Review of the Legal Profession Act Final Report


Advertising


CHAPTER 8: ADVERTISING


I MATTERS RAISED IN THE ISSUES PAPER

The only restrictions on general advertising by solicitors and barristers are currently those set out in the Trade Practices Act, which apply to false misleading or deceptive conduct by any person. Some exceptions apply to lawyers who advertise services under the Workers Compensation Act 1987 and regulations.

Apart from any restrictions in other Acts, only the Regulations made under the Legal Profession Act can impose greater restrictions on solicitors’ and barristers’ advertising. The Rules of the professional Councils cannot do so.

The removal of restrictions on advertising is consistent with competition policy because it promotes the provision of information in the marketplace, facilitating consumer choice and competition among practitioners.


II RESPONSES RECEIVED

Most respondents agreed that advertising is a means of informing consumers. The ACCC stated that the removal of controls on advertising had contributed to a better informed community.

However, some respondents were concerned that the removal of restrictions on advertising has created an environment in which vulgar or misleading advertising has increased and that the powers of the Councils or the Legal Services Commissioner to act on complaints about inappropriate advertising are unclear. The Law Society expressed concern that advertising (especially ‘no win no fee’ type advertising) may mislead consumers about costs and encourage unmeritorious litigation. The Law Society also stated that it regularly receives complaints and expressions of concern about individual advertisements. However, the LSC expressed the view that vulgar or sensational advertising could be grounds for professional misconduct. The LSC did not support the reintroduction of controls on advertising but did indicate that the current guidelines on advertising (which explain the Law Society’s view of misleading advertising) should be made as Solicitors’ Rules. The LSC also recommended amendments to the Act to make it clear that a breach of section 38J could be investigated and could constitute professional misconduct.

The Law Society stated that advertising should be re-regulated to protect the public interest in maintaining the standards of the legal profession. The LSC rejected this view because of the subjective nature of concepts such as ‘vulgar’ or ‘sensationalist’. The ACCC expressed concern with the position of the Law Society because of the subjective criteria suggested and because such controls may be applied in an anti-competitive way. It noted that in some circumstances such Rules might need its authorisation under the Trade Practices Act.
QUESTIONS

8.1 Has competition been engendered by the removal of restrictions on advertising by lawyers?

It appears that in certain areas of practice where discrete services or transactions are provided, such as wills and conveyancing, advertising may have facilitated competition.

There is limited evidence of harm to the public as a result of the removal of restrictions on advertising. However, it appears that any harm to the public is outweighed by the public benefit conferred by freedom to advertise.

The reintroduction of controls on advertising does not appear to be justified. While ethical standards may be undermined by inappropriate advertising, any attempt to regulate in this area would inevitably rest on subjective concepts. While it is noted that this matter does not appear to have been tested by the Tribunal, the LSC states that vulgar advertising may form a basis for disciplinary proceedings and this position suggests that remedies are already adequate.

Such controls could be justified only if it could be demonstrated that the public benefit outweighed their anti-competitive effect.