ORIGIN OF THIS REFERENCE

1.1 Section 5(2) of the Legal Profession (Practising Certificates) Amendment Act 1992 (NSW) required the New South Wales Law Reform Commission to review the operation and policy basis of several provisions of the Legal Profession Act 1987 (NSW) relating to barristers’ practising certificates.

BACKGROUND

The position under the Legal Practitioners Act 1898 (NSW)

1.2 Under the Legal Practitioners Act 1898 (NSW), there was no requirement that barristers hold a current practising certificate in order to work as a barrister. Once a barrister was admitted by the Supreme Court and signed the Roll of Barristers, he or she could commence unrestricted practice at the New South Wales Bar at any time. Although for a number of purposes - such as listing in the New South Wales Law Almanac - persons admitted to the Bar were labelled as either “practising barristers” or “non-practising barristers”, this classification had no formal status. A “non-practising barrister” was perfectly entitled to accept a brief, offer advice and appear in court.

1.3 The New South Wales Bar Association, the voluntary professional association representing barristers in this State, published a set of Bar Rules based on English precedents, local rules promulgated by the Bar Council, ethical rulings, and judicial decisions. The Bar Rules applied directly to members of the Bar Association, but also, were generally accepted by the courts as amounting to a practical code of conduct for all barristers, based upon well recognised principles in New South Wales.¹

1.4 The Law Society of New South Wales² was given substantial statutory regulatory powers over solicitors under the Legal Practitioners Act 1898 (NSW), including among other things the powers to issue, to refuse to issue, or to place conditions upon practising certificates; to promulgate rules of practice with statutory force; and to operate a disciplinary tribunal (the Solicitors’ Statutory Committee).

1.5 By way of contrast, the New South Wales Bar Association had no real regulatory authority. While the Bar Association, in common with other private associations, had the power to expel a member for breach of its rules, this in itself did not affect the right of that person to continue to practise as a barrister before the courts.

1.6 The Supreme Court of New South Wales, with its inherent supervisory jurisdiction over all legal practitioners, acted as the sole disciplinary authority in respect of barristers (and the ultimate authority in respect of solicitors). Thus, complaints against barristers could be investigated by the Bar Association, but disciplinary action required initiating proceedings (following a decision of the Bar Council) in the Supreme Court. The Supreme Court could also initiate proceedings on its own motion, through the office of the Prothonotary (the senior administrative official in the Court).

1.7 In the divided profession in New South Wales, the paths of entry to practice were (and still are) different for barristers and solicitors. Solicitors traditionally were obliged to serve a term as an “articled clerk” under a “master solicitor”, imitating the guild/apprenticeship origins of the English legal profession. Complementing the strong shift to university-based primary education for lawyers in the post-World War II period, articles were phased out and replaced by practical legal training (hereafter PLT) courses in the 1970s.³ In New South Wales, this practical training is now provided by the School of Legal Practice (commonly known as the College of Law) within the University of Technology, Sydney.

1.8 Admission as a solicitor, then, followed upon the attainment of a basic legal education (an LL B degree from a university law school or a Diploma in Law from the Solicitors’ Admission Board) plus successful completion of a PLT course. Initial admission as a solicitor only entitled the admittee to a restricted practising certificate. This meant that the person had to work as an employed solicitor under a more senior lawyer for a number of years⁴ until an unrestricted certificate could be obtained, allowing the solicitor to operate as a principal in a firm or as a sole practitioner.

1.9 Ironically, notwithstanding the Bar’s traditional position as the “senior branch” of the profession, admission as a barrister was considerably less demanding. Any person who satisfied the basic educational requirement (an LL B or a Dip Law from the Admission Board) and was a fit and proper person (the character requirement) could be admitted as a barrister by the Supreme Court and acquire full rights to practise at the Bar.

The original position under the Legal Profession Act 1987 (NSW)

1.10 The Legal Profession Act 1987 (NSW) (hereafter, the “LPA”) replaced the 1898 Act as the principal piece of legislation governing the regulation and discipline of the legal profession in New South Wales. The LPA followed upon the detailed inquiry into the legal profession by this Commission in the late 1970s through the early 1980s, which resulted in seven discussion papers, five background papers, an options paper, and four Reports.⁵ While the LPA reflected the Law Reform Commission’s concern to provide for a considerably greater degree of accountability and public involvement in the regulation of the legal profession, many of the Commission’s specific recommendations did not find their way into the law.

1.11 The LPA established for the first time the requirement that barristers hold current practising certificates in order to practise at the New South Wales Bar,⁶ although this had been a condition of practice imposed on solicitors since 1935.⁷ This certificate is renewable annually, and requires payment of a fee (scaled according to experience and status). The LPA placed the responsibility for administering the new system⁸ with the Bar Council (the executive council of the Bar Association), finally giving the Bar Council statutory powers.

1.12 In the Parliamentary debates over the Legal Profession Bill 1987 (NSW), the then Attorney General, the Hon Terry Sheahan, noted that the Bar Association “was implacably opposed to common admission” of barristers and solicitors,⁹ and unwilling to discuss with the Government the detail of the Bill until the notion of common admission was dropped¹⁰ (which did eventuate). The Bill as a whole was commended by the Attorney on the basis that it would “ensure that public expectations of professional regulation, discipline and accountability are met, thus restoring public confidence in the profession.”¹¹

1.13 The specific issue of barristers’ practising certificates did not receive a great deal of attention in the Parliament. The then Attorney General, Mr Sheahan, stated that:

Clause 32 provides that all barristers who are practising at that date and are not pupils shall be entitled to an unrestricted practising certificate. Those barristers who are practising but serving a period of pupillage may be given a certificate subject to a condition requiring them to complete their period of pupillage. In relation to barristers admitted but not practising the Bar Council will have a discretion as to whether a condition of pupillage will be imposed on the barrister. Many barristers employed by the Crown have not practised and it is therefore provided that they may choose to hold a practising certificate subject to a restriction that they practise only as an employee of the Crown. The other significant reform in part 3 is the provision, in clause 3, whereby the Law Society can require solicitors to undergo each year various additional forms of legal training. The society is concerned to ensure solicitors remain up-to-date with changes to the law...¹²

1.14 The introduction of the practising certificate system for barristers under the LPA generally appeared to be something of an afterthought. The powers of the Bar Council over barristers’ practising certificates were not developed in a parallel fashion to those of the Law Society Council in respect of solicitors. For example, while the Law Society Council was authorised to impose a much broader range of conditions upon a solicitor’s practising certificate, the Bar Council had little flexibility in this regard. Similarly, the Legal Profession Standards Board and the Legal Profession Disciplinary Tribunal were given an array of disciplinary sanctions which could be imposed upon a solicitor, but the Board and Tribunal had less scope to fashion an appropriate sanction in relation to a barrister.¹³ Much of the subsequent amendment activity in this area has been in the direction of rationalising the powers of the Bar Council to bring them more into line with those of the Law Society Council.

1.15 Section 32(1) of the LPA provided that an unrestricted certificate be given to an admitted barrister who was “practising as a barrister immediately before” the operative date of this part of the legislation (1 July 1988). However, the Bar Council was given discretion to grant only a conditional practising certificate¹⁴ for newcomers to the Bar and for persons already admitted to the Bar (such as legal academics, government lawyers, and in-house corporate lawyers) whom the Council regarded as “non-practising” barristers, even if such persons previously held an unrestricted right to practice consequent upon admission. This conditional practising certificate required compliance with conditions of practice which were already demanded by the Bar Association; for example, those required of a newly admitted barrister. Such conditions were therefore not unique, rather, the LPA (and similar subsequent legislation) provided a legislative imprimatur for existing practice.

1.16 Perhaps the only real controversy, in policy terms, surrounding the grant of statutory powers to the Bar Council under the LPA was the treatment of admitted barristers deemed by the Bar Council to be “non-practising” barristers.¹⁵ Although new occupational licensing schemes usually include a “grandfather clause” to avoid disadvantaging existing practitioners, the application of the LPA provisions in respect of barristers’ practising certificates served to remove retrospectively the rights to practise of a class of admitted lawyers who did not practise solely at the private Bar. As a result, whilst on 30 June 1988 such persons had been entitled to appear as counsel in a murder trial in the Supreme Court (assuming such a brief could be obtained), on 1 July 1988, with a restricted practising certificate, such barristers could not appear (without leave) as an advocate in a Local Court to make representations on a plea of guilty to a parking offence.

1.17 Following a subsequent amendment to s 32(3)(b) of the LPA,¹⁶ which had been sought by the Bar Council, the Council also gained the power to issue another category of restricted practising certificates, for academic lawyers and others in a similar position, which permits the holder to engage in opinion work but not to act as an advocate in a court or tribunal without the presence of a “leader”.

The Bar Association’s request for further powers

1.18 Although the Bar Association originally did not regard the practising certificate system as necessary or desirable, following the passage of the LPA, it embraced the opportunities for tightening control over rights to practise at the Bar.

1.19 However, after two years of experience with the administration of the new system, the Bar Association expressed concern that the provisions contained in the LPA were insufficient to ensure that persons beginning practice at the Bar had attained an appropriately high degree of knowledge of such areas as Evidence and Practice and Procedure. Without statutory backing, the Bar Council had no power to require the fulfilment of conditions endorsed on a practising certificate, or to impose any sanctions if these conditions were not satisfied. In a letter to the then Attorney General, the Hon John Dowd QC MP, dated 10 July 1992, the Bar Association expressed the following view:

Although the majority of pupils attend the (Reading) Programme, there have always been a minority who have not or who have only attended some portion thereof. Despite threats by the Reading Committee (none which were enforceable) indicating dire consequences in the event of a pupil failing, by a specified period, to complete their reading requirements, there have been numerous persons who have either ignored the requirements or who have been extremely dilatory in attending to their obligations with respect thereto ... . The Council has no power to suspend or cancel a practising certificate where a pupil fails to comply with any condition ... It seems to the Reading Committee that pupils are well aware of the Council’s lack of power in this regard: hence the frustration that the Committee has experienced in forwarding threatening letters to pupils which are ignored. The difficulty that the Council finds itself in is that the current provisions of the Act and, in particular, Sections 32 and 35, do not accommodate the above concerns. Thus the Council has no power to withhold a practising certificate until the satisfactory completion of the ... course. Further, and just as importantly, the Council has no power to suspend or cancel a practising certificate where a pupil fails to comply with any condition imposed thereon.

1.20 The Bar Association’s letter to the Attorney proposed certain amendments to the provisions of the LPA, suggesting that these changes would enhance the standards of competency of new barristers for the benefit of the public. These proposed changes to the LPA included:

• Giving the Bar Council the discretion to issue a practising certificate subject to such conditions as it thought appropriate in the circumstances.¹⁷ As the legislation stood, upon completion of the period of pupillage, a barrister was entitled to an unconditional practising certificate. The amendment would have empowered the Bar Council to refuse to issue a certificate to a pupil until such time as that pupil had completed any full-time component of the Bar’s Reading Program to the Council’s satisfaction. In other words, the Bar Association wanted a requirement of successful completion of its program, rather than mere completion. This amendment would have made the powers of the Bar Council more congruent with those exercised by the Law Society Council.¹⁸
  
• Giving the Bar Council the complementary power to revoke or vary the conditions on a practising certificate, or to impose new or additional conditions at any time during the currency of the certificate, rather than only once a year at the time of issue.
  
• Amending section 35 to incorporate existing subparagraphs¹⁹ into one subsection. This would give the Bar Council greater flexibility with respect to barristers who breach conditions of their practising certificates, and give the Bar Council the same powers as are given in section 35(2) to the Law Society Council.
  
• Giving a barrister the right to appeal to the Supreme Court against any adverse decision of the Bar Council in respect of his or her practising certificate.²⁰

The effect of the Legal Profession (Practising Certificates) Amendment Act 1992 (NSW)

1.21 Further discussion of these matters between the Attorney General and the Bar Association resulted in the Legal Profession (Practising Certificates) Amendment Act 1992 (NSW). These amendments are reproduced in full at Appendix A of this Report.

1.22 In general terms, the amendments permit the Bar Council, after 1 January 1993, (subject to certain exceptions) to refuse to issue a practising certificate to a barrister, who, as a pupil, has not satisfactorily completed the full-time component of the reading program and who has not sat for and passed an examination as part of that program.²¹ The amendments also allow the Bar Council to issue conditional or unconditional practising certificates. Conditions that can be imposed include the requirement that the holder of the certificate complete the reading program, read with a specified barrister or with a barrister of a specified class or description, and undertake further legal education.²²

1.23 The amendments also give the Bar Council the power to refuse to issue, or to suspend or cancel a practising certificate in certain circumstances.²³ Such circumstances include where the barrister is in prison; where a barrister who is required by the Bar Council to explain conduct by the barrister, fails and continues to fail to give a satisfactory explanation to the Bar Council; and where in the opinion of the Bar Council the barrister has failed to comply with a condition attached to his or her practising certificate. The appeal provisions to the Supreme Court, contained in the previous section 37 were amended to encompass the above changes.

THE NATURE AND CONDUCT OF THE COMMISSION'S REFERENCE

1.24 When introducing the amendments into Parliament in 1992, the then Attorney General, the Hon P E J Collins QC MP, stated that the Government’s intention was to ensure the maintenance of high standards of competence of members of the Bar, and to help provide for appropriate client protection against practitioners who did not meet the required standards.²⁴ The legislation would enable the Bar Council to do something about barristers it regarded as insufficiently trained or unqualified to hold an unconditional licence to practise as a barrister in New South Wales. According to the Attorney:

It is all about giving consumers of legal services better value for their money. It is all about raising professional standards, self regulation by the profession, peer assessment, and the maintenance of standards by people who serve this State as officers of the Supreme Court of New South Wales.²⁵

1.25 However, some concern was expressed in the community and in the media that the changes sought by the Bar Association were not intended to be used to maintain standards or knowledge, ethics and practice, but rather, to limit competition by restricting entry into the profession. This could adversely affect the public interest. In its Issues Paper, the Trade Practices Commission (hereafter TPC) noted the view that the imposition of such increased “educational” requirements can operate in practice to limit the number and type of applicants who may enter the profession, and thus limit the degree of competition in the market. Similarly, both clients and practitioners are forced to forgo other benefits which might be obtained from more flexible or efficient business structures.²⁶ The Report by the Independent Committee of Inquiry into Competition Policy in Australia (the Hilmer Report) was also concerned that regulatory regimes that operate by reference to standards or qualifications may be more restrictive than necessary to protect the public interest objectives for which they were imposed. Even if the standards are objectively reasonable, there may be concerns over whether they are administered or enforced in a way that unduly favours incumbents.²⁷

1.26 In particular, the amendments were strongly opposed in the Parliament by Mr John Hatton MLA (South Coast). Mr Hatton referred to community concern that: (1) the public interest may be jeopardised by giving an already powerful body (the Bar Council) too much statutory regulatory authority; and (2) there was a possibility that the amendments could be manipulated to refuse or limit the rights of practice of persons who were otherwise qualified, but had somehow earned the enmity or suspicion of the Bar Council. Mr Hatton expressed concern that the amendments would result in further restrictive practices at the Bar.²⁸

1.27 Mr Hatton originally proposed a one year “sunset clause” for the amendment, after which the Law Reform Commission would be asked to report on whether the amendment had served the public interest. In particular, the Commission would be asked to consider whether: the increase in the Bar Council’s powers had improved the standards of the profession; the changes had a restrictive effect on competition; the Bar had used these increased powers properly.²⁹ This proposal was not accepted by the Parliament. However, in deference to those who considered these amendments as providing the opportunity for hostile manipulation, the following “compromise” provision was inserted into the amending legislation:

Review and expiry of certain provisions

5. (1) This section applies to the following provisions of the Legal Profession Act 1987, as amended by this Act, namely: section 32(3) and (4) and section 35(1)(c).

(2) The Law Reform Commission is to inquire into and report to the Minister on the policy objectives of the provisions to which this section applies and the impact of the enactment of those provisions on the legal profession. The Commission must deliver its report within 9 months after the date of assent to this Act and the Minister is to cause the Commission’s report to be tabled in Parliament.

1.28 The Attorney General formally referred the matter to the Commission in a letter dated 16 March 1993, since the Commission normally operates on the basis of a reference from the Attorney General.³⁰ The particular sections of the Legal Profession (Practising Certificates) Amendment Act 1992 (NSW) that the Commission is required to review are:

s 32(3) The Bar Council may attach a condition to a practising certificate when it is issued, or at any time after it is issued, and at anytime may vary or revoke any such condition.

s 32(4) Conditions of the following kind can be attached to the practising certificate of any barrister:

(a) a condition requiring the holder to undertake and complete to the satisfaction of the Bar Council a reading program as determined or approved by the Council;

(b) a condition requiring the holder to sit for and pass any examination set by the Council as part of the reading program;

(c) a condition requiring the holder to read with a specified barrister or with a barrister of a specified class or description for a specified period and to comply with such requirements as will enable the barrister, at the end of the specified period, to certify to the Bar Council that the holder is fit to practise as a barrister without restriction.

s 35(1) The Bar Council may refuse to issue, may cancel, or may by order suspend, a practising certificate applied for or held by a barrister (other than the Attorney General) who:

(d) being required by the Council to explain specified conduct by the barrister as a barrister fails, and continues to fail, to give an explanation satisfactory to the Council.

THE LEGAL PROFESSION REFORM ACT 1993 (NSW)

1.30 During the course of this inquiry the Government introduced the Legal Profession Reform Bill 1993 (NSW). After substantial amendment, the Legal Profession Reform Act 1993 (NSW) (hereafter the “Reform Act”) was passed by Parliament on 20 November 1993.

1.31 The Reform Act changes the structure, regulation and operation of the legal profession in New South Wales. Among other important changes, the Reform Act will subject legal practitioners in New South Wales to the operation of the competition provisions of the Trade Practices Act 1974 (Cth).³¹ This change is intended to take effect from 31 July 1994, or on a date which the Federal Court, the Trade Practices Commission and the Trade Practices Tribunal are, by a Commonwealth law, permitted to exercise the jurisdiction, powers and functions conferred on them under the restrictive trade practices laws.³²

1.32 The Reform Act also creates the office of the independent Legal Services Commissioner, who will manage the new system for handling complaints against lawyers.³³ The Reform Act represents the first statutory recognition of the Bar Council’s right to make rules with respect to practice as a barrister.³⁴ (The powers of the Law Society Council to make rules with respect to practice as a solicitor were recognised in the earlier legislation, and continued in the Reform Act.)³⁵ The Reform Act specifies that such rules are binding on barristers, even where a barrister is not a member of the Bar Association.³⁶ Failure to comply with such rules does not of itself amount to a breach of the Act, but such failure is capable of amounting to professional misconduct or unsatisfactory professional conduct.³⁷

1.33 The provisions of the LPA under review in this Report, were largely replicated in the Reform Act.³⁸ The previous requirement under the LPA for the satisfactory completion of a reading program, is now the satisfactory completion of a full-time or part-time component of that program, whichever is applicable to the barrister in question. Secondly, the condition under the LPA requiring the holder of the certificate to read with a barrister of a specified class or description chosen by the holder, can now include a barrister chosen from a list of at least 10 barristers kept by the Bar Council for that purpose. This change was designed to assist those persons new to the Bar whose initial choice of Tutor may not be completely satisfactory, and who may need to choose another Tutor or Tutors.

1.34 The Commission does not intend to comment further in this Report on the Reform Act as it is not relevant to this reference.

FOOTNOTES

1. See NSW Bar Association v Livesey [1982] 2 NSWLR 231.

2. In particular, the Council of the Law Society.

3. See D Weisbrot Australian Lawyers (Longman Cheshire Pty Ltd, Melbourne, 1990) at 148-151.

4. Initially a twelve month period of restricted practice was required in New South Wales. From 1 January 1994 this period increases to two years and there is a further requirement of the completion of a practice management course approved by the Law Society.

5. New South Wales Law Reform Commission First Report on the Legal Profession: General Regulation and Structure (LRC 31, 1982); Second Report on the Legal Profession: Complaints, Discipline and Professional Standards (LRC 32, 1982); Third Report on the Legal Profession: Advertising and Specialisation (LRC 33, 1982); Fourth Report on the Legal Profession: Solicitors’ Trusts Accounts (LRC 44, 1984).

6. Section 25.

7. The power to do so was conferred by Pt IX of the Legal Practitioners Act 1898 (NSW), introduced by legislation amending that Act in 1935. Prior to that time the Law Society lacked any legislative power to govern solicitors.

8. Section 32.

9. New South Wales Parliamentary Debates (Hansard) 29 April 1987, Legislative Assembly at 10753.

10. New South Wales Parliamentary Debates (Hansard) 13 May 1987, Legislative Assembly, at 11883.

11. New South Wales Parliamentary Debates (Hansard) 29 April 1987, Legislative Assembly, at 10762.

12. New South Wales Parliamentary Debates (Hansard) 29 April 1987, Legislative Assembly at 10755.

13. See New South Wales Law Reform Commission Complaints Against Lawyers (Discussion Paper 26, 1992) paras 4.54-4.58.

14. Section 32(3).

15. Weisbrot at 61-62.

16. Legal Profession (Amendment) Act 1987 (NSW), Sch 2(4).

17. By amending s 32.

18. Pursuant to s 33.

19. Subsections (1), (1A), (1B) and (1C).

20. By amending s 37(1), to provide an appeal right in respect of decisions made under the proposed amendments to s 32 and 35.

21. LPA s 29A.

22. LPA s 32.

23. LPA s 35.

24. New South Wales Parliamentary Debates (Hansard) 26 March 1992, Legislative Assembly at 2155.

25. New South Wales Parliamentary Debates (Hansard) 16 September 1992, Legislative Assembly at 5887.

26. Trade Practices Commission Study of the Professions - Legal Profession (Issues Paper, July 1992) at 54.

27. Independent Committee of Inquiry into Competition Policy in Australia (the Hilmer Report). National Competition Policy. Canberra: AGPS 1993 at 197.

28. New South Wales Parliamentary Debates (Hansard) 16 September 1992, Legislative Assembly at 5880-5884.

29. New South Wales Parliamentary Debates (Hansard) 16 September 1992, Legislative Assembly at 5888.

30. See the Law Reform Commission Act 1967 (NSW) s 10.

31. Although there are a number of exemptions and authorisations possible. For example, s 38FE (3) states that practice as a barrister under the Crown or as parliamentary counsel is not affected.

32. Section 38FA.

33. This follows the recommendations of this Commission in the report Complaints Against Lawyers (LRC 70, 1993).

34. Clause 57A.

35. Clause 57B.

36. Clause 57D(3).

37. Clause 57D(5).

38. Section 32(3) of the LPA will be replaced by s 32(2) of the Legal Profession Reform Act 1993 (NSW) (the Reform Act) when that Act comes into force. Section 32(4) of the LPA will be replaced by s 34 of the Reform Act. Section 35(10)(c) of the LPA will be replaced by s 37(1)(a) of the Reform Act.