Without Prejudice
Issue 27
Without Prejudice
Issue 27
In this issue
Update on incorporated practices
Recommendations for change to solicitor consent reprimands
OLSC argues for open UPC hearings at the ADT
Portable practicing certificates
Complaints practitioners never see
Ensuring we’re all heading in the same direction
Happy New Year from everyone here at the OLSC and welcome back to what I am sure will be a busy and productive year for us all.
We are beginning the year at the OLSC with a Stakeholder Forum sponsored by NSW Attorney General, Bob Debus, in early March for all those with strategic interests in the Incorporation of Legal Practices.
I see the forum as ensuring that those involved in incorporation own the process and that we are all moving in the same direction.
Bringing together representatives from the Law Society of NSW, the Attorney General’s Department, LawCover, the College of Law’s Centre for Best Practice, the QL Gateway to Best Practice Board and practitioners from incorporated and unincorporated legal practices, the forum will discuss strengths and weaknesses of the legislation, structure and the best way to regulate.
It’s also possible that legislative change or a ‘fine tuning’ of the regulatory function could result from the forum – but we’ll bring you more on that in the next issue of Without Prejudice. In the meantime, be sure to read the page two story about incorporation so far in NSW.
Current system provides appropriate balance but review recommends changes
The current co-regulatory system and its underpinning of collective responsibility within the legal system should be retained and continue to be funded by the public purpose fund, according to the Further Review of Complaints Against Lawyers report released in November last year by the NSW Attorney General’s Department.
However, the review makes important recommendations suggesting that provisions of Part 10 should be simplified and that greater flexibility is needed in complaint-handling for regulators.
An increase in non-lawyer participation in the complaints process, nationally consistent standards for regulatory schemes and mutually agreed uniform approaches by the OLSC, the Law Society of NSW and the NSW Bar Association to classification of complaints and disciplinary outcomes are among the 24 changes recommended by the review to improve transparency and openness at all levels, in the operation of Part 10 of the Legal Profession Act 1987.
Responding to submissions received by the Attorney General’s Department to 24 questions raised in an issues paper released in November 2001, the review makes some key recommendations, which if adopted, will introduce significant changes to the way complaints about solicitors, barristers and licensed conveyancers are handled in NSW.
Among some of the more significant recommendations put forward by the review are amending the definitions of professional misconduct and unsatisfactory professional conduct, extending financial and or management audit powers for the Legal Services Commissioner -currently applicable only to incorporated legal practices - so that any legal practice, including multidisciplinary legal practices and barristers’ practices, can also be subject to review and investigation.
The review recommends a broad power be granted to the professional councils and the Legal Services Commissioner to suspend a practicing certificate at any stage of an investigation (with a right of appeal to the Administrative Decisions Tribunal and the Supreme Court).
Other recommendations include:
- the power to refer matters, after mediation through the Legal Services Commissioner, to an arbitrator who can award maximum compensation of up to $25 000;
- referral to the ADT without investigation in certain circumstances;
- a role for the Legal Profession Advisory Council in advising the Attorney on specific issues relating to the operation of Part 10; and
- that licensed conveyancers should be subject to the same standard of care that legal practitioners must meet when undertaking conveyancing work.
The review recommendations are still to be considered by the Attorney General. Any developments will be reported in future issues of Without Prejudice.
Recommendations to remove consent reprimands
The Legal Services Commissioner and Councils of the Law Society and the Bar Association may soon be able to issue reprimands to practitioners without their consent, if the government adopts recommendations made by the Law Reform Commission in its report, Complaints Against Lawyers: an interim report.
Currently, the Legal Profession Act 1987 allows the Legal Services Commissioner and the Councils to reprimand legal practitioners in certain circumstances, but only with the consent of the legal practitioner – which is usually provided.
The Legal Profession Act currently states that, if, on completion of an investigation, it appears to the Legal Services Commissioner or the relevant Council that there is a reasonable likelihood that the practitioner would be found guilty of unsatisfactory professional conduct (but not professional misconduct) a reprimand may be imposed, with the practitioner’s consent.
The issuing body notes the issue of such a reprimand, allowing them to maintain a check on the conduct or behaviour of practitioners and ensure that repeat offenders are dealt with adequately.
Consent reprimands help to avoid the need to institute proceedings. They also distinguish the roles of the Legal Services Commissioner and the Councils from the judicial role of the Tribunal.
The Law Reform Commission, as part of its mandate to review the operation of Part 10, questions the usefulness of a power to issue reprimands that is subject to the practitioner’s consent and recommends the consent requirement be removed.
If enacted in its current form, the Legal Services Commissioner and the Councils will be able to issue a reprimand where, after investigation, there appears a reasonable likelihood that the practitioner would be found guilty of unsatisfactory professional conduct if the matter were referred to the Tribunal. The current restriction excluding the offer of a reprimand in circumstances where there is a reasonable likelihood of professional misconduct would be maintained, meaning serious matters involving allegations of professional misconduct would still be referred to the Tribunal where they would be heard openly.
OLSC adopts ‘education for compliance’ strategy with incorporated legal practices
Recent OLSC research into almost 200 legal practices that have incorporated or are in the process of incorporating, indicates a great number remain unaware of their mandatory and professional obligations and lack effective systems for avoiding complaints.
But Legal Services Commissioner, Steve Mark, says an “education towards compliance” strategy is being pursued by the OLSC to ensure these incorporated practices meet their professional and mandatory obligations and avoid complaints.
“Incorporated Legal Practices (ILPs) need to understand that failure to maintain appropriate management systems and ensure that legal services are provided in accordance with the Act and Regulations can amount to professional misconduct,” Mr Mark says.
Prior to, and since the introduction of legislative change in June 2001 enabling legal practices to incorporate, the OLSC has been working closely with the Law Society of NSW and the College of Law on their QL Gateway to Best Practice program to help ILPs.
“We are working closely with the NSW QL Board to create a specific module in the QL Gateway to Best Practice program to help ILPs comply with the management systems required of them by changes to the Legal Profession Act 1987 and Regulations, and to address the lack of a definition of ‘appropriate management systems’ referred to in the Act,” he says.
“We expect, once this is implemented and ILPs have achieved certification in the revised training program, that they will be less likely to be targeted for ‘audit’ by the OLSC in the absence of a complaint, for at least the first year of certification.”
Bob Watson, ILP Project Consultant to the OLSC says that ILPs comprise mostly small practices with up to three directors (formerly partners) from Sydney city and suburban areas. Practices in regions such as Wagga Wagga, Broken Hill and Wollongong have also opted for incorporation.
Most ILPs are providing traditional consumer and small commercial legal services, Mr Watson says, with only very few operating as Multi-Disciplinary Practices that provide services beyond just legal services.
“It is also apparent that reasons for incorporation are wide-ranging.”
Despite whether or not a complaint has been made to the OLSC, the Legal Services Commissioner will be able to exercise his wide-ranging powers to investigate and review ILPs in connection with the provision of legal services.
These compliance-based audits will determine if ILPs are meeting their mandatory and other obligations and if so, make them less likely to attract complaints.
The “education towards compliance” strategy is also being supported by the NSW Attorney General, Bob Debus, who is inviting all parties – including representatives of selected ILPs - with a strategic interest in the success of legislation governing ILPs to a ‘Stakeholders Forum’ in early March to ensure all parties achieve a broader level of understanding and agree on what needs to be done.
A report of the forum will appear in the next issue of Without Prejudice.
Public hearings in ADT enhances accountability
The OLSC has called for open hearings by the Administrative Decisions Tribunal (ADT) of cases relating to unsatisfactory professional conduct (UPC), but has supported discretionary powers for the ADT in determining whether or not a hearing should be closed.
Section 170 (1) of the Legal Profession Act 1987 states the Tribunal is to direct that a hearing (or part of a hearing) relating only to a question of UPC be held in the absence of the public unless to do otherwise is in the public interest or the interests of justice. The OLSC argued in its submission to the statutory review of the Administrative Decisions Tribunal Act 1997 (“the Act”), that open hearings would add to the integrity of the decision-making process and guarantee development of an informed legal services market.
Legal Services Commissioner Steve Mark, says the OLSC believes it is the intention of the Act, and within its objectives, that all disciplinary proceedings should be held in public, unless there are exceptional circumstances.
“It is clearly stated in section 75 of the Act that Tribunal hearings be conducted in public and we argue that anything other than that is overly protective of the individual.
“Closed hearings do not appear to reflect the objectives of transparency and public accountability,” Mr Mark says.
Despite the clarity of section 75, section 126 of the Act - which applied criminal penalties to anyone publishing names or identifying persons involved in proceedings - had previously been used to maintain secrecy around proceedings and finally led to this section being amended in 2000 so that it now only applies to hearings in the Community Services Division of theADT, as intended.
The OLSC submitted that while these earlier amendments addressed public concern about the statutory presumption of secrecy in relation to disciplinary proceedings against legal practitioners, openness in proceedings improves both the quality of justice and the community’s confidence in the justice system – both of which are integral to a healthy common law tradition.
Input provided to review of Tripartite Deed
OLSC officers preparing a submission to the review of tripartite deeds being undertaken by the Ethics Committee of the Law Society of NSW, are expected to highlight difficulties with the deed in relation to workers compensation matters.
They will also outline difficulties that can arise when, for example, a solicitor argues that a contingency agreement, stipulating that the client must pay all costs and disbursements immediately if they terminate instructions mid-stream, has greater legal force than the deed.
As well, they will raise instances where a client seeks to revoke an apparently irrevocable authority.
Designed by the Law Society to assist in file transfer when clients change solicitors midway through a matter, the deed is available to members of the Society on request as a means of providing ‘satisfactory security’ under Rule 29 of the Solicitors’ Rules. It has been particularly useful in personal injury matters.
Difficulties already identified by the Ethics Committee include costs disputes between clients and their former solicitors, where the period for cost assessment may expire before the matter has been concluded. If the final award is less than anticipated, this may leave the first solicitor paid but with no money left to pay the new solicitor or even for the client.
The OLSC is increasingly aware of solicitors insisting on full payment of all outstanding fees before file transfer can occur. This can mean files are never transferred as many clients have no funds to pay and the incoming practitioner is often unwilling to fund the litigation. New solutions need to be found, either through a revised deed or a revised rule that allows genuine cases to go ahead.
Amendment opens up NSW to solicitors from other jurisdictions
Commencement of the Legal Profession Amendment (National Competition Policy Review) Act , NSW, on 4 October 2002, has introduced the ‘portable practicing certificate’ scheme to Australia.
Previously, Part 3B of the Legal Profession Act 1987, which deals with interstate practitioners, allowed for a reciprocal arrangement whereby interstate practitioners from participating states and territories were entitled to practice in another participating state or territory provided certain requirements were met, such as having appropriate indemnity insurance coverage. They were also required to notify the appropriate state regulatory authority of their intention to set up an office in order to ensure that requirements pertaining to such things as trust funds and fidelity funds were met.
However, Western Australia, Queensland and Tasmania were not ‘participating states’ under this scheme and only recognised practitioners with NSW practicing certificates after administrative arrangements prescribed in mutual recognition legislation were fulfilled.
The portable practising certificate amendments have replaced the previous definition of ‘participating state’ with “another state or a territory” and have the effect of opening up legal practice in NSW to legal practitioners from all other Australian jurisdictions and New Zealand.
Complaints practitioners never hear about
Lawyers are quick to tell you that they have never had a complaint made about them, but in every year complaints are made about practitioners who never even know it.
These complaints are among nearly 18 per cent of around 3000 complaints received by the OLSC in 2001-2002 that were dismissed.
Some of these are dismissed after exploration and consultation with the practitioner, but others are dismissed without the practitioner ever knowing.
In keeping with the OLSC’s problem-solving philosophy of putting effort where outcomes can be achieved, practitioners involved in these complaints dismissed without the need for further exploration or consultation with them, are only ever told about the complaint if they have specifically asked to be notified. They will also be told if the complaint is threatening or raises concerns about security for the practitioner or the OLSC.
“While some practitioners may not be happy about not being notified because they believe it somehow denies them procedural fairness, the reason we don’t notify practitioners is because there is no substantive complaint and our resources can be better used.
“We focus instead on using our resources widely and trying for the most constructive yet least intrusive results,” says Jim Milne, Assistant Commissioner (Complaints).
Some complaints are dismissed because they are considered misconceived, in that they’re based on rights the complainant thinks they have which they don’t have.
A number of other complaints are dismissed because they are not within the Legal Services Commissioner’s jurisdiction, such as those made about judges or magistrates, or people representing themselves as lawyers when they are not. Complaints without sufficient information can also be dismissed.
Still others clearly reflect a lack of understanding of what lawyers can and can’t do, or arise from unrealistic expectations of lawyers or the courts, says Mr Milne.
“Other complaints we dismiss come from people who may have a mental illness which has been exacerbated by their court experience and they think, wrongly, that we can help them,” he says.
Supreme Court says Legal Services Commissioner to decide how investigations are undertakenActing Justice Burchett determined in the Supreme Court in November last year that, in circumstances where a complaint under the Legal Profession Act 1987 had not been summarily dismissed, “…it is left to the Legal Services Commissioner to decide, in each particular case, how to go about the necessary investigation, guided by the circumstances and the scope and purposes of the legislation.”
Making the determination in Kawicki –v- Legal Services Commissioner and Anor, Burchett AJ emphasised that the Legal Profession Act 1987, did not establish a set of requirements to be satisfied by an investigation in circumstances where the complaint had not been summarily dismissed.
Mr Kawicki had complained to this Office about the conduct of the Director of Public Prosecutions (DPP) in advising the Attorney General in relation to an application by Mr Kawicki for an ex gratia payment following the quashing of his conviction by the Court of Criminal Appeal after his sentence had been served.
The complaint was dismissed by the Legal Services Commissioner on the basis that the conduct so described was not conduct in the practise of law and not of sufficient seriousness to be considered as professional misconduct justifying a finding that the DPP was not a fit and proper person to hold a practising certificate.
Mr Kawicki commenced proceedings in the Administrative Law Division of the Supreme Court seeking a declaration that the DPP’s conduct did occur in the practise of law and an order overturning the Commissioner’s decision to dismiss his complaint.
The application was dismissed by his Honour who held that the DPP’s conduct was not conduct in the practise of law. He held, further, that there was no authority (including the decision in Murray –v- Legal Services Commissioner), which required the Commissioner to involve a practitioner in an investigation or complaint in circumstances where no determination adverse to the practitioner was being contemplated by the Commissioner.
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