model bill that is in force in all jurisdictions except for New South Wales and Victoria. The latter jurisdictions operate under the Legal Profession Uniform Law Application Act 2014.

Both the model bill and the uniform law contain provisions for the regulation and registration of foreign lawyers. A locally registered foreign lawyer is only entitled to practise foreign law in Australia. Overseas admitted practitioners who wish to practise Australian law must apply for admission in Australia and will then be regulated as an Australian legal practitioner.

The Law Society are of the view that the inclusion of the foreign lawyer provisions will facilitate the provision of legal services across South Australian borders and will also provide export opportunities for South Australian legal practitioners and practices. The foreign lawyers provisions in the bill are modelled on the relevant provisions from the model bill so that South Australia remains consistent with the other model bill jurisdictions.

The other significant amendment in the bill is an amendment relating to trustee companies. Trustee companies are corporations regulated by the Corporations Act 2001 (Cth) that provide 'traditional trustee company services', which are defined in the Corporations Act as: performing estate management functions; preparing a will, a trust instrument, a power of attorney or an agency arrangement; applying for probate of a will, applying for a grant of letters of administration, or electing to administer a deceased estate; and establishing and operating common funds.

National Australia Bank (or NAB) has identified an issue with the Legal Practitioners Act that affects its subsidiary National Australia Trustees Limited, which I will refer to as NAT. NAB has identified that trustee companies such as NAT most likely fall within the definition of 'incorporated legal practice' used in the Legal Practitioners Act. This problem has also been identified with respect to legal profession legislation in other jurisdictions.

The advice received by the Attorney-General indicates that trustee companies do, in fact, fall within the definition of an incorporated legal practice under the Legal Practitioners Act, and so in theory must comply with the entire regulatory regime set out in schedule 1, which covers incorporated legal practices. This means that not only are trustee companies over-regulated as they are subject to both state and commonwealth regulatory regimes, it is likely that some of the provisions of the Legal Practitioners Act, as they apply to trustee companies, may be inconsistent with the Commonwealth Corporations Act and therefore invalid.

As a result of advice sought from the Crown Solicitor's office and extensive consultation with the Law Society, the Legal Practitioners Act will be amended to remove trustee companies from the ambit of the Legal Practitioners Act. The Attorney-General is satisfied that the relevant trustee companies are sufficiently regulated by the Corporations Act such that there is no risk to consumers of the trustee companies being under-regulated.

In order to achieve this outcome, regulations will be made under clauses 1(2)(c) and 1(3) of schedule 1 of the Legal Practitioners Act to exclude trustee companies from its operation; however, it is necessary to first undertake a legislative amendment to ensure that a court would not find the regulations to be in conflict with section 21(3)(s). Therefore, the bill contains an amendment to section 21(3)(s) to exclude trustee companies offering traditional trustee company services (as defined by the Corporations Act) from the operation of the Legal Practitioners Act. The relevant regulations will be developed in the usual way following the passage of the bill.

I note that an additional amendment was inserted into the bill via a government amendment in the other place. The amendment to section 77N of the Legal Practitioners Act allows the Legal Profession Conduct Commissioner to recover the costs of a cost assessment undertaken in a successful overcharging complaint from the legal practitioner who is the subject of that complaint. There is already a very similar provision in the same section which applies to fees which may be recovered from the legal practitioner; however, as the cost assessment is classed as a disbursement, an additional provision is necessary to allow the recovery to take place. 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 inserts a number of definitions required for the purposes of the measure.

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

This clause amends the definition of associate of a law practice so that the term includes—

an Australian-registered foreign lawyer who is a partner in the law practice; and

an Australian-registered foreign lawyer who has a relationship with the law practice of a class prescribed by the regulations.

6—Insertion of section 5B

New section 5B, inserted by this clause, provides a definition of home jurisdiction. A legal practitioner's home jurisdiction is the jurisdiction in which the practitioner's only or most recent current Australian practising certificate was granted. For an Australian-registered foreign lawyer, the home jurisdiction is the jurisdiction in which the lawyer's only or most recent current registration was granted.

7—Amendment of section 20AI—Refusal, amendment, suspension or cancellation of practising certificate—failure to show cause

Section 20AI is amended by this clause to give the Supreme Court the power to impose conditions on a practising certificate where the applicant for, or holder of, the certificate has provided a written statement as required under section 20AG or 20AH. Those sections require an applicant for, or holder of, a practising certificate to provide a statement to the Supreme Court if a show cause event in relation to the person has happened.

8—Amendment of section 21—Entitlement to practise

This clause makes amendments to section 21 consequential on the introduction of provisions into the Act relating to registration of foreign lawyers. Under the section as amended, the provision of the section that prevents a natural person who is not a local legal practitioner or an interstate legal practitioner from practising the profession of the law will not apply in relation to the practice of foreign law by an Australian-registered foreign lawyer in accordance with Schedule 1A.

As a consequence of additional amendments made by this clause, officers and employees of trustee companies and certain other bodies corporate will be authorised to undertake certain legal work (for example, preparing wills) even if they are not local or interstate legal practitioners.

9—Insertion of Part 3 Division 4A

Under proposed section 24A, which is included in new Division 4A of Part 3, Schedule 1A applies in relation to the practise of foreign law in South Australia.

10—Amendment of section 39—Delivery up of legal papers

11—Amendment of section 40—Authority of legal practitioner or foreign lawyer to act on behalf of person of unsound mind

12—Amendment of section 43A—Interpretation

The amendments made by this clause are consequential on the insertion into the Act of provisions relating to the registration of foreign lawyers in this jurisdiction.

13—Amendment of section 49—Supreme Court may grant authority permitting director to practise

Section 49 prohibits a legal practitioner who is or has been a director of an incorporated legal practice during the winding up of the corporation for the benefit of creditors from practising the profession of the law without the authority of the Supreme Court. The section as amended by this clause will extend the prohibition to Australian-registered foreign lawyers and corporate entities entitled to engage in legal practice in a foreign country.

14—Amendment of section 57—Fidelity Fund

Currently, money in the Fidelity Fund includes costs recovered in disciplinary proceedings against legal practitioners or former legal practitioners. This clause expands the relevant provision so that costs recovered in disciplinary proceedings against Australian-registered foreign lawyers and former Australian-registered foreign lawyers are also included.

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

Under section 77N(4), the Legal Profession Conduct Commissioner can arrange for legal costs that are the subject of a complaint of overcharging to be assessed by a legal practitioner. This clause amends the section so that, if the complaint results in a determination or finding that there has been overcharging or a requirement for costs to be reduced or refunded, the costs of the assessment can be recovered from the legal practitioner or former legal practitioner who is the subject of the complaint.

16—Insertion of Schedule 1A

This clause inserts a Schedule that sets out provisions that apply to the practise of foreign law in South Australia.

Schedule 1A—Foreign lawyers

Under Schedule 1A, a person is prohibited from practising foreign law in South Australia unless the person is an Australian-registered foreign lawyer or an Australian legal practitioner. An Australian-registered foreign lawyer is a locally registered foreign lawyer or an interstate-registered foreign lawyer.

Under Part 3 of the Schedule, an overseas-registered foreign lawyer may be registered as a foreign lawyer. An overseas-registered foreign lawyer is a natural person who is properly registered to engage in legal practice in a foreign country. Part 4 of the Schedule sets out provisions relating to the granting or renewal of registration as a foreign lawyer. Application is to be made to the Law Society. Unless there are grounds for refusing an application, the Society must grant an application for registration as a foreign lawyer if the Society—

is satisfied the applicant is registered to engage in legal practice in one or more foreign countries and is not an Australian legal practitioner; and

considers an effective system exists for regulating engaging in legal practice in one or more of the foreign countries; and

considers the applicant is not, as a result of criminal, civil or disciplinary proceedings in any of the foreign countries, subject to—

any special conditions in engaging in legal practice in any of the foreign countries; or

any undertakings concerning engaging in legal practice in any of the foreign countries, that would make it inappropriate to register the person; and

is satisfied the applicant demonstrates an intention to commence practising foreign law in this jurisdiction within a reasonable period if registration were to be granted.

The Society may refuse to grant or renew registration if—

the application is not accompanied by, or does not contain, the information required by Schedule 1A or prescribed by the regulations; or

the applicant has contravened the Act or a corresponding law; or

the applicant has contravened an order of the Tribunal or a corresponding disciplinary body; or

the applicant has contravened an order of a regulatory authority of any jurisdiction to pay any fine or costs; or

the applicant has failed to comply with a requirement under the Act to pay a contribution to, or levy for, the Fidelity Fund; or

the applicant has contravened a requirement of or made under the Act about professional indemnity insurance; or

the applicant has failed to pay any expenses of receivership payable under the Act; or

the applicant's foreign legal practice is in receivership (however described).

Clause 24 sets out additional grounds for refusal to grant or renew registration.

Under Part 9 of the Schedule, registration as a foreign lawyer is subject to conditions imposed by the Society, statutory conditions imposed by the Act, conditions imposed under the legal profession rules and conditions imposed under Part 6 of the Act.

Provisions relating to amendment, suspension and cancellation of registration are also included.

The Society is required under the Schedule to keep a register of the names of locally registered foreign lawyers.

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

This clause amends Schedule 2 to insert a definition of 'law practice' that applies for the purposes of the Schedule and includes an Australian-registered foreign lawyer who practises foreign law on the lawyer's own account and a partnership consisting of one or more Australian-registered foreign lawyers or one or more Australian legal practitioners, or both.

18—Amendment of Schedule 3—Costs disclosure and adjudication

This clause makes a number of amendments to Schedule 3 to ensure that the costs provisions in the Act apply to Australian-registered foreign lawyers.

19—Amendment of Schedule 4—Investigatory powers

This clause amends Schedule 4 to insert a definition of 'law practice' that applies for the purposes of the Schedule and includes an Australian-registered foreign lawyer who practises foreign law on the lawyer's own account and a partnership consisting of one or more Australian-registered foreign lawyers or one or more Australian legal practitioners, or both.

Schedule 1—Transitional provision

1—Transitional provision

This clause provides that the amendment to section 77N made by clause 15 applies in relation to a complaint of overcharging received by the Legal Profession Conduct Commissioner after the commencement of the amendment irrespective of when the final bill to which the complaint relates was delivered to the client.

Debate adjourned on motion of Hon. I.K. Hunter.