• Introduction
• The Need for Regulation
• Present Regulation of the Profession
• The Need for Change
• A Basic Conflict of Interest
• Restricted Perspectives
• A Balanced Regulatory Body
• Laymen and the Law
• Guidelines for Reform
• A Legal Profession Council
• A Community Committee on Legal Services
• The System in Operation

Introduction

The first Discussion Paper published in the course of the Commission’s Inquiry into the Legal Profession Inquiry concerns the general regulation of the profession. It is written with the object of advancing the Inquiry by evoking further discussion. Many steps have already been taken to encourage contributions, both written and oral, to the Inquiry. A general invitation was extended to the public and the profession, and widely advertised. Hundreds have responded, and naturally these have included the Law Society of New South Wales, and the New South Wales Bar Association, which have made numerous submissions. Members of the Commission have also attended a number of meetings of lawyers throughout New South Wales and also meetings organized by non-legal groups.

A special effort was made to obtain the views and experiences of ordinary citizens, whose voice is often not heard for want of organization. Facilities were provided, and widely advertised, to make submissions by telephone and personal interview at the Commission’s offices, as well as in writing. In addition the Commission conducted "Open Houses" in eight country and six suburban centres where, at well publicized times, a member of the public could talk privately to a member or officer of the Commission. More than 800 files were opened on the basis of individual communications, before the sheer volume compelled the Commission to cut off this avenue of inquiry. In some centres public meetings were held. In addition we examined over 600 files in which the professional associations had dealt with complaints against their members, and obtained information about thousands of other such complaints. Most of this material came from the Law Society. Further details of this research will be given in Discussion Paper No.2, Complaints, Discipline and Professional Standards, - Part I, and in Background Papers to this inquiry.

We co-operated with the Law Foundation’s latest survey of the New South Wales legal profession, and established an advisory committee to the survey. The Commission has also engaged in considerable research into the vast literature on the legal profession, particularly in relation to countries with similar legal backgrounds. Many inquiries have been made by correspondence, or by personal contact when opportunities arose, here or overseas, to meet lawyers from other places.

The Discussion Paper directs attention particularly at general principles and at developments in the legal and other professions in Australia and in countries with a similar legal background. But equally basic to the Commission’s thinking have been the results of its own investigations of the profession’s relations with the public, many details of which will emerge in other Discussion and Background Papers.

The Need for Regulation

Many changes in recent years have tended to increase the importance of legal services to a widening section of the community. Increasingly complex social and economic regulation, a growing system of welfare benefits and services, the growth in home ownership, a keener concern for town planning standards and environmental protection, more frequent divorce, and drug problems that span the community, are some of the matters that lead more and more people to want legal advice, representation and other services. Legal aid makes these services available to more people.

The availability, competence, integrity and independence of lawyers are of fundamental importance. How are they to be secured? In law, as in other professions, part of the answer has traditionally been a system of regulation, under which entry to the profession is controlled, those admitted are subject to extensive rules, their conduct is open to investigation, and they may be disciplined and struck off the register.

Some people, like the economist Milton Friedman, argue that we would be better off if we did not prescribe licensing requirements for professionals and give them monopolies in certain fields, but instead relied on the competition of a free market to produce a high standard of service. Others, like Ivan Illich, condemn our growing dependence on professions generally, and urge more self-reliance. The Commission recognises that there is much to be learnt from these arguments, particularly in defining the extent of professional monopolies and the kinds of regulation that are in the public interest. However, we consider that licensing, and some forms of regulation, of lawyers continue to be necessary.

Present Regulation of the Profession

Of necessity, regulation of a profession involves conferring legal powers on a regulatory body, rather than relying on voluntary compliance by all members of the profession. In other professions in New South Wales some regulatory powers are given to an independent statutory board. In the Discussion Paper, we describe the present system of regulation of lawyers. In the case of solicitors, many regulatory, powers are given to their own professional association (the Law Society of New South Wales) and to a Statutory Committee of solicitors who act as a disciplinary tribunal. In the case of barristers, most of the power lies in the Supreme Court (composed exclusively of former barristers) , which gives an important role to the New South Wales Bar Association.

We also look in the Paper at the various areas of regulation, including the professional monopoly, criteria for admission to practice, rules of conduct, the handling of complaints, discipline, supervision of trust accounts, fees, specialisation and advertising, and continuing education. In each of these areas, decisions that are made can be of vital concern not only to lawyers, but to clients and the general public. Decisions which are in the interests of lawyers may not be in the interests of the other people affected. Yet most of the decisions are made, and enforced, exclusively by lawyers’ own professional associations or by some other body consisting exclusively of lawyers.

The Need for Change

Is the present situation satisfactory? Some argue that it is. Only lawyers, they say, can understand the issues involved; lawyers can be trusted to look after the public interest; unless lawyers govern themselves, their independence will be at risk.

Others argue that lawyers, and particularly their professional associations, face a conflict of interest when regulating their own profession and are likely to favour the interests of the profession rather than the public. They say that lay participation on regulatory bodies would bring wider or different perspectives and would increase the likelihood of the public interest being the paramount consideration in regulation.

Who then should exercise the powers of regulation? Should it be the lawyers themselves, either through their professional associations or specially elected representatives? Should it be the Government, or a body appointed by Government? Should it be the Courts? Should it be representatives of clients - the consumers of legal services - or other lay persons from the community at large? Should it be an independent statutory board with a membership reflecting a range of various interests?

In the Discussion Paper we examine in detail the advantages and disadvantages of these alternatives. We also examine a wide range of comparisons and analogies from elsewhere in Australia and overseas, and from other professions. Among other recent developments, we refer to the addition of lay members to governing bodies of the legal profession in most Canadian provinces and in parts of the United States, and to the disciplinary bodies of the profession in Victoria, the United Kingdom and the United States.

In the light of the discussion, we suggest that the present system for general regulation of the profession is not satisfactory. Two major reasons may be mentioned here.

A Basic Conflict of Interest

It is a fundamental principle of the law, endorsed by courts and lawyers on countless occasions, that nobody shall be a judge in his own cause. Those who have special obligations to look after the interests of others should not be in a position where their own interests might conflict with the interests they should safeguard. This is not primarily because some people will occasionally be deliberately dishonest or selfish in such situations. With the best will in the world, it is difficult to be impartial when one’s own interests are involved.

We suggest that the time has come to give these well-tried principles and insights of the law more weight in the regulation of the legal profession itself. Regulating the legal profession often involves balancing the interests of clients and the general public against those of the legal profession, and in resolving these issues lawyers should not be left to be the sole judges of their own cause.

In particular, professional associations, one of the major tasks of which is to look after the interests of lawyers, should not have the conflicting role of protecting the public interest against the claims of the legal profession. One or the other interest will suffer, or will believe it has suffered. It would not be satisfactory merely to add lay people to the governing body of the professional association. The conflict of interests would still remain. If the change succeeded in converting the governing body into one devoted to the public interest, lawyers would find themselves without a body to champion their interests. This sort of development has led to friction in California and Quebec.

This is not to deny that lawyers must play a very important role in the regulation of the profession. Their professional expertise is needed, the independence of lawyers must be maintained, and their pride in their profession and sense of responsibility for it must be maintained.

Restricted Perspectives

It is often the case that a person does not so much prefer his own interests in, a conflict, as fail even to see the conflict. It is easy to be oblivious of the interests of others, particularly if one has never been in their position. There is the further fact that people come over a period of time to accept injustices and absurdities as natural or inevitable.

The greatest danger in a body composed of people with one professional background is that they will be inward-looking and insular, and will not appreciate the viewpoint and interests of others unless it is forcefully put to them. This is particularly likely if,. as may often be the case with the governing bodies of professions, their socioeconomic, religious, ethnic and political composition differs from that of the population at large.

One important viewpoint which needs to loom large in considering regulatory issues is that of the consumer. The rendering and use of professional services is a two-way relationship. Consumers may often (but by no means always) lack understanding of the problems of the professional, but they do understand, by direct experience, the problems of the client, to which the professional is too often insensitive.

A Balanced Regulatory Body

The solution suggested has two aspects. Lawyers should be in a majority on the regulatory body, and should reflect a wide range of professional interests. But there should also be a strong, independent and well-informed group of lay members, who are qualified and able to bring to bear different viewpoints to those of the lawyer.

Experience in other places has not borne out fears expressed by lawyers that lay members may be unable to contribute, or be disruptive or breach confidentiality. The greatest risk, particularly if they are isolated and without roots in a constituency, is that lay members may be ineffective and lose interest in their role, or become too closely identified with the lawyer majority. To some extent this problem may be eased by careful selection of lay members, but it is not a total solution. Indeed it raises another problem: who is to select the lay members?

Laymen and the Law

The most effective way of developing a body of lay people equipped to take part in the regulation of the legal profession may be through encouraging more public interest in and concern with the law and the administration of justice generally. In another field dominated by professionals, that of health administration, there have been successful moves towards lay participation: the Community Health Councils in Great Britain are one example. In the field of law, we have found stimulating the example of the Citizens’ Advisory Committee in the District of Columbia.

The Paper suggests the establishment of a Community Committee on Legal Services, which would concern itself with the law generally - the courts, the administration of justice, legal aid, law reform, to take some examples. Such a body could not only select lay members to participate in the regulation of the legal profession; it could provide a suitable training ground for them, and a constituency to sustain them.

Guidelines for Reform

The tentative views expressed in the Discussion Paper are summarised in the following propositions:

(i) Regulation of the legal profession remains necessary to protect the public against the unscrupulous and the incompetent.

(ii) Regulation should be in the public interest. Assessment of the public interest is a complex value judgment involving the consideration of, and attempts to resolve, potential conflicts between the interests of members of a profession and the interests of the clients, and often other interests, for example, the many interests in the administration of justice.

(iii) The perception and resolution of such conflicts should not be left to one interested group, whether the professionals themselves or those likely to be affected by the- work of lawyers, as clients or otherwise.

(iv) More especially, the task should not be left to a body which not only is composed entirely of members of the profession, but also is responsible for advancing the interests of members of the profession.

(v) The safeguarding of professional independence in those areas of professional activity where it is necessary or desirable is one of a number of important goals of regulatory machinery. It is hot a justification for excluding non-lawyers from the regulatory machinery, or for turning the regulatory function over to a professional association.

(vi) Although the legal profession cannot be excluded from the elected Parliament’s and Government’s general rights and duties to legislate and govern, the day-to-day regulation of the profession should not be left in the hands of Government.

(vii) While there is a continuing role for the Supreme Court in the regulation of the legal profession, it is not an appropriate body to exercise general powers of regulation.

(viii) Substantial professional participation in the regulatory machinery is necessary not only so that the interests of the professional are adequately represented and understood, and the skill and knowledge of the professional are utilized. It is also needed to preserve sufficient identification of the professional with the system of regulation, so as to command his respect and maintain his sense of individual responsibility for the standards of the profession.

(ix) Such professional participation should preferably be drawn from a wide range of the profession, for example academic and government lawyers as well as lawyers in private practice. Barristers and solicitors should participate in, and be regulated by, the one authority, even if the division of the profession continues in its present form.

(x) Significant participation from outside the profession is necessary to provide access to public attitudes and needs and to differing and wider viewpoints, to maintain public confidence and to give assurance that decisions are being made in the public interest. Such participation is not incompatible with efficient regulation and due respect for independence and confidentiality, but methods for selecting lay participants require most careful consideration, and adequate support is necessary if they are to be effective.

(xi) It would not be satisfactory merely to add lay people to the governing bodies of professional associations. The conflict of roles of those bodies would still remain. If the change succeeded in converting the governing bodies into ones devoted to the public interest, lawyers would find themselves without a body to champion their interests.

(xii) An independent regulatory body, established by statute, is the best instrument for achieving satisfactory professional regulation but its success will depend on its composition, functions and resources.

(xiii) Effective public participation in such a body would be greatly assisted if another body, predominantly lay and without regulatory functions, could be established. It would choose some members of the regulatory body, support them with information, views and opportunities for discussion, and act as a channel of communication between them and the community, but should not be limited to these functions. It could provide a vehicle for increased understanding and constructive criticism by the public of the legal system and the administration of justice as a whole and for influencing policy-making in those areas.

A Legal Profession Council

The Council would be an independent statutory body consisting of 21 members, of whom eleven would be elected by the practising profession and ten (whom we call "public members’ and some of whom would be lay) would be chosen in other ways. We suggest the following composition:

11 members elected by and from practising barristers and solicitors, including not less than two solicitors with restricted practising certificates and (in present circumstances) not less than two barristers;

1 member elected by and from full-time teachers in the Faculties of Law at Macquarie University, the University of New South Wales, the University of Sydney and the New South Wales Institute of Technology;

5 members nominated by the Community Committee on Legal Services, not less than three of them lay members;

1 member nominated by the Commissioner for Consumer Affairs;

1 practising lawyer nominated by the Attorney General;

1 lay member nominated by the Legal Services Commission (which, we understand, the New South Wales Government proposes to establish in the near future with responsibilities in relation to legal aid, and with legal and lay membership).

(a) a second member might be nominated by the Attorney General;

(b) a second member (perhaps a lawyer) might be nominated by the Legal Services Commission;

(c) a judicial member might be included;

(d) if a Council of Legal Education or similar body is established, it might nominate a member;

(e) a second academic member might be added.

Although there may be exceptions, the general policy should be that Council committees reflect the diversity of its own membership, and include lay and other public members.

We think it important that the Legal Profession Council should not be regarded as a department or instrumentality of government. Although this may go without saying, it may be worth spelling it out by statute. For the same reason, and because of the importance of ensuring that the Council can adequately control the carrying out of its policies, the Council should select, employ and dismiss its own staff, and they should not be subject to the Public Service Act. It should control its own funds.

We suggest that the Legal Profession Council should be financed partly by practising certificate fees paid by practitioners, and partly by recourse to the Statutory Interest Account (which draws interest from solicitors’ trust accounts), assuming that Account continues to be available for the purpose.

A Community Committee on Legal Services

The Committee would have up to 31 members, comprising:

(i) two members nominated by the Attorney General by reason of their interest, or the interest of an organization proposing them, in the provision of legal services or in law reform.

(ii) two members nominated by the Commissioner for Consumer Affairs, by reason of their interest, or the interest of an organization nominating them, in the protection of consumers;

(iii) two members nominated by the Ethnic Affairs Commission by reason of their interest, or the interest of an organization nominating them, in the problems of members of ethnic groups;

(iv) two members nominated by the Legal Services Commission by reason of their interest, or the interest of persons nominating them, in the delivery of legal services;

(v) two members nominated by the New South Wales Council of Social Services;

(vi) two members nominated by the Labor Council of New South Wales;

(vii) two members nominated by appropriate organizations concerned with the interests of industry and commerce;

(viii) ten members, each nominated by an organization specified by regulations;

(ix) not more than five members co-opted by the Committee.

So far as item (viii) is concerned, we envisage that the regulations would specify certain organizations each of which would be entitled to a representative on the Committee. This would ensure continuous representation of bodies with an established claim to speak in relevant areas, but allow the list to be revised relatively easily if bodies lose interest in the areas or become inactive. However, the revision would necessarily be public, and subject to disallowance by Parliament. Wide publicity should be given to the occasion of establishing the list, and of any subsequent revision, so that all interested bodies can press their claim.

The following list illustrates, but does not exhaust, the kind of bodies which should be considered as bodies to be given a power of nomination under the regulations:

Australian Consumers Association

Law Consumers Association

Council of Civil Liberties

Probation and Parole Officers Association

Women’s organizations

Senior citizens organizations

Aboriginal organizations

Small business organizations

Doctors’ organizations

Country interests

Local Government and Shires Association

A first essential for a successful Committee would be a high-calibre Secretary or Executive Officer, backed by reasonable office and secretarial resources. He or she should be a person equipped to investigate and report; not necessarily a lawyer, although we would not exclude a lawyer.

The Committee should be an independent body and not thought of as an instrumentality of government. For the same reasons as in the case of the Legal Profession Council, it should have its own allocation of funds, and should be able to select, employ and dismiss its own staff. The cost of the Committee might reasonably be borne by the Statutory Interest Account or the Government.

The System in Operation

The overall system of regulation which we envisage would give a role to a variety of interests and institutions.

Parliament would lay down the general structure of the regulatory system, define the area of the lawyers’ monopoly, and have power to disallow statutory regulations made by the Legal Profession Council. The Government would, in addition to its general responsibility to monitor the working of the system and to propose changes to Parliament, have some powers of appointment to the Legal Profession Council and the Community Committee on Legal Services, and its consent would be necessary to any regulations made by the Legal Profession Council. The Supreme Court would have the usual supervisory jurisdiction in relation to statutory boards and tribunals, some specific appellate powers and perhaps other functions to be discussed in later Papers.

The main powers of regulation would be in the Legal Profession Council. It would have, speaking in broad terms, similar general powers in relation to the whole profession as the Law Society now has in relation to solicitors. The Commission will discuss in later Papers exactly what these powers should be. They would include defined powers to supervise and investigate lawyers, to lay down rules of professional conduct, to receive complaints and take up cases of breach of professional standards, and to make regulations, for example on the subject of specialization and advertising. The hearing of charges of breaches of professional standards would be the function of two tribunals suggested in our Discussion Paper on Complaints, Discipline and Professional Standards.

The Community Committee on Legal Services, with a background of continuing interest in the law, the administration of justice, legal aid, and law reform, would monitor the working of the legal profession, supply informed lay members to the Legal Profession Council, and provide a source of information, a forum for discussion, and moral support for lay members.

The public, through interested organizations and individuals nominated from various sources, would have the opportunity to participate in the Community Committee on Legal Services, and through it, in the election of some members to the Legal Profession Council. There would also be roles for lay members on committees of the Council and on tribunals adjudicating on professional standards cases. Individuals who wished to complain about lawyers would have the facilities suggested in the Discussion Paper on Complaints, Discipline and Professional Standards.

Lawyers would elect a majority of members of the Legal Profession Council, and other lawyers would be appointed to it. Lawyers also would find important roles on committees of the Council and on professional standards tribunals.