INTRODUCTION
2.1 In order to practise law in New South Wales, barristers and solicitors must be admitted to the Supreme Court of New South Wales and hold a current practising certificate. Until the introduction of the Legal Profession Reform Act 1993 (NSW), the primary piece of legislation regulating the provision of legal services in this State was the LPA. Rules of practice and regulations made under the principal legislation are also promulgated by the Councils of the Bar Association and Law Society. A comparison of practice requirements in other Australian States and Territories and the United Kingdom is found at Appendix B.
2.2 Two major considerations arise from this position. The first is the vexed question of the appropriateness of self regulation by professional bodies. This issue has attracted much debate and criticism, raising questions over the ability of such associations to act in the public interest while at the same time advancing their members’ interests. The second and related consideration is whether entry and practising requirements stipulated by these professional associations amount to restrictive practices which operate contrary to the public interest.
2.3 The Commission has previously noted the arguments about the inherent conflict of interest - in appearance, certainly, if not always in fact - present in a single body having simultaneous responsibility for advancing the interests of its membership (the “sectional” or “trade union” function) as well as regulating and disciplining that membership in the public interest.1 To avoid the appearance of conflict, it requires at least, a clear separation of the administration of those two functions.
2.4 The issue of restrictive practices has recently been addressed by the TPC. In its draft Report on the Legal Profession,2 the TPC made a number of comments and recommendations on the regulation of solicitors’ and barristers’ practices, which the Commission will refer to in this chapter.
ENTRY INTO PRACTICE AS A BARRISTER
The Pupillage and Reading Program
2.5 The New South Wales Bar Association has long regarded the use of the pupillage system and attendance at a Reading Program as essential to gaining a sufficient degree of basic knowledge to enable barristers to commence practice. The LPA converted this position from a voluntary program for persons wishing to become members of the Bar Association, to a compulsory program for all admitted barristers who wish to hold a current practising certificate. This is now a requirement for practice in New South Wales.
2.6 Newly admitted barristers (and others deemed to be “non-practising” barristers) are required to attend a Reading Program and serve a period of time during which they are called “pupils”.3 The Reading Program, conducted by the Bar Council, is designed to be a comprehensive introduction to the Bar. It is offered twice a year in February/March and August/September, and is a one month, full-time course. Intending applicants to the Reading Program are advised that all newly admitted barristers are required to sit for and attain at least a 75% pass mark in an examination on Ethics. An additional examination in Aspects of Evidence will also be held from August 1994. Examinations are scheduled to take place approximately six weeks prior to the commencement of the reading program. Applicants are advised not to give notice of termination to employers until examination results confirm entry to the Reading Program.
2.7 Once the Reading Program is completed, and passed, the barrister is required to submit to the professional supervision of a Tutor appointed by the Council.4 Whilst the Bar Rules detail the duties and responsibilities of a pupil and Tutor,5 and guidelines exist, the relationship is essentially an unregulated and personal one. Until the satisfactory completion of service as a pupil, a new barrister is issued with a restricted practising certificate which specifies he or she is a pupil, and that:
This certificate is subject to the condition that the holder comply with the conditions and restrictions imposed on pupils by the Rules of the NSW Bar Association.
During the first three months from the date of issue of the practising certificate, the pupil is not allowed to appear as an advocate in a court or tribunal without the approval of, or on behalf of, the Tutor.6 Satisfactory completion of the program includes attendance at all sessions (save for excused absences); the completion of various drafting exercises; demonstrating advocacy skills; conducting conferences with clients; preparing and presenting a (simulated) trial; and passing a written examination on legal ethics.
2.8 After completion of the full-time component of the program, the reader must then attend each of the Continuing Legal Education lectures arranged during the year by the Reading Program, attend a further advocacy workshop, undertake further criminal and civil reading, and generally fulfil the obligations of a Reader pursuant to the Bar Rules.
Attendance or satisfactory completion?
2.9 Under the original provisions of the LPA, the Bar Council could impose a condition that a barrister attend a Reading Program. However, there was nothing in the LPA which authorised the Bar Council to insist upon satisfactory completion of that course before an unrestricted practising certificate would be granted.7 The 1992 amendments to the LPA remedied this anomaly, allowing the Bar Council, after 1 January 1993, to:
refuse to issue a practising certificate to a barrister who, as a pupil, has not completed to the satisfaction of the Council a full-time component of a reading program applicable to the pupil and determined or approved by the Council or who has not sat for and passed an examination set by the Council as part of that program.8
2.10 This provision does not apply to barristers who are holders of statutory positions under the Crown in right of New South Wales, or of any other State or Territory, or of the Commonwealth; a barrister who acts as parliamentary counsel; or a barrister who is a member of a class or of a description of barristers, specified by the Bar Council or prescribed by the Regulations for the purposes of the section.9 Barristers practising in such positions as parliamentary counsel or the Office of the Department of Public Prosecutions hold restricted practising certificates.
The applicable conditions
2.11 The LPA also gives the Bar Council the discretion to attach conditions to a practising certificate when it is issued, or at any time after it is issued, or at any time to vary or revoke any such condition.10 Such conditions are limited to the following:
(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 a 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.11
2.12 At a practical level these sections reinforce the Bar Association’s own practice pursuant to the Bar Rules.
The choice of tutor issue
2.13 A pupil has complete freedom of choice of Tutor, provided that the nominated choice is a member of the Bar Association and has practised at the Bar for no less than seven years.12 Those who are unable to find Tutors are assisted in this by the Bar Association. The Commission believes that the requirement that the Tutor be a member of the Bar Association is essentially restrictive. Non-membership of the association would seem to be an arbitrary reason to deny junior barristers of good standing at the Bar the opportunity of tutoring.
2.14 According to the Bar Association, the condition requiring the pupil “to read with a specified barrister or with a barrister of a specified class or description”13 is not intended to operate to restrict a pupil’s choice of Tutor.14 The purposes behind s 32(4)(c) of the LPA are to firstly ensure that both the criminal and civil areas of legal practice are sufficiently well observed and discussed with experienced counsel so that new barristers do not commence practice without reasonable grounding; and secondly, to ensure that an experienced barrister is able to certify to the Bar Council at the end of pupillage, that the pupil has attained a level of advocacy, skill and knowledge commensurable with professional practice.
The Bar Council’s exercise of power to date
2.15 Since the 1992 amendments came into effect the Bar Council can vary or revoke a practising certificate during its currency.15 A pupil can be asked to show cause why his or her practising certificate should not be cancelled for either failure to pass an examination in legal ethics, refusal (without reasonable excuse) to submit to a re-examination, substantial failure to attend upon a Tutor, or failure to complete a period of pupillage to the satisfaction of the Tutor. The Bar Council has advised the Commission that there has been only one instance since the introduction of this amendment, where a pupil’s practising certificate has been cancelled pursuant to this power.
ENTRY INTO PRACTICE AS A SOLICITOR
The effect of s 33 of the LPA
2.16 The Council of the Law Society has imposed restrictions on solicitors’ practising certificates since 1967. Since 1978, all newly admitted solicitors have been required to complete a period of restricted practice before being entitled to engage in private practice. Prior to the Reform Act, practising certificates were regulated by the LPA, in particular section 33, which stated:
33. (1) The practising certificate issued to a solicitor (other than a solicitor corporation):
(a) may entitle the holder to practise as a solicitor on his or her own account or may impose a condition limiting the practising rights of the holder as provided by subsection (2); and
(b) if the Council so determines, may impose a condition requiring the solicitor to undertake and complete a specified course of legal education.
(2) The practising certificate issued to a solicitor (other than a solicitor corporation) may limit the practising rights of the holder in any manner determined by the Law Society Council.
(3) For the purposes of subsection (1)(b), the Law Society Council shall arrange for the establishment and administration of courses of further legal education.
(4) The practising certificate issued to a solicitor corporation is not to be subject to any condition.
This section is comparable to s 32 of the LPA which deals with the issue of barristers’ practising certificates and identifies the types of conditions that can be attached to them by the Bar Council.
2.17 Those solicitors admitted before 1 January 1986, are required by the Law Society to undertake a 12 month period of practice as an employed solicitor in private practice before being eligible to engage in private practice on his/her own account, or in partnership. Solicitors admitted after 1 January 1986 are not entitled to practise other than as employees until certification of satisfactory completion of 12 months approved practice has been received and approved by the Law Society. Solicitors are precluded from practising as a sole practitioner until they have had three years experience as a solicitor and satisfactorily completed a prescribed course in office management. When a practising certificate is issued by the Law Society, a summary of conditions and restrictions appear on the reverse side of it.16
2.18 Following a comprehensive review of practising certificates and the conditions and restrictions assigned to them, the Council of the Law Society resolved in June 1993 to implement a new practising certificates policy to come into operation from 1 January 1994. From that date, any solicitor admitted after 1 January 1986 or who was admitted before 1 January 1986 but did not take out a practising certificate before 1 January 1994, and who seeks the issue of an unrestricted practising certificate, will be required to complete a two year period of restricted practice and a practice management course approved by the Law Society.
2.19 The restricted practitioner will be supervised by a practitioner who holds an unrestricted practising certificate, and in his or her application for an unrestricted practising certificate has to demonstrate that work constituting restricted practice has been undertaken. Restricted practice is defined as legal practice that is performed as an employed solicitor involving the application of legal knowledge and skills, the delivery of legal services, and work that is undertaken in the context of a solicitor/client relationship. These requirements are identified in greater detail in the “Guidelines for Applicants” document produced by the Law Society.
2.20 A further condition that is imposed on any solicitor’s practising certificate, is the condition that the holder will undertake and complete a specified course of further education.17 A solicitor must complete a minimum of 10 Mandatory Continuing Legal Education (MCLE) units during the period 1 April of each year and 31 March of the following year. If in the opinion of the Law Society Council a practitioner has failed to comply with this condition, it may, pursuant to section 35(2) of the LPA, refuse to issue, cancel or suspend, a practising certificate.
The operation of s 35(2)(c) of the LPA
2.21 Section 35(2)(c) of the LPA allows the Law Society Council to refuse to issue, cancel or suspend a practising certificate applied for or held by a solicitor who has been required to explain specified conduct and has failed and continues to fail to give a satisfactory explanation of that conduct. The Law Society has only cancelled five practising certificates pursuant to this section, as most solicitors respond to the notification of the Council’s resolution.18
2.22 Both this section, and section 35(1)(c), which gives an identical power to the Bar Council, were criticised in this Commission’s recent Report, Scrutiny of the Legal Profession: Complaints Against Lawyers.19 The Commission suggested that given that the sanction of suspending or cancelling a practising certificate is so serious that it is reluctantly and rarely invoked, delinquent practitioners count on this reticence.20 Whilst the Commission does not resile from comments made in that Report, it would seem that such a power provides both the Bar Association and the Law Society with greater flexibility to deal with delinquent practitioners.
THE ISSUE OF RESTRICTIVE PRACTICES AND CONCLUSIONS OF THE TPC
2.23 In any professional area there may exist what purport to be standards or requirements of skill or experience whose real intention is to limit the number of entrants to that profession and thereby reduce competition.21 However, in its Draft Report on the Legal Profession, the TPC states that from a restrictive trade practices point of view, there is nothing inherently wrong in setting higher educational or other requirements, such as a pupillage or reading program, where these are calculated to set or raise standards of competency, in the public interest.
2.24 From time to time, there have been suggestions that making rights of practice conditional upon satisfying further requirements after a barrister has been admitted by the Supreme Court, may amount to an impermissible restrictive (anti-competitive) practice, reducing the flow of persons into that branch of the legal profession. The TPC’s conclusions were that the reading and pupillage requirements of the independent Bars in Australia do not add unreasonably to the cost or difficulty of gaining admission. The TPC considered that those requirements appear to be directed only to providing new entrants with exposure to the skills of advocacy, case preparation, court practices and procedures, and the traditions and ethics of the Bar, under the guidance of an experienced Tutor. Consequently the TPC generally did not regard the training and experience requirements for entry into practice at the Bar as creating barriers to entry which would impede competition or more efficient forms of advocacy practice.22 The TPC made no recommendation for review or reform of this area.23
2.25 The Commission agrees with these views and believes that such programs are in the public interest. Imposing licence requirements on practitioners gives clients greater confidence in those providing the legal service. Further safeguards such as professional codes of ethics, indemnity and fidelity insurance, and discipline, work against incompetence or misconduct.
FOOTNOTES
1. See New South Wales Law Reform Commission The Legal Profession: General Regulation (Discussion Paper 1, 1979) at 29-31, 52, 86, 122-127, 136, 138, 149-152, 159, 166 and 185-187; New South Wales Law Reform Commission Scrutiny of the Legal Profession (Discussion Paper 26, 1992) at para 5.4 and 5.17-5.20; and New South Wales Law Reform Commission Scrutiny of the Legal Profession(Report 70, 1993) at para 3.19.
2. Australia. Trade Practices Commission Study of the Professions-Legal Profession (Issues Paper, July 1992); and Australia. Trade Practices Commission Study of the Professions-Legal (Draft Report, October 1993).
3. The New South Wales Bar Association Rules, R 97.
4. The New South Wales Bar Association Rules, R 98(a).
5. The New South Wales Bar Association Rules, R 98 and 99.
6. The New South Wales Bar Association Rules, R 98(b).
7. Nor was there any statutory provision which permitted the imposition of study requirements as part of the disciplinary process.
8. Section 29A.
9. Section 29A(2).
10. Section 32(3).
11. Section 32(4).
12. The New South Wales Bar Association Rules, R 100(b). In practice, Queen’s Counsel are not Tutors.
13. Section 32(4)(c).
14. There was some confusion when the amendments were introduced to Parliament that this was the intention of the section. See New South Wales Parliamentary Debates (Hansard) Legislative Assembly, 1 September 1992 at 5326, and New South Wales Parliamentary Debates (Hansard) Legislative Assembly, 16 September 1992 at 5882.
15. Section 35, as amended.
16. A copy of a certificate is found at Appendix C.
17. LPA, s 33(1)(b).
18. Letter from the Law Society of New South Wales, dated 10 September 1993.
19. LRC 70.
20. LRC 70 at 165.
21. The Independent Committee of Inquiry into Competition Policy in Australia (the Hilmer Report). National competition policy. Canberra: AGPS, 1993, at 191, stated that regulatory barriers to market entry have the most direct influence over competitive conditions within an industry. The Report recommended that regulations that restrict competition should not be adopted unless the restriction is justified in the public interest. See generally Chapter 9, 190-198.
22. The TPC did have some concern over other practices, such as those which make it unnecessarily difficult for lawyers to move flexibly from practice as a solicitor to practice as a barrister and back again. See Chapter 13 of the TPC Draft Report.
23. See TPC Draft Report at para 16.4.1 and 16.5.1.
