INTRODUCTION

4.1 In the next Chapter, the Commission offers three Options for the regulation of the legal profession, with the major variable being the degree of control which the executive Councils of the peak professional associations - the Law Society and the Bar Association - exercise over the process. In Option One, the professional Councils will continue to play the main role in the reception and investigation of complaints, as well as continuing to have certain, limited dispositive powers (to dismiss and to reprimand) and the power to refer matters to the Standards Board or Disciplinary Tribunal for hearing and determination. A number of possible changes to the existing system are canvassed. In Option Two, the establishment of an independent Legal Services Complaints Commission is considered, which would supplant the role of the professional Councils in the disciplinary system. In Option Three, the reception and investigation of complaints would be placed in the hands of an independent Legal Services Ombudsman, but the professional Councils would continue to have limited dispositive powers and the responsibility for deciding which matters to refer to the Board or Tribunal. The Legal Services Ombudsman would also serve as the external monitor of the system.

4.2 In this Chapter, we consider a range of issues which apply across the board. For example, the analysis of, and tentative proposals made in connection with, the role and position of complainants, the powers and procedures of the Standards Board and Disciplinary Tribunal, and measures for the enhancement of professional standards, are not contingent upon the particular mode of regulation which is ultimately preferred. Depending upon the course chosen, this may involve amendments to the Legal Profession Act 1987 and/or changes to administrative arrangements.

4.3 It is worth pointing out here that, while the choice of regulatory model is of obvious importance, the formal disciplinary system is not the only institution which ensures or tends to ensure compliance with professional standards. Other factors which bear upon the conduct of lawyers include “professional pride”, collegial and peer pressures, education and socialisation, and market controls (client satisfaction and retention). At the somewhat more formal level, there is also the threat of liability for professional negligence or malpractice, consumer claims, costs orders, Fidelity Fund claims, complaints to the Ombudsman (in respect of public officials) and other controls on competence.¹

4.4 Similarly, no single regulatory system will effectively control the conduct of all lawyers in all circumstances. The increasing diversity of the organisation of legal work in Australia² means that it is difficult to speak of a “typical” lawyer or a “traditional” style of practice. For example, the ethical dilemmas which face sole-practitioner solicitors, senior barristers, community legal centre lawyers, partners in the “mega-firms” of solicitors, and lawyers employed in the public service, are likely to be quite different, as will be the pressures referred to above and the resources which are available to assist in resolving the problem. As a consequence, it is necessary to pursue a variety of strategies in order to meet the public interest - to take steps to enhance professional standards as well as to punish breaches.

THE ROLE AND POSITION OF COMPLAINANTS

General issues

4.5 It is an unfortunately common feature of legal systems that, as they become more formal and sophisticated, the parties lose control over their own dispute.³ Once the formal proceedings commence, the alleged “victim” becomes marginalised and is assigned the role of witness or, sometimes, is assigned no role at all. It may be that part of the public dissatisfaction with the existing disciplinary system for the legal profession stems from the fact that complainants⁴ feel removed from the process and uncertain about whose interests and concerns are really at the heart of the system.

4.6 In order to correct this problem, it is necessary to put in place mechanisms throughout the disciplinary process which are responsive to the concerns of complainants and which assess the satisfaction of complainants with the manner in which their complaints are being handled. This may sometimes involve assuring complainants that their concerns are not well-founded, as well as sometimes telling the professional associations that there are systemic problems, or problems with the handling of a particular case. The Commission’s discussions with the people who directly deal with complaints against doctors and lawyers suggest that the key to proper handling of complaints is the recognition that the clients have suffered at least some degree of anxiety, trauma or financial loss, whether or not this was the result of any fault on the part of the service-provider. The complaints-handling process must be sensitive to this, and part of it must be specifically geared towards helping the complainant resolve their feelings about the situation. In Victoria, the Solicitors’ Board has recently begun surveying complainants and respondent solicitors to determine their relative levels of satisfaction with the dispute resolution process, thereby providing information which may help to improve services.⁵

4.7 In this Chapter and the next, we make a number of proposals aimed at improving the position of complainants, including: increased advice and assistance to persons inquiring about the lodgment of a complaint; statutory requirements and practical measures to reduce delays in complaints-handling; the institution of less adversarial and less formal dispute settlement techniques, such as mediation and conciliation, in appropriate cases; more active and thorough investigation of complaints raising issues of unsatisfactory professional conduct or professional misconduct; ensuring that to the extent possible there is “open justice” in the disciplinary system; granting increased powers to the various disciplinary bodies to fashion appropriate, tailor-made remedies, which consider the needs of the complainant as well as the proper penalty for a “guilty” legal practitioner; a greater role and increased support for independent, lay members on the various disciplinary bodies; a much more effective and powerful system of external monitoring of the whole system; and an emphasis on prevention, through educational and support programs aimed at the enhancement of legal ethics and professional responsibility.

Complainant immunity

4.8 In order for any disciplinary system to be effective, prospective complainants must feel free from any suggestion of intimidation or retaliation. The findings and recommendations of the Royal Commission of Inquiry into Chelmsford Hospital pointed out the urgent need for complainant immunity in the medical disciplinary area⁶, and this Commission understands that immunity is likely to be guaranteed in the new legislation establishing the independent Health Care Complaints Commission, which will replace the Health Department’s Complaints Unit. The need for immunity in the legal disciplinary system is at least as plain, for prospective complainants will be acutely aware that lawyers will have the necessary expertise, access to the courts, and financial resources to sue or threaten to sue them, if they are so minded, in order to forestall or force a withdrawal of the complaint.

4.9 Complainants should be absolutely immune from civil suit for all communications made to a body with disciplinary responsibilities in respect of a complaint against a legal practitioner, and for all statements made within any disciplinary proceedings. The officers in charge of the initial intake of complaints should be under a positive obligation to inform all prospective complainants of the nature and existence of this absolute immunity.

4.10 The Commission notes the conclusion of the American Bar Association’s Commission on Evaluation of Disciplinary Enforcement ("ABA Disciplinary Evaluation Commission") in this regard, that:

the small potential for harm to the individual lawyer’s reputation is a price the profession must pay to maintain public confidence in the profession as a whole. The public must be convinced that the profession is not only willing to consider but actively seeks out information about unethical lawyers and will protect those who attempt to present it.⁷

4.11 In conjunction with the passage of the Legal Profession Act in 1987, the Defamation Act 1974 (NSW) was amended¹¹ to provide for a defence of absolute privilege for a publication to or by the Bar Council, the Law Society Council, the Conduct Review Panel, the Standards Board, the Disciplinary Tribunal, or a member of any of these bodies¹² (in his or her capacity as a member), as well as any report of a decision or determination by one of these bodies. The Defamation Act also characterises the proceedings of the legal professional Councils and disciplinary bodies as “proceedings of public concern” for the purposes of permitting a “fair protected report” of the proceedings, which carries a defence to any action for defamation.¹³

4.12 These provisions might be sufficient to protect individual complainants and the public interest in encouraging prospective complainants to come forward without fear of intimidation or retribution. There are some uncertainties which need to be clarified, however. The most pressing point is that, at present, the initial complaint is not made directly to the professional Councils, but to designated officers of the professional associations: the Law Society’s Community Assistance and Professional Conduct Departments and the Bar Association’s Professional Affairs Director. The Law Society’s complaints form is addressed to the Law Society Council, but all of the communications with the Community Assistance and Professional Conduct Departments which lead up to the formal, written complaint arguably are not covered. The Bar’s complaints form is addressed to the “Bar Association” rather than to the Bar Council, and in any event the status of communications occurring before the tendering of the written complaint is unclear. Neither of the Explanatory Brochures provided to prospective complainants by the Law Society and the Bar Association discuss this issue or reassures prospective complainants about their position in this respect.

4.13 Legislation should make clear that all communications made in the course of making a complaint, and in the subsequent proceedings involving the resolution of that complaint, whether involving the complainant, the respondent lawyer, any person responding to a request for information from the authorities, the authorities involved, or the agents or staff of any of the aforementioned, should be privileged in respect of defamation and that complainants are absolutely immune from other civil actions. (It is already the case that members of the Standards Board, the Disciplinary Tribunal, the Review Panel, and the Bar and Law Society Councils, are immune from liability for any act done in good faith as part of their disciplinary responsibilities.)¹⁴ The same principles apply whether complaints in future will be made to the professional associations, to a Complaints Commission, or to a Legal Services Ombudsman.

The right to be kept informed

4.14 One major source of complainant dissatisfaction seems to stem from the absence of regular communication from the professional associations and disciplinary bodies informing the complainant of the progress of the case. In those cases in which the complaint is dismissed summarily or after investigation- which means the great majority of cases¹⁵ - the complainant sometimes receives a rather terse letter with the technical reason for the decision (such as, “the complaint did not disclose evidence of unsatisfactory professional conduct or professional misconduct”) but without a full explanation in “Plain English”.¹⁶ While the technical assessment of the merits of the complaint are no doubt usually correct, the manner of its communication may give rise to doubts about the probity of the process.

4.15 The ABA Disciplinary Evaluation Commission described a similar phenomenon in the United States:

In the vast majority of matters the only communication between the complainant and the [disciplinary] agency is by mail. Complainants file a complaint and weeks or months later receive a dismissal letter. The complainant has no way of judging how much consideration the complaint has received. Even in those cases in which charges are filed and further proceedings held, complainants are not routinely informed of the status or development of the case. Complainants in many jurisdictions are notified of the dismissal by a form letter that states only that the complaint failed to allege a violation of the ethics rules or that sufficient evidence of a violation was not found. The complainant is not informed of the facts considered or the reasoning used to arrive at a decision to dismiss. Of all complaints summarily dismissed, a significant portion arises from lawyer behaviour that does constitute legitimate grounds for client dissatisfaction but does not violate the rules of professional conduct. This distinction is meaningless to most complainants.¹⁷

4.16 Complainants should be entitled to routine communication about the status of their complaint. In order to ensure that this actually occurs in practice, an officer in the complaints-handling agency should be designated to serve as the point of contact for the complainant in respect of each individual complaint, and the complainant should be so informed. That officer would be responsible for periodically reporting (say, every 60 days) in writing to the complainant about the progress of the matter, and for answering any direct inquiries from the complainant. Complainants also should be entitled to a clear and full explanation of the reasons for any dismissal. The letter notifying the complainant of a dismissal should include a statement to the effect that “if you do not understand the result or wish to discuss this matter further, please contact [the designated officer]”. The same general principles should apply to the determinations of the Legal Profession Standards Board, which currently conducts its proceedings in camera. Nothing in the Act requires the Standards Board or the Disciplinary Tribunal to communicate its determinations to the original complainant, who is not necessarily a party to the proceedings (see below).

Alteration of secrecy provisions

4.17 Under the Act, the Law Society may appoint inspectors to examine the trust accounts or investigators to scrutinise the affairs of a solicitor of firm of solicitors.¹⁸ The Act makes it an offence, however, to make an unauthorised disclosure of the fact of the appointment of inspectors or investigators, or the contents of any report produced by such inspectors or investigators.¹⁹ Authorised disclosure may be made to the Attorney General, members of the Law Society Council, agents or officers of the Law Society, the Supreme Court, the Standards Board, Disciplinary Tribunal and Review Panel, a member of the police force, and others who are required by the Act to be furnished with a copy of the report.²⁰ Where the action was taken following information provided by a complainant, the complainant is not among those who is informed that a trust account inspection or a financial investigation has been ordered or is under way, and the complainant is not entitled to receive a copy of the report. There may be a long period of time involved in the Council deciding to appoint an inspector or investigator, the inspector or investigator completing the report, and then the report being considered by Council, and the matter determined by Council or referred to the Board or Tribunal. In the meantime, the complainant may be left in the dark about the status of their matter, and under the false impression that the matter is not being dealt with seriously. As a matter of policy and good practice, the complainant should be entitled to be kept informed of the progress of the investigation by the complaints-handling agency and informed, at least in general terms, of the reason for any significant delay.²¹

The rights to appear as a party and to be present

4.18 A complainant is only entitled to appear as a party at a hearing before the Standards Board or the Disciplinary Tribunal if he or she has requested the making of an order in relation to fees, compensation or waiver of a lien,²² and that entitlement extends only to “those aspects of the hearing that deal with the loss (if any) suffered by the complainant as a consequence of the conduct the subject of the hearing”.²³ The Commission proposes that a complainant should always be entitled to appear as a party to the hearing. Where the complainant takes an active role in the proceedings, it may be that such participation should be subject to a risk as to costs.

4.19 The complainant’s right to be present also should be a fundamental entitlement. However, under the present legislation,²⁴ the hearings of the Standards Board are to be held “in the absence of the public” (in camera), and the complainant has no statutory right to be present other than the limited right to appear as a party in respect of a request for compensation, as described in the preceding paragraph. The Commission understands that complainants are occasionally allowed to be present at Board hearings, in practice, but there should be general provision for this in the Act. At present, the Registrar of the Board and the Tribunal only notifies parties to the proceedings about the time and place of a hearing, so that if a complainant is not a party the only way he or she will learn of the hearing is, fortuitously, through the relevant professional association. Hearings of the Disciplinary Tribunal are normally conducted “in the presence of the public”, except that the Tribunal has discretion to close proceedings to all but the parties and their representatives in the interests of justice.²⁵ Again, the complainant should have a statutory right to be present at the Tribunal even if he or she is not formally a party to the proceedings.

4.20 As a general matter, the disciplinary system should be open to the public to the extent possible. This is discussed in further detail in the section on “Open Justice”, below.

Parallel rights and responsibilities for complainants and lawyers

4.21 The tenor of much of the Legal Profession Act 1987 suggests that complainants and complaints are to be treated with caution, while legal practitioners who are the subject of a complaint are to be accorded full procedural rights. Without derogating from the natural justice requirements which must be applied in favour of those who are in jeopardy of being sanctioned, the rights and responsibilities of complainants and legal practitioners should be constructed in a parallel manner.

4.22 For example, the professional Councils currently may require the complainant to verify the complaint in writing in the form of a statutory declaration.²⁶ However, there is no parallel provision requiring the responses of legal practitioners to be verified in the form of a statutory declaration. Indeed there is no direct statutory requirement at all for lawyers to respond, much less to respond in a timely fashion, except that the Law Society may cancel or suspend the practising certificate of a solicitor who fails, and continues to fail, to give a satisfactory explanation to the Law Society Council after being required to do so.²⁷ Although there is nothing in the Act which specifically authorises it, the Law Society’s Explanatory Brochure for complainants states that if a complainant is requested by the Law Society to provide further particulars and fails “to do so within one month of such a request, ... the Society may dismiss your complaint”. Despite placing such a narrow time limit on complainants, the legal practitioner is not under any equal or similar obligation to respond promptly. Similarly, a Council may not dismiss a complaint with a reprimand without the consent of the legal practitioner involved,²⁸ yet there is no parallel requirement to gain the consent of the complainant to a dismissal, with or without a reprimand, or to give the complainant an opportunity to be heard on the matter.

Establishing a “Complainant’s Charter of Rights”

4.23 Consideration should be given to the legislative statement of a “Charter of Rights” for complainants,²⁹ in order to make clear the position of complainants and to emphasise the integrity of the system. The Charter could enshrine, for example, the following principles:

• Complainants are entitled to receive sufficient advice and assistance in order to prepare a complaint in writing in the prescribed form, and to understand the nature of their rights and responsibilities in the disciplinary process.
• Complainants shall be absolutely immune from civil suit for all communications made to the officers of the agency responsible for the handling of complaints, for all communications made to the various disciplinary bodies exercising direct or delegated statutory powers, and for all statements made within the disciplinary proceedings.
• Complainants must receive regular and adequate notice of the status of disciplinary proceedings at all stages of the proceedings. In general, a complainant should receive, contemporaneously, the same notices and orders the respondent receives as well as copies of the respondent’s communication to the agency, except information that is subject to another client’s privilege.
• Complainants must be permitted a reasonable opportunity to rebut statements of the respondent before a complaint is dismissed.
• Complainants must be notified in writing when a complaint has been dismissed (with or without a reprimand to the legal practitioner). The notice should include a concise recitation of the specific facts and reasoning upon which the decision to dismiss was made. The complainant should normally be given a copy of the investigator’s report, unless there are good reasons for doing so in a particular case (such as problems of confidentiality).³⁰
• Complainants must be given effective notice of the date, time, and location of any proceedings before the Legal Profession Standards Board or the Legal Profession Disciplinary Tribunal,³¹ and shall have the rights to attend, to appear as a party, and to testify at the hearing.
• Complainants shall have the right to have any decision of the Law Society Council or the Bar Council, or any official or body acting on the delegated authority of one of those Councils, reviewed by the Legal Profession Conduct Review Panel. (This assumes the retention of the existing system.)

The Commission would welcome submissions on these issues.

ACCESS TO THE COMPLAINTS-HANDLING SYSTEM

Access to information

4.24 Brochures, pamphlets, videos and other means of communication should be used to provide a clear statement (in Plain English) of: the rights and responsibilities of complainants; the assistance which is available to prospective and actual complainants; the general nature of the disciplinary process, including the remedial orders which may be given; and the other forums for the resolution of disputes about the provision of legal services (mediation, civil suits, the Consumer Claims Tribunal, etc). It must be remembered that while some complaints are received from other lawyers, judges, court officials and public officials, the great bulk of complaints are initiated by members of the public (usually clients),³² who begin the process with very little information about how the disciplinary system works.

Assistance to non-English speakers

4.25 All literature produced in relation to complaints about lawyers should be available in a wide range of community languages.³³ However, the production of brochures should not be regarded as fully satisfying the requirement to assist complainants or to overcome barriers to effective access. A recent report by the Administrative Review Council on access to administrative review by members of the ethnic communities found that there has been an over-reliance on the perfunctory production of pamphlets and brochures by organisations and service-providers, without any careful assessment of how to convey the information to targeted groups in a manner which most effectively identifies the way in which they actually, commonly receive information.³⁴ Migrant resource centres apparently are flooded with brochures, pamphlets, notices and posters, with little real prospect for this information to be disseminated to those in particular need. More imaginative marketing techniques must be employed to reach more people and convey the information more effectively.³⁵

4.26 Further, sufficient interpreter services must be made available to assist persons who are communicating with “the front counter” by telephone or who are in need of assistance to provide the details of the complaint in writing, as is required. In the first instance, this would be likely to involve making greater use of the existing Telephone Interpreter Service (TIS), followed by the making, there and then, of an appointment between the complainant, a competent interpreter, and someone (preferably a senior officer) from the professional body involved, to assist the complainant in formulating the detailed, written complaint. The submission from the NSW Combined Community Legal Centres Group emphasised that, in its experience, the existing complaints mechanisms were clearly inadequate to meet the needs of persons from non-English speaking backgrounds, or persons with low literacy skills or other disabilities, preventing them from making an effective complaint.³⁶

Access to offices and officials

4.27 The submission from the NSW Combined Community Legal Centres makes the useful point that the disciplinary system should be made more “accessible” to complainants not only in terms of language, but also in respect of location, working hours and minimal formality, as well as ancillary services such as costs assessment and counselling.³⁷

CONSENSUAL DISPUTE RESOLUTION

General issues

4.28 The disciplinary system established by the Legal Profession Act 1987 is a legalistic one, relying on hearings before bodies with varying degrees of procedural formality. No provision was made for other forms of dispute settlement. In our recent Report on dispute resolution,³⁸ we noted the increasing acceptance and use of non-adversary and non-adjudicative dispute resolution techniques, whether as an alternative to the use of the courts and tribunals or as an adjunct (official or unofficial) to those more formal methods. The Commission is generally supportive of these developments, while recognising that “alternative dispute resolution” (or, preferably, “additional dispute resolution”) is not a panacea for the notional ills of the judicial system but rather a set of further options to be carefully considered in each case. Depending upon the broader social consequences of a dispute, the nature and relationship of the parties, the imbalance in resources or power, and other factors, there are often very good reasons why matters are best handled in open court, using formal rules of evidence and procedure, and concluding with an adjudicated result by an impartial finder of fact.

4.29 In the area of conflicts between lawyers and their clients, there is certainly room for and advantage in the use of additional dispute resolution techniques, such as mediation and conciliation. The preponderance of complaints by clients relate to problems of delay, poor communications, discourtesy, and disputes over fees. Many of the allegations, even if true, will not amount to “unsatisfactory professional conduct” or “professional misconduct” within the meaning of the Act. Few of these disputes require, or would profit from, a formal hearing. Most of these disputes would no doubt be resolved quickly and effectively, from the client’s point of view, by mediation, so long as there is not an implicit assumption that “mediation” means that “each party has to give a little bit”.

4.30 However, a smaller proportion of complaints, which raise questions about the character, honesty or competence of the lawyer involved, will still require a formal hearing (instead of or in addition to mediation) so that disciplinary action may be considered. Other complaints may raise issues in which there is a general public interest beyond the resolution of the particular dispute, and these also should be referred back into the system so that general issue may be ventilated. For example, it may be that the lawyer involved has acted in accordance with standard practice, but the practice itself is open to question.

4.31 The submission of the Law Society, to which we will return below, strongly endorses the idea of mediating disputes between clients and lawyers, and contains a specific proposal for the insertion of this process into the existing disciplinary system. The Bar Association’s submission also states that:

The use of informal mediation is also to be explored in appropriate matters where both the complainant and the barrister are willing to participate. The types of matters which readily lend themselves to such an approach include complaints about delays with chamberwork, delays in returning a brief, misunderstandings about the role of a barrister, and where there is an apparent failure on the part of the barrister to properly explain things to the client. There may be many other cases where mediation would assist.³⁹

4.32 The submission of the Australian Consumers’ Association also urges that priority be given to the resolution of the complainant’s particular grievance, with the disciplinary aspects of the complaint handled later:

Many complaints against lawyers will involve both a compensation aspect and a disciplinary aspect. In our opinion a scheme will be most successful if it can deal with the consumers’ primary objective first, that is, to recover compensation and then deal with disciplinary aspects. If a scheme attempts to deal with disciplinary matters first than the scheme is likely to be seen as inefficient from the consumer’s point of view and therefore is less likely to be used.⁴⁰

4.33 The Law Society’s submission suggests that in many, if not most, of the complaints it receives about solicitors, the complainant is principally interested in obtaining “redress of a grievance rather than retribution against the solicitor involved.”⁴¹ The Law Society already has proceeded to establish a voluntary scheme of dispute resolution. The Law Society has hired a full-time legal officer with responsibility for serving as a mediator, and has utilised the services of LEADR (Lawyers Engaged in Alternative Dispute Resolution) to provide training for staff members.⁴² The Law Society has recognised that there will be circumstances in which, despite the satisfaction of a complaint through mediation and the willingness of the complainant to withdraw it, the Law Society will be constrained by law⁴³ to refer the matter to the Standards Board.⁴⁴

4.34 The Law Society proposes two things in relation to dispute resolution. First, that in a case which has been resolved to the client’s satisfaction by mediation, but conduct by the solicitor constituting unsatisfactory professional conduct is involved, the Law Society Council should be able to dismiss the complaint or make other appropriate orders, such as issue a reprimand. The Law Society Council already has the power to dismiss a complaint with a reprimand, and even to dismiss without a reprimand, where it is satisfied that the complaint involves a question of unsatisfactory professional conduct, so long as it is also “satisfied that the legal practitioner concerned is generally competent and diligent and that no other material complaints have been made against the legal practitioner”.⁴⁵ The Law Society suggests that “alternative dispute resolution will, except in cases of professional misconduct, produce the most effective and just result.”⁴⁶ Secondly, the Law Society proposes that:

In order to develop more effectively the mediation processes it has already in hand, the Council of the Law Society, the Legal Profession Standards Board and the Legal Profession Disciplinary Tribunal need a broader discretion under the Act for the determination of complaints which are justly resolved to the satisfaction of both the complainant and the practitioner.⁴⁷

4.35 The enthusiasm of the Law Society for mediation stems in part from the experience of similar schemes in Victoria and England, which report very high “success rates” for mediated settlement of complaints.⁴⁸ In the scheme operated by the Law Institute of Victoria, professional conduct issues are separated from “non-conduct” (or “disputes”) issues, and only the latter are sent for “conciliation” if the parties agree. Naturally, some complaints contain both conduct and non-conduct issues. If the dispute is not settled by conciliation, the Law Institute has no power to dismiss it - the Institute must refer the complaint to the Registrar of the Solicitors Board for determination (ie, effectively, by arbitration).

Concerns and qualifications

4.36 Given the nature and substance of many of the complaints, it is very likely that a high proportion will be happily resolved by mediation, as the submissions from the professional associations suggest. It may also be that the availability of a quick, responsive mediation process will encourage more mildly disgruntled clients to come forward in the first instance.⁴⁹

Preservation of the dual nature of the disciplinary system

4.37 However, the experience elsewhere also suggests a number of concerns which should be kept in mind. First, the dual nature of the disciplinary system must not be lost. The system certainly should be reformed so that it becomes more attuned to redressing the grievances of individual complainants, but this should not be at the expense of the general public interest in ensuring that licensed legal practitioners conduct their work with honesty, diligence and competence, and that the standards of practice required of lawyers generally are maintained at a sufficiently high level. Of course, there is no reason why both aims of the system cannot be accommodated. The Law Society’s apparent view that “minor matters” of unsatisfactory professional conduct should, in effect, be ignored if the client is satisfied by the outcome of mediation, must be treated with some caution.

4.38 The creation of the Legal Profession Standards Board, based on the Commission’s earlier recommendations, was meant to address the significant concern that these “minor matters” were not being treated with sufficient gravity, given the prevalence of these sort of complaints, their adverse impact on clients, their potential for eroding respect for the work of the profession, and the possibility that patterns of persistently poor work could not be detected if the focus remained only on the more obviously serious acts of professional misconduct, such as trust account defalcations and other acts of dishonesty. Matters which raise suggestions of “unsatisfactory professional conduct” should be sent to the Standards Board (or any successor body) for consideration of the disciplinary aspect of the complaint, even where there has been a successful mediation. Similarly, there may be circumstances in which a complaint raises issues in which there is a general public interest beyond the satisfactory resolution of the particular dispute. These matters should be referred back into the main disciplinary system for exploration. For example, it may be that the lawyer involved has acted utterly in accordance with standard legal practice, but the practice itself is arguably contrary to the public interest.

Sensitivity to the imbalance of power and knowledge in the lawyer-client relationship

4.39 If informal dispute resolution is to be promoted, there must be due sensitivity to the considerable imbalance in the relative positions of lawyers and clients in terms of power and knowledge.⁵⁰ It will be the rare case in which the client has as much negotiating experience as the lawyer, has as much knowledge about the alternatives to settlement by mediation, has as clear an idea of the likely outcome of any future disciplinary or legal proceedings, and so on. While noting the obvious trend towards the increased use of additional dispute resolution techniques (beyond formal adjudication in the courts), we did sound this cautionary note in our recent report on the training and accreditation of mediators:

[T]he contention [that mediation is unproblematic] ought to be regarded with caution given that empirical studies of informal dispute resolution have found that the rhetoric of self-determination and voluntary participation is matched with the realities of capitulation and coercion. The potential for clients to be harmed is exacerbated by the nature of the process which is inherently imprecise and manipulable.⁵¹ [Emphasis supplied]

The independence of mediators

4.40 Perhaps the mediators used should not be staff members of the Law Society or Bar Association, and particularly not staff members who are involved in any way in the investigation or prosecution of complaints. Mediators must be independent of the professional associations to assure complainants of their impartiality. There is already a danger that the dynamics of the mediation situation will inherently favour the lawyer, who is used to negotiating and operating in such an environment, rather than the lay complainant. While it is not really the role of the mediator to redress the balance of power or sophistication between the parties, an experienced mediator should be able to restrain one of the parties from being overbearing. In order to assure complainants that the system is not weighted against them, independent mediators should be used. Depending upon the nature of the complaint, the mediators need not necessarily be legally trained. For example, disputes about discourtesy or poor communications would not require the mediator to be a lawyer. Where an understanding of the exigencies of legal practice would be a major advantage for the mediator, such as in the case of a dispute arising out of the tactics or strategy employed by a barrister in the course of a trial, then it may be best to seek the services of an academic lawyer, a retired judge, a government lawyer or some other lawyer who is not readily associated with the interests of the professional associations.

4.41 The independence of the mediator also is very important from the point of view of the legal practitioner who is the subject of the complaint. The lawyer should be able to participate in the mediation effort in a full and frank manner, without fear that any admissions or concessions made in the process will be used against him or her in a subsequent disciplinary hearing or civil proceeding.

Training and qualifications of mediators

4.42 In any event, the mediators who are used to handle disputes between clients and lawyers should be specifically trained for this purpose. It is not sufficient to assume that, for example, lawyers are “natural” or appropriate mediators by virtue of their legal training or experience. To quote again from the Commission’s recent report on mediation:

The Commission accepts that training for mediators is necessary for competence as a mediator and to enhance the credibility of mediation. We accept that no one is automatically qualified to perform the role of a mediator simply by virtue of professional or occupational qualifications in another discipline, or because of appropriate personal qualities. The role requires knowledge and skills of a distinct process. Training is the most effective way for a person to acquire expertise. Failure to undergo training in the process increases the risk that a mediator’s behaviour will be incompetent and unethical, and of harm to clients.⁵²

THE OPERATION OF THE LEGAL PROFESSION STANDARDS BOARD AND DISCIPLINARY TRIBUNAL

Merger of the Board and Tribunal?

4.43 The Legal Profession Act 1987 established a bifurcated hearing system in which allegations of “unsatisfactory professional conduct” are heard by the Legal Profession Standards Board, while (more serious) allegations of “professional misconduct” are heard by the Legal Profession Disciplinary Tribunal. The Act follows recommendations made by the Law Reform Commission in 1982, in our earlier reference on the Legal Profession.⁵³ The logic behind the establishment of a two-tier process was that poor work falling short of professional misconduct (such as cases of delay or negligence) also should be dealt with by the disciplinary system, but that “it would be unfair and counterproductive if less serious breaches were made subject to the same procedures and sanctions as the serious breaches. The system therefore provided for a formal body, a Tribunal, to deal with serious breaches and a less formal body, a Board, to deal with less serious breaches.”⁵⁴

4.44 To employ a rough analogy drawn from the criminal justice system, allegations of unsatisfactory professional work are like summary offences, dealt with by the lower courts, while allegations of professional misconduct are like indictable offences, triable by the superior courts. Prior to the advent of the new system, these lower level complaints were not dealt with effectively (or, often, at all) by the disciplinary system, since the focus of the system at all levels was on professional misconduct. Yet complaints amounting to unsatisfactory work were far more common than those alleging misconduct. By splitting the process, the Commission hoped that these “less serious” complaints would now receive more attention, and that the Councils of the professional associations would be more willing to refer them to a disciplinary body for hearing.

4.45 Given the prevalence of complaints amounting to allegations of unsatisfactory professional conduct, it could be expected that there would be many more referrals to the Standards Board than to the Tribunal. However, this is far from the case. For example, according to figures supplied by the Law Society of New South Wales, in 1990, there were 1245 written complaints against solicitors.⁵⁵ Of these, at least 80 per cent seemed to relate to issues of unsatisfactory professional conduct: 264 involved undue delay; 37 involved discourtesy; 254 related to negligence or quality of work; 79 involved poor communications; 104 involved allegations of overcharging; and 256 related to conduct or standards breaches. Yet only 12 matters (1% of the total number of complaints)⁵⁶ were referred by the Law Society Council to the Standards Board. Only eight matters had been referred in 1988, 15 in 1989, and one in 1991 (of the over 700 matters finalised). By contrast, 61 matters were referred to the Disciplinary Tribunal in 1988, 43 in 1989, 55 in 1990 and 25 in 1991 (of those cases finalised). In the last four years, the number of matters referred by the Bar Council to the Standards Board amounted to: 3, 1, 4 and 2, respectively, while the numbers referred to the Tribunal were: 2, 4, 9, and 6, respectively.

4.46 Thus, over the four years since the new system was put into place, only 46 complaints⁵⁷ were referred to the Standards Board from the two Councils, while 205 complaints were referred to the Disciplinary Tribunal.⁵⁸ During the same period, about 2-3% of written complaints to the Law Society and 7-12% of written complaints to the Bar Association have resulted in reprimands⁵⁹ administered to the legal practitioners involved. No doubt many or most of these cases involved unsatisfactory professional conduct. However, what is clear is that the Commission’s earlier belief that the creation of a two-tier system would result in the regular referral of less serious matters to the Standards Board has not eventuated. Instead, only a small proportion of these matters are referred, while the remainder either are dismissed or result in a reprimand. (It may be that the selection of Options Two or Three for the future regulation of the profession would increase the workload of the Standards Board, however, as neither a Legal Services Ombudsman nor a Legal Services Complaints Commission would have the dispositive powers currently vested in the professional Councils, and thus could be expected to push a higher proportion of complaints through to the Board level.)

4.47 Apart from the failure to utilise the mechanism of referral to the Standards Board to deal with sub-standard work, there are other problems associated with the two-tier system of hearings which have been identified by the Commission and in some of the submissions. Dual complaints involving elements of both unsatisfactory professional conduct and professional misconduct, or complaints which tread the fine line between unsatisfactory professional conduct and professional misconduct, place the Bar and Law Society Councils in the difficult position of having to decide whether to send a particular matter to the Board or to the Tribunal, or whether to divide the complaint and refer aspects to each body for hearing.⁶⁰ Finally, there are suggestions from the profession that the Standards Board is not operating as the simple, summary, inquisitorial proceeding that was originally intended, but instead has become a more adversarial process not unlike that of the Disciplinary Tribunal.

4.48 The submissions from the New South Wales Bar Association and the President of the Legal Profession Disciplinary Tribunal, Mr David Hunt, both recommend the merger of the Standards Board and the Disciplinary Tribunal into a body which may hear and determine both forms of complaint. The Bar’s submission suggests that the “two-tier approach involves additional expense and bureaucracy which is unwarranted. Secondly, the two-tier system creates difficulties and restrictions which are inimical to an efficient and streamlined system of dealing with complaints from the public.”⁶¹ Mr Hunt’s submission suggests that the present system of hearings is “clumsier” than before and has contributed to the delays in the handling of complaints.⁶²

4.49 It is worth noting here that the Board and Tribunal together hear only a tiny percentage of the original complaints lodged, and the Commission has emphasised other aspects of complaint-handling in this Discussion Paper. Nevertheless, the experience of the past several years and the desire for streamlining the rather complex disciplinary system both suggest that the merger of the Board and Tribunal is an idea worth serious consideration. The Commission’s concern of over a decade ago, that less serious matters involving unsatisfactory professional conduct should not be “made subject to the same procedures and sanctions as the serious breaches”,⁶³ could be met in a different way. There is no reason why, when hearing a complaint about unsatisfactory professional conduct, that a merged body could not conduct itself in a somewhat less formal manner, be given a different range of sanctions to be applied, and so on. Indeed, there is an important general issue about how disciplinary proceedings are conducted. Given that the Board and Tribunal both exercise an essentially "protective" function (see para 5.109) rather than a punitive one, there is a strong argument that the process should be inquisitorial. The Commission is especially interested in receiving further submissions on these questions.

The question of open justice

General principles

4.50 The right of the complainant to be present at disciplinary proceedings and to appear as a party is considered above.⁶⁴ As a general matter, the restoration and maintenance of public confidence in the legal profession’s disciplinary processes is dependent upon clear evidence that the system is fair, open and accountable. As many elements of the system as possible should be open to the public and on the record, and reasons for decisions should be available. The ABA Disciplinary Evaluation Commission recently reported that it was:

convinced that secrecy in discipline proceedings continues to be the single greatest source of public distrust of lawyer disciplinary systems. Because it engenders such distrust, secrecy does great harm to the reputation of the profession. The public’s expectation of government and especially of judicial proceedings is that they will be open to the public, on the public record, and that the public and the media will be able to freely comment on the proceedings. The public does not accept the profession’s claims that lawyers’ reputations are so fragile that they must be shielded from false complaints by special secret proceedings. The irony that lawyers are protected by secret proceedings while earning their livelihoods in an open system of justice is not lost on the public. On the contrary, it is a source of great antipathy toward the profession. ... The arguments against open disciplinary systems are based on conjecture and emotion, not experience.⁶⁵

Hearings of the Standards Board

4.51 Under the Legal Profession Act 1987, the hearings of the Legal Profession Standards Board in New South Wales are to be held “in the absence of the public” (in camera), with only parties to the hearing and their representatives entitled to be present.⁶⁶ By way of contrast, however, a common law action filed by a client against his or her solicitor alleging professional negligence would be heard in open court. The Commission agrees with the view of the American Bar Association that secrecy is likely to engender suspicion. The threat to the reputation of the legal practitioner before the Board is no greater than that of the lawyer sued for negligence - nor, for that matter, is the threat greater than that to the ordinary citizen who is charged with a minor criminal offence and subjected to open justice in the Local Courts.

4.52 The secrecy of the Standards Board’s proceedings may cause some unnecessary problems in practice. For example, if the Board orders that a legal practitioner pay compensation to a complainant⁶⁷ but the lawyer does not comply with the order,⁶⁸ there are some doubts about how the complainant may enforce this “judgment”, which is itself secret. At a minimum, the compensation order ought to be able to be extracted in order to be enforced in a civil court.

Hearings of the Disciplinary Tribunal

4.53 Hearings of the Disciplinary Tribunal are “held in the presence of the public”, except that the Tribunal may close the proceedings (to all but the parties and their representatives) “if it is of the opinion that the absence of the public will aid the ends of justice”.⁶⁹ The Commission understands that the discretion to close proceedings has been exercised in only a few cases, but is nevertheless concerned that the wording of the Tribunal’s statutory power is too open-ended. It would be preferable if the presumption of openness was somewhat stronger and the Tribunal’s discretion to close proceedings was the same as that of the Supreme Court: that is, limited to those rare cases “where the presence of the public will defeat the ends of justice”.⁷⁰

Powers of the Board and Tribunal

Gaps and inconsistencies in the statutory allocation of powers

4.54 The Commission’s own research, as well as many of the submissions received (including those of the Law Society, the Bar Association, and the President of the Disciplinary Tribunal), point to some anomalies and inconsistencies in the distribution of powers between the disciplinary bodies provided for in the Legal Profession Act 1987, and in the sanctions and orders available in respect of members of the different branches of the legal profession. For example, under the prior legislation, it was generally considered that the Solicitors’ Statutory Committee had the same powers to discipline solicitors as the Supreme Court had in relation to solicitors and barristers. However, the Standards Board and the Disciplinary Tribunal have only those powers which are specifically enumerated in ss 149 and 163 of the 1987 Act. In this respect, the previous position is to be preferred. One current uncertainty is whether the Disciplinary Tribunal’s specified powers to make orders against a legal practitioner found guilty of professional misconduct⁷¹ implicitly subsume the (more varied) powers that the Tribunal and the Standards Board have with respect to practitioners found guilty of the lesser charge of unsatisfactory professional conduct.⁷²

Powers in relation to barristers

4.55 When the Standards Board is satisfied that a barrister is guilty of unsatisfactory professional conduct, it may, under s149 of the Legal Profession Act, reprimand the barrister, order a course of further legal education, and/or impose a fine of up to $2000. (Compensation also may be ordered in certain circumstances. See para 4.61 et seq, below.) If the lawyer found guilty of unsatisfactory professional conduct is a solicitor, however, the Board may do any of those things, as well as subject the solicitor’s practice to periodic inspection, order the solicitor to seek management advice, order that the solicitor cease to employ certain persons or require the solicitor to employ a certain class of person(s), order that the solicitor cease to accept instructions in certain areas of work, and/or order that the solicitor’s practising certificate be restricted so that he or she may only practise in the employ of a senior solicitor.

4.56 Although the organisation of work is essentially very different for solicitors and barristers, of course, there is no good reason for this statutory disparity. The 1987 Act required barristers, for the first time, to hold current practising certificates, but the disciplinary provisions in Part 10 of the Act seem to be based on the previous position. There is no reason why the Board should not be able to place conditions or restrictions on a barrister’s practising certificate; for example, to cease to accept briefs in a particular area of legal work.⁷³ The Bar Association’s submission agrees that there should be more flexibility in this respect.⁷⁴

Powers in relation to practising certificates

4.57 In the Commission’s view, the power to impose a condition on a practising certificate - whether in relation to a barrister or solicitor - should not be limited to restricting the legal practitioner’s right to practice as a sole practitioner or without collegial supervision.⁷⁵ Rather, the Board or Tribunal should be given some latitude to fashion conditions appropriate to the circumstances of the individual case, in the same way that courts are given wide discretionary powers to impose conditions upon the granting of bail or the imposition of a suspended sentence or a good behaviour bond.⁷⁶

4.58 Where the Disciplinary Tribunal is satisfied that a legal practitioner is guilty of serious professional misconduct, it may, under s163 of the Legal Profession Act, cancel or suspend that person’s practising certificate, order that the person be struck off the roll of barristers or solicitors, and/or impose a fine of up to $25,000. If the Tribunal finds that the legal practitioner is only guilty of the less serious charge of unsatisfactory professional conduct, however, it has the same powers available to the Standards Board under s149. There is some question about whether the powers in relation to the more serious charge subsume those in relation to the lesser charge. Upon a finding of professional misconduct, the Tribunal should be able to fashion an order appropriate to the particular circumstances of the case, including, where it sees fit, to impose conditions on a lawyer’s practising certificate (rather than cancel or suspend it), order a course of further education, limit areas of professional practice, require the lawyer to employ or cease to employ certain persons, and so on. The Commission proposes that this should be made clear in the legislation.

Powers where the evidence indicates a systemic failure

4.59 In a number of matters observed by the Commission or which have been brought to our attention, the complaint and the ensuing investigation indicated that, in addition to (or instead of) personal failings on the part of the legal practitioners concerned, there was evidence of broader, systemic problems in the law firms concerned. It should be possible for the various legal profession disciplinary bodies to make appropriate orders in respect of a firm of solicitors - short of putting in a receiver⁷⁷ - aimed at rectifying any perceived systemic problems. For example, it should be possible to order the establishment of an internal Ethics Committee, or to improve internal systems of management and supervision, with the firm required to approach the disciplinary body after a specified period of time to demonstrate what changes have been made and their effectiveness.⁷⁸ The Commission would welcome submissions on this issue.

The need to increase the present limits on fines

4.60 As mentioned above, the Standards Board may fine a barrister or solicitor an amount not exceeding $2000 where the Board is satisfied that the legal practitioner is guilty of unsatisfactory professional conduct.⁷⁹ The Disciplinary Tribunal may fine a legal practitioner guilty of serious professional misconduct an amount up to $25,000.⁸⁰ It may be that these limits are sufficient in the majority of cases. However, the Commission believes that the limits should be raised to afford the Board and the Tribunal (or a merged body) sufficient flexibility to impose a substantially greater fine in an appropriate case. A (Medical) Professional Standards Committee, for example, which is the equivalent of the Legal Profession Standards Board, may impose a fine not exceeding $5000.⁸¹ The Commission notes that the maximum fines applicable to company directors and other professional advisers who act improperly have been increasing markedly in recent years. For example, the public exposure draft of the Corporate Law Reform Bill 1992 (Cth) provides for a pecuniary (civil) penalty of up to $200,000 for a contravention of a civil penalty provision by an individual.⁸²

Compensation orders

4.61 Powers to make compensation orders. The Standards Board and the Disciplinary Tribunal both have the power to make an order that the legal practitioner waive or repay fees, carry out certain legal work free of charge or for a specified fee, waive any lien in respect of documents, or pay a specified amount of compensation, upon a finding of unsatisfactory professional conduct or professional misconduct, respectively.⁸³ However, such an order may be made only where the complainant has specifically requested such a remedy in his or her complaint, with supporting particulars,⁸⁴ and two other qualifications are met.

4.62 The first qualification is that an order for compensation not exceeding $2000 may be made without the consent of the legal practitioner involved, but the consent of both the practitioner and the complainant is required for an order above that cash amount, or for any of the other three compensatory orders.⁸⁵ This provision creates the anomalous situation that the complainant may be awarded cash compensation of $2000 without the consent of the lawyer involved, but cannot get a fee waiver or specific performance worth, say, $500, without the practitioner’s consent. In the Commission’s view, the same principle should apply across the board, with consent required only where the cash amount or the deemed value (as determined by the Board or Tribunal) exceeds the specified amount.

4.63 The second qualification is that the complainant has not received and is not “entitled to receive compensation pursuant to an order of a court or compensation from the Fidelity Fund”.⁸⁶ The Commission also has a concern about the wording of this provision. If the meaning here of “entitled to receive” is that the complainant already has been granted an order for compensation from a court, or a claim against the Fidelity Fund has been allowed, but the person has not yet actually received the cash in hand, then there is no problem. However, if the phrase could be construed to refer to the entitlement of a complainant subsequently to seek compensation from a court or the Fidelity Fund, then we believe that this outcome would be wrong on policy grounds. The Act already contains provisions against “double-dipping” by complainants, by requiring that any award of compensation by the Board or the Tribunal must take into account any other compensation granted to the complainant in respect of the same loss.⁸⁷

4.64 These conditions appear to be weighted too heavily against the complainant. The Board and Tribunal should have the power to make any or all of the orders referred to above if the interests of justice and fairness so require. Complainants will often not be aware of the nature or existence of a solicitor’s lien, for example, or understand in advance the sort of compensation they may be entitled to. Where a Board or Tribunal is satisfied on the evidence that a complainant has suffered as a result of a legal practitioner’s poor professional work, and such harm may be rectified in whole or in part by an award of compensation or other remedial order, it should be free to make such an order whether or not the complainant has specifically requested such a course of action and whether or not the legal practitioner consents to such an order. The consent requirement is particularly difficult to understand in view of the requirement that the Board or Tribunal may make a remedial order only if it is first satisfied that the legal practitioner is guilty of unsatisfactory professional conduct or professional misconduct and the complainant has suffered loss as a consequence.

4.65 The limits on compensation. The current upper limit of $2000 for compensation orders under the Act also is open to question. In Victoria, the current limit is $2500, but there is a move to raise this to the more realistic sum of $10,000. The point of providing for compensation within the disciplinary process is to avoid the need for the complainant to go to yet another civil court or tribunal (such as the Consumer Claims Tribunal) to seek redress. However, this aim is not achieved where the compensation ceiling is so low that it forces complainants to go elsewhere to get a proper remedy.

The power to deal with matters arising in the course of proceedings

4.66 The Bar Association’s submission points out that, at present, the Standards Board and the Disciplinary Tribunal have no powers to deal with matters involving professional conduct (or misconduct) which are revealed in the course of a hearing but which were not the subject of the particular complaint being heard.⁸⁸ The Law Society also has raised this issue in discussions with the Commission. The Commission sees merit in the suggestion of the professional associations that the Board and the Tribunal should have the power to deal with matters which arise before them. This power, of course, should be exercised subject to considerations of natural justice in each case.

Joinder of complaints

4.67 There may be some cases in which it is difficult to determine before hearing whether one or another legal practitioner (or both) is responsible for the conduct or failing complained of. Absent a formal hearing there may be insufficient information for the relevant Council to make the determination, or it may be one practitioner’s word against the other. Consideration should be given to permitting the joinder of complaints in these circumstances, to permit the Board or Tribunal, as appropriate, to make the determination after hearing from all of the parties. This may be especially important where the legal practitioners involved are a barrister and a solicitor, in which case neither professional Council would have sufficient jurisdiction to handle the matter properly. In such cases, the composition of the Board or Tribunal should include equal numbers of members from both branches of the profession.

Membership of the Board and Tribunal

Composition

4.68 For the purposes of conducting a hearing into a complaint, the Standards Board is constituted by two of its barrister or solicitor members (depending upon the subject of the complaint) plus one of its lay members.⁸⁹ Under the original provisions of the Legal Profession Act 1987, the President of the Disciplinary Tribunal was to have been the Chief Justice of the Supreme Court of New South Wales, who would appoint two other Supreme Court judges to be members of the Tribunal.⁹⁰ For the purposes of conducting a hearing, the Tribunal was to have been comprised of a judicial member as well as a legal member and a lay member (or two legal members and two lay members, as the President considered appropriate in the circumstances of the case).⁹¹ In 1989, the legislation was amended to remove the judicial members of the Tribunal,⁹² apparently in keeping with the general policy of utilising judges to reduce delays in the courts and appointing instead senior lawyers (usually barristers) to quasi-judicial bodies and tribunals. At the time, the then Attorney General, the Hon JRA Dowd, QC MP, stated in Parliament that “I am of the view that valuable judicial time should not be spent on tribunals unless there is some very special reason. No such reason has been shown to support the appointment of judges to the Legal Profession Disciplinary Tribunal.”⁹³ (It is noted that a District Court Judge still presides over the Medical Tribunal in New South Wales, however.)⁹⁴ Thus, for the purposes of conducting a hearing into a complaint, the Disciplinary Tribunal is now constituted by two of its legal members (depending upon whether the complaint concerns a solicitor or barrister) and one of its lay members, as nominated by the President in each case.⁹⁵

Judicial involvement?

4.69 There is question whether, whatever the general policy on the allocation of judges to tribunals, there may be a special case for having a judicial presence on (and supervision of) the Legal Profession Disciplinary Tribunal. Such a presence would go some way towards ensuring that complainants and the general public regard the Tribunal as being sufficiently independent of the practising profession. In the United States judges traditionally have been centrally involved in the disciplinary system. The ABA Disciplinary Evaluation Commission has recently recommended that the “American Bar Association should continue to place the highest priority on promoting, developing, and supporting judicial regulation of the legal profession and professional responsibility.”⁹⁶ The Commission makes no proposal in this respect at this time, but is interested in receiving submissions on this question.

Lay participation

4.70 Current acceptance of the principle. Although there was very strong opposition to non-lawyer (“lay”) involvement in the disciplinary process when the Commission first considered these issues over a decade ago,⁹⁷ especially from the Bar Association, it is now widely accepted that this is an important feature of the system and is essential in providing sufficient external accountability to maintain public confidence in the integrity of the system which is largely controlled by the legal profession. A few submissions have called into question the value of lay members in the disciplinary process, asserting variously that lay participants do not possess sufficient expertise or experience to understand fully the legal or practical issues involved in many complaints, and that lay members actually often tend to be “softer” than the legal members when it comes to disciplining the lawyer complained about. However, the aim of lay participation in the disciplinary system was not to “balance” the voting but rather to provide additional perspectives and to introduce a measure of external accountability into a system which is otherwise largely closed and dominated by lawyers. As the Commission wrote in 1979,

without [lay participants], there cannot be public confidence that decisions will be made with due regard to the interests of both non-lawyers and lawyers.⁹⁸

4.71 This position is now accepted by both legal professional associations, and neither submission contained a call for the end of lay participation in the legal disciplinary system. Indeed, after the commencement of this inquiry the Bar Association increased lay participation on its Professional Conduct Committees from one to two members, having placed newspaper advertisements to attract a field of candidates for this purpose.

4.72 The meaning of “lay”. There are some concerns, however, about two aspects of the manner in which lay participation has been handled in the several years since the new legislation came into effect. The first concern relates to the appointment and qualifications of lay members. The purposes of lay involvement, again, are to provide diverse perspectives and external accountability. Unfortunately, some of the appointments appear to be contrary to these purposes. For example, in previous years the “lay” appointees to the Bar Association’s committees have included retired Queen’s Counsel and other persons with long associations with the legal profession. The Act provides only that “a lay member is a person who is not a barrister or solicitor”.⁹⁹ Technically, this might be construed to include a legally qualified person who does not hold a current practising certificate; but clearly this is not what was intended. The most recent lay members are more genuinely “external” appointees.

4.73 A Public Council on Legal Services? In its earlier work on the legal profession, this Commission recommended the creation of a broadly constituted Public Council on Legal Services as an important part of the general regulation and structure of the legal profession.¹⁰⁰ As we wrote then,

[T]he Council will provide a pool of non-lawyers who have special interests in, and experience of, the law and the legal profession. It is our view that the Council could become a valuable aid to the Law Society. It could, for example, be responsible for, or advise the Society in relation to, the appointment of lay members of the Council’s committees, including the Complaints Committee.¹⁰¹

4.74 In the end, the Legal Profession Act 1987 did provide for a more limited “Legal Profession Advisory Council”, comprised of two barristers, three solicitors and four community representatives (one of who may be a lawyer), with responsibilities to “keep under constant review the structure and functions of the legal profession” and to report and make recommendations to the Attorney General on any matter relating to the legal profession.¹⁰² However, in the period since the commencement of the Act, the Council has never been constituted. As a consequence, the appointments process for lay members has been rather ad hoc and uninformed. The Commission believes that serious consideration should be given to the establishment of the Legal Profession Advisory Council or, preferably, to the Commission’s original recommendation for a more broadly constituted Public Council on Legal Services.¹⁰³ In any event, the appointment of lay participants in the disciplinary process should follow a system of advertising, interviewing and selection on merit, in the manner normally associated with appointment to important public bodies.

4.75 Support for lay participants. Another important concern is that greater support should be made available to lay members, in particular, to ensure that they can participate in the process in a meaningful way. This may involve special training courses, research and secretarial assistance, and other resources. Lay members should also receive a realistic level of compensation for the work involved, in order to continue to attract and retain members with outstanding personal qualities and community standing. In any event, the remuneration offered to the lay participants should be the same as that offered to the professional members on the same body.

CONFIDENTIALITY AND THE PROTECTION OF COMMUNICATIONS

Confidentiality and investigative procedures

4.76 The Legal Profession Act 1987 contains no provisions which expressly deal with the question of privilege from discovery of confidential material gathered or produced in the course of investigations, trust account inspections or other aspects of the administration of the disciplinary process. There is no doubt that a public interest immunity attaches to confidential documents and other confidential communications gathered in the course of an investigation into a complaint against a legal practitioner, or a review of the handling of that complaint.¹⁰⁴ This immunity is based on the public interest in the maintenance of a body of competent barristers and solicitors with high ethical standards and on the availability of a proper system of handling complaints against lawyers.¹⁰⁵ The public interest immunity amounts to a qualified privilege, however, and not an absolute privilege against discovery. For example, disclosure can not be resisted if the material is necessary for the defence of a person charged with a criminal offence. With respect to civil litigation, the disclosure of the documents is subject to a “balancing exercise” in each case, weighing the detriment to the public interest involved in the disclosure of the material against the detriment involved in denying a litigant access to material relevant to the prosecution or defence of his or her case.¹⁰⁶ Consequently, this sensitive material is arguably open to subpoena in any State court (eg, for the purposes of a negligence action) or Federal court (eg, upon application by the Australian Taxation Office or the National Crimes Authority).¹⁰⁷ The policy of the professional associations is to resist to the highest level the release of investigative files on public interest grounds, but this has not always been successful.¹⁰⁸

4.77 There are similar issues with respect to Freedom of Information. Concern over whether Freedom of Information principles apply to the Conduct Review Panel led the Bar Association to refuse to turn over any files to that body for over three years, prohibiting any external review of the handling of complaints against barristers by the Bar Council for that period despite the requirements of the Act. Under the Freedom of Information Act 1989 (NSW) (hereafter, the “FOI Act”), the principal objects¹⁰⁹ are to allow wider public access to the rules and practices of Government and to permit individuals to check the accuracy of information about them held in the files and databases of public agencies.¹¹⁰ Certain documents are exempt from discovery under the FOI Act, including documents affecting law enforcement or public safety, documents affecting personal or business affairs, documents relating to judicial functions, and documents concerning the operations of public agencies.¹¹¹ This may cover most communications made in connection with the disciplinary process, but the exemption must be claimed, argued and proved in each case. The FOI Act also exempts specified bodies, wholly or in part, from the operations of the Act, including the Director of Public Prosecutions (wholly), the Independent Commission Against Corruption (wholly), and the Ombudsman (in respect of complaints-handling and investigations).¹¹²

4.78 The absence of clear provisions on the question of privilege has several important negative consequences for the investigation of complaints against legal practitioners. In Chapter 5, the Commission proposes that the complaints-handling agency - whether this continues to be the professional associations or a Complaints Commission or a Legal Services Ombudsman - be given increased powers to compel the production of files, documents and other material, and be directed to take an active approach to investigation rather than largely relying upon voluntary disclosure of information from the respondent lawyer. It would be difficult to justify these increased powers, however - or even to expect a reasonable level of voluntary disclosure - if the material may be discovered by subpoena or under FOI. For example, a solicitor may prejudice his or her rights under professional indemnity insurance by answering a complaint in a full and frank manner which effectively makes admissions about liability for negligence. At a minimum, delays may be occasioned while the lawyer seeks legal advice from the insurer about how to answer the complaint, and candour may be compromised by financial considerations. Even more difficult issues arise in respect of the disclosure of material which raises the possibility of criminal liability.

4.79 The disciplinary process should not be used as a form of discovery in contemplation of civil litigation, nor as a means of commercial debt recovery. There is a strong public interest in ensuring that the investigation of complaints against lawyers is conducted in a thorough, active manner, and that lawyers are under an obligation to be candid with the disciplinary authorities. Confidentiality is an essential part of any investigative procedure, while subsequent proceedings should, to the greatest extent possible, be subject to principles of open justice. The confidentiality of other investigative agencies, such as the police, the Director of Public Prosecutions, Independent Commission Against Commission, and the Ombudsman is already recognised in the FOI Act. The Commission proposes that the investigation of complaints against legal practitioners be treated in the same way, and be given express protection in the Legal Profession Act and the Freedom of Information Act.

Confidentiality and mediation

4.80 As discussed above,¹¹³ there is a strong trend towards the use of mediation and other informal conflict resolution techniques to settle disputes between lawyers and clients. This raises confidentiality issues outside of the more formal disciplinary system. Under the voluntary mediation scheme currently operated by the Law Society, the complainant and the respondent lawyer are asked to sign a standard confidentiality agreement (which is drafted in Plain English) , although the parties may agree to waive this. Unless the mediation process is confidential or “without prejudice”, it is unlikely to achieve its purpose, as the parties should be encouraged to be candid and lawyers may wish to offer a settlement even if they do not believe that they are at fault, legally or otherwise.

4.81 Confidentiality provisions, thus, should cover the mediation process as well as the mediator. That is, as a general matter, the mediator should not be able to called at a subsequent proceeding to testify about any communication made in connection with the mediation process. For example, conferences with court counsellors and welfare officers which occur as part of the processes of the Family Court are made expressly privileged under the Family Law Act.¹¹⁴

Qualification in the case of certain disclosures?

4.82 There are sometimes exceptions made to the general rule about confidentiality. To use the Family Court mediation example again, recent amendments to the legislation now oblige court counsellors and welfare officers to report any reasonable suspicions about child abuse to the appropriate authorities.¹¹⁵ In the legal complaints context, the parallel circumstance may be the present requirement that solicitors are required to report (to the President of the Law Society) any reasonable suspicion that another solicitor has dealt with trust money or controlled money in a manner that may be dishonest or irregular.¹¹⁶ The Commission proposes that admissions or communications which reveal such alleged dishonesty or irregularities should not be subject to confidentiality or privilege.

THE ENHANCEMENT OF PROFESSIONAL STANDARDS

Feedback from the disciplinary system

4.83 The existing disciplinary system for lawyers, in common with most quasi-judicial systems, proceeds on a case-by-case basis with the focus on the handling of individual complaints. There is no person or institution charged with maintaining an overview of the whole process, to ascertain trends in the demography or subject matter of complaints or to make recommendations about changes in legal education or practice aimed at remedying common problems. By way of contrast, the Complaints Unit of the Department of Health sees one of its major roles as monitoring the whole system of health care provision as well as processing individual complaints against doctors and other health care providers. The Complaints Unit has developed a sophisticated, computerised data base which can cross-reference the information using a number of variables. For example, the data base can provide information about trends in complaints according to geographic region, area health authority, medical speciality, hospital, and so on. The information gained may then be fed back to the specialist medical colleges, the Department of Health, hospitals and others in order to address specific concerns and to assist in education and policy development. Whatever mode of regulation is adopted after this inquiry, the Commission believes that this feature should be integral to the system.

4.84 At present, the decisions of the Disciplinary Tribunal are published, but the decisions of the Standards Board are not. In Victoria, the same situation generally applies, but the Lay Observer has taken to publishing the results of proceedings before the Standards Board with the names and other identifying material removed. This allows practitioners to become familiar with the sorts of conduct which is found to constitute unsatisfactory professional conduct, and the sorts of sanctions which are applied in the circumstances. This approach is quite common in the United States as well, where State Bar journals publish this information. In New South Wales, the Chief Executive Officer of the Law Society does from time to time gather up some of the more interesting Standards Board determinations and publishes a summary of them (without identifying material) in the Law Society Journal. Consideration should be given to doing this on a regular basis.

The provision of ethics information and advice to practitioners

4.85 Many of the complaints made about lawyers involve allegations of discourtesy or dishonesty, and the most effective antidote to this sort of conduct is a disciplinary system which reacts promptly, consistently, and firmly to professional misbehaviour. However, there also are many situations in which lawyers find themselves in difficult ethical quandaries which are not easily solved by a resort to “common sense” or old canons of conduct. The nature and organisation of legal work in Australia both have changed very dramatically in recent decades with, among other things, the emergence of new areas of legal practice, greater specialisation, substantial growth in the employment of lawyers in the public sector, increased national and international practice, and the rise of the “mega-firm” of solicitors.¹¹⁷ The old paradigm of legal practice - the private solicitor in a small firm or sole practitioner dealing with relatively routine matters for individual clients - no longer holds true for a great many lawyers, and the ethical standards of the profession must develop accordingly.

Codes of Ethics

4.86 One obvious way to provide general information to legal practitioners about ethics and professional responsibility is for the professional associations to produce Codes of Ethics and Codes of Practice. The New South Wales Bar Association has produced for some time a set of Rules for barristers. The Law Society has included a considerable amount of material on ethics in the loose leaf service that is provided to all solicitors,¹¹⁸ in the form of textual discussion, annotated legislation, rules and regulations, and a collection of ethical rulings, practice guidelines and special bulletins from the Law Society Council. The Law Society also is now in the process of formulating a comprehensive Ethics Code for solicitors, with the final version expected in the middle of the year. Such developments obviously are to be encouraged, particularly to the extent that a practical, modern, client-centred approach is taken. One common criticism of the traditional approach to professional ethics has been that:

By far the most attention is paid ... [to] detailing the professional’s obligations to his colleagues, to matter of etiquette between colleagues, and to carrying his professional practice in ways which do not infringe colleague-prerogatives or give him a professional (especially an economic) advantage.¹¹⁹

While there is a need to preserve professional comity, legal ethics should be about defining and encouraging the provision of proper services to clients, having regard to general concerns about candour, fairness, and social responsibility. Ethical behaviour, for example, will sometimes require counselling clients that they may not pursue a certain course of action.

Ethics Hotlines

4.87 Another means of providing immediate advice or information to legal practitioners is through the institution of a “Ethics Hotline” by the professional associations. Such hotlines, which are in common use in the United States, offer free advice by senior lawyers who are expert in ethics to legal practitioners who want immediate, confidential, independent advice about their ethical position in a given situation. It may often be the case that a lawyer faced with an ethical dilemma will feel that he or she has no one to speak to, and it is inappropriate or improper (eg, for reasons of client confidentiality) to discuss the matter openly with professional associates. In California, the State Bar’s Office of Professional Competence, Planning and Development¹²⁰ has established an Ethics Hotline which is highly regarded and heavily utilised. In 1990, the Hotline handled 22,000 calls from lawyers, which amounts to one inquiry from every six lawyers in that state.

4.88 A hotline mechanism will be of particular assistance to solicitors in small firms and sole practices, where it is very difficult to get an independent or “outside” opinion. Although the most striking trend in the legal profession is the growth in the number and size of the “mega-firms”, it is still the case that solicitors overwhelmingly practice in small firms. According to the Law Society, nine out of ten firms have five or fewer solicitors, and 97% of suburban firms fall into this category.¹²¹

Ethics committees and internal Ombudsman

4.89 In recent times concerns have been widely expressed within and outside the legal profession that the pronounced trend toward “corporatisation” of the large firms of solicitors (“mega-firms”), in which the traditional structure of a “partnership of equals” is being replaced by specialised management structures which borrow from the commercial world, could result in the further subordination of ethical or professional concerns in relation to commercial ones. The Commission believes that the larger firms should be encouraged, if not required, to establish internal Ethics Committees which have a real role in policy-making and in advising on particular ethical issues, such as on questions of confidentiality, conflicts of interest, and possible contravention of social obligations. Earlier in this Paper, we considered the possibility that courts and disciplinary bodies might be given the power to order such developments, where the evidence indicated a systemic problem.¹²²

4.90 The Commission understands that it is now a practice requirement in England and Wales under the Law Society’s “Client Care” scheme for each firm of solicitors (of whatever size) to designate a senior lawyer as the complaints officer or to establish some other in-house complaints handling procedure, to deal with matters initially and to liaise with the appropriate bodies and officers in the disciplinary system.¹²³

4.91 Serious consideration must also be given to the use of external or independent members on the Ethics Committees, perhaps in the form of an internal Ombudsman. Matters of confidentiality and commercial sensitivity would prevent the use of practising lawyers in this capacity, but the position could no doubt be filled from among the ranks of senior academics, retired judges and others with sufficient legal expertise and sensitivity to the imperatives of professional practice. All law firms, and especially the larger ones, should examine their in-house training programs and the sufficiency of the supervision placed on new or inexperienced solicitors and other staff.

A Director of Professional Standards?

4.92 In the Commission’s earlier work on the legal profession, we briefly considered the establishment of the position of “Director of Professional Standards”, with responsibility for the receipt and investigation of complaints.¹²⁴ The idea was not taken up in the Commission’ eventual recommendations. However, reconsideration of the establishment of such a position may be timely, if the Director has a much more general brief to assist in the enhancement of professional ethics and standards of conduct. In Option 3, below, this function would likely be subsumed in the responsibilities of the Legal Services Ombudsman. In the present Option, this function could be assumed by the chairperson of the re-vamped Conduct Review Panel (or Lay Observer, as the Law Society prefers), or else special provision would need to be made for such a position (including financial provision).

Ethics as part of a basic legal education

4.93 In order to qualify for admission to practice law in New South Wales, a person must satisfy the Joint Qualifications Committee of the Supreme Court that he or she has a sufficient educational background in law. This is typically achieved by evidence of a University law degree (LL B) or a diploma from the Admission Board. In the case of solicitors, successful completion of the postgraduate certificate course offered by the College of Law is also required. New barristers are obliged to undergo a “reading” course run by the Bar Association in order to gain an unrestricted practising certificate. Clearly, then, one important way of educating aspiring lawyers about legal ethics and professional (and social) responsibility is through the existing systems of academic and practical legal training.

4.94 Among the University law schools in this state, only the University of New South Wales (UNSW) and the University of Wollongong have compulsory subjects exclusively dedicated to the legal profession, legal ethics and professional responsibility. The new law school at the University of Newcastle, which takes its first students next year, is planning the introduction of a later-year compulsory subject along similar lines. The University of Technology, Sydney (UTS), offers nine “skills subjects” from which students are require to complete any three. Two of the subjects are “The Legal Profession” and “Legal Ethics”, and although students are not obliged to choose these subjects, the law school reports that Legal Ethics, which focuses on the position of advocates, is a popular option.

4.95 The law schools at the University of Sydney, the Australian National University (ANU), and Macquarie University, do not currently require students to take any subjects in this area, although elective subjects are sometimes available, and issues of ethics and professional responsibility naturally may arise interstitially in other subjects.¹²⁵ The Admissions Board course requires students to complete subjects on Legal Ethics and Trust Accounting, but the quality of this program often has been called into question.¹²⁶ The College of Law’s Practical Legal Training course includes eight sessions on Professional Responsibility spread throughout the course, and the Bar Association’s reading program includes a two-hour lecture on Ethics and an examination, but neither course comes close to satisfying the requirements for a lawyer’s complete education in this area.

4.96 The position in New South Wales is, perhaps, somewhat better than in other states. Among the established law schools, only the University of Tasmania has a compulsory subject on legal ethics, although the newer law schools appear to be more open to the idea of providing training in this area. The Pearce Committee inquiry on legal education in Australia surveyed recent law graduates for its 1987 report to the federal government, and found that only two law schools in Australia (Macquarie and UNSW) had a majority of graduates (surveyed) who reported that they were “stimulated by their law courses to think of the social, political and ethical dimensions of legal issues”. Nearly three-quarters of graduates surveyed expressed the view that it was the role of the university law school to teach professional and ethical standards, but only one-third believed their own law course had made a substantial contribution in this area.¹²⁷

4.97 By way of contrast, courses on professional responsibility are available in virtually every American and Canadian law school, and are compulsory in many. Most American states also require applicants for admission to practise law to successfully complete an examination on professional responsibility as part of the system of “Bar exams”.¹²⁸

4.98 The Commission believes that the study of legal ethics and professional responsibility should be an integral part of any law school program, whether this involves mounting a discrete, compulsory subject or dealing with these questions as a significant part of a larger subject. It is only during this formative period in a lawyer’s education that there is the opportunity for sustained study, discussion and reflection. Consideration should also be given to the institution of a requirement of successful completion of an examination on legal ethics and professional responsibility in New South Wales as a condition of admission to legal practice.

Continuing and further education

4.99 The foundations of understanding of professional responsibility gained at law school must be regularly reinforced in practice. In New South Wales, there is now a Mandatory Continuing Legal Education (MCLE) requirement imposed on solicitors by the Law Society requiring eight hours per year of continuing education,¹²⁹ in order to maintain a current practising certificate.¹³⁰ It may be that part of this requirement - or perhaps an additional requirement - should be continuing education in the area of professional responsibility. Again, this is an area that barristers’ chambers and the larger firms, at least, could consider handling on a regular, in-house basis. There is no MCLE requirement for barristers at present. The Commission would be interested in receiving comments or submissions on this issue.

4.100 CLE as a disciplinary sanction. It was suggested above that the various bodies with disciplinary responsibilities - the professional Councils, the Standards Board, the Disciplinary Tribunal (and the Courts) - should have far more flexibility to fashion appropriate orders, penalties and remedies where the conduct of legal practitioners fall short of the expected standards. For example, it should be possible to place appropriately customised conditions on a barrister’s or solicitor’s practising certificate. One order which should be utilised, whether as a direct sanction or as a condition of maintaining a practising certificate, is that the lawyer involved undertake and successfully complete an approved course of continuing or further education relating specifically to legal ethics and professional responsibility.¹³¹

4.101 In California, the State Bar has established an “Ethics School” for the purpose of facilitating such orders, and lawyers in that state may be required to attend for a specified period of time and successfully complete a designated program at the School. The Commission can see some virtues in the establishment of a similar institution in New South Wales, although it is recognised that this State has only about 5% the number of lawyers that California has, and economies of scale may limit such innovations here. Nevertheless, this is a matter worthy of consideration, perhaps in conjunction with associations representing other professions and with bodies devoted to ethical training, such as the St James’ Ethics Centre in Sydney.

Specialist accreditation

4.102 In our earlier work on the legal profession, the Commission considered the benefits to both consumers and lawyers of specialisation, and the introduction of specialist accreditation schemes, and generally endorsed movements in this direction.¹³² The Commission identified the advantages of specialisation as follows:

[The] benefits relate partly to the speed and cost of legal services ... [b]ut they relate also to quality of service. A practitioner who is specially familiar with a field is less likely to be unaware of, or to misinterpret, the relevant law and practice. Moreover, detailed knowledge of official procedures and personalities in a particular field is often of great importance. These advantages of specialisation have increased in significance as the growing complexity and diversity of Australian society has been reflected in the laws and legal system by which we are governed. The emergence of new fields of practice, and the rapid changes in law and technique in many traditional fields, have made it increasingly difficult for a practitioner to provide skilled service across a wide range of areas. Furthermore, specialisation enables lawyers to restrict their work largely to those fields which interest them most or to which their talents are best suited. Increased job satisfaction can improve greatly the quality of a practitioner’s work.¹³³

4.103 As a general matter, specialisation is likely to improve the quality of services available to consumers, assist consumers to identify the particular lawyer or legal firm that they wish to retain, and enhance the standards and levels of satisfaction of the legal profession. The Law Society’s plans to develop a specialist accreditation scheme are at an advanced stage,¹³⁴ and the Commission supports and encourages such developments.

FUNDING THE REGULATION OF LAWYERS

Present and possible sources of funding

The Statutory Interest Account

4.104 All solicitors are obliged to deposit with the Law Society a portion of the funds held in their trust accounts.¹³⁵ The interest income on this Statutory Interest Account amounts to about $7-10 million per year and is used, among other things, to pay for the costs of running the disciplinary system - that is, the costs of the Law Society and Bar Councils and their committees and departments involved in the investigation of complaints,¹³⁶ the costs of operating the Standards Board, Disciplinary Tribunal and Conduct Review Panel, and any other costs (eg court actions) involved in prosecuting “unqualified practitioners”¹³⁷ or lawyers whose professional conduct has been complained about.¹³⁸ Other disbursements from this Account are made for the purposes of legal aid, the supplementation of the Fidelity Fund, legal education, the Law Foundation, and the operation of the Legal Fees and Costs Board.¹³⁹ The disbursement of funds from the Statutory Interest Account is “determined” by the Law Society Council and “approved” by the Attorney General.¹⁴⁰

4.105 The Law Society also maintains another special trust fund, known as the Law Society’s Solicitors Trust Accounts Fund,¹⁴¹ which accrues the interest income on residual funds held in solicitors’ trust accounts. The trustees of this Account are the President and Treasurer of the Law Society and a nominee of the Attorney General. The fund is “applied to purposes similar to those of the statutory interest account”.¹⁴²

Practising certificate fees

4.106 In contrast with the position in New South Wales, the rather elaborate and expensive disciplinary system in California¹⁴³ is paid for entirely by the legal profession itself, out of annual membership dues (the equivalent of fees paid for practising certificates in New South Wales). The Legal Services Trust Fund Program in California, which is the equivalent of the Statutory Interest Account, devotes its resources exclusively to funding legal aid and pro bono publico (public interest) programs. This approach is based on the notion that, given the high level of self-regulation and the profession’s self-interest in maintaining its reputation and standards, the principal responsibility for funding the regulatory system should lie with the profession through its own system of licensing fees.

Consolidated Revenue

4.107 At the opposite end of the spectrum, the budget of the New South Wales Department of Health’s Complaints Unit comes entirely from Consolidated Revenue, with no direct contribution from the medical profession or other health care professionals. It is anticipated that the same position will obtain after the reconstitution of the Complaints Unit as an independent Health Care Complaints Commission.

4.108 This approach is based on the notion that the regulation of health care professionals is a matter of general public interest of sufficient importance to warrant the expenditure of public funds. Having given up their own regulatory responsibilities to an independent body, the medical and allied health professions have likewise been relieved of the responsibility for funding the system. Unlike lawyers, of course, health care professionals do not hold clients’ funds in trust, and thus there is no equivalent ancillary source of funding.

Relationship with the different regulatory options

Costing the different Options

4.109 In the next Chapter, the Commission presents three regulatory Options for consideration: (1) improvement of the present system, which places most of the responsibilities with the Law Society and Bar Association, their Councils, and various committees and staff; (2) the replacement of professional associations by an independent Legal Services Complaints Commission based on the model currently used to regulate doctors and most other health professionals; and (3) the establishment of an office of Legal Services Ombudsman, which would handle the initial intake and investigation of complaints (replacing the professional associations in this respect) and provide an external check on the subsequent processing of complaints by the professional Councils.

4.110 Given the range of suggested improvements to the existing system (Option One), and the replacement of some volunteers by paid staff in the other two Options, it is possible that whichever Option is preferred there will need to be additional funds provided for its successful operation. It is not at all obvious, however, that any of the Options is more or less expensive than the others. The current annual budget for the disciplinary system covering over 11,000 solicitors in New South Wales is “in excess of $2.6 million”, excluding “the costs of various Investigators and Receivers”.¹⁴⁴ The current annual budget for the Health Complaints Unit, which covers 20,000 doctors, 80,000 nurses and 300,000 other health care providers, is $2.5 million. The Commission is not suggesting that an independent investigative commission is necessarily more efficient, but nor is it clear that such a body is inevitably more expensive.

Access to the Statutory Interest Account and other sources

4.111 As discussed above, the funding of the administration of the current disciplinary system, including the activities of the professional Councils, is drawn entirely from the interest on clients’ moneys which are under the temporary control of solicitors and the Law Society. Although the profession tends to view the Statutory Interest Account with a proprietorial eye, it must be emphasised that if the interest income on trust money is not to be returned directly to clients on a pro rata basis, this income must be disbursed for the benefit of the general public rather than for the benefit of the profession. Consequently, this source of funding should be equally available whichever of the three Options presented in Chapter 5 is ultimately preferred. Given that a Legal Services Ombudsman or a Legal Services Complaints Commission would supplant the role of the Councils and their committees and staff in varying degrees, the entitlement to this source of funding could be shifted accordingly.

4.112 The Commission believes it is worth raising the question, however, about whether the Statutory Interest Account should continue to be used to pay for all or part of the disciplinary system. Any contribution made by legal practitioners towards funding the disciplinary system would free up the equivalent amount for application for other public purposes, such as for the provision of legal aid or for community legal education. Consideration should be given to whether a portion of barristers’ and solicitors’ practising certificate fees be applied for, or an additional levy made for, the purposes of funding the regulatory system, including those measures which are aimed at the enhancement of professional standards and the prevention of substandard or unethical professional conduct as well as the system of handling complaints.

4.113 There is also a question about whether the general revenue should be committed for these purposes, as is presently the case with the regulation of health care professionals. Arguably, the community has as great an interest in the proper and effective regulation of lawyers as it does in the regulation of doctors.

4.114 It may be that the sliding scale of relative “independence” of the three proffered Options should also serve as a guide to the source of funding. The more control that the profession has over its own regulation, the stronger the argument that the profession should itself contribute to the costs of the process through practising certificate fees; conversely, to the extent that regulatory responsibilities may be vested in an independent agency, the argument for public funding through the Statutory Interest Account or Consolidated Revenue gains strength.

DISPUTES OVER FEES AND COSTS

The present system

4.115 The issue of barristers’ and solicitors’ remuneration¹⁴⁵ is not explicitly part of the Commission’s terms of reference for this inquiry. However, disputes about legal fees, costs and disbursements do represent a significant proportion of the complaints received by the professional associations about lawyers.¹⁴⁶

4.116 Under the Legal Profession Act, a solicitor may not sue for costs until at least one month after the delivery of a bill of costs to the client.¹⁴⁷ The Supreme Court may order a solicitor to provide a detailed bill of costs to a client, and may order the surrender of documents held pursuant to a solicitor’s lien.¹⁴⁸ In the event of a dispute about the amount of the bill, a client may apply to the Supreme Court to have the bill “taxed” (appraised) by Court officers.¹⁴⁹ If the bill is reduced by a factor of at least one-sixth by taxation officers, the client has “won”, and the losing party bears the expenses of the process.¹⁵⁰

4.117 It is widely accepted that taxation is a cumbersome, little-understood, and generally unsatisfactory method of resolving disputes about fees and costs.¹⁵¹ It is well beyond the reach of most clients to initiate an action in the Supreme Court simply to require a solicitor to render a proper bill of costs, or to have a lien lifted, or to have the fairness or otherwise of a bill of costs assessed. Nor is there any special reason why, if the formal Courts must play a role, such matters could not be heard in the lower courts. Alternatively, the resolution of fee disputes could be entrusted to the Standards Board and Disciplinary Tribunal, with increased powers and resources given to the Registrar.

The Working Party on Legal Costs

4.118 A Working Party on Legal Costs has been established by the Attorney General, with representation from the Attorney General’s Department and the profession. It is understood that the Working Party is moving towards: (1) the abolition of the Legal Fees and Costs Board, which sets fee scales for non-contentious matters (such as conveyancing) subject to Parliamentary disallowance (in the manner of a regulation), and its replacement by indicative (non-compulsory) fee schedules issued by the Law Society; and (2) the abolition of the taxation system, and its replacement with a two-phase system of mediation and determination. Under this proposed system, all fee disputes would initially be subject to mandatory mediation between lawyer and client; in the event that the dispute is not consensually resolved by mediation, it would be heard promptly by a Fee Review Panel designed to provide a relatively informal and inexpensive summary determination.

4.119 The Commission is in general accord with this approach and considers that these developments make it unnecessary for us to review this area in further detail at this time. However, there are two matters which may warrant the Commission’s later attention if they are not adequately dealt with by the process in train. These matters are set out below.

Preventive measures: disclosure and fee agreements

4.120 Any system designed to reduce the level of conflict between lawyers and clients over fees must address the prevention of such disputes as well as prompt and effective resolution. This is best achieved by ensuring that there is clearly communicated, “up-front”, written disclosure to clients (and prospective clients) of all reasonably foreseeable fees, costs and disbursements, followed by written fee agreements in Plain English. These documents should include information about the scope of the retainer, the basis of charges, the nature of disbursements, the method by which clients will be kept informed of the progress of the matter and the accrual of costs, and a contact person in the event of questions or problems. This “Client Care” approach was adopted by the Law Society of England and Wales about one year ago,¹⁵² and appears to be working well.

4.121 Similarly, every bill of costs rendered by a legal practitioner should contain a clear, brief statement at the end about what to do in the event of any question or problem, and how to seek external review.

Assessment of barristers’ fees

4.122 At present, and traditionally, there is no taxation of barristers fees’ available. This is based on the premises that there is no direct relationship between clients and barristers, and that solicitors are best positioned to determine whether to engage a particular barrister and at what cost. The Commission believes that consideration should be given to treating barristers’ fees and solicitors’ fees in the same manner and resolving fee disputes using the same processes. The Bar Association reports almost precisely the same proportion of complaints received about fee disputes as does the Law Society over the past four years.¹⁵³ Few clients will appreciate the details and nuances of the divided profession, and it is not clear why, in the contemporary regulatory environment, barristers’ fees alone are exempt from review. Section 195 of the Act permits the making of a remuneration agreement between solicitor and client in respect of non-contentious business, and s197 permits the Supreme Court to enforce, vary or set aside any such agreement. In respect of contentious business, the Supreme Court Rules provide for the taxation of a solicitor’s bill of costs, but there is no provision for the taxation or other review of a fee agreement between a barrister and a client (made through a solicitor).¹⁵⁴ It may be that the rules should be the same in respect of contentious and non-contentious business, and in respect of solicitors and barristers.

OTHER MATTERS

Why are there so few complaints against barristers?

4.123 One of the most striking features of the statistical profile of the complaints system is the relative rarity of complaints against barristers. In 1990, there were 1245 complaints lodged with the Law Society against solicitors and solicitors’ firms, while only 89 complaints were lodged with the Bar Association against barristers. Even allowing for the much larger number of active solicitors, there were still twice as many complaints lodged against solicitors on a per capita basis.¹⁵⁵ Despite the wealth of anecdotal evidence from within the profession and the judiciary about instances of poor performance on the part of barristers, this does not translate into formal complaints.

4.124 The Commission noticed this phenomenon in its previous inquiry into the legal profession. At that time, the Commission was only able to find 48 complaints filed against barristers in the three-year period 1975-1977.¹⁵⁶ The relative infrequency of complaints made against barristers appears to be a general feature of the divided profession. In England “there are less than a fifth as many complaints per practising barrister as there are complaints per practising solicitor”.¹⁵⁷

4.125 There are some ready explanations for the imbalance in complaints. The average solicitor is likely to handle a much greater number of client transactions per year than the average barrister, increasing the odds of receiving a complaint. Barristers do not handle clients’ money, do not directly bill clients, and have little or no contact with clients which is not mediated through the solicitor. Further, few clients are in a position to assess the quality of advocacy, the thoroughness of preparation, the tactical wisdom, or other performance standards on the part of their barristers.¹⁵⁸ Abel has noted that in England, the “fact that nearly a quarter of complaints [against barristers] are filed by prisoners suggests that complaining is an act of desperation by those with low opportunity costs”.¹⁵⁹

4.126 Although other lawyers are in the best position to discern and report misconduct on the part of barristers, they do not do so with regularity. In New South Wales in 1990, two-thirds (66%) of complaints against barristers came from members of the public (including clients and former clients), with only 18% from solicitors, 12% from barristers and three percent from judges.¹⁶⁰ The experience in England is roughly similar, although judges and court officials there account for about 14% of complaints.¹⁶¹

4.127 The Commission would be interested in receiving submissions on the question whether a greater onus ought to be placed on legal professionals and on judges and court officials to report instances of perceived unsatisfactory professional conduct and professional misconduct on the part of barristers. One problem in this regard may be that the complaints of judges would be given too much weight, raising natural justice issues. However, as a general matter, it seems unlikely that the professional standards of barristers can be effectively monitored, much less raised, without the more active cooperation of the profession in reporting poor work.

Solicitors’ liens

4.128 A number of individual submissions as well as the submissions of the Australian Consumers’ Association (ACA) and the NSW Combined Community Legal Centres Group (CCLCG) called into question the fairness of the common law “solicitor’s lien”, whereby a solicitor may withhold all files, documents and other personal property of the client from the client until the solicitor’s bill of costs has been paid in full¹⁶² or there is a Supreme Court order requiring the solicitor to give up the documents.¹⁶³ The ACA’s submission states that: “The present lien which solicitors have over files until fees are paid is a substantial barrier to consumers being able to seek advice, complain, or take action against their previous lawyer. This barrier to accountability needs to be removed.”¹⁶⁴ The CCLCG submission identifies a particular problem with “the use of liens in disputes involving costs to impede access to documents necessary if the client is to obtain a second opinion about the matter”.¹⁶⁵

4.129 Solicitors’ liens can be a considerable source of tension in circumstances in which the client is already dissatisfied with the standard of service being provided. Solicitors have as much right to receive payment for their work as any other service-provider, but they do not deserve any special privileges in this regard. The dispute - and the relevant files and documents - belong to the client and not to the solicitor. Solicitors have access to the courts to recover unpaid fees, and are obviously in a better position than clients to make the running in a civil action. Serious consideration should be given to the abolition of solicitors’ liens, or closer supervision by the courts. The legitimate interests of solicitors also may be protected in other ways, such as by giving the first solicitor in a personal injury case a charge for the amount of the taxed or agreed costs upon the judgment money.

Limitation period on complaints

4.130 The Bar Association’s submission recommends the institution of a limitation period for the lodgment of complaints of six months from the time when the complainant became aware of the conduct which is the subject of the complaint. In appropriate cases, late complaints could be considered with the leave of the Council. In support of this submission, the Bar Association refers to the obvious problems in trying to defend allegations which are based upon events which occurred some time in the past.¹⁶⁶

4.131 As discussed above, one of the most frequently cited problems with the legal disciplinary system has been delay in the processing of complaints, including review of decisions, rather than delay in the lodgment of complaints. The Commission is not aware of particular cases in which practitioners have been forced, to their disadvantage, to defend “stale” allegations of unsatisfactory professional conduct or professional misconduct. We suggest in Chapter 5 that time constraints ought to be built into the system to assure the expeditious processing of complaints. Nevertheless, the Commission accepts that some limitations period ought to be considered, subject to extension in appropriate cases, particularly where the allegations go to the more serious charge of professional misconduct. Even if this were not expressly included in the legislation, it is likely that the courts would develop the principle in this context by reference to the recent run of “abuse of process” decisions involving disciplinary proceedings.¹⁶⁷ The legislative prescription of the time period is preferable from the point of view of certainty. As for the period itself, six months may be far too short; rather, the limitations period should be on the order of three years, or perhaps even six years - the limitations period which obtains in respect of civil actions for professional negligence.¹⁶⁸ The Commission notes that in Victoria, the time limit for complaints in respect of a bill of costs is six months, but for all other types of complaints the time limit is six years. Submissions on this point would be welcomed.

The clarification of transitional provisions

4.132 Complaints about the conduct of legal practitioners which occurred before the entry into force of the Legal Profession Act 1987 (in January 1988) raise some difficulties. The Act, unfortunately, does not contain clear transitional provisions to deal with such cases. In practice, complaints which raise issues going to professional misconduct are being dealt with, since this was recognised prior to the Act by both the common law and the earlier legislation. However, there is less certainty about what to do with complaints which allege, in effect, unsatisfactory professional conduct, a head of professional impropriety which did not explicitly exist under the earlier law. This is obviously a problem which will invariably diminish over the next few years, but it is not yet a moot point. In 1990, the Bar Association still received five complaints (out of 84, or 6%) which related to pre-1988 events.¹⁶⁹ The Commission proposes that Schedule 8 of the Act be amended to make clear that these complaints - whether about professional misconduct or unsatisfactory professional conduct - may be dealt by the Councils, the Standards Board and the Disciplinary Tribunal, subject to whatever general limitation period is adopted.

Requiring the legal practitioner to plead

4.133 Under the present scheme, there is no statutory requirement for the legal practitioner to “plead” with respect to any allegations made against him or her. The submission of the Bar Association suggests that as a result of this failure, “a lot of unnecessary costs are incurred in that the matters have to be prepared on the basis that everything in the Complaint is in issue”, and that “it would save time and costs to require the barrister to file a Reply to the Complaint.”¹⁷⁰

4.134 As discussed in more detail in the next Chapter, there are serious concerns about delays in the handling of complaints, many of which stem from the unresponsiveness of legal practitioners to complaints forwarded to them by the professional associations. The disciplinary process probably would be expedited and facilitated by requiring legal practitioners to formally respond to complaints (to “plead”) in a timely fashion and in a manner which serves to narrow the issues for investigation and hearing. The legal practitioner’s candour - or lack of candour - in this respect should itself be matter for consideration by the disciplinary authorities.

1. See D Weisbrot, Australian Lawyers (1990) at 210-216. (Hereafter, “Weisbrot”.)

2. See Weisbrot, Ch 7: “The Changing Face of Legal Practice”.

3. See N Christie, “Conflicts as Property” (1977) 17 British Journal of Criminology 1, and L Fuller, “The Forms and Limits of Adjudication” (1978) 92 Harvard Law Review 353.

4. There is a terminological problem in the Legal Profession Act 1987 in that “complainant” is used to refer to both the individual who makes the original complaint (under s130) and the professional Council which takes up the complaint and subsequently refers it to the Standards Board or the Disciplinary Tribunal for determination (under s134). A Council also may commence an investigation on its own motion (under s135). This may cause confusion where a member of the public hears the Law Society or Bar Council referred to as the complainant. It also confuses the position regarding the enforcement of a compensation order made under s163, for the benefit of “the complainant”. The Law Society has suggested, and the Commission agrees, that the Act should be amended to clarify that the “complainant” is the maker of the original complaint, while the Council which refers the complaint to a disciplinary body should be the “informant”.

5. See Chapter 3 for a discussion of the system in Victoria.

6. Justice Slattery’s main recommendations in this area were that: (1) All causes of action for defamation or malicious prosecution for communication or actions referring to the professional conduct of any mental health professional should be abolished; and (2) Those who take part in the decision-making process - professional bodies, boards, Complaints Units and so on - should be granted either absolute privilege subject to claims for intentional malice or recklessness or alternatively should be granted qualified privilege.

7. Report of the Commission on Evaluation of Disciplinary Enforcement to the American Bar Association (May 1991) (hereafter, “ABA Report”), at 28.

8. Legal Profession Act 1987 (NSW), s131. Unless otherwise indicated, all section references in this chapter refer to the Legal Profession Act.

9. Under the Oaths Act 1900 (NSW), s25, it is a misdemeanour if a person “wilfully and corruptly makes any such declaration, knowing the same to be untrue in any material particular”.

10. ABA Report, at 28.

11. No. 111 of 1987, Sch 1.

12. Defamation Act 1974 (NSW), s17J(1).

13. Defamation Act, s24 and Sch 2, cl 16.

14. Sections 172 and 211. Members of conduct committees, acting under delegated authority from the Councils, are also expressly covered by s172(3).

15. Submission of the Law Society of New South Wales, 31 January 1992, (hereafter, the “Law Society submission”) Appendix 2, at 12-13. According to the Law Society’s figures, 59% in 1988, 65% in 1989, and 60% in 1990. The Law Society does not count in these figures the category of “Matters closed with the consent of the complainant containing no evidence of unsatisfactory professional conduct or professional misconduct resolved between the parties directly or by mediation”, which actually amount to dismissals and would bring the total percentage to over 75% in each year.

16. Section 134(3) states that “A Council shall cause its decision with respect to a complaint, together with its reasons for the decision, to be notified to the complainant.”

17. ABA Report, at 30.

18. Section 55. The instrument making the appointment must be signed by the President or two members of Council.

19. Section 56.

20. Section 56(5).

21. One possible complexity is that, once a complaint is made against a solicitor and investigated, the report of the investigator may well go far beyond the original complaint. For example, if a solicitor has misapplied the trust funds of one client, and this is detected, it often happens that the investigation reveals the misapplication of the funds of other clients.

22. Section 130(3).

23. Under ss 144 and 158.

24. Sections 144-145.

25. Section 159.

26. Section 131.

27. Section 35(2)(c). There is no similar provision in the Act in respect of barristers, although the Legal Profession (Practising Certificates) Amendment Bill 1992, which is presently before Parliament, would give the Bar Council the same powers as the Law Society Council in this regard. Rule 67 of the NSW Bar Association Rules provides that: “A barrister shall comply promptly with every reasonable request for information or explanation by the Council or a Committee of the Council pertaining to his conduct as a barrister, unless the barrister receiving such request informs the Registrar in writing that in his opinion the reply that he would need to make would expose him to prosecution for a criminal offence.”

28. Section 134(2). The consent requirement is no doubt present because of natural justice concerns, which require a hearing before punishment, but it nevertheless highlights the general disparity between the level of concern shown for the position of the respondent lawyer and that shown for the complainant.

29. This list is adapted from the recommended Charter in the ABA Report, at 29.

30. The Bar Association reports that this is now its policy: Submission of the New South Wales Bar Association, 20 February 1992, (hereafter, the “Bar Association submission”) at 7.

31. Later in this chapter, the Commission considers the merger of these bodies.

32. According to figures supplied by the Bar Association and the Law Society, two-thirds of complaints against barristers and three-quarters of complaints against solicitors in 1990 came from members of the public (usually clients). This excludes the small proportion of cases which are initiated by the professional Councils themselves.

33. Bar Association submission, at 15. The Bar is planning to produce its explanatory brochure provided to complainants in five languages. The Law Society has notified the Commission of its intention to produce its literature in 20 languages.

34. Administrative Review Council, Report No. 34: Access to Administrative Review By Members of Australia’s Ethnic Communities (1991) at 51. (Hereafter, the “ARC Report”.)

35. ARC Report, at 32.

36. Submission of the NSW Combined Community Legal Centres, 28 February, 1992, at 2-3. (Hereafter, the “Community Legal Centres submission”.)

37. At 3.

38. New South Wales Law Reform Commission, Alternative Dispute Resolution: Training and Accreditation of Mediators (LRC 67, 1991).

39. Bar Association submission, at 16.

40. Submission of the Australian Consumers’ Association, 23 December 1991, at 2. (Hereafter, the “ACA submission”.)

41. Law Society submission, at para 13.

42. At paras 18-19.

43. Section 134 of the Act.

44. Or, presumably, the Disciplinary Tribunal , in the case of evidence of professional misconduct.

45. Section 134(1)(b) and (1A).

46. At para 22.

47. At para 23.

48. According to the New South Wales Law Society, 80% of matters in Victoria and 85% of matters in England are successfully resolved by mediation.

49. The Victorian experience seems to suggest that the availability of a conciliation procedure, particularly where compensation is a likely outcome, will lead to an increase in the number of complaints filed.

50. Community Legal Centres submission, at 3-4.

51. LRC 67, at paras 4.19-4.20.

52. LRC 67, at para 3.6.

53. New South Wales Law Reform Commission, Second Report on the Legal Profession: Complaints, Discipline and Professional Standards (LRC 32, 1982). (Hereafter, “LRC 32”.)

54. LRC 32, at para 3.26.

55. This was comprised of 1189 complaints received by the Law Society under s130, and 56 investigations commenced by the Law Society on its own initiative.

56. The true proportion may be even smaller, given that a number of complaints are sometimes aggregated into a single “matter” referred.

57. Involving fewer than 30 legal practitioners.

58. It is interesting to note, by way of contrast, that in the period between 1968-1978 - that is, in the decade before the Commission’s previous inquiry into the legal profession - the Law Society and Bar Association between them referred fewer than ten complaints to the Supreme Court, and the Law Society referred fewer than 60 complaints to the Solicitors’ Statutory Committee, the predecessor to the Disciplinary Tribunal. See New South Wales Law Reform Commission, Complaints, Discipline and Professional Standards - Part 1 (DP 2, 1979) at para 5.19.

59. Informally, or under s134(1)(b)(ii).

60. See s134 of the Act.

61. Bar Association submission, at 10-11.

62. David Hunt, Submission on Scrutiny of the Legal Profession, 5 February 1992, at 2.

63. LRC 32, at para 3.26.

64. See paras 4.18-4.20, above.

65. ABA Report, at 23.

66. Section 145. The parties are enumerated in s144. Under s148, the Board may give directions preventing or restricting the release or publication of any information arising from the hearing, with the penalty for breach a fine of up to $2000. Cf s22 of the Consumer Claims Tribunal Act 1987, which also provides for claims to be heard in private.

67. Under s149(3).

68. A solicitor may have his or her practising certificate suspended or cancelled for failing to comply with an order of the Board or Tribunal, under s35(2)(e), but this only indirectly assists the complainant to receive the compensation awarded. Barristers are not presently covered by any similar provision, although the Legal Profession (Practising Certificates) Amendment Bill 1992 would achieve this effect.

69. Section 159. Section 162 gives the Tribunal the same powers to restrict the release of information given to the Standards Board. See the note immediately above.

70. This wording is taken from the Supreme Court Act 1970 (NSW) s80(b).

71. Under s163.

72. Under s149. See para 4.58, below.

73. The Legal Profession (Practising Certificates) Amendment Bill 1992, currently before Parliament, would achieve this effect.

74. Bar Association submission, at 10.

75. Under s149(2)(h).

76. The Bar Association’s submission makes a similar point, at 11.

77. See ss 91 et seq.

78. There are parallels here with the more innovative sanctions being developed in connection with corporate liability. See B Fisse, “Sentencing Options Against Corporations” (1990) 1 Criminal Law Forum 211-258, regarding court-ordered internal discipline and organisational reform.

79. See s149(1)(c) in relation to barristers; s149(2)(i) in relation to solicitors.

80. Section 163(1)(d).

81. Under the Medical Practitioners Act 1938 (NSW) s32I.

82. Clause 1317AJ(1)(b). If the act is done knowingly, intentionally or recklessly, and with the intention to defraud or to gain through dishonesty, the person may be fined up to $200,000 and imprisoned for up to five years, under clause 1317AT.

83. Sections 149(3) and 163(3).

84. Section 130(3)-(4).

85. Sections 149(4)(b) and 163(4)(b).

86. Sections 149(4) and 163(4).

87. Sections 149(5) and 163(5).

88. Bar Association submission, at 12.

89. Section 142.

90. Section 128.

91. Section 151.

92. Legal Profession (Amendment) Act 1989.

93. See New South Wales Parliamentary Debates (Hansard), 2 August, 1989, at 9144, per the Attorney General, Mr Dowd (Legislative Assembly).

94. See the Medical Practitioners Act 1938, ss 32M and 32N.

95. Section 156.

96. ABA Report, Recommendation 2.1, at 6.

97. See DP 2, at paras 5.19-5.24; and LRC 32, at paras 2.15-2.17, 3.19-3.21, 4.4, 6.24-6.25, and 6.36-6.37.

98. DP 2, at para 5.23.

99. See ss 50(4) and 53(4).

100. New South Wales Law Reform Commission, First Report on the Legal Profession: General Regulation and Structure (LRC 31, 1982).

101. LRC 32, at para 6.22.

102. Section 58 and Schedule 3.

103. See also the Submission of the Lawyers Reform Association, 8 April 1992, at paras 1.8 and 4.7.

104. See Borg v Barnes (1987) 10 NSWLR 734, at 738.

105. At 737-738.

106. At 739-740.

107. In the event of confidentiality provisions in State legislation, the matter becomes one for argument under s109 of the federal Constitution to determine whether State or Commonwealth legislation takes precedence in the particular area.

108. For example, in the Barnes case, above, Carruthers J held against the Law Society and the Bar Association and permitted the subpoena of documents produced for the purposes of the disciplinary system but which were relevant to the plaintiff’s suit for professional negligence.

109. The Freedom of Information Act 1989 (NSW) (“FOI Act”), s5.

110. As defined by s6 of the FOI Act.

111. FOI Act, Sch 1, esp clauses 4, 6, 7, 11 and 16.

112. FOI Act, s9 and Sch 2.

113. See paras 4.28 et seq.

114. Family Law Act 1975 (Cth) s62(5).

115. The Family Law Amendment Act 1991 (Cth) adds a s70BB(1) to the Family Law Act, to this effect.

116. Legal Profession Regulation 1987 (NSW), reg 21.

117. See Weisbrot, at Ch 7.

118. F Riley, New South Wales Solicitors Manual: A Commentary on the Law and Practice Relating to the Profession of the Solicitor in New South Wales. (Hereafter, “Riley”.)

119. B Maley, “Professionalism and professional ethics”, in D Edgar (ed), Social Change in Australia (1974) 397.

120. In California, the legal profession is merged (ie, there is no division into barristers and solicitors), and the State Bar is the professional body responsible for, among other things, administering the admission examinations, and the continuing education, of all lawyers.

121. Law Society of New South Wales Research and Policy Planning Unit, Trends in Firm Size, Structure and Growth 1984-1991 (1991). See also N Vithanage, “Movements in firm size: Smaller firms - a threatened species?”, (December 1991) 29 Law Society Journal 30-31; and Weisbrot, at 249-266.

122. See para 4.59, above.

123. See (1991) 5 Law Society’s Gazette 6.

124. DP 2, at para 6.7.

125. For example, there is a segment on “Litigation Ethics” in the compulsory subject Litigation at Macquarie Law School.

126. See the Report of the Committee of Inquiry into Legal Education in New South Wales (1979) (“the Bowen Report”) ch 7; and D Pearce, E Campbell and D Harding, Australian Law Schools: A Discipline Assessment for the Commonwealth Tertiary Education Commission (1987) (“the Pearce Report”) ch 23, esp at 969-970. This material is summarised in Weisbrot, at 141-143.

127. The Pearce Report, Appendix 5, at 164 and 199. See Weisbrot, at 128-136, for a summary of the main findings and recommendations of the Report.

128. See Weisbrot, at 133.

129. This is an attendance requirement - there is no examination or other assessment.

130. The Bar’s position is, essentially, that barristers’ work almost invariably requires wide reading and research, and a degree of specialisation, obviating the need for a specific MCLE requirement. Many barristers do attend CLE sessions of their own volition, of course.

131. See s149(1)(b) (regarding barristers) and (2)(b) (regarding solicitors), which permit the Board to make orders that the legal practitioner undertake a specified course of further education. The Commission is not aware of any cases in which the order has been tailored to education in legal ethics and professional responsibility.

132. New South Wales Law Reform Commission, Third Report on the Legal Profession: Advertising and Specialisation (LRC 33, 1982), Recommendations 5-6, considered in paras 6.22-6.42.

133. LRC 33, at para 5.10.

134. See Law Society of New South Wales, Discussion Paper: Specialist Accreditation (June 1991).

135. Section 64. The amount is determined by a formula contained in the Legal Profession Regulation 1987, clauses 22A-22D.

136. Section 6(3)(d)-(e).

137. Such as conveyancing companies.

138. See ss 67(3)(c) and 168, regarding the funding of costs incurred in enforcing Parts 9 and 10 of the Act.

139. Section 67(3)-(4).

140. Section 67(2)(b).

141. Sometimes referred to colloquially as the “Westpac Account”, although there a number of banks involved.

142. Riley, at para 1070.

143. The 1992 budget for the disciplinary system in California is over $40 million, for about 132,000 lawyers.

144. Law Society submission, at para 28.

145. See Part 11 of the Act.

146. For example, in 1990, the Law Society received 104 complaints (or 8.4% of the total number) about “overcharging”. Other fee disputes may be categorised under other headings, such as “No communications”.

147. Section 198.

148. Section 208.

149. Sections 199 and 206.

150. See the Supreme Court Rules, Part 52, r56.

151. See Weisbrot, at 216-222, regarding the regulation of legal fees and costs, including taxation of bills of costs (at 221).

152. See (1991) 5 Law Society’s Gazette 6. See the discussion of the Client Care system in Chapter 3.

153. 22 out of 263 complaints received (or 8.4%) by the Bar Association in the period 1988-1991.

154. See the Supreme Court Rules, Part 52.

155. In 1990, there were 1595 barristers holding current practising certificates, so that there was one complaint for every 18 barristers. There were 11073 solicitors with current practising certificates, so that there was one complaint for every nine solicitors.

156. DP 2, at para 4.4.

157. R L Abel, The Legal Profession in England and Wales (1988) at 134.

158. See DP 2, at para 4.3.

159. Abel, at 135.

160. Figures supplied by the Bar Association, 8 April 1992. In the same year, about three-quarters of complaints against solicitors came from members of the public (including clients and former clients).

161. Abel, at 135-136.

162. See Barratt v Gough-Thomas [1950] 2 All ER 1048, at 1053. See Riley, at paras 2506 et seq, for a good discussion of general and particular solicitors’ liens.

163. See s208(1)(b).

164. ACA Submission, para 8.

165. Community Legal Centres submission, at 2.

166. Bar Association submission, at 12-13.

167. See, eg, Herron & Gill v McGregor (1986) 6 NSWLR 246, at 254 (NSW CA), per McHugh J, Street CJ and Priestley J agreeing. In this case, which arose out of the Chelmsford Hospital inquiry, the Court of Appeal granted a stay of the proceedings before the Medical Tribunal because delays in the launching of the disciplinary action made the charges difficult to defend. The basis of the decision is that the Supreme Court has inherent supervisory and protective powers to stay proceedings in disciplinary tribunals on the ground that their institution is harsh and oppressive and an abuse of process. The High Court recently has granted special leave to appeal. See also Gill v Walton [1992] ACL Rep 10 NSW 1 (NSW Court of Appeal, unreported, CA Nos 40347-9/91, 19 Nov 1991). Cf Jago v District Court (NSW) (1989) 168 CLR 23, in which the High Court of Australia ruled that the same considerations do not necessarily apply to criminal proceedings.

168. See the Limitation Act 1969 (NSW), s14(1)(b).

169. Down from 24 in 1988 and 14 in 1989.

170. Bar Association submission, at 14.