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House of Assembly - Fifty-First Parliament, Second Session (51-2)
2007-10-17 Daily Xml
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LEGAL PROFESSION BILL

Second Reading

Adjourned debate on second reading.

(Continued from 16 October 2007. Page 1052.)

Mr HANNA (Mitchell) (12:17): I am speaking briefly to the Legal Profession Bill which the government has brought into the House of Assembly. The member for Heysen has extensively covered the clauses in the bill, and I will not even attempt to repeat her effort. I declare an interest as a legal practitioner, although, like the member for Heysen, I may not return to practice and, indeed, I have not actively practised since the last election at least. The bill has the support of the Law Society, and I will not go behind that. I do offer the observation, though, that we have had the benefit of a particular culture in the Adelaide legal profession which has been of benefit to practitioners and to the community at large. There has been something of a small town atmosphere, which has been to the benefit of the community, an atmosphere where lawyers can trust each other, on the whole, and where many of the lawyers know each other in the particular area in which they practise. The legal profession in Melbourne and Sydney is very different, particularly in relation to the way members practise at the bar. The reflection I wanted to make about this legislation then is that it seems to me that it is driven primarily by the concerns and experiences of larger firms, and interstate firms in particular.

I can see how it makes sense for one set of rules to apply when increasingly we are seeing solicitors and barristers transfer and practise in various states concurrently. There is, indeed, good cause for the legislation to be put before us, but there are elements of this legislation which will no doubt be examined more closely in a moment and which, I think, discourage the sort of small-scale legal practice that has been the mainstay of the Adelaide legal profession. The other comment I want to make about the Adelaide legal profession while I have the opportunity is to place on the record the absolutely sterling efforts of Adelaide lawyers when it came to dealing with asylum seekers who were interned at Woomera and then Baxter over the last 10 years. I was heavily involved in that work between 2002 and 2006. I think that as many as 100 lawyers out of our relatively small profession in Adelaide got involved to work for free for the rights of interned people at some stage or another. Some people did literally dozens of Federal Court cases for no money at all.

That is a side of the legal profession which is not celebrated enough. The amount of pro bono or pro deo (in other words, free) work that is done by the legal profession just is not celebrated enough. To have the Premier and others regularly berate lawyers sticks in the throat somewhat when you know what honourable and generous members of the community almost all the members of the legal profession are. Having said that, I certainly support the bill. I also appreciate the cooperation of the Attorney-General and his staff in relation to a particular amendment I discussed with them.

The Hon. M.J. ATKINSON (Croydon—Attorney-General, Minister for Justice, Minister for Multicultural Affairs) (12:22): The member for Heysen asked questions about the detail of the bill and stated that the intention is to introduce a new regime from 1 January next year. Actually, the intention is for the act to commence on 1 July next year to coincide with the next period of professional indemnity insurance cover, and also because the Law Society has asked for six months to instruct the profession about the changes. On clause 3 the honourable member expressed concern that the definition of 'engage in legal practice'—an expression used throughout the bill—is vague. A decision was taken nationally that, rather than try to lift comprehensively the activities that make up the practice of law, it would be better to leave this to the common law. Already a good deal of case law is examining what it means to practise law or engage in legal practice. Using this nationally-broad definition will build on existing common law, eventually leading to a national jurisprudence on this point.

The honourable member also noted that the definition of 'supervised legal practice' includes the case of a person who is supervised despite being a partner in a law practice. She was puzzled about when this might occur. An example might be where a person who was already a partner in a law practice is disciplined for wrongdoing. The tribunal might impose a requirement for a period of supervised practice. The honourable member asked why the definition of 'associate' is wide: this is because there are some requirements that must apply to everyone associated with a law practice, even non-lawyers. For example, it is necessary to regulate the handling of trust money by any staff member not only by the legal practitioners.

The member queried the use of the term 'home jurisdiction'. This concept is necessary in the absence of national regulators. In effect, each practitioner has a regulatory home to whose regulators he is answerable. Each jurisdiction relies on the regulatory authorities in all other jurisdictions to regulate their own practitioners so that there is no need for further regulation each time a boundary is crossed.

As for community legal centres, the national model makes no provision but says that local provisions may be used. The bill takes the opportunity to clarify the position of lawyers employed in community legal centres. It makes clear, for example, that the centre, although not a legal practitioner, can operate a trust account and, in so doing, is subject to the same trust account regulation as other law practices. The bill also protects lawyers in these structures against undue influence in the discharge of their professional duties. It makes clear that legal professional privilege is preserved in these structures. The peak body—the South Australian Council of Community Legal Services—is satisfied with the bill.

On clause 7, the member wondered why clauses about mortgage financing are so expressed. These clauses are similar to the provisions of section 95BA of the present act and seek to make clear that mortgage financing is not part of the practice of law and that that provision should not imply that it ever was. On clause 9—suitability matters—the member noted that the provision refers to a person's current reputation and character; that is, that the assessment is forward looking only.

Although that might be the case for placitum (a), the rest of the clause goes on to take into account the person's previous behaviour. Subclause (2) reinforces that view by providing that a matter is a suitability matter, even if it happened before the bill comes into operation. The member also noted that placitum (m) raises the case of a person who is not capable of carrying out the inherent requirements of practice. She wondered who would decide. The decision is one for the court, except to the extent that it is assigned this function. If there is evidence before the court that a person may be unsuitable for this reason the court must consider and weigh that evidence. An example might be a medical report showing that a person is suffering from an addiction that would prevent him or her properly attending to the practice.

The member asked about clauses providing for imprisonment. There are three offences that may result in imprisonment, not one. They can be found in clauses 357, 450 and 451, all of which deal with obstructing investigations. On the right of audience in clause 16, the member asked whether a next friend or litigation guardian would still be recognised by the courts. The current act contains a similar provision for right of audience and it has never been suggested that that affects the rights of litigation guardians or next friends. However, those persons do not enjoy a general right to act as representatives before the courts. They are only entitled to act in the particular matters in which they are appointed, and it would not be appropriate to refer to them in this provision. The member then queried whether clause 17(b) is in conflict with the provisions dealing with incorporated legal practices and multidisciplinary partnerships. The answer is no, because the prohibition on sharing profits in that clause is, again, subject to the permissions under the bill to do so.

The member said that clause 18 is core non-uniform. The clause is drawn from the present section 23AA of the Legal Practitioners Act, and what we have done is to tighten the circumstances under which the Legal Practitioners Disciplinary Tribunal can grant an authorisation for a disqualified person to work in a law practice. The tribunal must be satisfied that the person is not likely to create a risk to the public, and that his or her employment would not be otherwise contrary to the public interest. On clause 35(3), the member thought that the exclusion provision had to do with division 6 of chapter 3, part 3, about billing. That is a misreading. It has to do with division 6 of the part in which it appears about show cause events. This is because, if the show cause provisions apply, there is no need for this clause to apply.

The member noted that, in clause 59, it is said that government lawyers of other jurisdictions are not liable to contribute to the guarantee fund. She wondered why this might be. This is because a government of another jurisdiction is not a law practice, and any default by its employees will not be covered by our fund. On clause 82(1), and later on the similar clause, 112, the member felt that the provisions were circular or redundant because of the double reference to unsatisfactory conduct and professional misconduct. This is a misreading. What these provisions do is impute to the legal practitioner, director or legal practitioner partner the wrongdoing of an employee. It is his or her right to practise that is at risk if any one of the legal staff breaches a professional duty. This strengthens the obligations on that director or partner to ensure that the legal services are delivered properly.

On clause 94, and elsewhere, the member said that the references to the regulator and the society were redundant, as 'regulator' includes the society. That is not correct. The term 'regulator', as defined for the purpose of ILPs and MDPs, means the conduct board or its interstate equivalents. On clause 175, the member asked whether there is a general power for the society to exempt Australian legal practitioners from the provisions of the act and, if not, why not? There is no such general provision. This is because the bill intends to apply generally to Australian legal practitioners, and it would not be appropriate to allow the society to let practitioners out of their ordinary legal obligations. The reason for the possibility of exemptions for foreign lawyers is that they are not practising Australian law, and it might thus be that some provisions of the act or the regulations may prove to be, in practice, inapplicable to them.

On clause 196, the member asked how it might be that a practitioner could practise without having an office in any jurisdiction. The most likely case is where the practitioner practises solely by means of the internet and does not have any premises open to the public. On clauses 271 and 272 the member suggested that the uplift fee is really the same thing as the contingency fee or is even more dangerous. This is not so. The uplift fee is simply an increase in the rate of charging if the case succeeds. If a client gives properly informed consent to such an arrangement, then it is lawful, but the bill would limit the extent of the uplift.

It is true that the new limit may result in some clients being charged more than is possible under the so-called double or nothing rule that we have now. The figure of 25 per cent is a compromise figure agreed among all jurisdictions for the sake of national uniformity. The fee is, however, only an uplift and not a contingency fee. The contingency fee is a fee calculated as a proportion of the award or settlement in the case, or the value of the property recovered; that is, the practitioner does not just get a costs bonus but actually gets a share of the client's award. The more the damages the more the lawyer is paid. That is the mischief prohibited by clause 272.

On clause 331 the member was unsure whether or not the levies provision was a core provision: it is not. The levies provision has its origins in an early draft of the model, but there is no obligation on the government to include it in this bill. It is included because the government thinks it is a good idea. If amendments of the kind foreshadowed by the member to make the fund a first resort fund are adopted by the parliament, then it may well become necessary to levy practitioners one day to meet the fund's obligations to defrauded clients.

Mrs Redmond interjecting:

The Hon. M.J. ATKINSON: The member interjects because she wishes the taxpayers of South Australia to pick up the bill.

Mrs Redmond: Why should an innocent practitioner, who has not stolen money from a trust account, have to pay someone—

The Hon. M.J. ATKINSON: There we have it. Here is a further impost proposed on the taxpayers of South Australia by the member for Heysen.

Mrs Redmond interjecting:

The Hon. M.J. ATKINSON: The member for Heysen gives the benefit of clergy to her vocation and shifts the burden to the taxpayers. I would have thought the taxpayers were innocent.

Mrs Redmond: Why should any practitioner—

The Hon. M.J. ATKINSON: But it is not the first time the member for Heysen has thrust her hand and the Liberal Party's hand into the wallets of South Australian taxpayers to pay for losses which they did not incur. On clause 357 the member noted that the board is required to investigate a complaint. She recalled a complaint against herself that she considered vexatious and regretted that the board cannot dismiss a vexatious or frivolous complaint as it can do with complaints of overcharging. In fact, by clause 357(3), the board can decide not to commence or continue an investigation if it is apparent to the board that the complaint is frivolous or vexatious or the subject matter has already been dealt with.

Mrs Redmond interjecting:

The Hon. M.J. ATKINSON: And the member concedes that she has now found that provision. God forbid that we should have such provisions here in parliament and that some of the member's frivolous and vexatious complaints about me over the years, which have been found to have not a jot or tittle of substance, could not have been dismissed at the time. The government will be moving a handful of technical and other amendments during committee. The government will move an amendment to the bill to include a right of audience for employees of incorporated legal practices and multi-disciplinary partnerships.

The government agrees with the amendments proposed by the member for Mitchell and will support them. The Law Society will have new functions in regulating incorporated legal practices and multidisciplinary partnerships. The government will move an amendment to fund the costs of carrying out these new functions. The government will move amendments to provide that the society may, in its absolute discretion, make a hardship payment from the guarantee fund, even though the claimant is not entitled to recover because he is likely to be paid from another source. The government will move amendments designed to ensure that a court cannot make a costs order directly against the Legal Practitioners Guarantee Fund. Lastly, the government will move an amendment to remove a redundant clause allowing evidence against a practitioner to be used despite the practitioner not being a party to the proceedings; the matter is dealt with in another place in the bill.

At this point, I usually thank members for their contribution to the debate. However, since the member for Heysen made it clear that hour upon hour of her contribution was not on the merit of the bill but to punish the government for requiring her to debate the bill on the normal timetable—that is, that her contribution was for an ulterior purpose—I do not thank her for it.

Bill read a second time.

Committee Stage

In committee.

Clauses 1 to 12 passed.

Clause 13.

Mrs REDMOND: Before asking my question, I want to reiterate that, first, every comment I made on this bill was directly relevant; indeed, I could have taken much longer. It was forced upon me by the fact that I had to undertake a detailed consideration in the house, rather than being allowed by the Attorney a reasonable time in which to consider a bill comprising 515 clauses and a schedule. So, in response to the Attorney's earlier comments, I say that it was his unreasonableness that forced me to undertake that directly relevant contribution the way I did, rather than having the time to consider and ask further questions.

My question relates to clause 13, and the Attorney touched on this slightly in his closing remarks in his second reading speech. It deals with the prohibition against engaging in legal practice when not entitled to do so. It provides:

A person must not engage in legal practice in this jurisdiction unless a person is an Australian legal practitioner.

There are definitions that impact on reading that, and 'Australian legal practitioner' is obviously a defined term and 'jurisdiction' is a defined term. However, the one that I am still puzzled about is 'engaging in legal practice'. As I pointed out previously, the meaning of 'engaging in legal practice' is defined under clause 7, which provides:

Subject to any regulation made under subsection (2), in this act, engaging in legal practice includes practising law.

I accept that the Attorney has already explained that, rather than list every possible thing that could be considered as engaging in legal practice, he envisages that the common law will develop and there will be a jurisprudence about this issue eventually. However, in the meantime, what is to stop someone from setting up their shopfront and saying, 'Legal advice given' on a particular topic, whether they become specialists in WorkCover or falling over or whatever it is? Provided they do not actually go to a courtroom and seek a right of audience, what is the effect of this clause in terms of preventing someone from holding themselves out as being knowledgeable in the law on a particular area and, therefore, able to give advice on a topic which may or may not be normally considered to be something undertaken by solicitors or barristers?

The Hon. M.J. ATKINSON: The law does not change much on this point. The current law prevents people who are not authorised from dispensing legal services, and complaints will be dealt with as they are now. Indeed, if a person purports to be dispensing legal services with no suitable qualifications, then it may even be false and misleading conduct under our consumer laws.

Mrs REDMOND: Again, it is the use of expressions like 'legal services' that I think leaves the position somewhat open. It seems to me, for instance, that someone might have a vast knowledge of issues to do with commonwealth legislation and pensions and aged care and all that sort of thing and they might become very much a specialist in an area of knowledge which, although it might, in some circumstances, come within the purview of legal practitioner's practice, is largely an area that is not taken up by legal practitioners. There are not, as I am aware of it at the moment, legal practitioners who, for instance, specialise in aged law, as we might classify it. If I had no qualifications and I set myself up as a specialist in providing advice to elderly people about a whole of range of things (which may or may not involve state and federal legislation), is there anything in this legislation which would prevent me from doing it? Is the only way to stop it, when it occurs, by actually putting something into the regulations to say, 'No; we are not going to allow this person to do that'?

The Hon. M.J. ATKINSON: By the time the bill becomes an act and is proclaimed and brought into effect by proclamation we will have regulations. If there are areas which should be deemed not to be legal services for the purpose of the act, we can make that clear in the regulations.

Clause passed.

Clauses 14 and 15 passed.

Clause 16.

The Hon. M.J. ATKINSON: I move:

Page 34, lines 5 to 7—Delete paragraph (g) of subclause (1) and substitute:

(g) an Australian legal practitioner who is engaging in legal practice as a principal or an associate of a law practice;

This is a technical amendment to the provision granting a right of audience before courts and tribunals established under the law of South Australia. The right of audience will be widened to include principals and associates of all law practices. This will cover those practitioners working in traditional law firms as well as covering those practitioners working in the new business structures contemplated by the bill—that is, in incorporated legal practices and multi-disciplinary partnerships.

Mrs REDMOND: I do not anticipate that we would have any problems with the proposed amendment. As the Attorney has said, it is quite technical. I want to clarify something, though. My understanding is that a student—for instance, a GDLP student—is not mentioned in here but is specifically then authorised to obtain a right of audience by appearing before the person and seeking leave, if they are going into the Magistrates Court or some other jurisdiction.

The Hon. M.J. ATKINSON: The courts have long decided these matters and they have a policy that is well known.

Amendment carried; clause as amended passed.

Clauses 17 to 22 passed.

Clause 23.

Mrs REDMOND: I have a brief question to clarify my understanding. Clause 23 deals with suitability for admission and there were two questions I had which I will ask both at the same time because I do not think that they will be terribly complex. The first is that the Supreme Court must, in determining an application, consider the suitability matters in relation to a person and any other matters it considers relevant. I wonder what other matters potentially are considered relevant that have not been listed as the suitability matters.

My second question is about the note underneath which relates to the education and admission council rules being able to provide for a person to apply for an early indication as to his or her suitability for admission to the legal profession. I want to confirm that my understanding of the intention of that is correct. That is, if you had, for instance, a person who had a juvenile record which would obviously have to be disclosed but who had turned a corner and become a good guy, who had decided they wanted to study law and become a lawyer, then before embarking on that long process they could apply to the admissions council and seek confirmation that, if they went through all that bother, got their law degree and did their GDLP, they would not be denied admission and they could actually do that at the outset to stop them from having to waste six or seven years or how ever long it takes.

The Hon. M.J. ATKINSON: At clause 9 there is a long list of suitability matters, but we admit that there may be other matters relevant for the court, hence the subclause that allows the court to take matters into consideration. As to the LPEAC point, it is just continuing LPEAC's current practice.

Clause passed.

Clauses 24 to 74 passed.

Clause 75.

Mrs REDMOND: I have a very quick question on this clause. The Attorney and other members would be aware of my constant references throughout this discussion to my concern about the introduction of incorporated legal practices, because although at one end—the end that I am reasonably happy with—we have the idea of mum and dad forming an incorporated company and running the legal practice and, at the other end, potentially we have Woolworths law firms. I just want to confirm that there is no impediment—indeed, after this legislation comes into force—to Woolworths and Coles, and any other big organisation running law firms, provided they meet the requirements of having someone with an Australian practising certificate.

The Hon. M.J. ATKINSON: Provided a company complies with the requirements of the bill, the answer is yes.

Clause passed.

Progress reported; committee to sit again.

[Sitting suspended from 12:59 to 14:00]

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