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Legislative Council - Fifty-First Parliament, Second Session (51-2)
2007-10-17 Daily Xml
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LEGAL PROFESSION BILL

Introduction and First Reading

Received from the House of Assembly and read a first time.

Second Reading

The Hon. P. HOLLOWAY (Minister for Police, Minister for Mineral Resources Development, Minister for Urban Development and Planning) (20:51): I move:

That this bill be now read a second time.

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

Leave granted.

As the principal source of legal assistance, the legal profession plays an important role in the way that justice and the rule of law are delivered and perceived. The freedom in the profession to advise and represent its clients is a bulwark to the independence of the courts and is essential for a fair and effective legal system.

The Legal Profession Bill repeals and replaces the Legal Practitioners Act 1981. It represents a major milestone in achieving consistency and uniformity in regulating the legal profession in Australia. The Bill is part of a national scheme to assist lawyers and law practices to practise across State and Territory borders, and to encourage efficient business practices that will ultimately serve the interests of consumers. The mosaic of State and Territory based regulatory regimes has, until now, led to anti competitive practices and disincentives affecting both practitioners and consumers alike. This Bill will modernise the legal profession and make it more accountable to consumers.

This timely initiative has been driven by the continuing evolution of a national and international legal services market. It will establish a regulatory framework that removes State and Territory barriers while meeting the needs of the profession and protecting the interests of consumers through disclosures and oversight. The Bill deals with:

reservation of legal work and legal titles;

admission of legal practitioners;

legal practice requirements;

inter jurisdictional issues;

incorporated legal practices and multi disciplinary partnerships;

requirements for foreign lawyers;

community legal centres;

trust money and trust accounts;

costs disclosure and review;

other prudential requirements;

complaints and discipline; and

external intervention, investigation and examination.

This proposal arises from the decision taken by the Standing Committee of Attorneys General (SCAG) in July 2001 to devise national uniform laws regulating the legal profession to remove or reduce barriers to national practice (the model provisions). SCAG worked closely with the Law Council of Australia in developing the model legal profession provisions, and I wish to thank the Law Council and the Law Society of South Australia for their comprehensive and well organised contributions, which have made the task that much easier.

A consultation version of the model provisions drafted mainly by New South Wales officers was released in 2003 to more than 100 stakeholders. These included professional associations for legal practitioners, regulatory authorities, consumer organisations, and heads of courts and tribunals. A first iteration of the model provisions was endorsed by the Standing Committee in August, 2003 and in July 2004 all Australian Attorneys General signed the Legal Profession Memorandum of Understanding. Under the Memorandum each State and Territory agreed to use its best endeavours to implement legislation to give effect to the model provisions on a continuing basis.

'A number of iterations of the model provisions have since been produced. South Australia has waited until the model was effectively settled by all jurisdictions before introducing our Bill, because other States that introduced their equivalent legislation early have had to go back to Parliament on a number of occasions to amend the legislation to align with changes to the model.

This Bill is the culmination of many years of hard work and co-operation across all the Australian jurisdictions. In preparing this Bill, which implements the national model provisions for South Australia, the Government has consulted a wide range of stakeholders in this State including the senior judicial officers, the Law Society, the SA Bar Association, the Legal Practitioners Conduct Board, the Legal Practitioners Disciplinary Tribunal, the Legal Services Commission, the SA Council of Community Legal Services, and the Aboriginal Legal Rights Movement, among others.

I will first turn to the South Australian regulatory framework before moving on to the national reforms.

The regulatory framework

The Bill retains the current regulatory framework as far as possible. This Government has chosen not to overhaul the framework as some jurisdictions have, primarily because it is working perfectly well even though it is complex. Many of the provisions in Chapter 7 of the Bill simply replicate the equivalent provisions of the Legal Practitioners Act 1981.

The Supreme Court will continue to be the ultimate regulatory authority for lawyers and law practices under the Bill, while the Law Society will continue to administer the day to day requirements of the profession and its clients. The Legal Practitioners Education and Admission Council will continue to have the important role of developing uniform national standards for qualifications necessary to practice in Australia. The opportunity to update some matters has been taken, such as including the Dean of the new law school in the University of South Australia as an ex officio member of the Admission Council. The Board of Examiners will continue to report to the Supreme Court on potential admissions. The Legal Practitioners Conduct Board and the Legal Practitioners Disciplinary Tribunal will also continue with their present structures and with similar powers.

Funding arrangements will continue as at present. The combined trust account and the statutory interest account will operate as they do now, as will the Litigation Assistance Fund, the professional indemnity insurance scheme and the legal practitioners’ guarantee fund.

The national reforms

A number of earlier reforms to the traditional regulatory approaches in the various jurisdictions, such as mutual recognition, have already made some progress toward overcoming barriers to national legal practice. Both governments and the legal profession have driven these reforms.

The Standing Committee’s national legal profession project has considered how improvements could be made to harmonise the regulation of the legal profession and further reduce barriers to national practice. The focus of the project has been on the administrative aspect of regulating the legal profession–setting the operational obligations of lawyers–rather than mandating local regulatory structures or funding arrangements.

This is why the Standing Committee agreed that there would be categories of provisions: core provisions that must be textually uniform; core provisions not necessarily textually uniform; and non core provisions. The national model provisions represent the bulk of this Bill and I will address each of these topics in turn as I provide an overview of the Bill.

Reservation of legal work and legal titles

Part 1 of Chapter 2 of the Bill deals with the reservation of particular titles to legal practitioners and the reservation of legal work in favour of legal practitioners.

Why is reservation of titles and legal work important? Because consumers must be able to identify whether the person who is providing them with legal services is entitled to do so. Consumers place great trust in legal practitioners and must be able to identify, by reference to a shared jurisprudence of the common law, which areas of work can only be performed by a practitioner.

This Part contains a blanket prohibition on engaging in legal practice unless the person has relevant academic qualifications and legal training, including the requirements that the person be admitted to legal practice in Australia and hold a practising certificate. It is intended that the general standard across jurisdictions will give rise to a common jurisprudence on what it means to engage in legal practice.

There will also be a general prohibition on an unqualified person representing him or herself to be entitled to engage in legal practice. This broad approach is considered better than simply prohibiting specific titles, although there are some exemptions to this rule.

Admission of legal practitioners

The objective of Part 2 of Chapter 2 of the Bill is to allow for recognition of academic courses and practical legal training before admission, including those that have been approved for another jurisdiction. The Bill preserves the current regulatory structure involving the Supreme Court, the Legal Practitioners’ Education and Admissions Council, and the Board of Examiners.

The model provisions and the Bill introduce the concept of suitability matters which are taken into account in the decision to admit to the profession and to hold a practising certificate. Clause 9 of the Bill provides that matters going to suitability include a person’s reputation and character, whether he has been convicted of any offences, been subject to complaints or disciplinary action, whether he has been insolvent or is otherwise incapable or disqualified from various positions, etc.

Legal practice requirements

Part 3 of Chapter 2 of the Bill introduces the ground breaking concept of the national practising certificate. It will mean that a legal practitioner who is required to hold a practising certificate will be required to hold a practising certificate from his or her principal place of practice. However, once this requirement is satisfied, the practitioner will be entitled to practise across jurisdictions provided they meet any requirements imposed by the other regulatory bodies.

A person’s fitness and propriety to hold a practising certificate is measured on the suitability matters and other matters such as whether they obtained a practising certificate using incorrect information or contravened an order of the Disciplinary Tribunal, etc.

At this stage it is worth outlining a taxonomy of lawyers under the model regime:

A lawyer is a person who has been admitted to the legal profession (that is, the Supreme Court); the person may be a local lawyer and admitted to the Supreme Court of South Australia or an interstate lawyer admitted under a corresponding law; however, they are both Australian lawyers.

A legal practitioner is an Australian lawyer who holds a current practising certificate; the lawyer may be a local legal practitioner or an interstate legal practitioner; but they are both Australian legal practitioners.

One must be a legal practitioner to be a legal practitioner associate of a law practice; otherwise, he will be a lay associate. Employees of the law practice and lay associates cannot be a principal–that is reserved for sole practitioners, partners, and directors of law practices.

Foreign lawyers will be able to register in one Australian jurisdiction and this will entitle them to practise foreign law anywhere in Australia. If registered in South Australia they will be locally registered foreign lawyers practising foreign law; if not, they will be interstate registered foreign lawyers; either way, they will be Australian registered foreign lawyers. Foreign lawyers cannot practice Australian law but practise the law of their home jurisdictions.

The Bill makes it clear that the legal profession should continue to be a fused profession of barristers and solicitors. It also preserves the current system for the Supreme Court to appoint public notaries.

When combined with the reforms allowing for multi-disciplinary firms, which I will come to later, the national practising certificate is designed to promote competition in the legal services market and, ultimately, achieve better results for consumers. One way is by allowing firms to take advantage of skill efficiencies and build markets in other jurisdictions, possibly based on their local practice. It is likely that the national practising certificate will also benefit remote communities as legal practitioners will able to move freely about the country and sell their services, again promoting competition.

Practitioners who hold interstate practising certificates will have to comply with a smaller administrative burden upon practising in South Australia, which will encourage practitioners to establish an office here. However, the Supreme Court will continue to oversee a strict system of issue and renewal of practising certificates and regulation of interstate practitioners. Where decisions about a practitioner’s right to practise are made, the practitioner will be given the opportunity to respond to action being proposed against them–a “show cause” opportunity which affords natural justice. Again, it is expected that a common national jurisprudence will develop around what is a “show cause” event and the fitness and propriety required to be a legal practitioner.

Inter-jurisdictional issues

Part 6 of Chapter 2 facilitates the sharing of information between regulatory bodies in each jurisdiction regarding applications for admission to practise, removals from the roll of practitioners and decisions affecting practising certificates.

The Part also places positive obligations on practitioners to notify the Supreme Court of matters that affect their right to practise, whether in another Australian jurisdiction or a foreign country. Once notified, the provisions enable the Supreme Court and the Law Society to take action to limit a practitioner’s ability to practise in accordance with the action taken in the original jurisdiction.

Incorporated legal practices and multi disciplinary partnerships

The Bill adopts the textually uniform core provisions allowing for incorporated legal practices (ILPs) and multi disciplinary partnerships (MDPs). When combined with the national practising certificate reforms, the provisions allowing for ILPs and MDPs are designed to promote mobility and competition in the legal services market and, ultimately, better results for consumers. I turn first to ILPs.

Incorporated legal practices (ILPs)

Law firms in South Australia are presently constituted either as a partnership, a corporate practitioner, or a sole practitioner. For corporate practitioners, the sole object under the corporation’s constitution must be the practice of the profession of the law. The corporation must hold a practising certificate, as must all the directors.

It is worthwhile setting out clause 70(1) of the Bill here:

70—Nature of incorporated legal practice

1 An incorporated legal practice is a corporation that engages in legal practice in this jurisdiction, whether or not it also provides services that are not legal services.

Under the Bill, all current corporate practitioners will automatically become ILPs because it is assumed that they are engaging in legal practice. The only change will be that the corporation will not be required to hold a practising certificate–it is not required to do so under the model provisions. The corporation or its constitution need not be changed in any way, and it need not change its name to include the initials 'ILP'. Interstate ILPs must give the Supreme Court notice that they intend to engage in legal practice in this jurisdiction, but current local corporate practitioners will be deemed to have given that notice in the transition. What it means to engage in legal practice (which applies to the whole profession) has deliberately not been defined to allow the existing common law to be called upon in a dispute. Again, it is hoped that a common national jurisprudence will develop around what the phrase means.

The provision also heralds a significant reform to the potential scope of service provision by legal practitioners. It means that law practices will be able to offer legal and non legal services. All States and Territories, either presently or previously, restricted the ability of legal practitioners to share profits with non practitioners. The rationale was to help protect the integrity of the professional obligations that lawyers owe to the courts and their clients to be impartial and fair. This reform represents a significant departure from traditional modes of legal practice in South Australia. Removing restrictions on ownership and profit sharing is a key means of enabling legal practices to raise capital for expansion to facilitate competition in domestic and international markets. In addition, it will allow legal practitioners to compete with other service providers, such as banks and retailers.

Multi-disciplinary partnerships (MDPs)

A similar business opportunity is also afforded to partnerships. Law firms presently constituted as partnerships may continue to operate exactly as they do now. However, they could opt to become an MDP by entering into partnership with a person who is not an Australian legal practitioner, because the ancient ban on sharing profits with a non-lawyer will be lifted.

Safeguards for the role of the profession

In its place is a modern regulatory environment with consumer benefit being one of the drivers, and consumer protection being another. The model must, and does, come with numerous safeguards to ensure that a lawyer’s commitment to his or her ethical obligations is not diluted by the reforms (nor does it introduce a disincentive to do so).

Initially the Government had concerns about the potential for lawyers’ ethical obligations to be compromised by the decision to allow profit sharing with non practitioners. Two basic duties of lawyers are to provide impartial advice to a client and to assist the court in reaching a just and correct decision whilst representing the client. These duties potentially conflict with shareholder profit motives and the provision of non legal services by people that are not bound by the various duties but working for the same practice and the same client.

However, these concerns have been eased given the support for the reforms from the Law Society and many others consulted during the development of the Bill. The present regulatory framework is restrictive and the safeguards I will outline shortly are adequate to deal with any anticipated problems in the legal services marketplace.

Every ILP and MDP must have at least one legal practitioner director or partner respectively. That person must hold an unrestricted practising certificate and he must ensure that appropriate management systems are implemented and maintained so that the legal services are provided in accordance with professional obligations. There will be regulatory compliance audits for ILPs and the Law Society and the Attorney General have the power to apply to the Supreme Court to ban a corporation from providing legal services or a person from being a director.

Directors and partners must take responsibility for their practitioners and their fellow non-practitioner directors or partners. Legal practitioner employees of the practice cannot use the corporation to shield them from any failure to meet their professional obligations.

Consumers will have access to standard information about costs and the law practice generally. If some of the services to be provided will not be provided by an Australian legal practitioner, those services must be identified and the consumer told of the qualifications or status of the person who will provide the services. Consumers will also have access to easy to read information about making a complaint and other rights they have such as questioning bills from practitioners. Many prudent firms do this already but, as with much of this Bill, the intention is to standardise and formalise these practices–in a sense codifying the existing law and practice of the profession.

The Bill does not set out the Professional Conduct Rules–they remain for the profession, and particularly the Law Society, to formulate against the background of the common law; but the Bill does make them binding on practitioners and failure to comply is capable of constituting unsatisfactory professional conduct or even professional misconduct. The Professional Conduct Rules are another important consumer protection tool and even experienced practitioners would do well to read them every so often. I cannot overstate the importance of ethical practices when engaging in legal practice–while they are mysterious to some they give the law its integrity and thus its legitimacy.

Requirements for foreign lawyers

The Bill will also allow for the limited recognition of foreign lawyers practising foreign law. The aim of this Part is to facilitate the globalisation of the legal services market. Foreign lawyers will be required to register in one Australian jurisdiction and this will entitle them to practise foreign law anywhere in Australia. This Part provides that the ethical and professional standards which apply to Australian legal practitioners also apply to foreign lawyers, as well as the trust account obligations. Again the Bill encourages transactional transparency because foreign lawyers must identify on their letterhead and other identifying documents that they practise foreign law only.

Community Legal Centres (CLCs)

Part 7 of Chapter 2 of the Bill deals specifically with community legal centres (CLCs) and includes the Aboriginal Legal Rights Movement because they provide legal services to the public on a not for profit basis. The Bill provides that practitioners employed by CLCs are still subject to the Professional Conduct Rules, and that client legal privilege is preserved even if the practitioner discloses a matter to the non practitioner officers of the centre for any proper purpose.

Community Legal Centres will be law practices and will be able to hold trust monies just like any other law practice. Elsewhere the Bill provides that any money granted to a CLC is deemed not to be trust money or controlled money.

Trust money and trust accounts

I turn now to Chapter 3 of the Bill, which deals with conduct of business rules and prudential requirements. As noted above, it preserves the role of the Law Society in setting the Professional Conduct Rules and also gives the Society power to make specific rules for aspects of legal service delivery by ILPs and MDPs.

A legal practitioner will be required to open a trust account in each jurisdiction in which he or she has an office and receives trust money.

The requirements for the external examination of trust accounts and investigations are based on the current arrangements in place under the Legal Practitioners Act 1981. The model requires the adoption of about sixty offences relating to the trust money and trust account requirements. The approach taken by the model, and reflected in the Bill, can be characterised as prevention and compliance.

The Bill continues the present funding arrangements for the combined trust account and the statutory interest account. It also preserves the funding arrangements for the Legal Services Commission, CLCs, the guarantee fund, and research functions such as the Law Foundation.

Costs disclosure and review

Part 3 of Chapter 3 of the Bill deals with disclosures to clients and their ability to challenge a bill of costs, and are largely core provisions requiring textual uniformity under the model. Many firms already have good practices when it comes to communicating with their clients about costs. These provisions standardise and formalise best practice and preserve the rights of consumers to various avenues of redress.

Costs agreements that are conditional on the successful outcome of a matter will be allowed under the Bill, except for criminal, family law and migration matters. Uplift fees up to a maximum of 25% for litigious matters will be allowed if the risk of the claim failing, and of the client having to meet his or her own costs, is significant. However, costs that are contingent upon and calculated by reference to the amount of any award, settlement or the value of any property recovered in the proceedings will not be allowed.

Other prudential requirements

The Bill does not substantially alter the current arrangements for professional indemnity insurance. Local practitioners will continue to be insured partly under a master policy negotiated between the Law Society and insurers participating in the scheme.

The Bill does not disturb the operation of the legal practitioners’ guarantee fund, and it preserves the current exclusion for claims based on the mismanagement of a managed investment scheme or mortgage financing activities conducted by a law practice.

A local legal practitioner will contribute to the local guarantee fund only, and will be covered only by that fund, regardless of where a default may occur. The only exception to this will be where the practitioner is authorised to draw trust money from an account in another jurisdiction. In that case, to allow each fund to ensure it is able to meet its liabilities, the practitioner can be required to contribute to the fidelity fund in that other jurisdiction (as determined by that fund), and will be covered by that other jurisdiction’s fidelity fund. Under the model provisions, the consumer benefits delivered by the fund and the process of claim will be harmonised so that clients do not have different rights in different jurisdictions.

Complaints and discipline

The Bill largely preserves the current arrangements regarding complaints and the discipline of lawyers. The Legal Practitioners Conduct Board will continue to arrange to conciliate complaints and the Legal Practitioners Disciplinary Tribunal will continue in its present role but be given powers to order a fine of up to $50,000. The Supreme Court will continue to have ultimate oversight of the profession.

The model provisions on which this Bill is based follow our current law and set up a simple, graduated system of two levels of seriousness of conduct. Unsatisfactory professional conduct includes conduct that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent practitioner. Professional misconduct includes substantial or consistent unsatisfactory professional conduct as well as conduct that would justify a finding that the practitioner is not a fit and proper person to engage in legal practice.

The latter phrase preserves the current grounds for disciplinary action against practitioners. The Bill goes on to specify that suitability matters may be assessed along with other matters such as whether the practitioner has disobeyed an order of the Tribunal or contravened the requirements for handling trust money, etc. Once again it is hoped that a common jurisprudence will coalesce around these provisions.

The new regime will continue to allow the Board to deal with the more serious category of professional misconduct if the practitioner consents. The Board will be able to reprimand, impose conditions on the practitioner’s certificate, or order a specified payment instead of laying a complaint before the Tribunal.

For the first time there will be a Register of Disciplinary Action which will be made available to the public on the internet. Anyone will be able to inspect the Register which must include particulars of the disciplinary action taken for professional misconduct. Other jurisdictions will have similar registers also available on the internet.

External intervention, investigation and examination

The national model and the Bill require the adoption of uniform provisions in relation to the appointment of supervisors, managers and receivers of the business and professional affairs of legal practices in order to protect the public and the practice’s clients. Chapter 5 of the Bill sets out the circumstances in which external intervention is warranted, how external interveners may be appointed and the different roles and responsibilities of supervisors, managers and receivers.

It is the Law Society that is responsible for determining that a form of external intervention is warranted. The Society may determine to appoint a supervisor, a manager, or to apply to the Supreme Court for the appointment of a receiver.

A supervisor of trust money for a law practice is appointed where there are problems with the practice’s trust accounts but it is not appropriate that the practice be wound up. The supervisor can open trust accounts, receive trust money and keep records relating to the trust account. A supervisor’s appointment terminates when a receiver or manager is appointed, when all trust funds are distributed or when the Law Society determines that the appointment should cease.

A manager may be appointed where winding up is not justified but a person needs to be appointed to take over professional and operational responsibility for the practice. For instance, a manager may be appointed where the principal is sick or cannot otherwise run the practice. The manager may transact any urgent business, operate the trust account, accept instructions from clients, and wind up the affairs of the practice. The manager’s role ceases when a receiver is appointed with the powers of the manager, when the practice has been wound up or when the Society has determined that the appointment should cease.

The Society can apply to the Supreme Court for a receiver to be appointed if it believes the appointment is necessary to protect clients’ trust money and that it may be appropriate for the practice to be wound up and terminated.

External interveners must be Australian legal practitioners holding unrestricted practising certificates as they must deal with trust money in the same way as a law practice must deal with trust money. However, a person holding accounting qualifications with experience in law practices’ trust accounts may be a supervisor or receiver.

The Bill also provides for both specific and general reporting requirements for external interveners. These mechanisms provide further protection for trust money during an intervention.

Elsewhere the Bill provides for investigations and external examinations. This will allow the programme of audits of trust accounts conducted by the Law Society and its agents to continue. The Bill frees up the requirements to be an investigator or external examiner because the of the difficulty in securing approved auditors as required under the present Legal Practitioners Act 1981, which is a particular problem in the regions. In future, the audit period will be 1 April to 31 March to align with other jurisdictions.

In conclusion, the Bill recognises that the legal profession is an indispensable part of our legal system and should be regulated accordingly. However, it imposes few new requirements, especially for prudent practitioners who respect that their clients, and the law itself, are the ultimate beneficiaries of their hard work. The regulatory framework is complex because it provides checks, balances and protections of many sorts so that no one individual or body has ultimate influence in all areas–not even the Supreme Court. Aristotle wrote that “it is more proper that law should govern than any one of the citizens” and the Bill recognises and secures exactly that.

The legal profession is not simply another economic activity. Some of its activities have a profound impact on the self image of society, on its standards of justice and civilisation and on its commitment to the rule of law and the defence of rights. The abiding challenge facing the Australian legal profession as it enters a new millennium is one of preserving the idealism and professionalism of a potentially noble calling dedicated to the attainment of justice whilst paying more attention to the realities of delivering that same justice to ordinary people.

I commend the Bill to Members.

Explanation of Clauses

Chapter 1—Introduction

Part 1—Preliminary

This Part includes formal clauses relating to the short title and commencement of the Act. The date on which the Act is to come into operation will be fixed by proclamation.

Part 2—Interpretation

The provisions of Part 2 deal with preliminary matters, including definitions. There are some changes to terms used in the current Act, developed to facilitate national practice. A person admitted to the legal profession under this Act or a corresponding law of another State or Territory is an Australian lawyer. A local lawyer is a person admitted to the legal profession under the South Australian Act. A person admitted to the legal profession under a corresponding law who is not also admitted under the South Australian Act is an interstate lawyer.

An Australian lawyer who holds a current local practising certificate or a current interstate practising certificate is an Australian legal practitioner. If an Australian lawyer holds a current local practising certificate, he or she is a local legal practitioner. An Australian lawyer who holds a current interstate practising certificate but not a local practising certificate is an interstate legal practitioner.

This Part also includes defined terms relating to associates and principals of law practices.

The term engaging in legal practice includes practising law. Clause 7 provides that the regulations may make further provision in relation to the meaning of engaging in legal practice.

Clause 12 provides that it is Parliament's intention that the legal profession of South Australia should continue to be a fused profession of barristers and solicitors.

Other terms defined in this Part include home jurisdiction, suitability matter and information notice.

Chapter 2—General requirements for engaging in legal practice

Part 1—Reservation of legal work and legal titles

Chapter 2 deals with general requirements for engaging in legal practice.

Clause 13 prohibits a person from engaging in legal practice unless he or she is an Australian legal practitioner. This Part also makes it an offence for a person to advertise that he or she is entitled to engage in legal practice in South Australia unless he or she is an Australian legal practitioner.

Clause 18 makes it an offence for an Australian legal practitioner to be a party to an agreement or arrangement to employ or engage a disqualified person or a person who has been convicted of a serious offence. However, the Legal Practitioners Disciplinary Tribunal may authorise an Australian legal practitioner to be a party to such an agreement or arrangement. The Tribunal's authorisation may be subject to conditions.

Disqualified person is defined in Chapter 1 Part 2 as—

a person whose name has been removed from an Australian roll and who has not subsequently been admitted or re-admitted to the legal profession;

a person whose Australian practising certificate has been suspended or cancelled and who, because of the cancellation, is not an Australian legal practitioner or in relation to whom that suspension has not finished;

a person who has been refused a renewal of an Australian practising certificate, and to whom an Australian practising certificate has not been granted at a later time;

a person who is the subject of an order prohibiting a law practice from employing or paying the person in connection with the relevant practice;

a person who is the subject of an order prohibiting an Australian legal practitioner from being a partner of the person in a business that includes the practitioner's practice.

A serious offence is—

an indictable offence against a law of the Commonwealth or any jurisdiction (whether or not the offence is or may be dealt with summarily); or

an offence against a law of another jurisdiction that would be an indictable offence against a law of South Australia if committed in this State (whether or not the offence could be dealt with summarily if committed in this State); or

an offence against a law of a foreign country that would be an indictable offence against a law of the Commonwealth or South Australia if committed in this State (whether or not the offence could be dealt with summarily if committed in this State).

Part 2—Admission of local lawyers

Division 1—Admission to the legal profession

This Part sets out the process and requirements for admitting people to the legal profession.

Under Division 1, the Supreme Court is to maintain a roll of persons admitted to the legal profession under the Act. This is the local roll. On being admitted to the profession, a person becomes an officer of the Supreme Court.

Division 2—Eligibility and suitability for admission

Under the provisions of this Division, a natural person is entitled to be admitted to the legal profession if he or she satisfies the Supreme Court that he or she is of good reputation and character and that he or she has complied with the admission rules and rules made by Legal Practitioners Education and Admission Council. When determining an application, the Court is required to consider, in relation to the person, each of the suitability matters set out in Chapter 1 Part 2.

Part 3—Legal practice—Australian legal practitioners

Division 1—Legal practice in this jurisdiction by Australian legal practitioners

This Division provides that an Australian legal practitioner is entitled to engage in legal practice in South Australia (subject to other provisions of the Act).

Division 2—Local practising certificates generally

Practising certificates are to be granted by the Supreme Court. In considering whether or not a person is a fit and proper person to hold a practising certificate, the Court is to take into account any suitability matter relating to the person and any of a number of additional listed matters.

There is a requirement under this Division for a local legal practitioner to be insured against liabilities that may arise in the course of, or in relation to, legal practice if such a scheme is in force under Chapter 3 Part 4.

Division 3—Grant or renewal of local practising certificates

The provisions of this Division prescribe procedures for the grant or renewal of local practising certificates. An Australian lawyer may apply to the Supreme Court for the grant or renewal of a local practising certificate if he or she is eligible to do so under the Division. The Court is required to consider an application unless it is not made in accordance with the Act or the admission rules or is not accompanied by the prescribed fee. The Court is also authorised to amend or cancel a practising certificate if requested to do so by the holder.

Division 4—Conditions on local practising certificates

This Division deals with conditions on local practising certificates. Conditions can be imposed by the Court or are imposed by the Act. For example, it is a statutory condition of a local practising certificate that the holder of the certificate—

must notify the Supreme Court that the holder has been convicted of an offence that would have to be disclosed under the admission rules in relation to an application for admission to the legal profession under the Act, or charged with a serious offence; and

must do so within seven days of the event and by a written notice.

A local practising certificate may also be issued or renewed subject to conditions determined by the Legal Practitioners Education and Admission Council (LPEAC)—

requiring the holder of the certificate to undertake or obtain further education, training and experience required or determined under the legal profession rules; and

limiting the rights of practice of the holder of the certificate until that further education, training and experience is completed or obtained.

Division 5—Amendment, suspension or cancellation of local practising certificates

This Division sets out grounds for amending, suspending or cancelling a local practising certificate and authorises the Supreme Court to amend, suspend or cancel a certificate where the Court believes a ground exists. Those grounds are as follows:

the holder of the certificate is no longer a fit and proper person to hold the certificate;

the holder of the certificate does not have, or no longer has, professional indemnity insurance that complies with the Act in relation to 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 the holder is not entitled to engage in under this Act.

The Court is required to give the holder of the certificate notice of its proposed action and then consider any written representations made by the practitioner.

Division 6—Special powers in relation to local practising certificates—show cause events

This Division deals with show cause events. A legal practitioner who becomes bankrupt or is convicted of a serious offence or a tax offence is required to provide the Court with relevant details. The person must explain why, despite the show cause event, he or she is a fit and proper person to hold a practising certificate. The Court is authorised to refuse to grant or renew, or to amend, suspend or cancel, a local practising certificate if the applicant or holder fails to provide a written statement relating to a show cause event or, having provided a required written statement, fails to satisfy the Court that he or she is a fit and proper person to hold a local practising certificate.

Division 7—Further provisions relating to local practising certificates

The holder of a local practising certificate may, under this Division, surrender the certificate to the Supreme Court. The Court may cancel the certificate.

The Court is authorised under this Division to immediately suspend a practising certificate if the Court considers it necessary to do so in the public interest. The holder of the suspended certificate may make written representations to the Court about the suspension, and the Court must consider the representations.

Division 8—Interstate legal practitioners

This Division deals with interstate practitioners practising in South Australia.

An interstate legal practitioner is prohibited from engaging in legal practice, or representing or advertising that he or she is entitled to engage in legal practice, in South Australia unless he or she is covered by the required level of professional indemnity insurance. An interstate legal practitioner is not authorised to engage in legal practice in South Australia to a greater extent than a local legal practitioner could be authorised under a local practising certificate. The Supreme Court may impose additional conditions on an interstate legal practitioner's practice if those conditions could be imposed on a local practising certificate.

An interstate legal practitioner engaged in legal practice in this jurisdiction has all the duties and obligations of an officer of the Supreme Court, and is subject to the jurisdiction and powers of the Supreme Court in respect of those duties and obligations.

Division 9—Miscellaneous

This Division deals with miscellaneous matters. The Supreme Court is authorised under this Division to—

assign functions or powers conferred on or vested in it under Part 3 to a specified body or person, or to a person occupying a specified office or position; and

require an applicant in relation to, or the holder of, a local practising certificate to provide specified information or documents or to cooperate with the Court's inquiries.

The Court is required under the Division to keep a register of the names of local legal practitioners. This Division also authorises the Law Society to enter into certain arrangements with regulatory authorities of other jurisdictions and provides that government lawyers of other jurisdictions are not subject to any prohibition under the Act about engaging in legal practice in South Australia.

Part 4—Inter-jurisdictional provisions regarding admission and practising certificates

Division 1—Preliminary

Part 4 sets out inter jurisdictional provisions regarding admission and practising certificates.

Division 2—Notifications to be given by local authorities to interstate authorities

This Division authorises the Supreme Court to notify the corresponding authority for another jurisdiction of the making or withdrawal of an application for admission to the legal profession or the refusal of the Court to admit an applicant. The Division also requires the Court (or some other South Australian regulatory authority) to notify relevant authorities of other jurisdictions of the removal of the name of a practitioner from the local roll or

Division 3—Notifications to be given by lawyers to local authorities

The provisions of this Division require a local lawyer or local legal practitioner to give the Supreme Court written notice if his or her name is removed from an interstate roll or if an order is made under a corresponding law recommending that his or her name be removed from a local roll. Written notification is also to be given by a local legal practitioner if his or her certificate is suspended or cancelled or conditions are imposed on the certificate.

Division 4—Taking of action by local authorities in response to notifications received

If a local lawyer's name is removed from an interstate roll, the Registrar of the Supreme Court must remove the lawyer's name from the local roll. If the lawyer is the holder of a local practising certificate, the certificate must be cancelled.

This Division also prescribes "show cause" procedures for removal of a lawyer's name from the local roll, or cancellation of a local practising certificate, following the removal of a person's name from a foreign roll for disciplinary reasons or the suspension or cancellation of, or refusal to renew, a person's right to engage in legal practice in a foreign country.

Part 5—Incorporated legal practices and multi disciplinary partnerships

Division 1—Preliminary

Part 5 adopts the national model provisions relating to incorporated legal practices and multi disciplinary partnerships. The objective of the model provisions is to establish uniform provisions in all jurisdictions, ensuring that incorporated legal practices and multi disciplinary partnerships can practise across State and Territory borders with ease.

Division 2—Incorporated legal practices

An incorporated legal practice is a corporation that engages in legal practice in South Australia, whether or not it also provides services that are not legal services. An incorporated legal practice must have at least one director who is a legal practitioner. Before carrying on business, the corporation must notify the Supreme Court that it intends to provide legal services.

As corporations are separate legal entities at law, this Division includes provisions that ensure that legal practitioner employees of the practice cannot use the corporation to shield themselves from liability. Any breach by them of a professional obligation can amount to unsatisfactory professional conduct or professional misconduct. The provisions of the Act relating to insurance apply with any necessary changes to incorporated legal practices in relation to the provision of legal services. An obligation of an Australian legal practitioner who is an officer or employee of an incorporated legal practice must comply with the provisions of the Act relating to insurance.

An incorporated legal practice that provides legal and non-legal services must inform its clients which services are being provided by legal practitioners, and which are not. This is to ensure that clients are fully informed and not acting under a misapprehension about who is providing the services.

The Legal Practitioners Conduct Board, the Attorney General or the Law Society may apply to the Supreme Court to ban a corporation from providing legal services. Directors can be banned from managing incorporated legal practices.

Division 3—Multi-disciplinary partnerships

Multi-disciplinary partnerships are partnerships that provide legal and non legal services. Similar to an incorporated legal practice, a multi disciplinary partnership must give the Law Society notice of its intention to provide legal services.

If a partnership has legal and non legal partners, the legal partners are responsible under this Division for the management of the legal services provided. A legal practitioner employee in a multi disciplinary partnership must maintain professional standards that apply to other practitioners.

Division 4—Miscellaneous

This Division provides for the making of regulations about—

the legal services provided by incorporated legal practices or legal practitioner partners or employees of multi disciplinary partnerships; or

other services provided by incorporated legal practices or legal practitioner partners or employees of multi disciplinary partnerships in circumstances where a conflict of interest relating to the provision of legal services may arise.

A regulation prevails over any inconsistent provision of the legal profession rules.

Part 6—Legal practice—foreign lawyers

Division 1—Preliminary

This Part adapts the national model provisions relating to legal practice by foreign lawyers.

Division 2—Practice of foreign law

A person must not practise the law of a foreign country in South Australia unless the person is an Australian registered foreign lawyer or an Australian legal practitioner.

Division 3—Local registration of foreign lawyers generally

This Division provides for the registration of foreign lawyers.

Division 4—Applications for grant or renewal of local registration

Under this Division, an overseas-registered foreign lawyer may apply to the Society for the grant or renewal of registration as a foreign lawyer under the Act. The provisions of this Division regulate the manner in which an application is to be made.

Division 5—Grant or renewal of registration

The Law Society is required to consider an application made for the grant or renewal of registration as a foreign lawyer unless the application is not made in accordance with the Act. The Society may grant or refuse to grant, or renew or refuse to renew, an application.

Division 6—Amendment, suspension or cancellation of local registration

This Division sets out grounds for the Society to amend, suspend or cancel a person's registration as a foreign lawyer, as follows:

the registration was obtained because of incorrect or misleading information;

the person fails to comply with a requirement of Part 6;

the person fails to comply with a condition imposed on the person's registration;

the person becomes the subject of disciplinary proceedings in Australia or a foreign country (including any preliminary investigations or action that might lead to disciplinary proceedings) in his or her capacity as—

an overseas-registered foreign lawyer; or

an Australian-registered foreign lawyer; or

an Australian lawyer;

the person has been convicted of an offence in Australia or a foreign country;

the person's registration is cancelled or currently suspended in any place as a result of any disciplinary action taken in Australia or a foreign country;

the person does not meet the requirements of the Act relating to professional indemnity insurance;

another ground the Society considers sufficient.

Division 7—Special powers in relation to local registration—show cause events

This Division deals with procedures in respect of applications where a show cause event happened in relation to an applicant for registration as a foreign lawyer. (See note on Part 3 Division 6, above.)

Division 8—Further provisions relating to local registration

If the Law Society considers it necessary in the public interest to immediately suspend a person's registration as a foreign lawyer, it may do so by giving written notice to the person. The notice must state the reasons for the suspension. The notice must also inform the person that he or she may make written representations to the Society about the suspension. The Society must consider any written representations.

A person registered as a foreign lawyer may surrender the local registration certificate to the Society, and the Society may cancel the registration.

If a person registered as a foreign lawyer becomes an Australian legal practitioner, the registration is taken to be cancelled. When a person’s registration certificate under this Part as a foreign lawyer is amended, suspended or cancelled, the Society may require the person to return the certificate to the Society.

Division 9—Conditions on registration

This Division sets out conditions to which registration as a foreign lawyer is subject. These conditions include statutory conditions and conditions imposed by the Society.

Division 10—Interstate-registered foreign lawyers

An interstate registered foreign lawyer is not authorised to practise foreign law in this jurisdiction to a greater extent than a locally registered foreign lawyer could be authorised under a local registration certificate.

The Society may, by written notice to an interstate-registered foreign lawyer practising foreign law in this jurisdiction, impose any condition on the interstate-registered foreign lawyer’s practice that it may impose under this Act in relation to a locally registered foreign lawyer.

Division 11—Miscellaneous

The Law Society is required to keep a register of the names of locally registered foreign lawyers. The Society may publish the names of persons registered by it as foreign lawyers and any relevant particulars concerning those persons.

The Society is authorised to exempt Australian registered foreign lawyers or classes of Australian registered foreign lawyers from compliance with specified provisions of the Act or the regulations, or from compliance with specified rules that would otherwise apply to the foreign lawyers or classes of foreign lawyers.

Part 7—Community legal centres

This Part regulates the provision of legal services by community legal centres. A community legal centre does not contravene the Act merely because of the employment, or use of the services of, Australian legal practitioners to provide legal services. Nor does a community legal centre breach the Act because of a contractual relationship with a person to whom legal services are provided.

Regulations under the Act may modify or exclude the application of provisions of the Act to community legal centres or Australian legal practitioners employed by community legal centres.

This Part includes provisions dealing with the obligations and privileges of Australian legal practitioners who provide legal services on behalf of community legal centres as officers or employees. These practitioners are not excused from compliance with professional or other obligations of Australian legal practitioners and are subject to the legal profession rules.

Chapter 3—Conduct of legal practice

Part 1—Manner of legal practice

Division 1—Rules for Australian legal practitioners and locally registered foreign lawyers

This Part deals with the making of legal profession rules by the Law Society.

Division 2—Rules for incorporated legal practices and multi disciplinary partnerships

Legal profession rules may relate to the provision of legal services by incorporated legal practices or multi-disciplinary partnerships.

Division 3—General provisions for legal profession rules

Legal profession rules are binding on Australian legal practitioners and locally registered foreign lawyers to whom they apply, and a failure to comply with a rule is capable of constituting unsatisfactory professional conduct or professional misconduct.

Part 2—Trust money and trust accounts

Division 1—Preliminary

This Part sets out requirements and procedures for legal practitioner trust accounts.

Division 2—Trust accounts and trust money

This Division sets out requirements for trust accounts and trust money and includes definitions of new terms such as controlled money and transit money. Other provisions deal with protection of trust money, prohibition on intermixing, prohibition on deficiencies, reporting irregularities, keeping trust records and prohibition on receiving trust money under false names.

Division 3—Investigations and external examinations

Division 3 deals with investigations and external examinations of law practices. These provisions replace the provisions of the current Act that require audits. The Law Society may appoint an investigator to investigate the affairs, or a specified affair, of a law practice. The investigator may be authorised to conduct routine investigations on a regular or other basis, or he or she may be authorised to conduct investigations in relation to particular allegations or suspicions.

The Society may also designate persons as being eligible to be appointed as external examiners. Law practices must have their trust records externally examined at least once in each financial year by an external examiner appointed in accordance with the regulations. If the Society is not satisfied that this has occurred, it can appoint an external examiner to examine a law practice's trust records.

Division 4—Provisions relating to ADIs and statutory deposits

The provisions of this Division relate to authorised deposit taking institutions (ADIs).

The Law Society may approve ADIs at which trust accounts to hold trust money may be maintained.

Under provisions taken from the current Act, law practices are required to deposit money in the combined trust account, and the Society has an ongoing obligation to maintain the statutory interest account. The Society is required to pay into the statutory interest account all interest earned from deposits in the combined trust account.

Division 5—Miscellaneous

This Division includes provisions relating to various matters including protection from liability, restrictions on receipt of trust money by incorporated legal practices and multi disciplinary partnerships, disclosures to clients about money received by a law practice that is not trust money and the making of regulations for or with respect to trust money and trust accounts.

Part 3—Costs disclosure and adjudication

Division 1—Preliminary

This Part deals with the requirements in relation to costs disclosure and adjudication of costs by the Supreme Court.

Division 2—Application of Part

Under this Division, the Part will, as a general rule, apply to a matter if the client first instructs the law practice in relation to the matter in South Australia.

Division 3—Costs disclosure

When a client first instructs a law practice, the practice must disclose to the client—

the basis on which legal costs will be calculated; and

the client's right to—

negotiate a costs agreement with the law practice; and

receive a bill from the law practice; and

request an itemised bill after receipt of a lump sum bill; and

be notified of any substantial change to the matters disclosed under this section; and

an estimate of the total legal costs, if reasonably practicable or, if that is not reasonably practicable, a range of estimates of the total legal costs and an explanation of the major variables that will affect the calculation of those costs; and

details of the intervals (if any) at which the client will be billed; and

the rate of interest (if any) that the law practice charges on overdue legal costs, whether that rate is a specific rate of interest or is a benchmark rate of interest; and

if the matter is a litigious matter, an estimate of—

the range of costs that may be recovered if the client is successful in the litigation; and

the range of costs the client may be ordered to pay if the client is unsuccessful; and

the client's right to progress reports; and

details of the person whom the client may contact to discuss the legal costs; and

the avenues that are open to the client in the event of a dispute in relation to legal costs; and

any time limits that apply to the taking of any action; and

the law of South Australia applies to legal costs in relation to the matter; and

information about the client’s right—

to accept under a corresponding law a written offer to enter into an agreement with the law practice that the corresponding provisions of the corresponding law apply to the matter; or

to notify under a corresponding law (and within the time allowed by the corresponding law) the law practice in writing that the client requires the corresponding provisions of the corresponding law to apply to the matter.

There are certain exceptions to the requirement to disclose. These include, for example, where the total legal costs are not likely to exceed $1 500 (or such higher amount as might be prescribed); where the client has agreed in writing to waive the right to disclosure; and where the client is a law practice or an Australian legal practitioner.

Division 4—Legal costs generally

The provisions of this Division deal with the basis on which legal costs are recoverable, security for legal costs and interest on unpaid legal costs.

Division 5—Costs agreements

A law practice can enter into a costs agreement with a client under this Division. A costs agreement may be made—

between a client and a law practice retained by the client; or

between a client and a law practice retained on behalf of the client by another law practice; or

between a law practice and another law practice that retained that law practice on behalf of a client; or

between a law practice and an associated third party payer.

A costs agreement must be written or evidenced in writing and may provide that the payment of some or all of the legal costs is conditional on the successful outcome of the matter to which the costs relate (though there are certain types of matter to which a conditional costs agreement may not relate). A conditional costs agreement may provide for the payment of an uplift fee. Law practices are prohibited from entering into costs agreements where the amount payable is calculated by reference to the amount of any award or settlement or the value of any property that may be recovered in proceedings to which the agreement relates.

A costs agreement may be enforced in the same way as any other contract. (This is subject to Division 7, which deals with the adjudication of disputes about costs.)

Division 6—Billing

This Division prohibits a law practice from commencing legal proceedings to recover legal costs from a person until at least 30 days after the practice has given a bill to the person in accordance with the provisions of the Division. A bill may be in the form of a lump sum bill or an itemised bill. A law practice must comply with any request for an itemised bill by a person who has received a lump sum bill.

Division 7—Adjudication of costs

The Supreme Court is authorised under this Division to adjudicate and settle a bill for costs on the application of a client or a third party payer. A law practice that retains another law practice may also apply to the Court for an adjudication of a bill for legal costs.

The Court's power to adjudicate and settle a bill of costs may be exercised by the Registrar of the Court. The Registrar's decision on an adjudication is subject to appeal. Following an adjudication, the Court may order the refund of any amount overpaid or payment of legal costs in accordance with the adjudicated bill.

The Board may institute proceedings for the adjudication of legal costs on behalf of a person who is liable to pay, or has paid, the legal costs. The Board must institute such proceedings if ordered to do so by the Tribunal.

Division 8—Miscellaneous

The regulations may modify the application of Part 3 to incorporated legal practices or multi disciplinary partnerships, or both.

Part 4—Professional indemnity insurance

Under this Part, which is taken from the current Act, the Law Society may establish a scheme providing professional indemnity insurance for the benefit of local legal practitioners.

Part 5—The legal practitioners' guarantee fund

Division 1—Preliminary

This Part deals with the legal practitioners' guarantee fund.

Division 2—Guarantee fund

The Law Society is required under this Division to continue to maintain the fund, which consists of—

the money paid into it from the statutory interest account; and

all money recovered by the Society under Part 5; and

a prescribed proportion of the fees paid in respect of the issue or renewal of local practising certificates; and

costs recovered by the Attorney General, the Board or the Society in disciplinary proceedings against Australian legal practitioners or former Australian legal practitioners; and

any fee paid to the Board; and

any other money required to be paid into the fund under the Act; and

any money that the Society thinks fit to include in the guarantee fund; and

the income and accretions arising from the investment of the money constituting the guarantee fund.

The purposes for which the guarantee fund may be applied are listed in this Division.

Division 3—Defaults to which this Part applies

This Division sets out the procedures for determining when the Part applies to a default. The Part applies to a default arising from, or constituted by, an act or omission of one or more associates of a law practice, where South Australia is the relevant jurisdiction for the only associate or one or more of associates involved.

It is immaterial where the default occurs, and it is immaterial that the act or omission giving rise to or constituting a default does not constitute a crime or other offence under the law of South Australia or any other jurisdiction or of the Commonwealth.

Division 4—Claims about defaults

This Division deals with claims against the guarantee fund about defaults. If a person suffers pecuniary loss because of a default to which Part 5 applies, he or she may make a claim about the default against the guarantee fund to the Law Society. The Division includes provisions dealing with the time limit for making claims against the fund, the capping of payments after the Society has published a notice stating that a cap applies in relation to a particular default, investigation of claims by the Society and the making of payments from the fund to a claimant in advance of the determination of a claim.

Division 5—Determination of claims

Under this Division, the Law Society may determine a claim by wholly or partly allowing or disallowing it. The Society may disallow a claim to the extent that the claim does not relate to a default for which the guarantee fund is liable, and may wholly or partially disallow a claim, or reduce a claim, to the extent that—

the claimant knowingly assisted in or contributed towards, or was a party or accessory to, the act or omission giving rise to the claim; or

the negligence of the claimant contributed to the loss; or

the conduct of the transaction with the law practice in relation to which the claim is made was illegal, and the claimant knew or ought reasonably to have known of that illegality; or

proper and usual records were not brought into existence during the conduct of the transaction, or were destroyed, and the claimant knew or ought reasonably to have known that records of that kind would not be kept or would be destroyed; or

the claimant has unreasonably refused to disclose information or documents to or co operate with—

the Society; or

any other authority (including, for example, an investigative or prosecuting authority),

in the investigation of the claim.

Other provisions in this Division deal with—

the maximum amount payable in respect of a default, which must not exceed the pecuniary loss resulting from the default;

payment of a claimant's costs;

the addition of interest on the amount of a pecuniary loss;

the right of a claimant to appeal to the Supreme Court against a decision of the Society or a failure by the Society to determine a claim.

Division 6—Payments from guarantee fund for defaults

It is provided under this Division that the guarantee fund is to be applied by the Society for the purpose of compensating claimants in respect of claims allowed under the Part in respect of defaults to which the Part applies.

If the Society is of the opinion that the guarantee fund is likely to be insufficient to meet the fund’s ascertained and contingent liabilities, the Society may do any or all of the following:

postpone all payments relating to all or any class of claims out of the fund;

impose a levy on local legal practitioners (see below);

make partial payments of the amounts of one or more allowed claims out of the fund with payment of the balance being a charge on the fund;

make partial payments of the amounts of two or more allowed claims out of the fund on a pro rata basis, with payment of the balance ceasing to be a liability of the fund.

Where the Society is of the opinion that the guarantee fund is likely to be insufficient to meet its liabilities, the Society may (by resolution of the Council) impose a levy on each local legal practitioner, payable to the Society on account of the guarantee fund.

Division 7—Claims by law practices or associates

This Division deals with a claim by a law practice or associate in respect of a default arising from or constituted by an act or omission of an associate of the practice.

Division 8—Defaults involving interstate elements

This Division includes provisions giving the Society certain powers in relation to interstate defaults.

Division 9—Inter-jurisdictional provisions

The Law Society is authorised under this Division to enter into arrangements ('protocols') with corresponding authorities in other States or Territories for or with respect to matters to which Part 5 relates. This Division facilitates the investigation by the Society or a corresponding authority of another State or Territory of defaults that appear to the Society to have—

occurred solely in another jurisdiction; or

occurred in more than one jurisdiction; or

occurred in circumstances in which it cannot be determined precisely in which jurisdiction the default occurred.

Division 10—Miscellaneous

The provisions of this Division deal with—

regulation in respect of interstate practitioners who become authorised to withdraw money from a local trust account; and

the application of Part 5 to incorporated legal practices and multi disciplinary partnerships and sole practitioners.

Chapter 4—Complaints and discipline

Part 1—Introduction and application

Division 1—Preliminary

Chapter 4 adopts many of the national model provisions relating to complaints and discipline. Many provisions of the Legal Practitioners Act 1981 relating to complaint and discipline are also carried over into Chapter 4. The adoption of the model provisions will achieve greater uniformity in standards applied by regulators and courts across Australia to determine when a practitioner's right to practise should be removed or restricted. They will also ensure that the rights afforded to complainants are broadly comparable across jurisdictions. In particular, the bill adopts the definitions of unsatisfactory professional conduct and professional misconduct from the national model provisions, ensuring that this will be the same across Australia.

The Chapter applies to Australian lawyers and former Australian lawyers in the same way that it applies to Australian legal practitioners and former Australian legal practitioners. It applies to former Australian legal practitioners in relation to conduct occurring while they were Australian legal practitioners in the same way that it applies to Australian legal practitioners.

Division 2—Key concepts

Professional misconduct is defined in this Division as conduct that involves a substantial or consistent failure to reach or maintain a reasonable standard of competence or diligence occurring in the practice of law.

Unsatisfactory professional conduct is the lesser offence, and is defined as conduct occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the profession is entitled to expect from a reasonably competent legal practitioner.

Certain types of conduct that are capable of being unsatisfactory professional conduct or professional misconduct are set out, and these include serious offences, tax offences and offences involving dishonesty.

Division 3—Application of Chapter

Chapter 4 applies to an Australian legal practitioner in respect of conduct to which the Chapter applies. It applies—

whether or not the practitioner is a local lawyer; and

whether or not the practitioner holds a local practising certificate; and

whether or not the practitioner holds an interstate practising certificate; and

whether or not the practitioner resides or has an office in this jurisdiction; and

whether or not the person making a complaint about the conduct resides, works or has an office in this jurisdiction.

Part 2—Complaints and discipline

Division 1—Investigations by Legal Practitioners Conduct Board

This Division deals with investigations by the Legal Practitioners Conduct Board and provides that the Board may, on its own initiative, make an investigation into the conduct of an Australian legal practitioner if the Board has reasonable cause to suspect that the practitioner has been guilty of unsatisfactory professional conduct or professional misconduct.

The Board is required to investigate the conduct of a practitioner if directed to do so by the Attorney General or the Law Society, or if the Board receives a complaint about the conduct of the practitioner.

If the Board is satisfied that an investigation has revealed evidence of professional misconduct by an Australian legal practitioner, the Board is required to make a report on the matter to the Attorney General and the Law Society. The Board must also report suspected professional misconduct that would constitute an offence to all relevant law enforcement and prosecution authorities.

The Board is authorised to exercise certain powers in relation to a practitioner, instead of laying a complaint, if the Board is satisfied that there is evidence of unsatisfactory professional conduct or professional misconduct by the practitioner that can be adequately dealt with by the exercise of the power. The Board may only take this course of action with the consent of the practitioner. If taking this course of action, the Board may—

reprimand the practitioner; or

make an order imposing specified conditions on the practitioner's local practising certificate or recommending that specified conditions be imposed on the practitioner's interstate practising certificate—

relating to the manner or circumstances in which the practitioner engages in legal practice; or

requiring that the practitioner, within a specified time, to complete further education or training, or receive counselling, of a type specified by the Board; or

make an order requiring that the practitioner make a specified payment (whether to a client of the practitioner or to any other person) or do or refrain from doing a specified act in connection with engaging in legal practice.

Complaints of overcharging by a law practice must be investigated by the Board unless considered to be frivolous or vexatious.

The Board may arrange for a conciliation to be conducted in relation to a complaint

Division 2—Proceedings before Legal Practitioners Disciplinary Tribunal

This Division deals with proceedings in the Legal Practitioners Disciplinary Tribunal. A complaint alleging professional misconduct or unsatisfactory professional misconduct by a practitioner may be laid by the Attorney General, the Board, the Society or a person claiming to be aggrieved by reason of the alleged professional misconduct or unsatisfactory professional conduct.

If the Tribunal is satisfied, following a hearing in relation to a complaint, that a practitioner is guilty of professional misconduct or unsatisfactory professional conduct, the Tribunal may make such orders as it thinks fit, including the following:

an order that the practitioner’s local practising certificate be suspended for a specified period (not exceeding 6 months);

an order that a local practising certificate not be granted to the practitioner before the end of a specified period;

an order that—

specified conditions be imposed on the practitioner’s practising certificate; and

the conditions be imposed for a specified period; and

specifies the time (if any) after which the practitioner may apply to the Tribunal for the conditions to be amended or removed;

an order reprimanding the practitioner;

an order with respect to the examination of the Australian legal practitioner's files and records by a person approved by the Tribunal (at the expense of the practitioner) at the intervals, and for the period, specified in the order;

an order recommending that disciplinary proceedings be commenced against the practitioner in the Supreme Court;

an order recommending that the name of the practitioner be removed from an interstate roll;

an order recommending that the practitioner’s interstate practising certificate be suspended for a specified period or cancelled;

an order recommending that an interstate practising certificate not be granted to the practitioner before the end of a specified period;

an order recommending—

that specified conditions be imposed on the practitioner’s interstate practising certificate; and

that the conditions be imposed for a specified period; and

a specified time (if any) after which the practitioner may apply to the Tribunal for the conditions to

an order that the practitioner pay a fine of a specified amount, not exceeding $50 000;

an order that the practitioner undertake and complete a specified course of further legal education;

an order that the practitioner undertake a specified period of practice under specified supervision;

an order that the practitioner do or refrain from doing something in connection with the practice of law;

an order that the practitioner cease to accept instructions as a public notary in relation to notarial services;

an order that the practitioner’s practice be managed for a specified period in a specified way or subject to specified conditions;

an order that the practitioner’s practice be subject to periodic inspection by a specified person for a specified period;

an order that the practitioner seek advice in relation to the management of the practitioner’s practice from a specified person;

an order that the practitioner not apply for a local practising certificate before the end of a specified period.

Division 3—Disciplinary proceedings before the Supreme Court

If the Tribunal recommends that disciplinary proceedings be commenced against an Australian legal practitioner in the Supreme Court, the Board, the Attorney General or the Society may institute disciplinary proceedings in the Supreme Court against the practitioner. This Division includes provisions relating to the Court's jurisdiction and its power to order interim suspension of an Australian legal practitioner or to impose interim conditions on his or her practising certificate.

Division 4—Provisions relating to interstate legal practice

It is provided under this Division that if conduct by an Australian legal practitioner has been the subject of disciplinary proceedings in another State that have been finally determined, no proceedings are to be commenced or continued under this Chapter in relation to that conduct.

Division 5—Publicising disciplinary action

This Division provides for the keeping by the Law Society of a Register of Disciplinary Action. The Register is to record—

disciplinary action taken under this Act against Australian legal practitioners; and

disciplinary action taken under a corresponding law against Australian legal practitioners who are or were enrolled or engaging in legal practice in this jurisdiction when the conduct that is the subject of the disciplinary action occurred.

Disciplinary action means—

the making of an order by a court or tribunal for or following a finding of professional misconduct by an Australian legal practitioner; or

the exercise by the Board or a corresponding authority of a power where the Board or corresponding authority is satisfied that there is evidence of professional misconduct by an Australian legal practitioner; or

any of the following actions taken following a finding by a court or tribunal of professional misconduct by an Australian legal practitioner:

removal of the name of the practitioner from an Australian roll;

the suspension or cancellation of the Australian practising certificate of the practitioner;

the refusal to grant or renew an Australian practising certificate to the practitioner;

the appointment of—

a supervisor of trust money of the practitioner's practice; or

a receiver for the practitioner’s practice; or

a manager for the practitioner’s practice.

Division 6—Inter-jurisdictional provisions

The Board is authorised under this Division to enter into arrangements with corresponding authorities for or with respect to investigating and dealing with conduct that appears to have occurred in another jurisdiction or more than one jurisdiction. The Board may request a corresponding authority of another State or Territory to arrange for the investigation of a complaint being dealt with by the Board and to provide a report on the result of the investigation.

This Division also includes provisions relating to investigation of any aspect of a complaint being dealt with under a corresponding law and the sharing of information by the Board with corresponding authorities.

Division 7—Miscellaneous

This Division provides a protection from liability for various bodies and also deals with claims for privilege in investigations or proceedings under the Chapter and the waiver of privilege or duty of confidentiality.

Chapter 5—External intervention

Part 1—Preliminary

Chapter 5 provides for intervention in the business and professional affairs of law practices in certain circumstances in order to protect the interests of the general public and clients of the legal practice. An external intervener is a supervisor for the trust account of a law practice, a manager for a law practice or a receiver for a law practice.

Part 2—Initiation of external intervention

External intervention can take place in a range of circumstances set out in this Division, including where the practitioner has died, ceased to be a legal practitioner, or has become insolvent under administration.

Part 3—Supervisors of trust money

The Law Society may appoint a supervisor of trust money for a law practice where there are issues relating to the practice's trust account and it is not appropriate that the practice be wound up and terminated. The supervisor is responsible for the trust money and accounts of the practice. The supervisor has power to open trust accounts, receive trust money and keep records relating to the trust account. A supervisor's appointment terminates when a receiver or manger is appointed, when all trust funds are distributed or where the Law Society determines that the appointment should cease.

Part 4—Managers

The Law Society may appoint a manager for a law practice if the Society is of the opinion—

that external intervention is required because of issues relating to the practice's trust records; or

that the appointment is necessary to protect the interests of clients in relation to trust money or trust property; or

that there is a need for an independent person to be appointed to take over professional and operational responsibility for the practice.

The provisions of this Part deal with the appointment of a manager, the contents of a notice of appointment, the effect of service of a notice of appointment, the role of a manager and the termination of an appointment.

Part 5—Receivers

The Law Society may determine to apply to the Supreme Court for the appointment of a receiver for a law practice if of the opinion—

that the appointment is necessary to protect the interests of clients in relation to trust money or trust property; or

that it may be appropriate that the provision of legal services by the practice be wound up and terminated.

The provisions of this Part deal with the appointment of a person as the receiver for a law practice by the Supreme Court, the contents of a notice of appointment, the effect of service of a notice of appointment, the role of a receiver, the termination of a receiver's appointment and various additional matters.

Part 6—General

This Division includes general provisions relating to external interveners, including a provision that provides a right of appeal to the Supreme Court against the appointment of an external intervener in relation to a law practice. Other provisions of this Division relate to matters such as confidentiality, protection from liability and the offence of obstructing an external intervener.

Chapter 6—Investigatory powers

Part 1—Preliminary

This Chapter sets out the powers that can be exercised in trust account investigations, trust account examinations, complaint investigations and ILP compliance audits (that is, an audit in relation to an incorporated legal practice).

Part 2—Requirements relating to documents, information and other assistance

Part 2 sets out requirements that may be imposed for trust account investigations and trust account examinations. A person may be required to provide an investigator with—

access to the documents relating to the affairs of a law practice the investigator reasonably requires; or

information relating to the affairs of a law practice the investigator reasonably requires.

In relation to a complaint investigation, an Australian lawyer may be required to do any one or more of the following:

to produce, at or before a specified time and at a specified place, any specified document (or a copy of the document);

to provide written information on or before a specified date;

to otherwise assist in, or co operate with, the investigation of the complaint in a specified manner.

Part 3—Entry and search of premises

The provisions of this Part authorise the entry and search of premises by investigators in relation to trust account investigations and complaint investigations. An investigator may, for the purposes of carrying out an investigation, enter and remain on premises to exercise his or her powers of investigation. An investigator who enters premises in accordance with the Part may—

search the premises and examine anything on the premises;

search for any information, document or other material relating to the matter to which the investigation relates;

operate equipment or facilities on the premises for a purpose relevant to the investigation;

take possession of any relevant material and retain it for as long as may be necessary to examine it to determine its evidentiary value;

make copies of any relevant material or any part of any relevant material;

seize and take away any relevant material or any part of any relevant material;

use (free of charge) photocopying equipment on the premises for the purpose of copying any relevant material;

with respect to any computer or other equipment that the investigator suspects on reasonable grounds may contain any relevant material—

inspect and gain access to a computer or equipment;

download or otherwise obtain any documents or information;

make copies of any documents or information held in it;

seize and take away any computer or equipment or any part of it;

if any relevant material found on the premises cannot be conveniently removed—secure it against interference;

request any person who is on the premises to do any of the following:

to answer (orally or in writing) questions asked by the investigator relevant to the investigation;

to produce relevant material;

to operate equipment or facilities on the premises for a purpose relevant to the investigation;

to provide access (free of charge) to photocopying equipment on the premises the investigator reasonably requires to enable the copying of any relevant material;

to give other assistance the investigator reasonably requires to carry out the investigation;

do anything else reasonably necessary to obtain information or evidence for the purposes of the investigation.

The power to enter and remain on premises is subject to various provisions set out in the Part.

Part 4—Additional powers in relation to incorporated legal practices

This Part authorises the exercise of certain additional powers by investigators in respect of trust account investigations, complaint investigations and ILP compliance audits conducted in relation to incorporated legal practices.

Part 5—Miscellaneous

It is an offence under this Part for a person, without reasonable excuse, to obstruct an investigator exercising a power under the Act. The maximum penalty is a fine of $50,000 or imprisonment for 1 year.

Other provisions of this Part deal with various matters, including the protection from liability for investigators and the permitted disclosure of confidential information.

Chapter 7—Regulatory bodies and funding

Part 1—The Law Society of South Australia

This Division provides that the Law Society of South Australia is to continue in existence and includes provisions relating to the administration of the Society, the Council of the Society, the Litigation Assistance Fund (which the Society is to continue to maintain) and matters to be reported by the Society.

Part 2—The Legal Practitioners Education and Admission Council and the Board of Examiners

Division 1—The Legal Practitioners Education and Admission Council

The Legal Practitioners Education and Admission Council is continued in existence under this Division. The Council has the following functions:

to make rules prescribing—

the qualifications for admission to the legal profession; and

the qualifications for the issue and renewal of local practising certificates, including requirements for post admission education, training or experience;

to participate in the development of uniform national standards relating to the qualifications necessary for persons engaging in legal practice;

to keep the effectiveness of legal education and training courses and post admission experience under review so far as is relevant to qualifications for engaging in legal practice;

to perform any other functions assigned to the Council by the Act.

Division 2—The Board of Examiners

This Division provides for the continuing existence of the Board of Examiners, which has functions conferred on it by the Legal Practitioners Education and Admission Council or under the Act.

Part 3—The Legal Practitioners Conduct Board

The Legal Practitioners Conduct Board continues in existence. This Part includes provisions dealing with the composition of the Board, the conditions on which Board members hold office, the Director and staff of the Board and the functions of the Board, which are as follows:

to investigate suspected professional misconduct or unsatisfactory professional conduct by Australian legal practitioners;

following an investigation, to take action authorised under Chapter 4 or to lay a complaint before the Tribunal;

to receive and deal with complaints of overcharging in accordance with Chapter 4;

to arrange for the conciliation of complaints;

to commence disciplinary proceedings against Australian legal practitioners in the Supreme Court on the recommendation of the Tribunal.

The Board is authorised to delegate any of its powers or functions under the Act to any person, but cannot delegate the making of a determination as to—

whether evidence exists of professional misconduct or unsatisfactory professional conduct by an Australian legal practitioner; or

whether professional misconduct or unsatisfactory professional conduct by an Australian legal practitioner should be dealt with by the exercise of the Boards powers with the consent of the practitioner; or

whether to recommend that an Australian legal practitioner reduce or refund an amount charged by the practitioner; or

whether to lay a complaint before the Tribunal.

The Board may delegate the making of a determination that no evidence exists of professional misconduct or unsatisfactory professional conduct by an Australian legal practitioner.

Part 4—The Legal Practitioners Disciplinary Tribunal

This Division provides for the continuation of the Legal Practitioners Disciplinary Tribunal and includes provisions relating to the conditions of membership of the Tribunal, the constitution and proceedings of the Tribunal and the making of Tribunal rules.

Part 5—Lay observers

The Attorney General may, under this Part, appoint suitable persons to be lay observers for the purposes of this Chapter and Chapter 4. A lay observer is entitled to be present at any proceedings of the Board or the Tribunal and may report to the Attorney General on any aspect of the proceedings of the Board or the Tribunal.

Part 6—Annual reports

The Board and the Tribunal are each required to prepare and present to the Attorney General and the Chief Justice a report on their proceedings for the last financial year.

Chapter 8—General

Part 1—Public notaries

The provisions of this Part, which are carried over from the Legal Practitioners Act 1981, regulate the admission of public notaries. If the Supreme Court is satisfied that the name of a public notary should be struck from the roll of public notaries, the Court may, on its own initiative, or on the application of the Attorney General or the Law Society, strike the name of the public notary from the roll of public notaries.

Part 2—Miscellaneous

This Part includes miscellaneous provisions relating to the liability of principals of law practices, the disclosure of information by regulatory authorities, confidentiality of personal information, service of documents, approved forms, inspection of documents, the making of necessary or expedient regulations and various other matters.

Schedule 1—Repeal and transitional provisions

Part 1—Repeal of Act

1—Repeal of Legal Practitioners Act 1981

This clause repeals the Legal Practitioners Act 1981.

Part 2—Transitional provisions

The clauses of this Part provide for transitional arrangements in connection with the repeal of the Legal Partitioners Act 1981 and the enactment of the new Act.

Debate adjourned on motion of the Hon. S.G. Wade.


At 20:53 the council adjourned until Thursday 18 October 2007 at 11:00.


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