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National Competition Policy Review of the Legal profession Act 1987
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5.1 The traditional model for regulation of the legal profession was self regulation. Within the self regulation model, formal regulatory power over the profession was conferred by Government on the professional associations. Regulatory powers exercised by the professional associations included the determination of entry standards and regulation of lawyers professional conduct. The self regulation of the legal profession was traditionally regarded as integral to professional practice because it ensured the independence of the profession from Government intervention in its affairs and ensured that members of the profession were judged by their peers.
5.2 The COAG Working Party report did not canvass the role of self regulation in legal profession regulation, or the extent to which self regulation should be given legislative backing.
5.3 The model which has been adopted in the Legal Profession Act is that of co-regulation. The role of the Law Society and the Bar Association as the regulators of the profession has been largely preserved. The Act provides a legislative mandate to the role of the professional bodies in matters such as rule making and the administration of the disciplinary system on one hand and scrutiny of the exercise of their powers on the other. The professional bodies have both representative and regulatory roles. However, the Act sets standards to be applied by the professional councils and provides for external scrutiny of their actions.
5.4 A fundamental issue is how the co-regulatory model affects the market. Self regulation by professional bodies which also act as representative associations may lead to anti-competitive practices and limit the remedies of consumers and other market participants who are adversely affected. Conversely, an overly prescriptive statutory regime may inhibit the ability of lawyers to compete with each other and other professionals. This chapter examines the role of the professional bodies in the context of these considerations.
5.5 While the Access to Justice Advisory Committee was positive about the reforms set out to the complaints handling and disciplinary system in the 1993 Act, it noted arguments for the separation of the regulatory and representative functions of professional bodies and supported the scheme set out in the Western Australian Legal Practitioners Act, which establishes a statutory body which issues practising certificates and serves the profession generally.
I CURRENT SCHEME
Introduction
5.6 The Law Society and the Bar Association are professional bodies which represent the interests of their members. However, consistent with the co-regulatory policy, they also enjoy considerable statutory powers over solicitors and barristers.
5.7 Both the Law Society Council and the Bar Council may make practice rules binding on solicitors and barristers.[16] These are known respectively as the Solicitors' Rules and the Barristers' Rules, under Division 4 of Part 4 of the Act. Failure to comply with a rule by a solicitor or barrister may be professional misconduct or satisfactory professional conduct under 57D(4).
5.8 Practitioners need not join either the Law Society or the Bar Association but are entitled to do so, without further fee, once they have obtained a practising certificate: section 57M. Practitioners must comply with the Rules made by the respective Councils, irrespective of whether or not they are a member: section 57D(3).
5.9 Practitioners cannot practise unless they obtain a practising certificate from either the Law Society Council or the Bar Council.[17] However, the discretion of the professional bodies to refuse a practising certificate to a practitioner is limited. A practitioner who is refused a practising certificate may appeal to the Supreme Court, and the Act sets out circumstances in which a practising certificate may be refused.[18]
5.10 The 1993 Act inserted several provisions in the Act to enhance the accountability of the rule making process.[19] Rules must be consistent with the Act and regulations: section 57E. The Legal Profession Advisory Council is required to report on whether it considers any rules to be anti-competitive and not in the public interest, or otherwise not in the public interest: section 57H. When he has received a report of the Advisory Council, the Attorney General may declare such a rule to be inoperative: section 57I. The professional bodies are required to table their annual reports by section 57. As discussed below in chapter 8, complaints handling by the professional bodies is subject to review by the Legal Services Commissioner.
5.11 The professional bodies also have a number of other rights, including the investigation of complaints, appearance before the Legal Services Tribunal and supervision of practitioners.
5.12 The Act does not provide for the establishment of any other professional bodies for lawyers and such bodies cannot issue practising certificates or make binding rules which are inconsistent with the Solicitors' Rules or the Barristers' Rules. Any such bodies could not exercise any powers in relation to the investigation of complaints or disciplinary proceedings.
Victorian model
5.13 The Legal Profession Act 1996 (Vic) has adopted a different approach to the question of representation and supervision of the legal profession. The Act provides for the establishment of registered professional associations, which may issue practising certificates, make rules, and investigate complaints against their members. In order to ensure viability, registered professional associations are required to have at least 200 members. The Legal Practice Board is an independent statutory body, established to register RPAs, scrutinise their rules and ensure that they have in place proper complaints handling processes. Given the number of solicitors and barristers in New South Wales, there appears to be no reason that such a system could not operate in New South Wales. However, it is noted that the Law Society's Professional Regulation Taskforce was critical of the Victorian scheme as undermining the independence of the profession from Government intervention.[20]
II EVALUATION
Rule making powers
5.14 The rules comprise an important part of the regulation of the profession because a breach of the rules may affect the ability of a solicitor or barrister to practise. However, despite being subject to external scrutiny, the Solicitors' Rules and Barristers' Rules continue to include restrictions on the mode of practice of both solicitors and barristers. Some of these restrictions are discussed below in chapter 10. Given their importance and their status under the Act, it might be argued that the rules should be made in the same way as subordinate legislation. This would ensure Government scrutiny of any restrictions sought to be placed on the profession by the professional Councils.
5.15 Conversely, it might be argued that the rules represent an aspect of the self regulation of the profession and that the Act should not confer any additional status on them. In this were so, a breach of a rule would be regarded as evidence of conduct that was not accepted within the profession, and as possible evidence of unsatisfactory professional conduct or professional misconduct, but would not carry the greater weight which is given to a breach of the rules at present.
5.16 A further issue is whether the rules are necessary to practice at all. It might be argued that the obligations placed on solicitors and barristers by the Act and Regulations are sufficient to govern the profession and that the rules of the professional associations represent a further layer of regulation which is not justified. Nevertheless, the rules set out in detail many of the obligations of practitioners toward the court, each other and to clients, and in the absence of rules the public might have insufficient protection from incompetent or dishonest lawyers.
Broader issues: consequences of the statutory functions of the Law Society Council and the Bar Council
5.17 The provisions for scrutiny of the professional Councils' rules and complaints handling processes and tabling of annual reports, ensure their public accountability. However, the statutory functions accorded to the Councils prevent solicitors and barristers from exercising choice in professional association, because they are required to submit to the rules of the respective Councils even if they choose not to belong to the Law Society or the Bar Association.
5.18 The current system may inhibit debate within the profession about ethical matters, business practices and appropriate restrictions on practice. It may also impair the ability of practitioners to diversify their services because of the existence of a single set of rules governing all solicitors and all barristers.
5.19 However, the existing system promotes uniformity and consistency within the profession and clients can rely on adherence to the same rules by all solicitors and all barristers. The current system may also promote ethical practices and mutuality among members of the profession because of the commonality of profession membership. In addition, members of the profession may be best placed to make and enforce practice rules and set conditions for practice.
Consequences for regulation of the profession
5.20 It might be argued that the public would benefit from a separation of the representative and regulatory functions of the Councils and that practising certificates should be issued by a Government body, rather than by the members of the profession. Such a scheme might ensure greater transparency in the issuing of practising certificates and the making of rules. However, perhaps because of the accountability mechanisms, there appears to be little evidence that widespread concerns are held about the current system. 5.21 Alternatively, it might be in the public interest, and that of the profession, to permit the registration of alternative bodies, as in Victoria, and enable those bodies to establish their own systems for regulation and governance, supervised by a statutory body. However, it is noted that no other bodies have sought registration in Victoria to date, and it is not clear that there would be sufficient demand in New South Wales to make alternative representative bodies viable.
QUESTIONS
A. Is there an appropriate balance between self regulation and Government intervention in the regulatory scheme set out in the Legal Profession Act?
B. Is there a need for the Solicitors' Rules and Barristers' Rules to be applied to the profession, in addition to the obligations set out in the statutory scheme?
C. Is it appropriate for the Law Society Council and the Bar Council to have the power to make rules which bind the profession, and for those powers to be recognised in the Act?
D. Does the system where the Law Society and the Bar Association exercise regulatory, as well as representative functions, for solicitors and barristers, restrict choice by practitioners and have an anti-competitive effect?
E. What are the benefits to the public of the conferral of exclusive statutory rights to regulate practice on the Law Society and the Bar Association?
Footnotes
[16] In Tasmania and Queensland binding practice rules may be made by the Councils of the Law Societies; Legal Profession Act 1993(Tas), s 17; Queensland Law Society Act 1952, s 5A. In Western Australia binding practice rules may be made by the Legal Practice Board: Legal Practitioners Act 1893, s 6. In Victoria binding practice rules are made by the Registered Practice Associations and the Legal Practice Board: Legal Practice Act 1996 (Vic), ss 72, 73. The Northern Territory, Australian Capital Territory and South Australian Acts do not explicitly provide for binding practice rules to be made by the Law Societies, but do provide for incorporation of the Law Societies: Legal Practitioners Act 1974 (NT), s 7; Legal Practitioners Act 1970 (ACT), s 4; Legal Practitioners Act 1981 (SA), s 7.
[17] Section 25.
[18] Sections 30,31,37,38 and 38A.
[19] Provisions for the review of statutory rules made by the professional associations vary between different jurisdictions. In Queensland rules must be approved by the Governor-in-Council, who may disallow them; Legal Practitioners Act 1995, s 61. In Victoria rules made by the RPAs and the Legal Practice Board must be forwarded to the Legal Ombudsman. Rules made by an RPA may be disallowed by the Legal Practice Board if the Legal Ombudsman recommends disallowance: Legal Practice Act 1996, ss 74-77. Other jurisdictions do not provide for statutory review of practice rules.
[20] Professional Regulation Task Force Report, 27. |
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