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Legal Profession Bill 2004
Explanatory note
This explanatory note relates to this Bill as introduced into Parliament.
Overview of Bill
The object of this Bill is to replace the Legal Profession Act 1987 with a new Act
to provide for the regulation of legal practice in New South Wales and to facilitate
the regulation of legal practice on a national basis, in conjunction with the National
Legal Profession Model Laws Project.National Legal Profession Model Laws Project
The Model Laws Project aims to achieve greater consistency and uniformity in legal
profession regulation and legal trade and resulted in the release of model provisions
developed through the Standing Committee of Attorneys-General. The model
provisions are of three types:• Core Uniform (CU)—these are core provisions that are to be adopted in each
State and Territory, using the same wording as far as practicable
• Core Non Uniform (CNU)—these are core provisions that are to be adopted
in each State and Territory, but the wording of the model provisions need not
be adopted
• Non Uniform (NU)—States and Territories can choose the extent to which
they will follow these provisions
In July 2004, the Commonwealth, States and Territories agreed to implement all the
CU and CNU provisions in their respective jurisdictions, and established the Legal
Profession Joint Working Group to maintain uniformity and monitor
implementation. The Joint Working Group has representatives from the
Commonwealth, States and Territories and also from the Law Council of Australia.The model provisions were designed to ensure that clients and practitioners in all
States and Territories have similar rights and responsibilities, and to provide for the
regulation of the legal profession on a consistent national basis (including
nationwide recognition of admission as a lawyer in any jurisdiction and of the grant
of a practising certificate in any jurisdiction to practise as a legal practitioner).Legal Profession Bill 2004
The Bill seeks to incorporate the Core Uniform (CU) and Core Non Uniform
(CNU) provisions mentioned above. Most of the Non Uniform (NU) provisions
have also been included.As the model provisions address only those aspects of legal profession regulation
where national uniformity is essential, parts of the current Legal Profession Act
1987 are proposed to be retained (eg regulatory bodies and legal authorities, and the
distinction between barristers and solicitors). The Bill also implements a number
of amendments to the provisions of the current Act, including certain amendments
proposed by:• the Law Reform Commission in Report 99 (Complaints against lawyers: an
interim report) April 2001
• the Attorney General’s Department in a review conducted by it (A further
review of complaints against lawyers) November 2002
• legal profession regulators
Terminology
The Bill defines a number of expressions used in it. Many of these expressions are
used in this explanatory note, including the following expressions:• Commissioner—the Legal Services Commissioner
• Council—the Bar Council or the Law Society Council
• jurisdiction—a State or Territory of Australia
• Tribunal—the Administrative Decisions Tribunal
Outline of provisions
Chapter 1 Introduction
Chapter 1 (clauses 1–11) contains definitions and other interpretative provisions.The 1987 Act is drafted principally to cover local barristers and local solicitors. The
Bill defines key terms using the concepts of lawyer and legal practitioner. This
ensures the activities of any Australian lawyer practising in NSW are covered by
relevant provisions.Under the 1987 Act, a person is a “legal practitioner” when admitted to the
Supreme Court and a “solicitor” or “barrister” when they hold the appropriate
practising certificate. This has been changed in the Bill. When admitted, a person
becomes a “lawyer”, and when they obtain a practising certificate they become a
“legal practitioner”.To assist with the uniform status of the model laws project, the Bill uses the
following new terms:• Australian lawyer—a person admitted to practise in any jurisdiction in
Australia (the 1987 Act currently only applies to people admitted in NSW)
• interstate lawyer—a person admitted in a jurisdiction other than NSW (the
1987 Act currently uses “interstate legal practitioner”)
• Australian legal practitioner—a person holding a practising certificate issued
by an Australian jurisdiction (there is no similar term in the 1987 Act)
• interstate legal practitioner—a person holding a practising certificate issued
by a jurisdiction other than NSW (1987 Act currently uses “interstate barrister
or solicitor”)
These definitions will allow a lawyer to apply for a practising certificate and be
covered by mutual provisions around Australia.Chapter 2 General requirements for engaging in
legal practice
Part 2.1 Preliminary
Part 2.1 (clause 12) provides a simplified outline of Chapter 2.Part 2.2 Reservation of legal work and legal titles
Division 1 Preliminary
Division 1 (clause 13) contains a statement of the purposes of Part 2.2.Division 2 General prohibitions on unqualified practice
Division 2 (clauses14–16) contains general prohibitions against engaging in legal
work unless suitably qualified. The prohibition is general, stating “a person must
not engage in legal practice… for fee gain or reward unless the person is an
Australian legal practitioner”. The Division also creates an offence for an
unqualified person to represent or advertise that they are entitled to engage in legal
practice and restricts the use of titles such as lawyer, legal practitioner, barrister,
solicitor, attorney, counsel, Queen’s Counsel, King’s Counsel, Her Majesty’s
Counsel, His Majesty’s Counsel, Senior Counsel.Division 3 Prohibitions regarding associates, clerks and
non-legal partners
Division 3 (clauses 17–20) imposes restrictions on a law practice having an
associate who is a disqualified or convicted person, restrictions on the employment
of non-legal clerks and restrictions on partnerships with non-legal partners.Division 4 General
Division 4 (clause 21) provides that a contravention of Part 2.2 by an Australian
lawyer who is not an Australian legal practitioner is capable of being professional
misconduct.Part 2.3 Admission of local lawyers
Division 1 Preliminary
Division 1 (clauses 22 and 23) provides a statement of the purposes of Part 2.3 and
definitions.Division 2 Eligibility and suitability for admission
Division 2 (clauses 24–30) deals with eligibility and suitability requirements for
admission as a lawyer. The Division provides a mechanism for early consideration
of suitability and for referral of some matters to the Supreme Court, and for appeals
to the Supreme Court.Division 3 Admission to the legal profession
Division 3 (clauses 31–34) provides for the admission of persons as lawyers by the
Supreme Court.Division 4 Legal Profession Admission Board
Division 4 (clauses 35–37) provides for the role of the Legal Profession Admission
Board (the Admission Board) in advising the Supreme Court on matters concerning
the admission of lawyers. The Board has a role in considering an applicant’s
eligibility and suitability for admission and issues compliance certificates for
applicants for admission.Division 5 Admission rules
Division 5 (clause 38) provides for the Admission Board to make rules for the
admission of persons as lawyers under the Act.Part 2.4 Legal practice by Australian legal practitioners
Division 1 Preliminary
Division 1 (clause 39) contains a statement of the purposes of Part 2.4.Division 2 Legal practice in this jurisdiction by Australian
legal practitioners
Division 2 (clause 40) provides for the entitlement of an Australian legal
practitioner to engage in legal practice in NSW.Division 3 Local practising certificates generally
Division 3 (clauses 41–44) deals with the grant of local practising certificates by the
Bar Council or Law Society Council and the issue of suitability to hold a local
practising certificate. The Division also provides for the duration of local practising
certificates.Division 4 Grant or renewal of local practising certificates
Division 4 (clauses 45–48) deals with the making of an application for a local
practising certificate, including eligibility to apply, the period within which an
application for renewal of a local practising certificate must be made, and the
procedure for determining an application for a local practising certificate.Division 5 Conditions on local practising certificates
Division 5 (clauses 49–58) deals with the imposition of conditions on local
practising certificates, including the imposition of various statutory conditions.Division 6 Amendment, suspension or cancellation of local
practising certificates
Division 6 (clauses 59–64) provides procedures for the amendment, suspension or
cancellation of a local practising certificate.Division 7 Special powers in relation to local practising
certificates—show cause events
Division 7 (clauses 65–77) contains special provisions for dealing with the
occurrence of “show cause events” (acts of bankruptcy, indictable offences and tax
offences) in respect of the holder of or an applicant for a local practising certificate.Division 8 Further provisions relating to local practising
certificates
Division 8 (clauses 78–80) provide for the immediate suspension of a local
practising certificate in certain cases, and the surrender, cancellation and return of
local practising certificates.Division 9 Practise as a barrister or solicitor
Division 9 (clauses 81–90) provides special additional requirements (based on
provisions of the 1987 Act) for practice as a barrister or solicitor, including
provisions concerning client access, advertising, specialisation and schemes for
recognition of seniority or status.Division 10 Fees for practising certificates
Division 10 (clauses 91–95) deals with the fees payable for local practising
certificates (including provision for late fees, refunds, submission of budgets and
audits).Division 11 Interstate legal practitioners
Division 11 (clauses 96–103) deals with the obligations of interstate legal
practitioners to notify the establishment of an office in NSW and the requirement
for professional indemnity insurance if an office is established in NSW. The
Division also provides for the extent of the entitlement of an interstate legal
practitioner to practise in NSW and additional conditions of practice on interstate
legal practitioners.Division 12 Miscellaneous
Division 12 (clauses 104–115) contains various miscellaneous provisions
concerning legal practice by Australian legal practitioners.Part 2.5 Inter-jurisdictional provisions regarding
admission and practising certificates
Division 1 Preliminary
Division 1 (clauses 116–118) contains a statement of the purpose of Part 2.5 and
definitions.Division 2 Notifications to be given by local authorities to
interstate authorities
Division 2 (clauses 119–121) provides for the notification of corresponding
authorities in other jurisdictions about the making of an application for admission
to the legal profession, the removal of a local lawyer’s name from the local roll and
a decision to refuse to grant an Australian lawyer a local practising certificate or to
suspend, cancel or refuse to renew an Australian lawyer’s local practising
certificate.Division 3 Notifications to be given by lawyers to local
authorities
Division 3 (clauses 122–125) requires local lawyers and local legal practitioners to
give notice to the appropriate authority in this jurisdiction of removal from an
interstate roll, the making of various interstate orders and foreign regulatory actions.Division 4 Taking of action by local authorities in response to
notifications received
Division 4 (clauses 126–131) deals with the taking of action by local authorities in
response to notifications received under Division 3.Part 2.6 Incorporated legal practices and
multi-disciplinary partnerships
Division 1 Preliminary
Division 1 (clauses 132 and 133) contains a statement of the purpose of Part 2.6
and definitions.Division 2 Incorporated legal practices
Division 2 (clauses 134–164) establishes a scheme for the recognition and
regulation of corporations that provide legal services. A corporation may not
provide legal services (with certain exceptions such as corporations providing
in-house legal services) unless it complies with the Division. Before starting to
engage in legal practice in this State, a corporation must give written notice to the
Law Society and must also notify the Society when it ceases to provide legal
services. Although an incorporated legal practice is not required to hold an
Australian practising certificate, it must have at least one legal practitioner director
who holds an unrestricted practising certificate and who is to be responsible for the
proper management and implementation of the provision of legal services. It will
be an offence for an incorporated legal practice not to have any legal practitioner
directors for a period exceeding 7 days and not to notify the Law Society of that
fact. The Division also makes it clear that a legal practitioner who provides legal
services on behalf of an incorporated legal practice has the same professional
obligations and privileges as other legal practitioners. In addition, the incorporated
legal practice and each insurable solicitor who is involved (either as a director or
employee) in the practice must comply with professional indemnity insurance
obligations. An incorporated legal practice must give a disclosure notice to clients
about services that clients might reasonably assume are legal services.The Division also makes other special provision with respect to incorporated legal
practices, including provision for the application of advertising and other
obligations as well as in relation to conflict of interest obligations. Jurisdiction is
conferred on the Supreme Court, on application by the Law Society Council or the
Commissioner, to disqualify a corporation from providing legal services or to
disqualify a person from managing an incorporated legal practice. Other provision
is made in relation to the operation of proceedings and laws relating to corporations
and the operation of the proposed Act. Restrictions on sharing receipts, income and
other revenue with non-lawyers are lifted. A new offence relating to undue
influence is created and there are restrictions on employment of and other
arrangements with disqualified persons.Division 3 Multi-disciplinary partnerships
Division 3 (clauses 165–180) establishes a scheme for the recognition and
regulation of partnerships that provide legal services, as well as other services, and
authorises legal practitioners to provide legal services while being involved in or
employed by such a partnership. Before starting to engage in legal practice as a
member of a multi-disciplinary partnership, a legal practitioner must give written
notice to the Law Society. The Division imposes requirements on members of
multi-disciplinary partnerships, including requiring a legal practitioner partner to be
responsible for the proper management and implementation of the provision of
legal services by the partnership. The Division also makes it clear that a legal
practitioner who provides legal services on behalf of a multi-disciplinary
partnership has the same professional obligations and privileges as other legal
practitioners. A disclosure notice must be given to clients about services that clients
might reasonably assume are legal services.The Division also makes other special provision with respect to multi-disciplinary
partnerships, including provision for the application of advertising and other
obligations as well as in relation to conflict of interest obligations that may arise out
of different services being provided. Restrictions on sharing receipts, income and
other revenue with non-lawyers are lifted. A new offence relating to undue
influence is created and there are restrictions on employment of and other
arrangements with disqualified persons.Division 4 Miscellaneous
Division 4 (clauses 181 and 182) contains miscellaneous provisions dealing with
the obligations of individual practitioners in the context of incorporated legal
practices and multi-disciplinary partnerships, and a regulation making power.Part 2.7 Legal practice by foreign lawyers
Division 1 Preliminary
Division 1 (clauses 183–185) contains a statement of the purpose of Part 2.7 and
definitions.Division 2 Practice of foreign law
Division 2 (clauses 186–197) sets out the practice rights and obligations in this
State of legal practitioners who are registered overseas as legal practitioners
(overseas-registered foreign lawyers) to practice the law of their home jurisdiction
in this State. An overseas-registered foreign lawyer may practice without
registration for a limited period. The services that a registered foreign lawyer may
provide are to be limited to those involving legal services concerning the law of the
home jurisdiction or conciliation and other similar proceedings, but do not extend
to legal proceedings before a court. Australian professional and ethical standards
are applied to registered foreign lawyers, as well as other obligations applicable to
other legal practitioners, including trust account obligations and insurance and
fidelity cover obligations (to the extent provided by the regulations).Division 3 Local registration of foreign lawyers generally
Division 3 (clauses 198–200) provide for the right of overseas-registered foreign
lawyers to be registered as foreign lawyers under the proposed Act and for
registration to expire at the end of the financial year in which it is granted.Division 4 Applications for grant or renewal of registration
Division 4 (clauses 201–203) sets out the procedures and requirements for
applications for registration as a foreign lawyer.Division 5 Grant or renewal of registration
Division 5 (clauses 204–206) requires a foreign lawyer to be registered by the Bar
Council or the Law Society Council (the domestic registration authority) if
satisfied as to the applicant’s registration in a foreign country, that law practice is
regulated in that country and that the person is not subject to restrictions in practice
in that country that would make registration inappropriate. It also enables
registration to be refused on disciplinary and other grounds.Division 6 Amendment, suspension or cancellation of local
registration
Division 6 (clauses 207–212) sets out the procedure for amending, suspending or
cancelling the registration of a foreign lawyer. The grounds for taking action
include being the subject of disciplinary proceedings or being a party in pending
criminal or civil proceedings. Before action is taken, the domestic registration
authority must issue a show cause notice and consider representations.Division 7 Special powers in relation to local
registration—show cause events
Division 7 (clauses 213–217) provides for an automatic show cause process, and
for the refusal, amendment, suspension or cancellation of, or a ban on, registration
as a foreign lawyer, if a foreign lawyer becomes insolvent under administration or
is convicted of a serious offence or a tax offence.Division 8 Further provisions relating to local registration
Division 8 (clauses 218–222) confers power on the domestic registration authority
to immediately suspend the registration of a foreign lawyer if it considers it
necessary in the public interest and provides for the surrender of a certificate of
registration. Registration is automatically suspended or cancelled if the registration
in the home jurisdiction is suspended or cancelled.Division 9 Conditions on registration
Division 9 (clauses 223–228) provide for the imposition of conditions on
registration as a foreign lawyer.Division 10 Interstate-registered foreign lawyers
Division 10 (clauses 229 and 230) provides for the conditions on which
interstate-registered foreign lawyers may practise foreign law in this State and
enables the domestic registration authority to impose conditions of practice on
interstate-registered foreign lawyers.Division 11 Miscellaneous
Division 11 (clauses 231–239) contains miscellaneous provisions relating to foreign
lawyers. They include provisions requiring foreign lawyers to provide information
to the domestic registration authority, the establishment of a register of registered
foreign lawyers by the domestic registration authority, enforcement of practice
conditions by Supreme Court order or injunction, a right to appeal to the Supreme
Court against decisions of the domestic registration authority and other provisions.Part 2.8 Community legal centres
Part 2.8 (clauses 240 and 241) defines community legal centres and enables their
operation, while applying the legal profession rules to their employees or people
who provide services to them. Regulations may be made with respect to the
application of the proposed Act to community legal centres.Chapter 3 Conduct of legal practice
Part 3.1 Trust money and trust accounts
Division 1 Preliminary
Division 1 (clauses 242-252) contains a statement of the purposes of Part 3.1 and
interpretative and application provisions for the Part.Division 2 Trust accounts and trust money
Division 2 (clauses 253–266) provides for the manner in which a law practice must
hold, disburse and account for trust money it receives.Division 3 Investigations
Division 3 (clauses 267–271) provides for the investigation of the affairs of a law
practice.Division 4 External examinations
Division 4 (clauses 272–279) provides for the external examination of the trust
records of a law practice.Division 5 Provisions relating to ADIs
Division 5 (clauses 280–282) deals with the approval of ADIs to hold trust money
of law practices and with the obligations and liabilities of those ADIs with respect
to trust money, reports, recommendations and information.Division 6 Statutory deposits
Division 6 (clauses 283 and 284) provide for the regulations to require a law
practice to pay amounts out of a general trust account of the practice into an ADI
account maintained by the Law Society for investment by the Law Society.Division 7 Public Purpose Fund
Division 7 (clauses 285–294) provides for the Public Purpose Fund, which is made
up of interest earned on the statutory deposits under Division 6. The Public Purpose
Fund is applied for the payment of various costs and expenses and for purposes
determined by the Trustees with the concurrence of the Attorney General.Division 8 Miscellaneous provisions
Division 8 (clauses 295–300) contains miscellaneous provisions dealing with
restrictions on the receipt of trust money, disclosure of information and the
application of Part 3.1 to incorporated legal practices, multi-disciplinary
partnerships and community legal centres.Part 3.2 Costs disclosure and assessment
Division 1 Preliminary
Division 1 (clauses 301–302) contains a statement of the purpose of Part 3.2 and
definitions.Division 2 Application of this Part
Division 2 (clauses 303–308) specifies the kinds of matters to which Part 3.2 will
apply.Division 3 Cost disclosures
Division 3 (clauses 309–318) imposes obligations on law practices to disclose
certain matters concerning legal costs to clients and prospective clients in respect
of the provision of legal services. The Division also makes provision for the
consequences of a failure to disclose such matters. As a general rule, a client will
not be required to pay legal costs in respect of matters that have not been disclosed
unless the costs have been assessed under Division 11.Division 4 Legal costs generally
Division 4 (clauses 319–321) specifies in general terms the kinds of legal costs that
are recoverable by law practices from clients. In particular, proposed section 319
provides that, subject to Part 3.2, legal costs are recoverable:
(a) in accordance with an applicable determination, scale, arrangement or other
provision fixing the costs or maximum costs for the legal services concerned
made by or under legislation, or
(b) if paragraph (a) does not apply, under a costs agreement made in accordance
with Division 5 or the corresponding provisions of a corresponding law, or
(c) if neither paragraph (a) or (b) applies, according to the fair and reasonable
value of the legal services provided.Division 5 Costs agreements
Division 4 (clauses 322–328) makes provision for how costs agreements may be
entered into. The Division also prohibits certain kinds of conditional costs
agreements. The conditional costs agreements prohibited include:
(a) agreements that provide for the payment of a premium on the legal costs
payable under the agreement on the successful outcome of the matter, and
(b) agreements that provide for a fee to be contingent on certain matters.Division 6 Costs fixed by regulations
Division 6 (clauses 329–330) enables the Governor to fix certain legal costs by
regulation.Division 7 Billing
Division 7 (clauses 331–334) generally requires a legal practice to give a client a
bill of costs before the practice is entitled to recover the costs.Division 8 Mediation of costs disputes
Division 8 (clauses 335 and 336) enables a dispute about a bill of costs to be
referred to mediation.Division 9 Maximum costs in personal injury damages
matters
Division 9 (clauses 337–343) fixes maximum amounts for legal costs in personal
injury damages matters.Division 10 Costs in civil claims where no reasonable
prospects of success
Division 10 (clauses 344–349) provides that generally a law practice must not
provide legal services in respect of a claim or defence of a claim for damages unless
the legal practitioner concerned reasonably believes on the basis of provable facts
and a reasonably arguable view of the law that the claim or defence has reasonable
prospects of success. A contravention of such a requirement may result in
disciplinary proceedings and costs orders against the legal practitioner concerned.Division 11 Costs assessments
Division 11 (clauses 350–395) makes provision for the following matters:
(a) the appointment of costs assessors,
(b) the making of applications for bills of costs to be assessed by a costs assessor,
(c) the procedure to be followed by costs assessors when conducting a costs
assessment,
(d) the making of determinations by costs assessors in respect of a costs
assessment,
(e) the review of costs assessments by a specially convened review panel where
a costs assessment is disputed,
(f) appeals to the Supreme Court against decisions of costs assessors and review
panels.Division 12 Miscellaneous
Division 12 (clauses 396–400) contains certain other provisions relating to the
application of Part 3.2 to certain kinds of lawyers. The Division also provides for
the payment of the costs of administering Part 3.2.Part 3.3 Professional indemnity insurance
Part 3.3 (clauses 401–417) imposes the same requirements as the 1987 Act for
professional indemnity insurance.Part 3.4 Fidelity cover
Part 3.4 (clauses 418–476) establishes the Fidelity Fund to meet claims by
consumers who have suffered financial loss due to a practitioner’s dishonest
default. This is known as “fidelity cover”.The Fidelity Fund is funded through contributions by NSW legal practitioners when
applying for a practising certificate. However, if the Law Society believes there is
insufficient money in the Fund it can levy solicitors to ensure client claims are met.The provisions of Part 3.4 are similar to the 1987 Act, except for the new
interjurisidictional provisions for defaults occurring in more than one jurisdiction.The Fidelity Fund covers a failure of the practice to pay or deliver money, or a
fraudulent dealing with trust property. It is immaterial that the default does not
constitute a criminal or civil offence.A person makes a claim against the Fund by writing to the Law Society within 6
months of the default (or other period specified by the Supreme Court). The current
time limit under the 1987 Act is only 3 months. Where there are large-scale defaults
by a practice the Law Society may run advertisements to inform clients.The Law Society can deny or pay a Fidelity Fund claim, either wholly or in part.
There is a list of factors for consideration when determining a claim, including
whether the practice concerned has previously paid the loss to the client. If a
claimant is dissatisfied with the Law Society’s decision the claimant can appeal to
the Supreme Court. Where an associate of a law practice causes a default, the law
practice may make a claim against the Fidelity Fund to recover for the default.The Law Society Council may set caps for maximum claims payable from the
Fund, which maintains the current position.Under the 1987 Act a person can claim against the Fidelity Fund for both a
“dishonest default” and a “failure to account”. This is maintained, with both these
concepts being incorporated into the definition of default.New provisions in the Bill are used to determine the jurisdictional arrangements
between different Fidelity Funds. Under the core uniform provisions, the Law
Societies in different States and Territories may determine how much, and the
extent to which, each Fund should pay when a default occurs partly in different
jurisdictions.Part 3.5 Mortgage practices and managed investment
schemes
Part 3.5 (clauses 477–493) substantially re-enacts Part 9 of the Legal Profession Act
1987. This Part provides for the regulation of certain mortgage work carried out by
solicitors and prevents claims against the Fidelity Fund from being made in respect
of losses arising from certain investments made in connection with mortgage
practices and managed investment schemes that are associated with solicitors.Chapter 4 Complaints and discipline
Chapter 4 provides the scheme for disciplining Australian lawyers and foreign
lawyers for unsatisfactory professional conduct or professional misconduct. The
broad purposes of the Chapter are:• to provide a nationally consistent scheme for disciplining the legal profession
• to promote and enforce nationally consistent standards
• to promote best practice legal service delivery
• to provide a means of redressing complaints against lawyers
The only Core Uniform (CU) provisions of Chapter 4 are the definitions of
unsatisfactory professional conduct and professional misconduct. Core Non
Uniform provisions (CNU) include the inter-jurisdictional provisions, the range of
disciplinary sanctions to be available, and the publicising of disciplinary action.Chapter 4 is based on the model provisions and relevant provisions of the 1987
Act. It also implements a number of amendments to the current provisions,
including certain amendments proposed by:• the Law Reform Commission in Report 99 (Complaints against lawyers: an
interim report) April 2001
• the Attorney General’s Department in a review conducted by it (A further
review of complaints against lawyers) November 2002
• legal profession regulators
Part 4.1 Preliminary and application
Division 1 Preliminary
Division 1 (clauses 494–498) states the purposes and objects of Part 4.1, defines
unsatisfactory professional conduct and professional misconduct, and specifies
certain kinds of conduct that is capable of being unsatisfactory professional conduct
and professional misconduct.Division 2 Application
Division 2 (clauses 499–502) specifies:• the persons to whom the Part applies—current and former Australian legal
practitioners, and current and former Australian lawyers (the Part also applies
by force of Part 2.7 to Australian-registered foreign lawyers), and
• the conduct to which the Part applies—conduct occurring in this jurisdiction,
and (in certain circumstances) conduct occurring outside this jurisdiction,
committed by those persons.Even though provisions of the Part are generally expressed to apply to an
“Australian legal practitioner”, the provisions extend to the persons mentioned
above.Part 4.2 Complaints about Australian legal practitioners
Part 4.2 (clauses 503–513) enables complaints to be made about the conduct of
Australian legal practitioners. Complaints may be made by clients, a Council, the
Commissioner or any other persons. Complaints must be made within 3 years after
the alleged conduct occurred, unless the Commissioner or a Council (as relevant)
determines that a complaint about earlier conduct may be dealt with having regard
to specified criteria.The practitioner against whom a complaint is made must be notified of the
complaint and has an opportunity to make submissions about it. A preliminary
assessment may be made of a complaint, and machinery is included for the
summary dismissal of complaints in appropriate cases and for the withdrawal of
complaints.The Commissioner may refer a complaint to a Council if the Commissioner decides
not to investigate the complaint.Part 4.3 Mediation
Part 4.3 (clauses 514–524) provides for the mediation of complaints that relate to
a consumer dispute only (ie a dispute that does not involve an issue of
unsatisfactory professional conduct or professional misconduct), or hybrid
complaints (ie disputes that relate to a consumer issue and involve an issue of
unsatisfactory professional conduct or professional misconduct).Part 4.4 Investigation of complaints
Part 4.4 (clauses 525–536) requires the investigation of complaints except in
specified instances, and sets out various powers and requirements regarding
investigations.A complaint is to be investigated by the Commissioner or by a Council if the
Commissioner refers it to the Council. The Commissioner may give directions
about the conduct of a complaint and may take over the conduct of an investigation
from a Council. The Commissioner or Council investigating a complaint may
appoint an investigator, and the Commissioner may appoint an independent
investigator in certain circumstances.The Commissioner or a Council may at their discretion, for the purpose of
investigating a complaint, apply for an assessment by a costs assessor of costs
claimed by an Australian legal practitioner.Chapter 6 applies to an investigation under this Part.
Part 4.5 Decision of Commissioner or Council
Part 4.5 (clauses 537–542) requires disciplinary proceedings to be commenced in
the Tribunal, unless the complaint is dismissed or summarily concluded by way of
caution, reprimand or compensation order.Provision is made for the commencement of disciplinary proceedings in the
Tribunal without starting or finishing an investigation if there is a reasonable
likelihood that the Tribunal will find that the practitioner has engaged in
unsatisfactory professional conduct or professional misconduct.Part 4.6 Review of Councils’ decisions
Part 4.6 (clauses 543–547) empowers the Commissioner, on the application of the
complainant, to review a decision of a Council:• to dismiss a complaint
• to impose a caution, reprimand or a compensation order
• to omit, from a disciplinary application made to the Tribunal, matter that was
originally part of a complaint made to the Council
Part 4.7 Immediate suspension of local practising
certificate
Part 4.7 (clauses 548–550) enables the Commissioner or a Council, in the public
interest, to immediately suspend a local practising certificate on the ground of the
seriousness of the conduct in respect of which a complaint has been made.Part 4.8 Proceedings in Tribunal
Part 4.8 (clauses 551–569) provides a scheme for the commencement, hearing and
determination of proceedings before the Tribunal in connection with a complaint.Proceedings are commenced by the Commissioner or a Council by way of
application (referred to in the Division as a “disciplinary application” to distinguish
it from other applications). A disciplinary application can be made within 6 months
after the Council or Commissioner decides that proceedings be commenced, but the
Tribunal may, on application in writing by the Council or Commissioner and
having regard to specified criteria, extend the time for making the application.Hearings are generally to be conducted in public.
The Division specifies a range of orders that the Tribunal may make when
determining proceedings on a disciplinary application, including the following:• orders requiring official implementation in this jurisdiction
• orders requiring official implementation in another jurisdiction
• orders requiring compliance by the practitioner
• ancillary or other orders
• interlocutory and interim orders
Provisions limit the maximum amount of fines that can be imposed, and authorise
consent orders to be made.Provisions of the Administrative Decisions Tribunal Act 1997 apply to the
proceedings.Part 4.9 Compensation
Part 4.9 (clauses 570–575) enables a complainant to request the making of a
compensation order against the Australian legal practitioner concerned for
pecuniary loss incurred through the conduct complained of. A request may only be
made within 6 years after the alleged conduct occurred.A compensation order may be made by the Tribunal, the Commissioner or a
Council, and maximum amounts are specified as to how much can be ordered to
be paid (more can ordered if the complainant and practitioner consent). Provision
is made for the review of or appeal from the making of compensation orders.Part 4.10 Publicising disciplinary action
Part 4.10 (clauses 576–582) provides for the publicising of disciplinary action taken
against Australian legal practitioners in this jurisdiction, and in other jurisdictions
in certain circumstances.The Commissioner and Councils may publicise disciplinary action in any way they
consider appropriate, but the Commissioner is required to keep a Register of
Disciplinary Action.Part 4.11 Inter-jurisdictional provisions
Part 4.11 (clauses 583–589) contains a number of provisions to assist with
inter-jurisdictional issues arising in connection with the conduct of Australian legal
practitioners, including the inter-jurisdictional conduct of investigations of conduct
and the enforcement of disciplinary orders made in any jurisdiction. Protocols may
be entered into to deal with cases where conduct appears to have occurred in more
than one jurisdiction.Part 4.12 Miscellaneous
Part 4.12 (clauses 590–609) contains a series of miscellaneous provisions relating
to the scheme to deal with complaints against and the discipline of Australian legal
practitioners, including:• preservation of the inherent jurisdiction and powers of the Supreme Court
regarding discipline
• application of the rules of procedural fairness
• the duty to handle complaints efficiently and expeditiously
• provision of information about the complaints procedure
• co-operation and information sharing
• pre-complaint powers to assist a client who is denied access to documents
• consequences of not complying with orders
• development of performance criteria by the Commissioner and Councils
• reports by the Commissioner and Councils to the Attorney General
• duty of the Commissioner and Councils to report suspected offences
• effect of current civil or criminal proceedings against a practitioner who is the
subject of a complaint
• protection of liability for, and non-compellability of, Commissioner, Councils
and others
• production by practitioner of information or documents despite a duty of
confidentiality between practitioner and client
• waiver by complainant client of confidentiality
• undertakings by Commissioner or Council regarding non-disclosure of
privileged or confidential information
• appeals to the Supreme Court against orders and decisions of the Tribunal
• payment of the costs of administering the Part from the Public Purpose Fund
to the Consolidated Fund
• enforcement of undertakings by practitioners
• other powers of investigation not affected by the Part
Chapter 5 External intervention
Part 5.1 Preliminary
Part 5.1 (clauses 610–614) contains a statement of the purposes of Chapter 5 and
definitions. The Part also provides for how the Chapter applies to barristers,
Australian-registered foreign lawyers and others.Part 5.2 Initiation of external intervention
Part 5.2 (clauses 615 and 616) provides for the circumstances in which external
intervention of a law practice may take place and the procedure for appointment of
a supervisor, manager or receiver for a law practice.Part 5.3 Supervisors
Part 5.3 (clauses 617–622) deals with the appointment of, and the role, powers,
authorities, duties and functions of, a supervisor of trust money of a law practice.Part 5.4 Managers
Part 5.4 (clauses 623–629) deals with the appointment of, and the role, powers,
authorities, duties and functions of, a manager of a law practice.Part 5.5 Receivers
Part 5.5 (clauses 630–645) deals with the appointment of, and the role, powers,
authorities, duties and functions of, a receiver for a law practice.Part 5.6 General
Part 5.6 (clauses 646–656) deals with miscellaneous matters concerning external
intervention, including conditions of appointment, status of acts, appeals to and
directions by the Supreme Court, disclosure of information by ADIs, and fees, legal
costs and expenses.Chapter 6 Provisions relating to investigations
Part 6.1 Preliminary
Part 6.1 (clauses 657 and 658) contains general provisions (including definitions)
for the purposes of Chapter 6 which deals with trust account investigations, trust
account examinations, complaint investigations and law practice compliance audits.Part 6.2 Requirements relating to documents,
information and other assistance
Part 6.2 (clauses 659 and 660) deals with the requirements that may be imposed by
an investigator in carrying out an investigation, examination or compliance audit
in relation to a law practice or an Australian lawyer.Part 6.3 Entry and search of premises
Part 6.3 (clauses 661–664) confers powers of entry and search, and other incidental
powers, on investigators in connection with the carrying out of trust account
investigations and complaint investigations.Part 6.4 Additional powers in relation to incorporated
legal practices
Part 6.4 (clauses 665–669) contains additional powers, such as the power to
examine persons, inspect books and hold hearings, that may be exercised by an
investigator in conducting an investigation or compliance audit in relation to an
incorporated legal practice. These additional powers are the same as those conferred
on ASIC under certain provisions of the Australian Securities and Investments
Commission Act 2001 of the Commonwealth.Part 6.5 Miscellaneous
Part 6.5 (clauses 670–678) contains other provisions in relation to investigations
and investigatory powers. Provision is made for audits to be conducted of the
compliance of law practices (other than barristers) with the requirements of the
proposed Act, the regulations and the legal profession rules. The Part also deals
with failure to comply with investigatory powers and makes it an offence to
obstruct an investigator and for an investigator to make an unauthorised disclosure
of his or her appointment. An indictable offence of destroying, concealing or
removing any information or document that may provide evidence of a
contravention of the proposed Act, the regulations or the legal profession rules is
also created. Provision is also made to authorise the disclosure, in certain
circumstances, of information obtained in the course of an investigation,
examination or audit under the proposed Part.Chapter 7 Regulatory authorities
Part 7.1 Legal Profession Admission Board
Part 7.1 (clauses 679–681) deals with the constitution and functions of the Legal
Profession Admission Board.Part 7.2 Legal Profession Advisory Council
Part 7.2 (clauses 682–685) deals with the constitution and functions of the Legal
Profession Advisory Council.Part 7.3 Legal Services Commissioner
Part 7.3 (clauses 686–693) deals with the appointment and functions of the Legal
Services Commissioner.Part 7.4 Professional bodies
Part 7.4 (clauses 694–700) contains provisions relating to the functions of the Bar
Council and the Law Society Council (including provisions requiring the Councils
to report to the Attorney General on their respective committees and to prepare
annual reports). Provision is also made for lay representation on the committees of
the Bar Association or Bar Council and on the committees of the Law Society and
Law Society Council.Part 7.5 Legal profession rules
Part 7.5 (clauses 701–717) enables the Bar Council and the Law Society Council
to make rules in relation to legal practice and contains a number of miscellaneous
and machinery provisions (such as the procedure for making rules and the review
of rules by certain bodies).Chapter 8 General provisions
Chapter 8 (clauses 718–739) contains provisions of general application to the Act
(including provisions for delegation, liability of principals, injunctions,
confidentiality and disclosure of information, legal professional and other
privileges, liability protection, offences, evidence and review of the Act).Schedule 1 Repeals
Schedule 1 lists the Legal Profession Act 1987 and an unrepealed amending Act
that are to be repealed.Schedule 2 Legal Profession Admission Board
Schedule 2 contains provisions relating to the members (including protection from
personal liability) and procedure of the Legal Profession Admission Board.Schedule 3 Legal Profession Advisory Council
Schedule 3 contains provisions relating to the members (including protection from
personal liability) and procedure of the Legal Profession Advisory Council.Schedule 4 Trustees of Public Purpose Fund
Schedule 4 contains provisions relating to the trustees of the Public Purpose Fund
and the procedure of meetings of the trustees.Schedule 5 Costs assessors
Schedule 5 contains provisions relating to the appointment of costs assessors.Schedule 6 Amendments
Schedule 6 contains consequential amendments to other Acts.Schedule 7 Professional indemnity insurance—
provisions relating to HIH insurance
Schedule 7 contains special indemnity insurance provisions relating to the HIH
Insurance collapse.Schedule 8 Mortgage practices and managed
investment schemes—provisions relating
to old mortgages
Schedule 8 provides for savings and transitional provisions in connection with Part
3.5 of the Bill (Mortgage practices and managed investment schemes).Schedule 9 Savings, transitional and other provisions
Schedule 9 contains consequential savings, transitional and other provisions.
Note: If this Bill is not modified, these Explanatory Notes would reflect the Bill as passed in the House. If the Bill has been amended by Committee, these Explanatory Notes may not necessarily reflect the Bill as passed.