2016-10-25
Ms PENNICUIK (Southern Metropolitan) — The Legal Profession Uniform Law Application Amendment Bill 2016 makes changes to the Legal Profession Uniform Law Application Act 2014 and to the Legal Profession Uniform Law, which is a schedule to the application act. The Legal Profession Uniform Law Application Act 2014 was the result of a national process by the Council of Australian Governments and the Standing Committee of Attorneys-General in 2004 with the aim of creating a harmonised system for the regulation of the legal profession. We have had a number of debates on this issue since then in the Parliament.
The act was amended last year in relation to cost disclosure by the legal profession, and I raised some concerns that stakeholders and consumer advocates had and emphasised the importance of legal practitioners providing ongoing and clear updates to their clients on the possible costs that they may face to avoid any confusion and disputes. I also outlined during the debate on the principal act in 2014 that some consumer advocates had argued that there had been a lack of consumer input into the development of the Legal Profession Uniform Law and its structures and about how the law may impact on consumers of the law over and above the legal profession itself. The same concerns have been raised again with us with the introduction of this bill.
The changes in this bill are as follows. The amendments require the Legal Services Board of Victoria to maintain a register of disciplinary action against lawyers enrolled or practising in Victoria who have a finding against them of unsatisfactory professional conduct or professional misconduct. This is an important measure to protect consumers and to ensure that they are fully informed when making decisions about the legal services they engage, since the register will include the lawyer's name and address for service and details of the disciplinary action taken.
Under clause 5 the register records disciplinary action taken under the law, action corresponding to the disciplinary action and any disciplinary action within the meaning of the act as in force. Disciplinary action means actions taken in respect of a lawyer for or following a finding by a court, a tribunal or a local regulatory authority of unsatisfactory professional conduct or professional misconduct, being the suspension, variation or cancellation of the lawyer's practising certificate, or refusal to renew it, or the removal of the lawyer's name from the Supreme Court roll and the making of an order under part 5 of the Legal Profession Uniform Law other than an order cautioning the lawyer or an order that is a recommendation that action should be taken against the lawyer.
While all stakeholders appear to support the proposal to make a broader range of disciplinary findings through the register beyond a court or tribunal, there are some concerns about the delay in publishing this information under new section 150E — that disciplinary action not be recorded in the register pending a rehearing or appeal. Obviously this is to ensure natural justice, but the Federation of Community Legal Centres, for example, state that it may also frustrate the purpose of the register, being to inform the public as to disciplinary findings made, because appeals and rehearings can drag out for a long time, so there may be an incentive for some lawyers who have been found to have engaged in professional misconduct to do this because the disciplinary action of course may affect their livelihood.
Over and above the establishing of this register the bill also amends the uniform law to specify that Australian-registered foreign lawyers may practice foreign law in partnerships solely comprising Australian-registered foreign lawyers. This aims to facilitate the internationalisation of legal services in Victoria and around Australia. The bill also removes the obligations on individual staff members of regulatory bodies to report and to provide documents to police or other relevant authorities about suspected serious offences. This is because often staff will not be in the best place to reach a reliable view about whether an offence was committed. The obligation, however, will continue to apply to the Legal Services Council and other regulatory bodies.
Also, clauses 10 and 11 ensure that a single audited financial statement can be prepared for the council and the commissioner in reference to their reporting requirements under the provisions, as the two entities are highly integrated at an organisational level.
An issue that has been raised with us in relation to this law but also more broadly is the issue of referrer conflict. According to the Consumer Action Law Centre and WEstjustice the extent of the risk of a conflict of interest and its associated harms that can arise in some arrangements where lawyers have a relationship with a party from which they receive regular client referrals is not fully appreciated by the profession, the literature or the regulators. In their article 'Lawyers and Referrer Conflict — an underrated risk' the Consumer Action Law Centre and WEstjustice discuss how formal and informal arrangements can compromise a solicitor's fiduciary duty to his or her client and in some cases can cause significant client detriment. Also these arrangements can be a core part of the lawyer's business rather than isolated incidents.
This type of problem was also recently highlighted by a Senate committee report entitled Scrutiny of Financial Advice. The committee highlighted losses suffered by investors as a result of land banking investments that were promoted. The committee noted:
A common thread running through the land banking schemes investigated by the committee was that the promoters of the schemes referred investors to lawyers, accountants and lenders with whom they had a potential conflict of interest because of their pre-existing (and often intertwined) … relationships.
The Consumer Action Law Centre and WEstjustice have also previously raised concerns about the relationship between repairers, replacement car hire firms, recovery agents and lawyers in the media and in formal submissions. We urge the government to liaise with the Consumer Action Law Centre, WEstjustice and other key stakeholders to consider any regulatory responses that are needed to deal with referrer conflict. Otherwise, the Greens are supportive of the provisions in the bill.