Legal Practitioners (Disciplinary Matters and Fidelity Fund) Amendment Bill

Introduction and First Reading

The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector, Special Minister of State) (15:34): Obtained leave and introduced a bill for an act to amend the Legal Practitioners Act 1981, and to make a related amendment to the Notaries Public Act 2016.

Second Reading

The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector, Special Minister of State) (15:35): I move:

That this bill be now read a second time.

Today, I introduce the Legal Practitioners (Disciplinary Matters and Fidelity Fund) Amendment Bill. This bill makes key changes. 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 (SACAT). It enhances and clarifies the powers of the Legal Profession Conduct Commissioner, and it increases the cap on the Fidelity Fund under the Legal Practitioners Act. I will address each of these three issues in turn.

Firstly, 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 conduct or professional misconduct made in relation to legal practitioners. The tribunal also reviews certain disciplinary decisions made against legal practitioners by the Legal Profession 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 members 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 that the South Australian legal profession maintains rigorous standards of professional conduct. I would like to thank the presiding member of the tribunal, Ms Maurine Pyke KC, and all those current and past members for their work on this important body. However, the government believes it is timely to transfer the functions to SACAT.

Already, SACAT deals with disciplinary matters for a range of other professions, including medical and other health professions under the Health Practitioners Regulation National Law and conveyances under the Conveyancers Act. This transfer will improve efficiency of tribunal proceedings, make use of existing facilities and processes of SACAT and further strengthen SACAT's role as a one-stop shop for such matters.

The transfer is intended to address concerns about growing backlogs in Legal Practitioners Disciplinary Tribunal cases, with pending decisions sometimes dating back several years. That 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 interstate general, civil and administrative tribunals already have 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 procedure that are no longer required because the equivalent provisions are contained in the SACAT Act. The bill is also drafted to ensure SACAT's powers and procedures in dealing with legal practitioners disciplinary matters are consistent to the greatest extent possible 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 matters, after which any residual matters would need to be transferred to SACAT for completion.

In relation to the Legal Profession Conduct Commissioner, the bill also contains a number of amendments to the Legal Practitioners Act to expand the disciplinary powers of the 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 practitioner's files and records examined;

to expand the Legal Profession Conduct Commissioner's powers 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; and

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 consequentially 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 a health assessment or to undertake treatment for an identified impairment.

Another amendment to the bill will address the possible risk arising from a recent South Australian Supreme Court (Court of Appeal) decision—in the Legal Profession Conduct Commissioner v A Practitioner [2024] SASCA 102—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 commensurate increases in maximum fines that may be imposed by SACAT in disciplinary matters under the Legal Practitioners Act.

In relation to the Fidelity Fund: 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 financial loss as a consequence of default by a legal practitioner and funding the investigation of complaints and disciplinary action against legal practitioners. No payment can be made from the Fidelity Fund without the authorisation of the Attorney-General.

The balance of the 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 Professional 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 those 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 Fidelity Fund account 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.

Debate adjourned on motion of Hon. J.M.A. Lensink.