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House of Assembly - Fifty-Second Parliament, Second Session (52-2)
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LEGAL PRACTITIONERS (MISCELLANEOUS) AMENDMENT BILL

Introduction and First Reading

The Hon. J.J. SNELLING (Playford—Minister for Health and Ageing, Minister for Mental Health and Substance Abuse, Minister for Defence Industries, Minister for Veterans' Affairs) (17:58): Obtained leave and introduced a bill for an act to introduce a bill for an act to amend the Legal Practitioners Act 1981; and to make related amendments to the Fair Work Act 1994, the Freedom of Information Act 1991 and the Legal Services Commission Act 1977. Read a first time.

Second Reading

The Hon. J.J. SNELLING (Playford—Minister for Health and Ageing, Minister for Mental Health and Substance Abuse, Minister for Defence Industries, Minister for Veterans' Affairs) (17:59): I move:

That this bill be now read a second time.

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

Leave granted.

The Legal Practitioners (Miscellaneous) Amendment Bill 2013 seeks to modernise the regulation of the legal profession in South Australia and provide greater harmonisation for South Australian practitioners than otherwise exists. The Bill makes substantial improvements to the disciplinary system, with a view to improving the system for both consumers and practitioners. Particular focus has been given to increasing the protections available for consumers of legal services in South Australia.

The Bill makes amendments to the Legal Practitioners Act 1981 to include relevant elements of the Legal Profession Bill 2007, which became deadlocked and lapsed during the last Parliament. This includes dealing with cost disclosure, trust accounts, incorporated legal practices, community legal centres and the Court's power over practising certificates.

Substantial amendments are made to the disciplinary system, including replacing the present Legal Practitioners Conduct Board with a Legal Profession Conduct Commissioner, with increased powers. It is also intended to enact a system of mentoring to provide early intervention in practices where there are signs of trouble, without waiting for formal complaints to arise. As proposed in the 2007 Bill, it is intended to establish a Register of Disciplinary Action, a public database of practitioners who have been disciplined for professional misconduct.

Discipline of lawyers

Using provisions that were proposed in the 2007 Bill, the draft Bill provides a new procedure for the Supreme Court to deal with practitioners who pose an immediate risk to the public. The Court, if satisfied that a ground exists, may decide to amend, suspend or cancel a practitioner's practising certificate. An application can be made to the Court by the Law Society, the Legal Profession Conduct Commissioner or the Attorney-General. Further, the Bill identifies certain events, including bankruptcy or being convicted of a serious offence, which trigger an obligation on a practitioner to explain to the Court why he or she is still a fit and proper person to practise law, failing which the certificate may be amended, suspended or cancelled. In addition, in a case where the Supreme Court believes it necessary in the public interest to immediately suspend a practitioner's certificate, it can do so of its own motion (or on application of the Society, Commissioner or Attorney-General) for up to 56 days.

Consistently with these new powers, section 15 of the Act is amended to make clear that it is a requirement for admission that the person must be fit and proper to practise the law.

The Bill replaces the current definitions of unsatisfactory conduct and unprofessional conduct with the definitions from the 2007 Bill of unsatisfactory professional conduct and professional misconduct (apart from a slight change of wording which does not affect the meaning). These definitions are already in use around Australia. They are also the definitions proposed in the new National Law which is under discussion.

The definitions capture a wider range of conduct than do the present provisions. In particular, it is made clear that conduct that is not connected with the practitioner's practice can still amount to professional misconduct, even if it is not a criminal offence or a particular type of criminal offence. Instead, the test is whether the conduct shows that the person is not fit and proper to practise law.

The Bill proposes to abolish the present Legal Practitioners Conduct Board and the position of Director. In their place, there is to be a Legal Profession Conduct Commissioner. As well as taking over the powers and duties of the present Board, it is proposed that the Commissioner have new powers to make binding decisions imposing sanctions without the consent of parties in some cases, and to impose a wide range of disciplinary sanctions with the consent of the practitioner. This is expected to reduce the demand on the Tribunal and to avoid the need for Tribunal proceedings where there is no dispute that the practitioner has acted wrongly.

In any case where it appears to the Commissioner that there is evidence that someone may have committed a criminal offence, the Commissioner must notify the Crown Solicitor as soon as possible.

Also, in recognition that practitioners sometimes get into trouble through mental illness or substance abuse, provision is made for the Commissioner, in a disciplinary matter, with the practitioner's consent, to impose a requirement for the practitioner to be medically assessed and to undergo treatment.

The Commissioner is also given the power to make binding determinations in overcharging complaints where the amount in dispute is no more than $10,000.

It is proposed to broaden the range of matters that may be dealt with by the Tribunal constituted of one member. The Commissioner may, in laying a complaint of professional misconduct, specify that he or she does not seek to have the practitioner struck off and does not seek a suspension longer than three months or a fine greater than $10,000. In that case, as well as where the proceedings before the Tribunal allege only unsatisfactory professional conduct or on appeal from a determination of the Commissioner under section 77K, the Tribunal can be constituted of a single member.

It is proposed that Tribunal be able to stay any charge or proceeding for good reason, including where the practitioner cannot adequately take part in the proceedings, for example, serious ill health. During a stay, the practitioner's right to practise is suspended until either the completion of disciplinary proceedings or the Supreme Court orders that their right to practise be restored. This recognises that there might be some situations where it is not reasonably practicable to complete the proceedings for some time and the public can be adequately protected by preventing the practitioner practising in the meantime.

Maximum penalties for disciplinary infractions are to be increased. The present maximum fine that may be imposed by the Tribunal of $10,000 becomes $50,000, except in the case of a former practitioner, where it is increased from $5,000 to $25,000. The maximum suspension of a practising certificate is to be increased from 6 to 12 months.

In addition, as a preventative measure, new provision is made for a system of professional mentoring. The Society or the Commissioner can enter into an arrangement with a practitioner that he or she receive mentoring from a suitably experienced practitioner for up to six months, with the possibility of extension. It is intended that the mentor will have access to the practitioner's files and will provide advice and guidance to the practitioner so as to both improve the practitioner's skills and protect his or her clients. Failure to comply with a mentoring agreement would, itself, be conduct capable of constituting unsatisfactory professional conduct or professional misconduct.

As proposed in the 2007 Bill, there is to be a public register of disciplinary action taken against lawyers.

Further, the Legal Profession Conduct Commissioner will be able to apply directly to the Supreme Court to have a practitioner struck off the roll on the ground of an indictable offence or for some other reason. Also, it is made clear that the Commissioner, the Society or the Attorney-General may move the Court in its inherent jurisdiction over legal practitioners, for disciplinary action.

Community legal centres

It is proposed to insert into the Act the provisions of the 2007-Bill which dealt with community legal centres. This will make clear that a practitioner who is employed in such a centre is nonetheless subject to all the professional obligations and retains all the privileges of a practitioner. Consequently, it is to be an offence for anyone to attempt to induce a practitioner employed at a community legal centre to act contrary to his or her professional obligations.

Fidelity fund

The Bill renames the guarantee fund as the Fidelity Fund and permits payments to be made in advance in a case of hardship where there is a reasonable prospect that the claim will ultimately be paid, but subject to a right of recovery if the claim in fact fails. The Bill also permits the fund to be applied to the expenses of the Board of Examiners and the Tribunal as well as the payment of honoraria to members of LPEAC, along with other amendments to reflect the changes made by the Bill.

Incorporated legal practices

The Bill permits incorporated legal practices to operate in South Australia but restricts the practice so that it may not provide any service, or conduct any business, that does not involve engaging in legal practice. Unlike company practitioners under the current Act, incorporated legal practices will not be required to hold a practising certificate.

Any incorporated legal practice wishing to engage in legal practice in South Australia must give notice to the Supreme Court of its intention to do so. Company practitioners currently operating in South Australia will be required to give notice to the Supreme Court of their intention to continue to engage in legal practice in South Australia as an incorporated legal practice. This will ensure the Supreme Court has a comprehensive register of companies providing legal services in this State.

An incorporated legal practice must have at least one legal practitioner director at all times, who is responsible for the management of legal services in the practice and must ensure appropriate management systems are implemented and maintained so that legal services are provided in accordance with professional obligations of legal practitioners and other obligations in the Act or regulations, or the legal profession rules.

It is an offence for an incorporated legal practice to be without a legal practitioner director and the practice must not provide legal services while in default of this provision. It is also an offence for a person to cause or induce or attempt to cause or induce a legal practitioner director or another legal practitioner providing legal service on behalf of the incorporated legal practice to contravene the Act, regulations or any other professional obligations.

The Society may conduct an audit of the compliance of the practice with the requirements in the Act, regulations and legal profession rules as well as the management of the provision of legal services. This maybe conducted whether or not a complaint has been made. The Society, the Commissioner and the Attorney-General will also have the power to apply tho the Supreme Court to ban a corporation from providing legal services in this jurisdiction.

Trust money and trust accounts

The Bill introduces the provisions proposed in the Legal Profession Bill 2007 dealing with trust money and trust accounts. The new provisions introduce the concept of 'controlled money' and 'transit money', allowing a practice to deal with trust money in accordance with instructions of the client other than depositing the money into the general trust account. Other provisions deal with protection of trust money, prohibition on intermixing, prohibition on deficiencies, reporting irregularities and keeping of trust records. The provisions also introduce more detailed provisions for investigations and examinations of trust records and activities.

The Bill allows the Society to make a determination that money is not trust money for the purposes of the Act and sets out the obligations on a practice to notify a client that their money is not to be treated as trust money.

As well as ongoing audit requirements, practitioners will be required to report trust account irregularities to the Society, even if giving such notice may incriminate the practitioner.

Costs disclosure and adjudication

The Bill inserts into the Act the provisions that were proposed in the Legal Profession Bill 2007, specifying what lawyers must tell their clients about the cost of their work. At the moment, there are professional conduct rules about this but they do not have the force of law. The proposed provisions are similar to those in use around Australia. They seek to ensure that clients engaging legal practitioners will be properly informed about what costs they will have to pay, to the extent that that is possible at the outset of a matter. The Bill provides a safe harbour whereby the practitioner can be assured that they have met certain of the costs disclosure requirements by using a standard form. These provisions are designed chiefly to protect more vulnerable clients and do not apply, for example, where the client is the government or a large company or partnership, or where the firm has tendered for the work.

The provisions also seek to ensure that clients know of their rights to negotiate a costs agreement, receive a bill, request an itemised bill, be notified of substantial changes, receive progress reports and avenues available to challenge a bill.

The Bill covers the making and setting aside of costs agreements. It also makes clear that conditional cost agreements are lawful but contingency fees, that is, where the lawyer shares in the award, are not.

The Bill also sets out the processes for making an application for adjudication of costs to the Supreme Court, including the powers of the Court, the criteria for adjudication and the cots of adjudication.

Investigatory powers

The Bill includes new extensive investigative powers for the conduct of complaint investigations, trust account investigations and examinations and compliance audits of incorporated legal practices.

There are powers to require production of documents and giving of information as well as entry and search powers for trust account and complaint investigations. The provisions also set out additional powers of investigators when conducting an investigation or audit in relation to incorporated legal practices.

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

A definition of associate is added in connection with the insertion of proposed new section 5A, which defines the terms associate, legal practitioner associate and principal in relation to law practices.

The definition of Board is deleted because of the proposed replacement of the Legal Practitioners Conduct Board with the Legal Profession Conduct Commissioner. A definition of Commissioner is also inserted in connection with this amendment.

The existing definition of community legal centre is amended to make it clear that the definition includes the Aboriginal Legal Rights Movement but does not include the Legal Services Commission.

The deletion of the definition of company and the insertion of a definition of corporation reflect a simple change in terminology. In connection with these changes, definitions of Director and officer are also inserted, reflecting the terminology used in the Corporations Act 2001 of the Commonwealth. A definition of related body corporate is also included.

The definition of guarantee fund is to be deleted because of the proposal to rename the fund as the Fidelity Fund.

The definition of fiduciary or professional default is amended to make it clear that the term applies in relation to incorporated legal practices in addition to firms.

The measure amends a number of clauses relating to legal practice, and inserts related definitions of law practice, incorporated legal practice, legal practitioner and practitioner and legal practitioner director. The definition of practise the profession of the law, legal practice or practise is amended to ensure that it extends to an incorporated legal practice. A definition of legal services is inserted, and defined as meaning work done, or business transacted, in the ordinary course of engaging in legal practice. A definition of sole practitioner is introduced and defined as a legal practitioner who practises the profession of the law on his or her own account.

A proposed definition of jurisdiction defines the term to mean a State or Territory of the Commonwealth.

A definition of legal profession rules is also inserted. The term is defined as meaning the professional conduct rules of the Law Society of South Australia, and any other rules prescribed by the regulations for the purposes of the definition.

A new definition is introduced to clarify the professional obligations of legal practitioners and incorporated legal practices, which are not defined under the current Act. These are defined to include—

duties to the Supreme Court; and

obligations in connection with conflicts of interest; and

duties to clients, including disclosure; and

ethical rules required to be observed by legal practitioners.

A definition of professional misconduct is inserted to reflect the proposed new regime for defining professional misconduct. The terms unprofessional conduct and unsatisfactory conduct are to be deleted. The term unsatisfactory professional conduct is defined by reference to new section 68. A definition of a show cause event is also inserted to clarify the provisions relating to practising certificates under proposed new Part 3 Divisions 2A to 2C. The term unrestricted practising certificate is inserted consequential on amendments relating to practising certificates.

A definition of professional mentoring agreement is inserted. The definition refers to new section 90B of the principal Act, which provides for the entering into of professional mentoring agreements.

A new definition of Regulator is to be added. Regulator is defined to mean, in relation to this jurisdiction, the Commissioner, and in other jurisdictions, a person or body corresponding to the role of Commissioner in this jurisdiction. The definition of regulatory authority is amended to replace the reference to the Board with a reference to the Commissioner, consequential on the establishment of the office of Legal Profession Conduct Commissioner. The introduction of the new defined term corresponding disciplinary body is consequential on the proposed amendments to Part 6 of Division 1, which relates to unsatisfactory professional conduct and professional misconduct, and Part 6 Division 6, which relates to the publicising of disciplinary action.

A definition of serious offence is introduced consequential on the insertion of new provisions relating to unsatisfactory professional conduct and professional misconduct. Conviction is defined as to include a formal finding of guilt.

The terms trust account and trust money have been replaced with definitions contained in proposed new Schedule 2 of the principal Act.

The section as amended will also provide that nothing in the Act or the legal profession rules affects the exercise by the Director of Public Prosecutions, the Crown Solicitor or a prosecutor instructed by the Director of Public Prosecutions or the Crown Solicitor of any discretion in the context of a prosecution.

5—Insertion of section 5A

Proposed new section 5A, inserted into the principal Act by this clause, contains definitions of terms relating to associates and principals of law practices. The proposed provision defines the terms associate, legal practitioner associate and principal in connection with law practices.

6—Amendment of section 6—Fusion of legal profession

This clause makes a minor amendment to section 6 of the principal Act so that reference is made to 'King's Counsel' and 'Senior Counsel' in addition to 'Queen's Counsel'.

7—Amendment of section 8—Officers and employees of Society

8—Amendment of section 12—Minutes of proceedings

The amendments made by these clauses are consequential on the change in designation of the Executive Director of the Society to Chief Executive.

9—Amendment of section 13—Society's right of audience

The first amendment made by this clause is consequential on the proposed insertion of sections 68 and 69 into the principal Act by clause 41 of this measure.

The section as amended will also require the Society to notify the Attorney-General if it appoints a legal practitioner to appear before a court, commission or tribunal.

10—Amendment of section 14AB—Certain matters to be reported by Society

The amendments made by this clause are to some extent consequential on the deletion of Part 3 Division 5 of the principal Act, relating to trust accounts and audits. A new Division has been substituted. Proposed new Division 5 states that the provisions in Schedule 2 apply to law practices in respect of trust money and associated matters.

Section 14AB of the principal Act outlines the Law Society of South Australia's reporting obligations. The proposed amendment substitutes a reference to the appointment of an inspector under Division 5 of Part 3 (relating to trust accounts and audits) and replaces it with a reference to 'an investigator or external examiner under Schedule 3' (which contains provisions related to investigations and external examinations).

The provision is also amended to replace references to the Board with references to the Commissioner.

References to 'unprofessional or unsatisfactory conduct' are also replaced with references to 'unsatisfactory professional conduct or professional misconduct'.

11—Amendment of section 14B—Establishment of LPEAC

This clause amends section 14B of the principal Act to add two additional positions to the Legal Practitioners Education and Admission Council, being the Dean or acting Dean of the faculty of the school of law at the University of South Australia and the presiding member of the Board of Examiners.

12—Amendment of section 14C—Functions of LPEAC

Under section 14C as amended by this clause, LPEAC will be permitted to prescribe categories of practising certificates and the limitations on the practise of the profession of the law that apply in relation to the prescribed categories.

13—Amendment of section 14E—Procedures of LPEAC

This clause is consequential on the proposed amendment to section 14B. It increases the quorum of LPEAC from 7 to 8.

14—Amendment of section 15—Entitlement to admission

This clause amends section 15 of the principal Act, which outlines a person's entitlement to admission to the profession. The current provision states that a person must satisfy the Supreme Court that he or she is of good character and that he or she has complied with the rules of the Supreme Court relating to admission and the rules made by LPEAC with respect to admission. The proposed amendment replaces the good character requirement with a requirement that the person be a 'fit and proper person to practise the profession of the law'.

This clause also inserts a new subsection (1a), which states that the Supreme Court must refer each application for admission by a person whose name has been removed from the roll of legal practitioners to the Attorney-General, the Commissioner and the Society. Each of theses bodies is entitled to be heard by the Court on the application.

15—Amendment of section 16—Issue of practising certificate

This clause amends section 16 of the principal Act by deleting subsections (2) to (4) and subsection (6). Subsections (2), (3) and (4) relate to applications by companies for practising certificates. The section as proposed to be amended will state only that where an admitted and enrolled legal practitioner applies to the Supreme Court for a practising certificate, the Court will issue such a certificate, subject to the Act.

The section as amended will also permit a person to apply for a particular category of practising certificate (if LPEAC has made rules prescribing different categories).

16—Amendment of section 18—Term and renewal of practising certificates

This clause inserts a new subsection (2a) into section 18 of the principal Act. The provision relates to the term and renewal of practising certificates. The proposed new subsection provides that if the Supreme Court is satisfied that any particulars appearing on a practising certificate are incorrect, the Court may cancel the practising certificate and issue a replacement.

17—Insertion of Part 3 Divisions 2A to 2C

This clause inserts proposed new Divisions 2A, 2B and 2C into Part 3 of the principal Act. These Divisions include provisions relating to the amendment, suspension and cancellation of practising certificates.

Division 2A—Amendment, suspension or cancellation of practising certificates

20AB—Application of Division

Proposed new section 20AB states that Division 2A does not apply in relation to matters referred to in new Division 2B.

20AC—Grounds for amending, suspending or cancelling practising certificate

Under proposed section 20AC, the following are grounds for amending, suspending or cancelling a practitioner's practising certificate:

the holder of the certificate is not a fit and proper person to hold the certificate;

if a condition of the certificate is that the holder is or has been limited to legal practice specified in the certificate—the holder is engaging in legal practice that he or she is not entitled to engage in.

20AD—Amending, suspending or cancelling practising certificates

Proposed section 20AD sets out the circumstances in which the Supreme Court may, on application by the Attorney-General, the Law Society or the Commissioner, make an order amending, suspending or cancelling a practising certificate.

Subsection (2) sets out the procedure by which an application must be made, including setting out the order sought, the grounds for making such an order, giving the holder of the certificate an opportunity to make written submissions to the Court, and the Court's duty to give the holder written notice of the terms of and reasons for the order.

20AE—Operation of amendment, suspension or cancellation of practising certificate

This proposed section applies where there has been an amendment, suspension or cancellation of a practising certificate. It provides that the change in the certificate takes effect either on the day that notice is given to the holder, or at a day specified in the notice, whichever is later. If the change in the certificate occurs because the holder has been convicted on an offence, the holder may apply to the Supreme Court for a stay of the order until the time to appeal against the conviction expires, or if an appeal is made, until the appeal is resolved. If the conviction is then quashed, the amendment or suspension ceases to have effect, and for a cancellation, the certificate will be restored as if it had been suspended.

20AF—Revocation of amendment, suspension or cancellation of practising certificate

Proposed new section 20AF provides that the holder of a certificate that has been amended, suspended or cancelled may make written representations to the Registrar of the Supreme Court and the Court must consider those submissions. This proposed provision also gives the Supreme Court the power to revoke the amendment, suspension or cancellation whether or not such written representations have been made.

Division 2B—Special powers in relation to practising certificates—show cause events

20AG—Applicant for practising certificate—show cause event

Proposed new section 20AG applies where a show cause event has happened in relation to an applicant for a practising certificate after the person was first admitted. If a show cause event has happened in this way, the applicant must provide the Supreme Court with a written statement setting out the particulars of the event and explaining why, despite the show cause event, the applicant considers him or herself to be a fit and proper person to hold a certificate. Subsection (4) provides that the written statement must also be served by the applicant on the Commissioner and the Law Society, who are in turn empowered to make submissions to the Court.

20AH—Holder of practising certificate—show cause event

This proposed provision is similar to proposed new section 20AG, but applies if a show cause event occurs in relation to a holder of, rather than an applicant for, a practising certificate. The holder must provide a notice and written statement to the Supreme Court within a specified time frame. It also provides that a notice and written statement provided under the section must be served by the holder on the Commissioner and the Law Society.

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

This proposed provision provides that the Supreme Court may refuse to issue or renew, or may amend, suspend or cancel, a practising certificate if an applicant or holder has failed to provide a written statement as required, or where the applicant or holder has provided the required statement but the Court does not consider that the applicant or holder has shown that he or she is a fit and proper person to hold a practising certificate in spite of the show cause event. The Supreme Court is required to provide the person with written notice of this decision.

Division 2C—Further provisions relating to practising certificates

20AJ—Immediate suspension of practising certificate

Despite Divisions 2A and 2B, the Supreme Court may, on application by the Attorney-General, the Commissioner or the Law Society, immediately suspend a practising certificate if it considers the suspension to be necessary in the public interest. The suspension may be made on any of the grounds on which the certificate could be cancelled under Division 2A, on the ground of the happening of a show cause event in relation to the holder or on any other ground that the Court considers warrants an immediate suspension.

The proposed provision also sets out requirements in relation to giving notice of the suspension to the holder of the certificate and states that the Court must consider any written representations made by the holder to the Court.

20AK—Surrender and cancellation of practising certificate

This proposed provision provides that a holder of a practising certificate may surrender the certificate and that the Supreme Court may cancel the certificate.

18—Amendment of section 21—Entitlement to practise

This clause substitutes subsection (1) and removes the reference to a company that holds a practising certificate, as well as circumscribing the application of the section to local and interstate legal practitioners. Subsection (2) is also amended. Subsection (2) provides an inclusive list of activities which, if the practitioner is acting for a fee or reward on behalf of another person, constitute the practice of the profession of law. The clause deletes the reference to the preparation of 'a memorandum or articles of association...of a body corporate' and replaces it with a reference to the constitution of a body corporate.

An evidentiary provision is also inserted, so that in proceedings for an offence against subsection (1) of section 21, a certificate purporting to be signed by the Chief Executive of the Society and stating that a person is not a local legal practitioner or not an interstate legal practitioner is, in the absence of proof to the contrary, prima facie evidence of that fact.

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

This clause makes a minor amendment to section 23AA by replacing references to the Board with references to the Commissioner.

20—Amendment of section 23B —Limitations or conditions on practice under laws of participating States

This clause amends section 23B(4), which currently states that a contravention or non-compliance with the section is unprofessional conduct. The clause as amended will refer instead to professional misconduct.

21—Amendment of section 23D—Notification of establishment of office required

This clause makes a minor amendment to section 23D(4) by deleting the reference to Board and replacing it with a reference to the Commissioner.

22—Insertion of Part 3 Division 3B

This clause inserts a new Division 3B into Part 3. The proposed new Division contains a number of provisions relating to community legal centres.

Division 3B—Provisions relating to community legal centres

23E—Community legal centres

Proposed new section 23E provides that a community legal centre does not contravene the Act merely because it employs legal practitioners to provide legal services or has a contractual relationship with a person to whom such legal services are provided. The regulations may modify or exclude provisions of the Act from applying to community legal centres or the legal practitioners employed by them.

23F—Obligations and privileges of practitioners who are officers or employees

Proposed new section 23F makes it clear that legal practitioners who provide legal services on behalf of community legal centres are not excused from their professional obligations, and retain their professional privileges. It also states that the regulations may make further provisions in connection with this.

The new section also provides that the law relating to client legal privilege and other legal professional privilege is not affected by the fact that the services are provided on behalf of a community legal centre.

New subsection (4) states that a legal practitioner may disclose matters to the officers of the centre for any proper purpose, and this will not affect the operation of legal privilege.

23G—Undue influence

New section 23G prohibits a person from causing or inducing, or attempting to cause or induce, a legal practitioner who is providing legal services on behalf of a community legal centre to contravene the Act, regulations, legal professional rules or professional obligations. It imposes a maximum penalty of $50,000.

23H—Application of legal profession rules

This proposed new section makes it clear that the legal profession rules apply in the same way to legal practitioners providing legal services on behalf of community legal centres.

23I—Costs

This proposed new section states that if legal assistance is provided to a person by a community legal centre, the centre is subrogated to the rights of the assisted person to costs in respect of that legal assistance.

23—Substitution of Part 3 Division 4

This clause substitutes Division 4 of Part 3, which currently contains provisions regulating legal practice by companies. Under the Act as proposed to be amended, this Division is substituted for a Division with the same heading containing a section stating that the provisions set out in Schedule 1 (relating to incorporated legal practices) apply in relation to a corporation that engages in legal practice in South Australia.

24—Substitution of Part 3 Division 5

This clause substitutes Division 5 of Part 3 of the Act, which currently contains provisions relating to trust accounts and audits. This Division is to be replaced with a Division entitled 'Provisions regulating trust money and trust accounts', which will contain substituted section 25. The section states that the provisions set out in the Schedule, which regulate trust money and trust accounts, apply in respect of trust money and associated matters, as specified in clause 4 of that Schedule.

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

This clause amends section 39 by substituting a new subsection (1). The subsection currently states that a legal practitioner could be ordered by the Supreme Court, on application by any person, to deliver up legal documents. The proposed new subsection (1) extends the power to make the order to any court and also extends the application of the subsection to incorporated legal practices.

This clause also amends subsection (3) of the provision consequential on the changes to subsection (1).

26—Substitution of Part 3 Division 8

This clause substitutes Division 8 of Part 3 of the Act, relating to recovery of legal costs. This Division is to be replaced by a new Division 8 entitled 'Costs disclosure and adjudication'. New section 41 states that the provisions set out in Schedule 3 apply in relation to the recovery of legal costs and adjudication of legal costs.

27—Amendment of section 43A—Interpretation

This clause amends section 43A (which sets out definitions of terms for Division 9, relating to the appointment of supervisors and managers), so that the definition of legal practitioner includes an incorporated legal practice.

28—Amendment of section 48—Remuneration etc of persons appointed to exercise powers conferred by this Division

This clause amends section 48(3) of the principal Act, which states that where a supervisor or manager is appointed under the Act, he or she will be entitled to remuneration, allowances and expenses, subject to those being taxed and settled by the Supreme Court, if an application is made by the Attorney-General. This clause replaces the term 'taxed' with 'adjudicated'.

29—Substitution of heading to Part 3 Division 10

This clause changes the heading to Division 10 of Part 3 from 'Restriction on practice by bankrupts etc' to 'Restriction on practice if corporation wound up'.

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

This clause amends section 49 by deleting paragraph (a) of subsection (1), which provides that a person who has become bankrupt must not practice the profession of the law without the permission of the Supreme Court. Paragraph (b) of subsection (1) applies in the same way to a person who is or has been a director of an incorporated legal practice during the winding up of the company. This clause amends that paragraph to reflect the change in terminology to corporation and to change the reference to 'incorporated legal practitioner' to 'incorporated legal practice'.

This clause also amends subsection (1a) of the section, which relates to the grant of an authority to practice on application by the legal practitioner. The proposed amendment removes the reference to a practitioner who 'is or is about to become bankrupt' so that the subsection applies to a legal practitioner who has been 'a director of an incorporated legal practice', and to change the reference to 'incorporated legal practitioner' to 'incorporated legal practice.'

This clause also proposes to insert new subsection (1b) into section 49, providing that an application for an authority under the section must be served on the Commissioner and the Society, each of whom is entitled to be heard by the Supreme Court on the application in accordance with the rules of Court.

31—Amendment of section 50—Supreme Court may authorise personal representative etc to carry on legal practice

This clause makes a minor consequential amendment to section 50 by replacing the reference to 'a company that is a legal practitioner' with a reference to an incorporated legal practice.

32—Amendment of section 51—Right of audience

Section 51 outlines the classes of persons who are entitled to practise in South Australian courts and tribunals. This proposed amendment makes minor changes, making a consequential amendment by deleting the reference to a legal practitioner employed by the Board and replacing it with a reference to 'the Commissioner and a legal practitioner employed by the Commissioner'.

33—Amendment of section 52—Professional indemnity insurance scheme

Currently, under section 52, a professional indemnity scheme established by the Society may operate for the benefit of legal practitioners. Under the section as amended by this clause, a professional indemnity scheme may also operate for the benefit of law practices. This clause also amends section 52 by adding to the definition of legal practitioner in subsection (5) an 'interstate legal practitioner'.

34—Substitution of section 52AA

This clause substitutes section 52AA, relating to professional indemnity insurance required by interstate practitioners, which states that the person or practice must not engage in legal practice unless there is an approved professional indemnity insurance in force. The penalty for interstate legal practitioners remains at $10,000, but a new penalty of $50,000 is added to apply to other cases. The section is also amended so that it applies to incorporated legal practices.

The new section defines approved professional indemnity insurance and also prescribed practitioner or practice.

35—Substitution of section 53

This clause inserts a new section 52B into the principal Act. Under the new section, the regulations may provide that specified provisions of Part 4 Division 1, and any other provisions of this Act, the regulations or the legal profession rules relating to that Division, do not apply to incorporated legal practices (or a specified class of incorporated legal practices) or apply to them with specified modifications.

New section 53, dealing with the obligation to deposit trust money in the combined trust account, applies to law practices rather than, as is the case under the current section, legal practitioners.

36—Substitution of heading to Part 4 Division 3

Division 3 of Part 4 of the principal Act relates to 'the legal practitioners' guarantee fund'. The heading to the Division is to be changed to 'Legal Practitioners Fidelity Fund' to reflect the proposed change of the name of the fund.

37—Amendment of section 57—Fidelity Fund

Minor consequential amendments are made to this section. The term 'guarantee fund' is replaced with 'Fidelity Fund', and 'Board' is changed to 'Commissioner'. In addition, subsection (4), which outlines the purposes for which money in the Fidelity Fund may be applied, is substituted.

The changes are mainly consequential, including references to the Commissioner, the new processes for investigating complaints, conducting audits and bringing proceedings, investigations and examinations, processing claims, and the appointment of a supervisor or manager. The purposes are also extended to expenses incurred by the Board of Examiners in addition to expenses incurred by members of LPEAC, the Board of Examiners and the Tribunal. The substituted provision will also authorise application of money in the Fidelity Fund for the purpose of the payment of honoraria, approved by the Attorney-General, to members of LPEAC.

38—Amendment of section 60—Claims

Section 60 is amended to make it clear that, in determining whether there is a reasonable prospect of recovering the full amount of a loss for the purposes of the section, potential action for the recovery of the amount that would not be taken by an ordinarily prudent, self-funded litigant is to be disregarded. Subsection (5) is consequentially amended so that it applies to incorporated legal practices as well as to interstate legal practitioners.

39—Insertion of section 64A

This clause inserts new section 64A into the principal Act. The new section provides that the Law Society may, in its absolute discretion, make payments to a person making a claim against the Fidelity Fund on advance of the determination of the claim, provided that it is satisfied that the claim is 'likely to be allowed' and that 'payment is warranted to alleviate hardship. The remaining subsections outline the process for making advance payments under this provision.

40—Amendment of section 66—Claims by legal practitioners and incorporated legal practices

This clause makes consequential amendments to section 66(1), making it clear that the application of the section extends to claims by incorporated legal practices in addition to claims by legal practitioners.

41—Substitution of Part 6 Divisions 1 and 2

Part 6 of the Act deals with investigations, inquiries and disciplinary proceedings. This clause amends the Part by replacing provisions relating to the Legal Practitioners Conduct Board with provisions establishing the office of Legal Profession Conduct Commissioner. The new provisions also provide definitions of the terms 'unsatisfactory professional conduct' and 'professional misconduct'.

Division 1—Preliminary

68—Unsatisfactory professional conduct

Proposed section 68 provides a definition of 'unsatisfactory professional conduct'. Under the proposed definition, unsatisfactory professional conduct includes conduct of a legal practitioner occurring in connection with the practice of law that falls short of the level of competence and diligence that a member of the public is entitled to expect of a reasonably competent legal practitioner.

69—Professional misconduct

Proposed section 69 provides a definition of 'professional misconduct'. Professional misconduct includes—

unsatisfactory professional conduct of a legal practitioner, where the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence; and

conduct of a legal practitioner whether occurring in connection with the practice of law or occurring otherwise than in connection with the practice of law that would, if established, justify a finding that the practitioner is not a fit and proper person to practise the profession of the law.

70—Conduct capable of constituting unsatisfactory professional conduct or professional misconduct

Proposed section 70 provides examples of conduct capable of constituting unsatisfactory conduct or professional misconduct. The matters encompassed by the proposed new section include the following:

contraventions of the Act, the regulations or the legal profession rules;

the charging of excessive legal costs;

convictions for serious offences, tax offences and dishonesty offences;

the insolvency of a legal practitioner;

disqualification of a legal practitioner from being involved in the management of a corporation;

failure to comply with a compensation order;

failure to comply with the terms of a professional mentoring agreement entered into with the Society.

Division 2—Legal Profession Conduct Commissioner

Subdivision 1—Legal Profession Conduct Commissioner

71—Legal Profession Conduct Commissioner

Proposed new Division 2 of Part 6 contains provisions relating to the creation of the new office of Legal Profession Conduct Commissioner. Subdivision 1 of the proposed new Division sets out clauses relating to the office of Commissioner, establishing the position of Commissioner, and stating that the Commissioner will be appointed by the Governor and is an agency of the Crown. The new section also sets out the eligibility requirements for the appointment of a Commissioner.

72—Functions

Proposed new section 72 sets out the functions of the Commissioner, which are to—

investigate suspected unsatisfactory conduct and professional misconduct; and

take action against a practitioner following an investigation or to lay charges before the Tribunal; and

receive and deal with complaints of overcharging; and

arrange for the conciliation of complaints; and

commence disciplinary proceedings against legal practitioners in the Supreme Court on the recommendation of the Tribunal; and

carry out other functions assigned to the Commissioner under the Act.

73—Terms and conditions of appointment

Proposed new section 73 sets out the terms and conditions of employment of the Commissioner. The Commissioner is to be appointed for a term not exceeding five years, with eligibility for reappointment after expiration of that period. Subsections (2) and (3) of the new clause set out the grounds on which the appointment of a Commissioner may be terminated and subsection (4) specifies the circumstances in which the Commissioner may resign.

74—Acting Commissioner

Proposed new section 74 specifies the circumstances in which the Minister may appoint a person to act as the Commissioner during a period for which the Commissioner is absent from or unable to discharge additional duties, and gives the Minister the power to specify the terms and conditions of such an appointment.

75—Honesty and accountability

Proposed new section 75 makes it clear that the Commissioner and Acting Commissioner are senior officials for the purposes of the Public Sector (Honesty and Accountability) Act 1995.

76—Staff of Commissioner

This proposed section states that the Commissioner may appoint staff to assist in carrying out the Commissioner's functions.

77—Delegation

Proposed new section 77 sets out the Commissioner's powers to delegate the Commissioner's functions or powers under the Act, and states the required formal aspects of the delegation.

Subsection (2) sets out a number of limitations on the Commissioner's power to delegate certain types of determinations.

77A—Exchange of information between Commissioner and Council

Proposed new section 77A states that the Commissioner and the Council may enter into an arrangement providing for the exchange of information relating to legal practitioners provided that the arrangement is reduced to writing and approved by the Attorney-General.

Subdivision 2—Investigation of unsatisfactory professional conduct and professional misconduct

77B—Investigations by Commissioner

This proposed section sets out the Commissioner's powers to make an investigation into the conduct of a current or former legal practitioner. Section 77B gives the Commissioner power to investigate current and former practitioners on the Commissioner's own initiative, provided that the Commissioner has reasonable cause to suspect that the practitioner has been guilty of unsatisfactory professional conduct or professional misconduct.

Subsection (2) provides that the Commissioner is required to make an investigation if directed to do so by the Attorney-General or the Society, or if a complaint has been received about the practitioner.

Subsection (3) clarifies that the Attorney-General and the Society cannot make such a direction without reasonable grounds for suspicion.

77C—Closure of whole or part of complaint

This proposed new section sets out the circumstances in which the Commissioner may close the whole or part of a complaint without further investigation or further consideration of its merits, including—

where the complaint is vexatious, misconceived, frivolous or lacking in substance; or

where the complainant has not cooperated with the investigation into or conciliation of the complaint; or

where the subject matter of the complaint has already been investigated, or would be better investigated by the police or other investigatory or law enforcement body; or

where the subject matter of the complaint is the subject of civil proceedings except insofar as it is a disciplinary matter; or

where the Commissioner does not have the power to deal with the complaint; or

where the Commissioner is satisfied that closure of the complaint is otherwise in the public interest.

77D—Notification of complaint to practitioner

Subsection (1) relates to the notification procedures which apply when the Commissioner has received a complaint about a practitioner or former practitioner. Under proposed paragraph (a), on receipt of a complaint the Commissioner may notify the practitioner of the complaint or, alternatively, provide him or her with a summary. If the Commissioner decides to investigate the complaint, the Commissioner must, as soon as practicable, give the practitioner or former practitioner a summary or details of the complaint and a notice informing the practitioner of his or right to make submissions. Paragraph (c) provides that this must occur before the Commissioner makes his or her determination.

Subsection (2) sets out the corresponding procedures applying where the Commissioner has decided to make an investigation into the conduct of a practitioner on the Commissioner's own initiative, or where the Commissioner has been directed to make an inquiry by the Attorney-General or the Society. These procedures are subject to proposed section 77F, which sets out a number of exceptions to the requirement for notification of a complaint. Subsection (3) of the proposed new clause provides that the practitioner has 21 days following the receipt of a notice to provide submissions, or such other length of time that the Commissioner reasonably believes to be warranted in the circumstances.

77E—Submissions by legal practitioner

This proposed new provision sets out the procedures applying to a practitioner's right to make submissions to the Commissioner. The Commissioner has the discretion to extend the period in which submissions may be made and is required to consider the submissions within the period specified in the notice before deciding what action is to be taken. The Commissioner may consider submissions received after this point.

77F—Exceptions to requirement for notification of complaint

The procedures applying to notification of a complaint to a practitioner contained in proposed section 77D are subject to the exceptions outlined in proposed provision 77F.

This section provides that, in certain circumstances, the Commissioner is not required to give a practitioner a summary or details of a complaint or the reasons for an investigation or notice regarding the right to make submissions. For example, the Commissioner is not required to do so if he or she reasonably believes that to provide this information would prejudice the investigation, adversely affect an investigation by another agency, place a complainant at risk of intimidation or harassment or prejudice court proceedings. In these circumstances the Commissioner may postpone giving the information until it is appropriate to do so or may give the practitioner the notice and a statement of the general nature of the complaint or reasons for investigation.

Subdivision 3—Action following investigation

77G—Interpretation

This proposed Subdivision sets out the procedures to be followed after the investigation of a practitioner, whether as a result of a complaint or on the Commissioner's own initiative. This new clause introduces a definition of the term complainant as used within the proposed new Subdivision. For the purposes of the Subdivision, the definition includes a person who has made a complaint, and the Attorney-General or Society if one of those bodies has directed that the investigation occur.

77H—Report on investigation

This proposed section, equivalent to current section 77 of the principal Act, states that where the Commissioner is satisfied that there is evidence of professional misconduct by a practitioner, the Commissioner must make a report to the Attorney-General and the Society. It further provides that if the Commissioner comes into possession of information suggesting that a criminal offence may have been committed, that information must be passed to the Crown Solicitor. If the Crown Solicitor or other prosecution authority requests material relevant to such an investigation or prosecution, it must be provided by the Commissioner. The Crown Solicitor or other authority then has the power to take any action appropriate to the commencement of criminal proceedings.

77I—Commissioner to notify persons of suspected loss

This proposed section, equivalent to current section 77AA of the principal Act, provides that if during the course of an investigation the Commissioner has reason to believe that a person has suffered loss as a result of the conduct of a practitioner or former practitioner, the Commissioner may notify the person.

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

Proposed new section 77J deals with the Commissioner's powers following an investigation into a practitioner's unsatisfactory professional conduct or professional misconduct. Pursuant to proposed subsection (1), where the Commissioner is satisfied that there is evidence of unsatisfactory professional conduct, the Commissioner may—

determine not to lay a charge before the Tribunal, but instead reprimand the practitioner or make various orders (order him or her to redo the work investigated at no costs or reduced fees, or pay the costs of having the work redone), or order him or her to undertake education, training or counselling or be supervised, or order a fine up to $5,000. The Commissioner is also empowered to impose specified conditions on the practitioner's practising certificate;

with the consent of the practitioner—determine not to lay a charge to the Tribunal, but instead require the practitioner to undergo a medical examination, receive counselling, or participate in supervised treatment or rehabilitation. If the Commissioner believes the legal practitioner may be suffering from an illness, mental impairment, disability, condition or disorder; the practitioner may be required to enter into a professional mentoring agreement or submit to orders with respect to the examination of the practitioner's files and records for a period as specified in the order. The Commissioner may also order a fine not exceeding $10,000, suspend the practitioner's practising certificate for a period not exceeding 3 months, or order a specified payment to a client or other person, or order the practitioner to do or refrain from doing a specified act in connection with legal practice.

Proposed subsection (2) relates to investigations into professional misconduct. The Commissioner is also empowered to make the orders detailed above in connection with a charge of professional misconduct if the practitioner consents to the course of action.

A key difference is that a fine of $20,000 rather than $10,000 may apply, the practising certificate may be suspended for up to 6 months, instead of 3, and the Commissioner also has power, under paragraph (f), to impose conditions on the practising certificate requiring that the practitioner complete further education or training or receive counselling.

Subsection (3) makes it clear that if the Commissioner proposes to exercise a power under subsection (1) or (2), the Commissioner must provide any complainant of the details of the proposal and invite him or her to make submissions. The Commissioner is required to take these submissions into account. Subsection (4) provides that the Commissioner may take into account previous action relating to the practitioner, and any other findings relating to the practitioner by the Tribunal, the Supreme Court or any other corresponding disciplinary body. The remainder of the section sets out the procedural requirements which flow from these provisions

77K—Appeal against determination of Commissioner

Proposed section 77K outlines the procedure by which a practitioner, or, in the case of a complaint, the practitioner or the complainant, may appeal to the Tribunal against a determination of the Commissioner.

77L—Commissioner must lay charge in certain circumstances

This proposed clause states that if the Commissioner is satisfied following an investigation that there is evidence of unsatisfactory professional conduct or professional misconduct, but he or she does not believe that the conduct can be adequately dealt with under proposed section 77J (which sets out the Commissioner's powers), the Commissioner must lay a charge before the Tribunal, unless it would be in the public interest not to do so.

77M—Commissioner to provide reasons

This proposed section makes it clear that where the Commissioner has determined not to investigate a complaint or has decided to close a complaint, or where the investigation has not yielded any evidence of unsatisfactory professional conduct or professional misconduct, the Commissioner must provide the complainant and practitioner with written reasons for such a determination.

This requirement also applies where there is evidence of unsatisfactory professional conduct or professional misconduct in circumstances where the conduct cannot adequately be dealt with under section 77J (the Commissioner's powers), and yet it would not be in the public interest to lay charges before the Tribunal.

Subdivision 4—Complaints of overcharging

77N—Investigation of allegation of overcharging

Proposed Subdivision 4 relates to complaints and investigations into allegations of overcharging against practitioners.

This proposed provision states that the Commissioner must investigate complaints of overcharging if they are brought within 2 years of a final bill being issued. The Commissioner may require the practitioner to pay a reasonable fee for the investigation. The Commissioner may require the practitioner to make a detailed report in relation to the relevant bill or to produce relevant documents. The Commissioner may also arrange for a costs assessment by a legal practitioner. At the conclusion of the investigation, the Commissioner has a range of powers following a finding that there has been an overcharging. If the amount in dispute is $10,000, the costs have been assessed by a legal practitioner and the Commissioner has given the parties details of the assessment and an opportunity to make submissions (and has had regard to any submissions made), the Commissioner may make a determination as to whether or not there has been overcharging and, if so, the amount overcharged. The determination is binding on (and enforceable by or against) the legal practitioner and the client unless the Supreme Court has adjudicated and settled the bill.

Subdivision 5—Conciliation

77O—Commissioner may conciliate complaints

This section provides for the conciliation of complaints by the Commissioner.

42—Amendment of section 80—Constitution and proceedings of Tribunal

This clause amends section 80 of the principal Act. The section specifies the constitution and proceedings of the Tribunal. A consequential amendment to subsection (1) will change the reference from 'unprofessional conduct' to 'professional misconduct'. Subsection (1a) currently states that where proceedings allege only unsatisfactory professional conduct, the Tribunal may consist of just one of its members, appointed by the presiding member. Proposed new subsection (1a) extends this to circumstances where—

the proceedings are an appeal against a decision of the Commissioner under new section 77J; or

the proceedings concern an allegation of professional misconduct, but the Commissioner has indicated to the Tribunal that the alleged misconduct does not warrant an order that the practitioner be struck off, an order that his or her practising certificate be suspended for more than 3 months or an order to pay a fine of more than $10,000; or

the Tribunal is dealing with a procedural or interlocutory matter.

43—Amendment of section 82—Inquiries

Section 82 of the principal Act is concerned with proceedings before the Tribunal. This clause proposes a number of minor amendments to section 82 that are consequential on the change in terminology from 'unprofessional or unsatisfactory conduct' to 'unsatisfactory professional conduct' or 'professional misconduct', and to reflect the establishment of the position and powers of the Commissioner. The proposed changes also state that charges must be laid before the Tribunal within three years of the alleged conduct unless the charge is laid by the Attorney-General or the Tribunal allows an extension of time.

Subsection (6), which relates to the Tribunal's powers when it is satisfied that a practitioner is guilty of misconduct, is to be amended by an increase in the period for which a practising certificate can be suspended from 6 months to 12 months. The maximum fine that can be ordered if a former legal practitioner is found to have engaged in professional misconduct while he or she was a legal practitioner is to be increased from $10,000 to $50,000. If a former legal practitioner is found to have engaged in unsatisfactory professional conduct while he or she was a legal practitioner, the maximum fine is to be $25,000. If the Tribunal is constituted of only one member because of an indication by the Commissioner under section 80(1a)(a), lower maximum penalties apply.

44—Amendment of section 84—Powers of Tribunal

This clause proposes a minor amendment to subsection (1) by replacing the reference to the Tribunal's power to require the preparation of 'a bill of costs in taxable form' to 'an itemised bill' to reflect the insertion of new Schedule 3, relating to costs disclosure and adjudication.

45—Insertion of section 84C—Stay of proceedings

New section 84C proposes that the Tribunal will have the discretion to stay proceedings if it thinks fit.

46—Amendment of section 85—Costs

Section 85 of the principal Act gives the Tribunal power to make costs orders against any applicant or person whose conduct has been subject to inquiry as it thinks just and reasonable. This clause proposes the insertion of a new subsection (1a), which states that where a practitioner accused of misconduct has refused to consent to the exercise of a power of the Commissioner under section 77J and is found guilty, and the Tribunal considers the refusal to have been unreasonable, the practitioner may be ordered to reimburse the Commissioner for the costs to the extent that they have been unreasonably incurred.

47—Insertion of section 88A—Supreme Court's inherent jurisdiction

This clause proposes the insertion of new section 88A into Division 5 of Part 6, which relates to disciplinary proceedings before the Supreme Court. The proposed provision makes it clear that the Part does not derogate from the Court's inherent jurisdiction to control and discipline legal practitioners. This is currently stated in section 89(3) of the principal Act and is consequentially removed from there.

48—Amendment of section 89—Proceedings before Supreme Court

Currently, under section 89, when the Tribunal has conducted and inquiry and recommended that disciplinary action be commenced in the Supreme Court, those proceedings can be commenced by the Commissioner, the Attorney-General or the Society. The proposed insertion of subsection (1a) provides that where the Commissioner is of the opinion that the name of a legal practitioner should be struck off the role, for example because the practitioner has been found guilty of a serious offence, the Commissioner may commence proceedings in the Supreme Court without first laying a charge before the Tribunal. The proposed new subsection would also provide that where a practitioner is informed that Supreme Court proceedings are intended to be pursued, the legal practitioner may inform the Court that he or she consents to having his or her name struck off the roll of legal practitioners. In that case, the Court may order that the practitioner's name be struck off the role despite the fact that disciplinary proceedings have not been instituted.

49—Amendment of section 89A—Court may order interim suspension of legal practitioner or impose interim conditions

This clause makes a minor consequential amendment. The amendment is necessary because of the establishment of the office of the Commissioner.

50—Substitution of Part 6 Division 6

This clause proposes the deletion of Division 6 of Part 6 of the principal Act, relating to lay observers, and its replacement with a new Division related to the publicising of disciplinary action.

Division 6—Publicising disciplinary action

89B—Definitions

This provision defines the disciplinary action to which the new Division applies, and also establishes the Register of Disciplinary Action.

89C—Register of Disciplinary Action

This proposed new provision provides that the Commissioner is to maintain a Register of Disciplinary Action. The clause sets out what is to be included in the Register, the particulars to be included when information is incorporated into the Register, and the availability of the Register for public inspection.

89D—Other means of publicising disciplinary action

This proposed provision gives the Commissioner the power to publicise disciplinary action in any way the Commissioner sees fit.

89E—Quashing of disciplinary action

This section provides that a reference to disciplinary action that has been quashed by appeal or review must be removed from the Register and the results of the appeal or review published with equal prominence by the Commissioner.

89F—Liability for publicising disciplinary action

This section defines a number of protected persons, including, for example, the Society, the Council, the Commissioner and the Crown, who are protected from liability in respect of anything done in relation to exercising the powers of the Commissioner or publicising disciplinary action, under the proposed new Division.

90—General

This proposed section provides that the new Division is subject to orders of the Supreme Court in relation to disciplinary action, and orders of corresponding disciplinary bodies and other courts and tribunals, so far as those orders prohibit or restrict the disclosure of information.

51—Amendment of section 90AF—Local legal practitioners are subject to interstate regulatory authorities

This clause makes a minor amendment consequential on the change in terminology from 'unprofessional conduct' to 'professional misconduct'.

52—Amendment of section 90A—Annual reports

Minor consequential amendments are made to this provision flowing from the replacement of the Board with the Commissioner.

53—Insertion of Part 6 Division 8

This clause proposes the insertion of a new Division into Part 6 of the principal Act, relating to professional mentoring agreements.

Division 8—Professional mentoring agreements

90B—Professional mentoring agreements

This proposed new section establishes the conditions under which the Society or the Commissioner may enter into a professional mentoring agreement for the appointment of a professional mentor for a practitioner. It sets out the role of the professional mentor and his or her reporting obligations. The section also deals with the form of the agreement and the term, appointment and remuneration of the mentor.

54—Substitution of section 95D

This clause substitutes section 95D, which relates to the service of notices and documents. The provision provides detail about the formal requirements of service of notices and documents.

55—Amendment of section 97—Regulations

Section 97 of the principal Act makes a consequential amendment by removing a reference to companies holding practising certificates under the Act. Subsection (3) currently specifies types of further regulations that could be made under the Act with the concurrence of the Society. The proposed substituted subsection (3) authorises the making of provisions of a saving or transitional nature consequent on the amendment of the principal Act by another Act.

56—Insertion of Schedules 1 to 4

This clause inserts four new Schedules.

Schedule 1—Incorporated legal practices

The provisions of Schedule 1 regulate incorporated legal practices. The Schedule is based on national model legislation concerned with the regulation of such legal practices. However, the Schedule differs from the model provisions in that clause 2 of the Schedule prohibits an incorporated legal practice from providing a service or conducting business that does not involve engaging in legal practice. Contravention of clause 2 is a ground for banning an incorporated legal practice under clause 21.

The Schedule deals with 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.

Schedule 2—Trust money and trust accounts

Schedule 2 is based on national model provisions dealing with the regulation of trust money and trust accounts.

Trust money is money entrusted to a law practice in the course of or in connection with the provision of legal services by the practice to which the practice is not wholly entitled. Trust money includes—

money received by a law practice on account of legal costs in advance of providing legal services (other than a retainer); and

controlled money received by the practice; and

transit money received by the practice; and

money received by the practice, that is the subject of a power, exercisable by the practice or an associate of the practice, to deal with the money for or on behalf of another person.

The definition does not include money received by a practitioner in the course of mortgage financing.

The Schedule requires law practices to have their trust records for a particular financial year externally examined as soon as possible after the end of that year. The provisions of the Schedule deal with matters such as investigations of the affairs of law practices, external examinations and approval of authorised deposit-taking institutions.

Schedule 3—Costs disclosure and adjudication

The costs disclosure provisions are based on national model provisions, with some minor variations. Application for an adjudication of costs is to be made to the Supreme Court. Clause 41 provides that the Court's power to adjudicate and settle a bill may be exercised by the Registrar of the Court. The costs of an adjudication are to be determined by the Supreme Court. Consistently with the model provisions, unless the Court orders otherwise, the law practice to which the costs are payable (or were paid) is to pay the costs of the adjudication if—

on the adjudication the costs are reduced by 15% or more; or

the Court is satisfied that the practice failed to comply with Part 3 of the Schedule (Costs disclosure).

However, if an application for an adjudication of costs is made after the Commissioner has made a determination in relation to the costs under section 77N, the applicant is required to pay the costs of the adjudication unless the Supreme Court orders otherwise.

Part 3 of the Schedule makes provision for the disclosure of costs to clients by law practices. Disclosure to a client is not required to be made by a person engaged only as a barrister for the purposes of the client's matter. However, if a law practice intends to retain a barrister on behalf of the client, it must disclose to the client the basis on which the barrister's costs will be calculated, including whether a recommendation as to barristers' costs applies to the legal costs.

Schedule 4—Investigatory powers

The provisions of Schedule 4, setting out investigatory powers under the Act, are also based on national model provisions, though there are some variations. For the purposes of the Schedule, an investigator is—

an investigator or external examiner under Schedule 2 (Trust money and trust accounts); or

the Commissioner or a person authorised by the Commissioner to investigate a complaint or the conduct of a legal practitioner or former legal practitioner; or

a person conducting an audit under Schedule 1 clause 19 in relation to an incorporated legal practice.

Schedule 1—Further amendments of Legal Practitioners Act 1981

The amendments made by Schedule 1 replace the term 'guarantee fund' with 'Fidelity Fund' throughout the Act, as required.

Schedule 2—Related amendment and transitional provisions

Part 1—Amendment of Fair Work Act 1994

1—Amendment of section 152A—Inquiries into conduct of registered agents or other representative

The amendment made by this clause to the Fair Work Act 1994 is consequential on the replacement of the Board with the Legal Profession Conduct Commissioner.

Part 2—Amendment of Freedom of Information Act 1991

2—Amendment of Schedule 2—Exempt agencies

This clause amends Schedule 2 of the Freedom of Information Act 1991 to add the Legal Profession Conduct Commissioner to the list of exempt agencies under that Act.

Part 3—Amendment of Legal Services Commission Act 1977

3—Amendment of section 26—Commission and trust money

4—Amendment of section 31—Discipline of legal practitioner employed by Commission

The amendments made by these clauses to the Legal Services Commission Act 1977 are consequential on changes to be made to the Legal Practitioners Act 1981.

Part 4—Transitional provisions

5—Interpretation

Part 4 includes transitional provisions. This clause defines a number of terms used in the transitional provisions. The principal Act is the Legal Practitioners Act 1981.

6—Practising certificates

This clause makes it clear that Divisions 2A to 2C of Part 3, inserted into the principal Act by section 17 the amending Act, apply in relation to practising certificates whether issued before, on or after the commencement of section 17.

7—Deficiencies in trust accounts

Clauses 23 and 24 of new Schedule 2 apply to trust money whether the money was received before, on or after the commencement of those clauses.

8—Combined trust account

This clause provides that an ADI that was an approved ADI within the meaning of section 53 of the principal Act before the substitution of that section will be taken to be an approved ADI for the purposes of section 53 as inserted.

9—Costs

New Schedule 3 applies to a matter if the client first instructs the law practice in the matter on or after the commencement of the Schedule. Part 3 Division 8 of the principal Act continues to apply to a matter if the client first instructed the law practice in the matter before the commencement of Schedule 3.

However, if Part 3 Division 8 of the principal Act applies to a matter because of this clause, the Division will cease to apply to the matter on the first anniversary of the commencement of Schedule 3. The Schedule will then apply to the matter.

10—Fidelity Fund

The legal practitioners' guarantee fund continues in existence as the Legal Practitioners Fidelity Fund.

11—Claims against Fidelity Fund

Subsection (1a) of section 60 of the principal Act does not apply in relation to a claim for compensation served on the Society before the commencement of the subsection.

12—Investigations

An investigation may be undertaken under Schedule 2 Part 3 of the principal Act in relation to an aspect of the affairs of a law practice whether the investigation relates to matters that occurred before or after the commencement of the Schedule.

13—Transfer of functions from Board to Commissioner

This clause provides for the transfer of the functions of the Board to the Commissioner. The Commissioner is to assume the conduct of investigations and proceedings commenced by the Board but not completed before the day on which the amendments relating to the establishment of the office of Commissioner come into operation.

14—Application of principal Act as amended to complaints, investigations, disciplinary proceedings and conduct

The principal Act as amended will apply in relation to—

complaints received by the Commissioner or for which the Commissioner has assumed the conduct; and

investigations commenced or continued by the Commissioner; and

disciplinary proceedings commenced by the Commissioner, the Society or another person or for which the Commissioner has assumed the conduct.

The principal Act as amended also applies in relation to conduct that occurred before the commencement of the new definitions of misconduct. However, the Act as amended will apply to such conduct as if—

'unsatisfactory professional conduct' were replaced with 'unsatisfactory conduct' wherever occurring; and

'professional misconduct' were replaced with 'unprofessional conduct' wherever occurring'; and

'unsatisfactory conduct' and 'unprofessional conduct' had the same respective meanings as in the principal Act as in force immediately before that commencement.

15—Transfer of employment

This clause provides for the transfer of the staff of the Board to the office of the Commissioner.

16—Contracts, etc

This clause provides that all assets, rights and liabilities of the Board are transferred to the Commissioner.

17—Continuing obligation of confidentiality

Under this clause, the duty of confidentiality imposed under repealed section 37 and the duty of confidentiality imposed under repealed section 73 of the principal Act will continue to apply.

Debate adjourned on motion of Hon. I.F. Evans.

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