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Legislative Council - Fifty-Second Parliament, Second Session (52-2)
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LEGAL PRACTITIONERS (MISCELLANEOUS) AMENDMENT BILL

Committee Stage

In committee.

Clauses 1 to 3 passed.

Clause 4.

The Hon. S.G. WADE: I will not move my amendment [Wade-1] 1. This amendment and related amendments propose to recognise the independent bar and the Bar Association, to enforce professional standards of the bar and engage the Bar Association in professional support of barristers. The opposition has agreed to the Attorney-General's suggestion that these amendments be further considered through a working party, engaging both the Law Society and the Bar Association.

The government proposes to move an amendment later that would require a report on the operation as it affects barristers to be prepared. The opposition considers that this is an appropriate assurance of the goodwill of all stakeholders in the discussions on the recognition of the bar in the act. In that context, I will not be moving this and related amendments and will support the government's amendment to insert a next new section 55A. By way of clarification, I will also not move my amendments [Wade-1] 2 to [Wade-1] 8 inclusive.

Clause passed.

Clauses 5 to 31 passed.

Clause 32.

The Hon. S.G. WADE: I move:

Amendment No 9 [Wade-1]—

Page 25, line 18 [clause32(2), inserted paragraph (g)]—After 'the Commissioner' insert:

(if he or she is a legal practitioner)

I draw members' attention to the fact that this is a sister amendment to [Wade-1] 16. The regulation of any profession is about the balancing of community interests and the interests of the profession itself. The legal profession relies on the confidence of the community to fulfil its vocation. Without that confidence the effectiveness of not only the profession but the whole justice system can be severely undermined.

Overall the firms and individuals constituting the legal profession in South Australia maintain very high standards and perform an outstanding service to the community. They play an important role in dealing with society's disputes and advocating for the safety and rights of South Australians. On occasions, people who have engaged legal services have been let down by the service they have received. Such instances can threaten to bring the profession into disrepute and undermine public confidence in both the profession and the advice it provides. The public confidence in the profession depends as much on the fairness of the services provided as on a perception of whether complaints are fairly and fully dealt with.

The government's bill proposes that the Legal Practitioners Conduct Board be dissolved and replaced with a legal services commissioner. The board currently comprises seven members: four lawyers and three non-lawyers. The Legal Practitioners Conduct Board is an independent body responsible for the handling of complaints about lawyers. The board takes disciplinary action in relation to professional conduct before the Legal Practitioners Disciplinary Tribunal and the Supreme Court.

The opposition supports the government's move to establish a legal services commissioner. We share the government's hope that it will lead to more timely resolution of disputes. In establishing a legal services commissioner, the government is following the lead of three other states which have also established legal services commissioners, those states being New South Wales, Victoria and Queensland.

All three of those jurisdictions allow for a non-lawyer to be appointed as the commissioner and some have done so. New South Wales and Queensland require the person to be familiar with the nature of the legal system and legal practice and possess sufficient qualities of independence, fairness and integrity. Victoria requires that the attorney-general appoint a person that they consider has sufficient knowledge of legal practice and the legal system to be able to perform the functions of commissioner.

The national legal profession reform envisaged a national legal services board not controlled by the legal profession. As all these jurisdictions have demonstrated, the idea that only a lawyer is capable of contributing to oversight of the legal profession is an outdated concept. This bill perpetuates that view by requiring the legal services commissioner to be a lawyer of at least seven years' standing, or a former judge of a court. The bill thereby removes lay input to the professional oversight of professional conduct. South Australia would become the only state where lay involvement in the legal profession is not possible. That is unacceptable to the Liberal opposition. Quite reasonably, the community expects more. That is why I will be moving and amendment after clause 41 to ensure that there are non-lawyer members of the tribunal.

Returning to this particular amendment, the real value of this change is to allow an appointment of a commissioner completely on merit. I acknowledge that a strong understanding and experience of the legal profession is essential for the role, but you need not be a lawyer to be an effective advocate of legal profession standards. It may well be that by far the majority of candidates for the role are lawyers.

Indeed, the criteria we are proposing, adopted from Queensland and New South Wales, heavily weight the appointment in favour of those who practise law. However, there are examples of people who are not lawyers who have a wealth of experience in the sector who have not been admitted or practised for seven years, and they should be able to be considered for the role. If members share the opposition's desire to ensure that community engagement and expectations are respected, I urge them to support the amendment.

The Hon. G.E. GAGO: The government opposes this amendment. Section 51 of the act is concerned with the entitlement to practise before any court or tribunal established under the laws of South Australia. The bill currently allows the commissioner, and legal practitioners employed by the commissioner, to appear before a court or tribunal. Provided that certain criteria are met, the opposition proposes that a layperson should be eligible to be appointed the commissioner. Given that laypersons do not have an entitlement to practise before the court or tribunal, this amendment clarifies that section 51 only applies if the commissioner is a legal practitioner.

This is a consequential amendment if the proposed amendment to section 71 regarding the appointment of the commissioner is adopted. In respect of the proposed amendments to section 71 to allow the appointment of a layperson as the commissioner, the government and the profession are firmly opposed. In regulating the legal profession, the commissioner will be exercising statutory duties and powers. Experienced legal practitioners are most qualified to interpret, review and decide matters of this nature. This amendment and later amendments are therefore strongly opposed.

The Hon. M. PARNELL: I find the minister's response to this amendment quite interesting because until very recently we had, for a period of many years, an attorney-general who as the first law officer of this state, would not have been eligible to fill this position under statute, and I find that quite remarkable. I have certainly appreciated the briefings I have had with government officers and I do understand that in this role the commissioner will have to weigh up evidence and determine how the law ought to be applied to that evidence.

The minister in her response just now said that the role of the commissioner would be to exercise statutory duties and powers and I come back to the fact that we had in the present Speaker of the House of Assembly, a long-serving attorney-general, someone who would not be eligible for this position and who also, as attorney-general, exercised statutory duties and powers, in fact, far more significant powers than that being given to the commissioner under this act. I just make that point at the outset.

At the heart of this amendment, and others we will be looking at, is that question of the extent to which the supervisory role over the legal profession ought to be comprised only of legal practitioners or whether there is a role for non-lawyers. I think that if we take this particular amendment as a test for some of these other issues that will arise later, if you were to ask members of the public what they thought about the competency and ability of lawyers to exclusively regulate themselves they would probably just come back, if they understood the question, with one answer—McGee. That is what they would say. They have seen cases where the legal profession has been through various representatives out of touch with popular opinion.

The position we are talking about here, that of the commissioner, replaces a board which did have three of its seven members being non-lawyers. I understand that there is an argument that you could put the non-lawyers elsewhere in the system, perhaps as members of the tribunal, and the Hon. Stephen Wade has foreshadowed he has an amendment to do just that.

The Greens' position is that we can see no logical reason why, in addition to that, we ought not to at least leave the door open for an appropriately qualified person, not necessarily being a lawyer of seven years' standing, to fill the position of commissioner. Whilst I certainly will not speak for the Hon. Stephen Wade, and I am sure he has other career goals in mind than this position, again, as shadow attorney-general, I understand, probably would not be eligible under the government's model for this position, yet I would be having had the requisite years of experience.

The Greens' position is to support this amendment. I accept what the Hon. Stephen Wade said, that in all likelihood a senior lawyer will be the person who ends up in a role like this, but need not be. It is not a prerequisite for this job. There are other people in the community who understand the legal system, they understand the legal profession, and they would be more than adequate to fill this role.

The Hon. D.G.E. HOOD: I think the Hon. Mr Parnell has said it well. We do not see why this position should be exclusively for senior lawyers, although I think in all likelihood the position of commissioner, in particular, would be filled by a senior lawyer. That being said, Family First can envisage situations where it may, in fact, be desirable that the person was not a senior lawyer. For that reason, we will be supporting the amendment.

The Hon. J.A. DARLEY: For the points already outlined by the Hon. Mark Parnell, I will be supporting the amendment.

The committee divided on the amendment:

AYES (11)
Darley, J.A. Franks, T.A. Hood, D.G.E.
Lee, J.S. Lensink, J.M.A. Lucas, R.I.
Parnell, M. Ridgway, D.W. Stephens, T.J.
Vincent, K.L. Wade, S.G. (teller)
NOES (5)
Finnigan, B.V. Gago, G.E. (teller) Hunter, I.K.
Kandelaars, G.A. Maher, K.J.
PAIRS (4)
Dawkins, J.S.L. Zollo, C.
Bressington, A. Wortley, R.P.

Majority of 6 for the ayes.

Amendment thus carried.

The Hon. G.E. GAGO: I move:

Amendment No 1 [AgriFoodFish-1]—

Page 25, after line 19 [clause 32(2)]—After inserted paragraph (g) insert:

and

(h) the Independent Commissioner Against Corruption and a legal practitioner engaged by the Independent Commissioner Against Corruption.

Section 51 of the Legal Practitioners Act sets out persons who are entitled to practise before any court or tribunal established under the law of the state. Currently, the list includes lawyers acting for the Crown or the Director of Public Prosecutions, legal practitioners acting on the instructions of the Corporate Affairs Commission, and legal practitioners employed by the society. This amendment inserts a new paragraph into subsection (1) to give a right of audience to the Independent Commissioner Against Corruption and any lawyer engaged by the commissioner. This amendment was requested by the new commissioner.

The Hon. S.G. WADE: The opposition supports this amendment and therefore humbly submits that there will be no need to divide.

Amendment carried; clause as amended passed.

Clause 33 passed.

Clause 34.

The Hon. S.G. WADE: As I indicated earlier, my two amendments are bar-related amendments and therefore I do not propose to move them.

Clause passed.

Clauses 35 to 37 passed.

Clause 38.

The Hon. J.A. DARLEY: I move:

Amendment No 1 [Darley-1] 1—

Page 31, lines 20 to 25 [clause 38(1)]—Delete subclause (1) and substitute:

(1) Section 60(1)—delete subsection (1) and substitute:

(1) Subject to this Part, if a person suffers loss as a result of a fiduciary or professional default, the person may, by instrument in writing served on the Society, claim compensation under this Part.

(1a) Section 60(2)(b)—delete ', or may reasonably be expected to recover (otherwise than under this Part)'

The amendment seeks to make the guarantee or fidelity fund one of first resort. Under the current act, where a person suffers loss as a result of fiduciary or professional default and there is no reasonable prospect of recovering the full amount of that loss, the person may claim compensation. The amount of a claim cannot exceed the actual pecuniary loss suffered by the claimant in consequences of the fiduciary or professional default, less any amount that the claimant has received or may be reasonably expected to recover.

Section 64 of the act goes on to provide that where the society has published a notice in respect of a specified fiduciary or professional default, or a specified series of fiduciary or professional defaults, the maximum amount that may be applied towards satisfaction of all claims to which the notice relates is the prescribed percentage of the balance of the guarantee fund. At the moment, the regulations prescribe an amount of 5 per cent. Further, the act provides that where the maximum amount that may be applied to satisfy claims does not permit the full satisfaction of the claims, the Law Society may apportion that amount between the various claims in such manner as it thinks fit.

Under the existing act, really what we have is a situation where not only do claimants have to establish that they have no reasonable prospect of recovering the full amount of their loss by other means but also the possibility of not recovering the full amount of money owed to them by virtue of the fact that the net amount of all claims cannot exceed 5 per cent of the balance of the guarantee fund.

As I pointed out during my second reading contribution, these claimants are innocent victims. When a person puts money into a solicitor's trust account they do so in good faith and with the expectation that they should be able to have access to that money when necessary. If that money goes missing through no fault of their own, they should be able to recover it from the fund without having to endure what the Magarey Farlam victims were confronted with. The fact that no other jurisdiction has a fund of first resort is no excuse. South Australia should lead by example. The bill provides that the society may, at its absolute discretion, make payments to a claimant in advance of the determination of a claim if it is satisfied that the claim is likely to be allowed and a payment is warranted to alleviate hardship.

The suggestion that an individual be forced to demonstrate that they are experiencing financial hardship before they can get their hands on their own money is nonsense. This is a fund that is made up predominantly of money earned from clients' funds. What the government is really proposing is no different from the 2007 situation. Innocent victims will have to explore every other avenue possible, including the firm in question, the firm's bank, the firm's auditors, and ultimately the courts in order to get their money back. If all that fails, they can then make a claim against the guarantee fund, but even then there is no guarantee that they will recover the full amount owed to them.

This amendment is a sensible amendment. It is consistent with that moved by the former shadow attorney-general in 2007. I would urge all honourable members, and the opposition in particular, to give it the consideration it deserves.

The Hon. G.E. GAGO: The government rises to oppose this amendment. This amendment seeks to make the fund a fund of first resort. This is impractical and therefore we oppose it.

The government has attempted to address the hardship that potential claimants had with the requirements under the act as it stands by inserting a reasonable test, that is, the prudent self-funded litigant test. The government considers that the insertion of this new test is a reasonable approach to address this issue and will continue to oppose attempts to make the fund a fund of first resort.

The Hon. S.G. WADE: As indicated in my second reading contribution, the opposition has given this issue a lot of thought and believes that there are no grounds for shifting the fund from a fund of last resort to a fund of first resort. We did indicate that we believe that, consistent with the national legal profession reform, there should be a consideration given to a claims management at arm's length from the Law Society, but we cannot support this amendment.

The Hon. D.G.E. HOOD: It appears that this amendment is going to be defeated, but I just want to place on the record that Family First supports it strongly.

The Hon. M. PARNELL: Six years is quite a long time, and when this matter first came up back in 2007 this question about whether the fund should be one of first resort or one of last resort was in fact, I think it is fair to say, probably the main sticking point in the bill. We had a procession of Magarey Farlam victims coming through our offices and telling us their genuine stories of hardship about how, as the Hon. Stephen Wade said, they had entrusted their money to a lawyer, the money went missing, and the lengths that they were forced to go to in order to get compensation.

Back in 2007, the Greens accepted the view presented by the government and the Law Society, but we did so with some little disquiet because we were not convinced that the fairness was being built into the system. The government has now made some changes. We have a new test, the prudent self-funded litigant test, to try to make clear the lengths to which people need to go to try to recover the money themselves before calling on the guarantee fund.

Given that it is a dead rubber, the Hon. Dennis Hood has said it is not particularly a live issue for us, but I just want to put on the record now that the Greens are inclined to support looking at this again and would be inclined to support either an increase in accessibility to the fund or, as the Hon. John Darley has put forward now, making it a fund of first resort.

But it is a dead rubber at the moment, so it does not really matter what the Greens or any of us on the crossbench think because the amendment will be defeated, but I acknowledge the Hon. John Darley for putting it back before us because the issue has not gone away. There is still unfairness in the system, and I think we will eventually be revisiting this probably after the next defalcation. That is the most likely time people are going to be thinking about this issue again.

The Hon. K.L. VINCENT: Again, the decision has been made but I would like to make it very clear that Dignity for Disability supports this amendment and would have liked to see it pass.

Amendment negatived; clause passed.

New clause 38A.

The Hon. J.A. DARLEY: I move:

Amendment No 2 [Darley-1]—

Page 31, after line 34—After clause 38 insert:

38A—Amendment of section 61—Limitation of claims

Section 61(1)—delete 'three' and substitute '6'

Section 61 of the act provides the society may fix a day not earlier than three months after the publication of the notice on or before which claims in respect of a fiduciary or professional default or a series of professional or fiduciary defaults must be made. It goes on to provide that a claim not made within the time prescribed by the notice is barred unless the society determines otherwise. The amendment is straightforward. It seeks to replace the reference to three months with six months instead. All it does is provide potential claimants with a bit more time to make a claim.

The Hon. G.E. GAGO: The government is willing to support this amendment at this particular point in time; however, we reserve the right to amend this provision further at a later stage when we have had an opportunity to consult with the Law Society. Unfortunately the timing of the tabling of this particular amendment by the Hon. John Darley did not allow us time to consult with the Law Society about this. Nevertheless, we are keen to progress this bill and we reserve our right to come back and address this at a later stage if we need to. So, for the time being, we support this amendment.

The Hon. S.G. WADE: The opposition welcomes the government's position and we look forward to the advice, presumably in the House of Assembly, as to the Law Society's consideration of the proposal.

New clause inserted.

New clause 38B.

The Hon. J.A. DARLEY: I move:

Amendment No 3 [Darley-2]—

Page 31, before line 35—Before clause 39 insert:

38B—Amendment of section 64—Satisfaction of claims

Section 64(2)—delete 'the prescribed percentage' and substitute:

a percentage (which must not be less than 30%) prescribed by regulation for the purposes of this subsection

As I explained earlier, section 64 of the act provides that where the society has published a notice in respect of specified fiduciary or professional default or a specified series of fiduciary or professional defaults, the maximum amount that may be applied towards satisfaction of all claims to which the notice relates is a prescribed percentage of the balance of the guarantee fund. At the moment the regulation prescribes an amount of 5 per cent.

My preferred position is that there not be prescribed limits applicable to claims. I do not agree with the government's position that there needs to be a limit. However, as I understand it, any such amendment would most definitely be opposed. As such, I am proposing that section 64 be amended so that the prescribed percentage be no less than 30 per cent of all claims. The government's concern, of course, is that if there were to be a repeat of the Magarey Farlam saga in South Australia but on a much larger scale and without some sort of prescribed cap then this could potentially deplete the fund of all of its assets. I expect that this could be a problem but I do not accept that it is a problem that cannot be overcome. There could, for instance, be some sort of mechanism for changing the gap in these sorts of extraordinary cases.

As I understand it, there are at least two other jurisdictions that do not have a cap on the limits that can be paid out of their respective funds and they do not seem to have the same concerns as we do here. The point is that, once again, we are dealing with innocent victims. History has shown us that neither the government nor society have shown a great deal of concern about the innocent victims of these sorts of affairs. In closing, I understand that there may be an alternative amendment to mine proposed by the opposition. I am certainly willing to consider that if honourable members are more inclined to support that position.

The Hon. S.G. WADE: The Hon. Mr Darley foreshadowed the fact that I was considering an amendment, and I propose to do that orally. I move:

Amendment No 1 [Wade-2]—

Amendment to Amendment No 3—Inserted clause 38B—

Delete '30%' and substitute '20%'

Again, it may well be that this is a matter that the government might want to, if you like, take on board without prejudice and consider between the houses. It is the opposition's general position that 5 per cent seems to be far too low a cap considering the experience of the fund over recent years. The payouts have been low, the quantum of the fund is relatively high.

We are a fiscally conservative party; that is why we won government last Saturday. We do not want to do anything that would damage the interests of consumers by threatening the viability of the fund, so we feel more comfortable with a quantum of 20 rather than 30. If the government sees fit to support the amendment or consider an alternative when it goes to the other place, that may be a way forward.

The Hon. G.E. GAGO: The government rises to oppose the Hon. John Darley's amendment. The current requirement is a prescribed percentage of the balance of the fund as disclosed in the accounts of the fund as last audited before the proposed application of money towards satisfaction of the claims. The prescribed percentage is 5 per cent. Five per cent of the fund as of 2011-12 would be approximately $1.3 million. Providing a high percentage minimum gap in the act we think is too inflexible. There could be a situation where the fund is severely depleted by a claim, leaving insufficient funds to meet a minimum cap.

In its current healthy state, the fund could cope with a significant claim, but that may not always be the case. However, the government accepts that the current cap of 5 per cent is too low so, with that, the government is prepared to indicate now that it will accept the Hon. Stephen Wade's amendment of 20 per cent with the same proviso as the earlier amendment, and that is that we reserve the right to be able to consider this further between the houses and revise our position when it goes back to the lower house. So, we support 20 per cent but not 30 per cent.

The Hon. D.G.E. HOOD: I had intended to support the Hon. Mr Darley's amendment but, in light of the comments by the minister, I think it is an excellent proposition that the government has put forward. I commend the government, in fact, for being flexible in that regard. Frankly, I see no reason why it should not be 50 per cent, but 20 per cent is a lot better than 5 per cent, and we will certainly support it.

The Hon. M. PARNELL: The Greens, too, will be supporting the 20 per cent figure as a way of moving this forward.

The CHAIR: Therefore, the question becomes that the amendment moved by the Hon. Mr Wade to new clause 38B as proposed to be inserted by the Hon. Mr Darley be agreed to.

Amendment carried; new clause as amended inserted.

Clauses 39 and 40 passed.

New clause 40A.

The Hon. S.G. WADE: I move:

Amendment No 13 [Wade-1]—

Page 32, after line 26—After clause 40 insert:

40A—Amendment of section 67A—Annual report

Section 67A(2)—delete subsection (2) and substitute:

(2) The report must—

(a) state the amount of the payments from the Fidelity Fund during the financial year and the nature of the claims in respect of which payments were made; and

(b) contain the audited statement of accounts of the Fidelity Fund for the period to which the report relates.

This amendment relates to the annual report of the Fidelity Fund. This amendment would require the annual report of the Fidelity Fund, which is already required under section 67A of the act to be prepared by the Law Society to include information detailing the number and nature of claims made each year and the audited statement of accounts for the fund.

At present the annual report to parliament only requires that the report state the amounts of payments from the guarantee fund during the financial year and the nature of the claims in respect of which payments were made. The Law Society, I understand, prepares more detailed information in its own annual report, but these reports are not publicly available. To support public confidence in the fund, it is the opposition's view that there needs to be more transparency. This is a simple change in administrative terms, but it is our view that it will contribute to the overall accountability of the fund and the programs and the claimants it supports. I commend the amendment to the council.

The Hon. G.E. GAGO: The government supports this amendment.

New clause inserted.

Clause 41.

The Hon. S.G. WADE: I indicate that [Wade-1] 14 is a bar-related amendment and I do not intend to move it. Instead, I move:

Amendment No 15 [Wade-1]—

Page 34, line 8 [clause 41, inserted section 71)2)]—After 'the Governor' insert:

, following consultation about the appointment by the Attorney-General with the Society and the South Australian Bar Association Incorporated,

This amendment would require the Attorney-General to consult with the Law Society and the Bar Association about the appointment of a commissioner. Given that it is important that the commissioner has the respect and confidence of the legal profession, it is the opposition's view that it is appropriate that this consultation should occur. While one would usually expect the consultation would happen in practice, it is not our view that this should be taken for granted. Hence I move this amendment on behalf of the opposition to provide assurance that the consultation does occur.

The Hon. G.E. GAGO: The government opposes this amendment. It is again linked with the opposition's attempt to insert the South Australian Bar Association into the act without full consequences of such action, we think, being thought through properly.

The Hon. S.G. WADE: To clarify, in case members are asking why we are not pursuing the other bar-related amendments and why we mention the Bar Association here, the Bar Association exists, it is an incorporated body and recognised under the law of South Australia. Whether or not it is an appropriate body to engage in professional oversight is a matter the working group is discussing but, considering that it is standard practice for all members of this chamber, the government and the opposition, to consult the Bar Association, we think that, if it is appropriate for the government to consult them about legislation and not consult them about the appointment of an important person like a legal services commissioner, it is somewhat bizarre.

I understand they are consulted about appointments such as QCs and I presume judges, although I admit that I am vague on that. This is a consultation. They do exist, they might provide appropriate input and, considering that the house has already indicated that we think it is appropriate for a non-lawyer to be appointed, I think it is particularly important that consultation be assured so that the Attorney-General, whoever that might be at the time, can ensure that he or she is aware of the views of the legal profession in a private appropriate way rather than those matters becoming a surprise after an appointment.

The Hon. M. PARNELL: Could I ask a question of the mover? In response to the minister's comments in relation to the other amendments that the opposition is not proceeding with that related to the Bar Association, my question of the mover is: if it is okay for those matters to be deferred to a working group, why does this particular amendment not fall into that category?

The Hon. S.G. WADE: I will make another attempt at explaining that. The other amendments I was moving, what I call the 'role of the bar' set, are intended to recognise the independent bar to enforce the professional standards which the Bar Association enforces on the independent bar and to engage the Bar Association in professional support of barristers.

That requires a certain level of governance standards. You cannot have, shall we say, a gentlemanly cigar club imposing what are statutory duties, but with all due respect I would not think it necessary or appropriate to consult a gentlemanly cigar club. The Bar Association does operate at a much higher level than that, but one of the issues the working party will be working through is: do they reach a sufficient threshold to take part in the regulatory framework under this act?

I am saying that the working group is going to discuss whether or not they reach the government's threshold, and relevant issues. I appreciate governance is not the only issue. There is a range of issues that will need to be discussed to, as the government puts it, consider the operation of the act in the context of those people who operate solely as barristers. To be an appropriate body to be recognised for the sake of consultation, I believe you need to meet a much lower threshold. I know it is the best suggestion.

It would not be hard to look in legislation for bodies that are required to be consulted that would not meet the high standard of governance that might be required for a body exercising statutory regulatory roles. This is not proposing a statutory regulatory role. All we are asking is that they be consulted. The Attorney-General does not have to agree with their view. For that matter, if the Bar Association Inc. ceases to exist, there is nothing stopping the Attorney-General going ahead and making appointment.

I hope that clarifies for the Hon. Mark Parnell that this is not, as the minister suggests, an attempt to put the foot in the door in terms of the Bar Association and pre-empting the discussions of the working group. We believe the consultation issues are very different from the regulatory issues.

The Hon. M. PARNELL: I thank the member for his answer and I accept that incorporated bodies are referenced in a number of statutes, usually in a consultative role. Thinking this through, the Greens have accepted that the commissioner may be a non-lawyer, or at least a lawyer without the requisite seven years' experience, so in fact I think it is consistent that if that was to be proposed by the government, that either a less experienced or a non-lawyer be appointed, then the legal profession be consulted, so that they hopefully are comfortable with the position.

I take the honourable member's point that the only requirement is to consult with the Law Society and the Bar Association. It is not a right of veto, and there is no comeback if the minister decides not to take any account of their concerns, but it seems to me consistent with the position we took earlier. If there is to be a less experienced lawyer or a non-lawyer then the more consultation with the legal profession the better. We will support this amendment.

The Hon. D.G.E. HOOD: I agree. I think a consistent position is to support the amendment and compel the consultation.

The Hon. J.A. DARLEY: I will be supporting the amendment.

The Hon. K.L. VINCENT: I am also supporting the amendment.

Amendment carried.

The Hon. S.G. WADE: I know why the committee is being so focused in its considerations. On one side, I have the President suffering and on the left-hand side I have the Hon. Mark Parnell suffering. I hope to stay standing before this debate concludes. The winter recess might have passed, but the winter ills have not passed us by. I move:

Amendment No 16 [Wade-1]—

Page 34, lines 10 to 17 [clause 41, inserted section 71(3)]—Delete subsection (3) and substitute:

(3) Although a person appointed as Legal Profession Conduct Commissioner need not be a legal practitioner, the Commissioner must be a person who, in the opinion of the Attorney-General—

(a) is familiar with the nature of the legal system and legal practice; and

(b) possesses sufficient qualities of independence, fairness and integrity.

In my contribution in relation to [Wade-1] 9, I argued the case, and I would suggest therefore, whilst this is a more substantial amendment, it is nonetheless consequential on [Wade-1] 9.

The CHAIR: We understood you were not moving this one.

The Hon. S.G. WADE: I am moving it, but I would suggest to the committee that it is effectively consequential. I am happy to re-run the argument.

The CHAIR: No, that is alright.

The Hon. G.E. GAGO: The government accepts that this amendment is closely related. They are sister amendments, and we oppose this, as we did the former amendment.

The Hon. M. PARNELL: As there is a new member in the chair, I agree with both the minister and the shadow attorney that this is consequential and therefore the Greens will support it, as we supported its companion amendment.

Amendment carried.

The Hon. S.G. WADE: I move:

Amendment No 17 [Wade-1]—

Page 35, after line 5 [clause 41, inserted section 72]—After inserted subsection (3) insert:

(4) The Commissioner may be represented in proceedings before any court or tribunal by a legal practitioner employed or engaged by the Commissioner.

I would also submit that this is consequential. Given the possibility that the commissioner may not be a legal practitioner, it is necessary in our view to insert the proposed subsection so that the commissioner can be represented in proceedings.

Amendment carried.

The Hon. S.G. WADE: I move:

Amendment No 18 [Wade–1]—

Page 36, lines 12 and 13 [clause 41, inserted section 77(1)]—Delete '(except the matters referred to in subsection (2) or any other prescribed function or power)'

It is up to the committee as to whether it wants to regard this amendment as consequential. We believe that the commissioner, as a lot of statutory officers, should have the freedom to delegate matters. There may be circumstances in which a delegation is necessary, for example, to handle issues such as conflict of interest, and so the limitations on the delegation we would say, even in a general sense, should be considered carefully, but particularly in the context of the possibility of a commissioner who is not a legal practitioner there may be matters that are peculiarly of a legal nature which the commissioner may wish to delegate. I would stress that this—

The Hon. G.E. Gago: If it helps, we see it as consequential.

The Hon. S.G. WADE: Thank you for that indication, minister.

Amendment carried.

The Hon. S.G. WADE: I move:

Amendment No 19 [Wade–1]—

Page 36, lines 14 to 21 [clause 41, inserted section 77(2)]—Delete inserted subsection (2)

Amendment carried.

The Hon. S.G. WADE: It if assists the Chair, and I am sure that the government would agree, the bar amendments [Wade-1] 20 through to [Wade-1] 26 are all bar-related amendments and therefore I do not propose to move them.

Clause as amended passed.

New clause 41A.

The Hon. S.G. WADE: I move:

Amendment No 27 [Wade–1]—

Page 50, after line 12—After clause 41 insert:

41A—Amendment of section 78—Establishment of Tribunal

(1) Section 78(2)—after 'Chief Justice' insert:

of whom—

(a) 10 must be legal practitioners; and

(b) 5 must be persons who are not legal practitioners but who are familiar with the nature of the legal system and legal practice.

(2) Section 78(3)—after 'Tribunal' insert 'under subsection (2)(a)'

(3) Section 78(4)—after 'member of the Tribunal' insert 'who is a legal practitioner'

(4) Section 78(4)—after 'another member' insert 'who is a legal practitioner'

I will try to expedite my comments because I have had an indication from the government that they are inclined to support this amendment. I will briefly summarise it for the sake of the record. In the context of maintaining appropriate engagement with the community in the context of the government's proposal to remove laypeople and consumers from the legal profession oversight, we looked at ways, whilst we supported the Legal Services Commissioner concept, we could maintain consumer involvement.

The Medical Board of South Australia has similar proportions of lay members as is proposed by the amendment, as does the legal practitioners' disciplinary tribunal in Tasmania. We believe that it is an appropriate balance, and there is assurance provided in the amendment that legal practitioners will be the majority and will provide the presiding member. I commend the amendment to the committee.

The Hon. G.E. GAGO: The government supports this amendment. Currently, the tribunal consists of 15 members who are legal practitioners of at least five years' standing. This amendment would change the constitution of the tribunal to comprise 10 legal practitioners and five laypeople who are familiar with the legal system and legal practice, so we consider this to be a reasonable amendment to put forward.

The Hon. M. PARNELL: The Greens, too, will be supporting this amendment. I know that it is just a matter of semantics. Often when we talk we interchange the terms 'laypeople' and 'consumers' but, just to make it clear, I do like the wording of the honourable member's amendments. They are people who are not necessarily consumers of legal services; they are people 'who are not legal practitioners but are familiar with the nature of the legal system and legal practice'. They may, in fact, be community advocates who might be appropriate. Whether or not they have actually used any legal services themselves is neither here nor there. I just make the clarification that we are talking about five well-informed non-lawyers.

New clause inserted.

Clause 42.

The ACTING CHAIR (Hon. R.P. Wortley): The next amendment is amendment No. 28, which is consequential.

The Hon. S.G. WADE: Mr Acting Chair, I have the right to move the amendment. I move:

Amendment No 28 [Wade-1]—

Page 51, after line 5 [clause 42(2)]—After inserted subsection(1b) insert:

(1c) The Tribunal when constituted of a panel of 3 of its members must include at least 1 member who is a legal practitioner and at least 1 member who is not a legal practitioner but when the Tribunal consists of only 1 of its members the member constituting the Tribunal must be a legal practitioner.

I submit that this amendment is consequential.

Amendment carried; clause as amended passed.

The Hon. S.G. WADE: I indicate that amendments [Wade-1] 29 through to 35 are all bar-related amendments, and I do not propose to move them.

Clauses 43 to 53 passed.

New clause 53A.

The Hon. S.G. WADE: I move:

Amendment No 36 [Wade-1]—

Page 60, after line 8—After clause 53 insert:

53A—Repeal of section 95C

Section 95C—delete the section.

This amendment would restore the common law privilege against self-incrimination. The Liberal Party has consistently sought to preserve the privilege against self-incrimination in the face of a consistent attempt by this government to undermine it. If I can briefly restate the creed that I put forward on this matter, that we believe in the opposition that the privilege against self-incrimination should be maintained unless there are strong public policy grounds not to do so. We do not believe that the legal profession bill represents such a risk to public health and safety that the privilege against self-incrimination should be removed.

I recognise that some stakeholders would prefer to codify the privilege in an attempt to protect it. On advice, the opposition considers that the best way to protect the privilege is to remove these provisions and to rely on the common law.

The Hon. G.E. GAGO: The government rises to oppose this amendment. As the honourable member outlined, this section removes the privilege against self-incrimination and legal profession privilege for the purposes of obtaining information or documents under the act so that investigators who may be investigating serious breaches of the act, such as the Magarey Farlam defalcation, can get to the truth of the matter.

However, the privileges are only abrogated to a limited extent. In the case of privilege against self-incrimination, any information furnished in compliance with the requirement is not able to be used against the person other than in proceedings in respect of the making of a false or misleading statement. In the case of legal professional privilege the answer or document will not be admissible in civil or criminal proceedings against the person who would, but for this section, have the benefit of the legal professional privilege.

There has been no objection to the operation of section 95C in the past, and the government considers that there is good reason for the retaining of section 95C. In this situation that reason is ensuring that all relevant information is disclosed to assist officers in the investigation of serious breaches of the act and, therefore, for those reasons outlined, we oppose this amendment.

The Hon. M. PARNELL: This is obviously a live issue now as we have two different viewpoints. My understanding is that, as the minister has said, section 95C has been in the legislation for some period of time and the opposition has taken the opportunity to revisit that question because the act is being revised. We make no criticism of the opposition for doing that and, in fact, it is a technique that all of us have used at various stages. When an act is opened up for reform, it is opened up for reforms other than those that the government had in mind.

I agree with the Hon. Stephen Wade that the principle of the right to silence, if you like, which is also referred to as the right not to have to incriminate yourself, can be overridden if there are strong public policy grounds. The most recent debate we had on this issue was in relation to natural resources management. I think it is probably fair to say that the only real question is: where do we draw the line? The question I pose is: what is at stake? Examples have been given of people who may have poisoned a water supply: do they have the right to silence or do we have a right as a community to insist that they answer questions? I think most people accept that no, we insist they answer questions.

In relation to NRM it might have been some harm that was potentially being done to the environment, not necessarily to human health but to environmental health. The Greens took the view that they were strong public policy grounds that meant that the right to silence, the right against self-incrimination could be overridden. The question we have to ask ourselves here is: what is at stake? The minister may have another answer but the only answer I can think of is that it is probably just money. I cannot see that much else is at stake; it is really just about money.

I guess the question—and it is a bigger public policy question—would be: to what extent do we want our legal system to retain this right to silence, the right against self-incrimination and, if we want it to remain but we want some exemptions, where do we draw the line? For now, the Greens are not convinced but I will hear anything more from the minister. We are not convinced that the convenience of investigators to perhaps find where the missing money went is sufficient reason to do away with the long-held legal right that a person does not have to incriminate themselves.

Certainly, I know in my discussions with officers, that I used the example of someone who might have robbed a bank. Do they have a right to silence? Well, yes, they do. Then the question became: what if it is an inside job; what if it is the bank teller who actually robbed the bank? Is there any particular duty that attaches to them that is different from the external bank robber? I am not sure there is. I think that that general principle that you are not obliged to incriminate yourself applies through most of the criminal law with rare exceptions but I think, as the Hon. Stephen Wade has alluded to, a growing number of exceptions. The question is whether this is a category here that should fall into that.

The Greens' starting position is that we are not convinced that section 95C is appropriate. We are inclined to support its deletion but I would be interested to hear any other arguments that the minister puts forward and, in particular, whether there is any human life at stake, whether there is any major environmental harm at stake, or whether we are really just talking about money.

The Hon. D.G.E. HOOD: Family First is not aware that there have been any complaints or abuses or allegations of complaints, if you like, about the misuse of section 95C in this particular bill. It is a fundamental issue, I think, and as the Hon. Mark Parnell has outlined quite succinctly, these are matters that our law takes very seriously, and so it should. However, Family First is persuaded by the minister's position and that is that this will be of assistance to investigators in the very rare circumstances that it would be required to be used. For that reason, we will not be supporting its deletion or the amendment.

The Hon. G.E. GAGO: Can I answer a question asked by the Hon. Mark Parnell?

The ACTING CHAIR (Hon. R.P. Wortley): Yes, minister.

The Hon. G.E. GAGO: Substantially, what is at stake was the question. It is basically money and a lot of it. There may be other considerations, and if there are I am happy to take that on notice and bring that back, but certainly the financial considerations are significant.

The Hon. S.G. WADE: I thank the minister for her answer to the Hon. Mark Parnell's question and also for the reflections the Hon. Mark Parnell provided. He raised the point that if you have a criminal who is grabbing the money out of the bank, we are going to give them the protection and the privilege against self-incrimination, but if you have a lawyer who is grabbing it out of their trust account, we will not give them that privilege. So the government and those who are inclined to support them are giving more protection to criminals than to members of the legal provision. We believe that is a fundamental right, as members have alluded to, and we can see no public policy grounds to treat this as a special case and have the privilege removed.

The Hon. J.A. DARLEY: I am persuaded by the government's argument and I will be opposing the amendment.

The Hon. M. PARNELL: Maybe it is a clarification that the minister can provide because I actually do not have the full text of section 95C in front of me, but I would have thought the consequences of someone breaching is simply extra charges or extra penalties to add to those that they are already facing. What I mean by that is that if the law says you do not have the right to silence but you exercise or you choose to be silent anyway, then all you are really doing is adding to the charge sheet and it is an extra offence that you will be charged with and extra penalties may be imposed on you. Have I understood the nature of a breach of that self-incrimination provision?

The Hon. G.E. GAGO: I am advised yes, that is the correct interpretation.

The committee divided on the new clause:

AYES (9)
Franks, T.A. Lee, J.S. Lensink, J.M.A.
Lucas, R.I. Parnell, M. Ridgway, D.W.
Stephens, T.J. Vincent, K.L. Wade, S.G. (teller)
NOES (8)
Brokenshire, R.L. Darley, J.A. Finnigan, B.V.
Gago, G.E. (teller) Hood, D.G.E. Maher, K.J.
Wortley, R.P. Zollo, C.
PAIRS (4)
Bressington, A. Kandelaars, G.A.
Dawkins, J.S.L. Hunter, I.K.

Majority of 1 for the ayes.

New clause thus inserted.

Clauses 54 and 55 passed.

New clause 55A.

The Hon. G.E. GAGO: I move:

Amendment No 1 [AgriFoodFish—4]—

Page 61, after line 15—After clause 55 insert:

55A—Insertion of section 98

After section 97 insert:

98—Review of operation of Act in relation to barristers

(1) The Minister must, within 6 months after the commencement of this section, cause a review to be undertaken into—

(a) the operation of this Act insofar as it affects legal practitioners who practise the profession of the law solely as barristers; and

(b) the operation of section 6, with particular reference to the role of a separate bar.

(2) A report on the review must be submitted to the Minister within 3 months after the commencement of the review.

(3) The Minister must, within 12 sitting days after receiving the report under this section, cause copies of the report to be laid before both Houses of Parliament.

This amendment reflects the government's intention to consider the Bar Association's request to be included in the new legislation. The government is happy to support further work on how the independent bar in South Australia ought to be recognised in the act but is mindful that it will involve the resolution of a number of interesting policy issues, including how to ensure that South Australia retains a fused profession whilst recognising the existence of an independent bar. This issue is being considered by a working party.

The Hon. S.G. WADE: As indicated in my comments on clause 4, the opposition welcomes this amendment and supports it.

New clause inserted.

Clause 56.

The Hon. G.E. GAGO: I move:

Amendment No 1 [AgriFoodFish–2]—

Page 77, after line 18 [clause 56, inserted Schedule 2, clause 1(1)]—After the definition of approved ADI insert:

barrister means a legal practitioner who practises the profession of the law solely as a barrister;

Amendment No 2 [AgriFoodFish–2]—

Page 82, line 34 [clause 56, inserted Schedule 2, clause 10]—Delete 'legal practitioner' and substitute 'barrister'

Amendment No 3 [AgriFoodFish–2]—

Page 99, after line 5 [clause 56, inserted Schedule 3, clause 1]—After the definition of adjudication insert:

barrister means a legal practitioner who practises the profession of the law solely as a barrister;

Amendment No 4 [AgriFoodFish–2]—

Page 103, line 18 [clause 56, inserted Schedule 3, clause 9]—Delete 'person engaged only as a barrister' and substitute 'barrister engaged'

As detailed earlier, the Bar Association has requested recognition in the new legislation, and the way that this can properly be done is the subject of a working party. These amendments insert a definition of 'barrister' as a first step in the process of that recognition.

Amendments carried.

The Hon. J.A. DARLEY: I move:

Page 103, after line 30 [clause 56, inserted Schedule 3, clause 10(1)]—After paragraph (b) insert:

(ba) whether or not the law practice is prepared to enter into an arrangement with the client under which the law practice will not receive trust money for the purposes of the client's matter; and

The purpose of this amendment is to make it clear to clients that they can come to a mutually agreeable alternative to depositing money into a lawyer's trust account, provided, of course, that both parties agree. Law firms are well within their right to refuse to enter into such an agreement, which means that clients who have concerns about how their money is held on trust can shop around for another firm that is willing to accommodate them. It could be that they agree to deposit the money into an account that is not held or controlled by the lawyers at all, or they can provide the lawyers with some sort of guarantee or security with respect to their fees. There is nothing in the act that says a client must deposit money into a lawyer's trust account.

This amendment just reinforces the point and makes it clear that parties do have other options. There is little doubt in my mind that victims of the Magarey Farlam affair would find it extraordinarily difficult to trust any other lawyer or law firm with their money in the future. Having said that, there is no guarantee that they will not need to retain the services of another lawyer in the future. This amendment may provide them with some comfort. I ask all honourable members to support the amendment.

The Hon. G.E. GAGO: The government supports this amendment. As with Darley amendment No. 2, we are willing to support the inclusion of this amendment; however, we reserve the right to further amend this provision in the upper house.

The Hon. S.G. WADE: The opposition will certainly be interested to hear the government's considered view because on our consideration thus far, the term 'trust money' is too broadly cast. We look forward to the government's considered view.

Amendment carried.

The Hon. S.G. WADE: I move:

Amendment No 37 [Wade–1]—

Page 129, lines 16 and 17 [clause 56, inserted Schedule 4 clause 5(2)(a)]—Delete paragraph (a)

Amendment No 38 [Wade–1]—

Page 129, lines 20 to 37 [clause 56, inserted Schedule 4 clause 5(3)]—Delete subclause (3)

Amendment No 39 [Wade–1]—

Page 130, line 6 [clause 56, inserted Schedule 4 clause 5(6)]—After 'the requirement' insert:

(other than on the ground that the giving of the information or access to information may tend to incriminate the practitioner)

Amendment No 40 [Wade–1]—

Page 130, lines 11 and 12 [clause 56, inserted Schedule 4 clause 5(7)]—Delete 'to comply with the requirement' and substitute:

of a kind referred to in subclause (6)

These amendments are consequential on the self-incrimination consideration on [Wade-1] 36.

Amendments carried; clause as amended passed.

Schedule 1.

The Hon. S.G. WADE: I move:

Amendment No 41 [Wade–1]—

Page 139 [Schedule 1, table, entry relating to section 67A(2)]—Delete both lines of the entry relating to section 67A(2)

I suggest to the committee that this amendment is consequential to [Wade-1] 13.

Amendment carried; schedule 1 as amended passed.

Schedule 2.

The Hon. J.A. DARLEY: I move:

Amendment No 5 [Darley–2]—

Clause 11, page 141, lines 11 to 14—Delete clause 11 and substitute:

11—Claims against Fidelity Fund

(1) Subsection (1)(b) of section 60 of the principal Act as in force immediately before the commencement of section 38(1) does not apply to a claim served on, but not determined by, the Society before that commencement.

(2) Subsection (2)(b) of section 60 of the principal Act as amended by subsection (1a) of section 38 applies to a claim served on, but not determined by, the Society before the commencement of that subsection.

(3) Section 64 of the principal Act applies to any claim in relation to a fiduciary or professional default, or a series of fiduciary or professional defaults, in respect of which the Society has published a notice under Part 5 of the principal Act before the commencement of section 38B as if—

(a) the amendment to section 64(2) made by that section had not been made; and

(b) the prescribed percentage for the purposes of section 64(2) were 5 per cent.

This is a consequential amendment.

The Hon. G.E. GAGO: The amendment is consequential and the government opposes it. We think it is related to the Fidelity Fund to do with a fund of first resort. We oppose it, but I do not believe we have the numbers.

The Hon. S.G. WADE: I do not think it relates to the fund of first resort but rather to the amendment on the cap—the second half is the cap. Be that as it may, we support the amendment. If it needs to be considered in the context of the consideration of other amendments between the houses, so be it.

I thank the government for clarifying the relationship between this clause and previous clauses. On the basis of that conversation, we would suggest that an alternative amendment that I propose to move would more accurately reflect the consequential implications of previous resolutions of the committee. I move:

Amendment No 1 [Wade-3]—

Page 141, after line 14 insert:

(2) Section 64 of the principal Act applies to any claim in relation to a fiduciary or professional default, or a series of fiduciary or professional defaults, in respect of which the Society has published a notice under Part 5 of the principal Act before the commencement of section 38B as if—

(a) the amendment to section 64(2) made by that section had not been made; and

(b) the prescribed percentage for the purposes of section 64(2) were 5%.

I do apologise if members do not have that, but I think it is actually in the pile. It is [Wade-3] 1. I urge the committee to support my amendment rather than Mr Darley's because I think it more accurately reflects the consequential implications of previous resolutions of the council.

The ACTING CHAIR (Hon. Carmel Zollo): For clarification, we require the Hon. Mr Darley to withdraw his amendment, I understand, so that we can deal with the Hon. Stephen Wade's.

The Hon. J.A. DARLEY: I will withdraw my amendment.

The ACTING CHAIR (Hon. Carmel Zollo): Thank you, Mr Darley.

The Hon. G.E. GAGO: The government supports the Hon. Stephen Wade's amendment.

The Hon. J.A. DARLEY: I will be supporting the Hon. Stephen Wade's amendment.

Amendment carried.

The Hon. S.G. WADE: I move:

Amendment No 42 [Wade–1]—

Page 143, after line 27 [Schedule 2 Part 4]—After clause 17 insert:

18—Tribunal members

(1) The office of all members of the Legal Practitioners Disciplinary Tribunal will become vacant on the commencement of section 41A of this Act.

(2) A person who ceases to hold office as a member of the Tribunal under subclause (1)—

(a) may be appointed to the vacant office; or

(b) may continue to act as a member of the Tribunal for the purpose of completing the hearing and determination of proceedings part-heard on the commencement of section 41A.

I would submit to the house that this amendment is consequential on [Wade-1] 27.

The Hon. G.E. GAGO: The government sees this as consequential and supports this amendment.

Amendment carried; schedule 2 as amended passed.

Title passed.

Bill reported with amendment.

Third Reading

The Hon. G.E. GAGO (Minister for Agriculture, Food and Fisheries, Minister for Forests, Minister for Regional Development, Minister for the Status of Women, Minister for State/Local Government Relations) (18:32): I move:

That this bill be now read a third time.

Bill read a third time and passed.


At 18:33 the council adjourned until Wednesday 11 September 2013 at 11:00.


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