National Legal Profession Reform in Australia: An Overview

Transcription

1 National Legal Profession Reform in Australia: An Overview Speech given by Glenn Ferguson, President, Law Council of Australia at the American Bar Association Annual Meeting International Bar Leader Roundtable Panel 6 August 2010 GPO Box 1989, Canberra ACT 2601, DX 5719 Canberra 19 Torrens St Braddon ACT 2612 Telephone Facsimile Law Council of Australia Limited ABN

2 History Australia is a federation of six States, and now includes two self-governing Territories. When the federation was established in 1901, the decision was made that each State would retain its constitutional power to regulate the legal profession. A similar decision was taken when Australia s two Territories achieved selfgovernment. Regulation of the legal profession evolved in each State and Territory, based on a co-regulatory model involving the courts, government and the legal profession, although the specifics of regulation and the split of functions varied in each jurisdiction according to its own legal, economic and social history and norms. This system of eight separate jurisdictions, each operating its own regulatory framework worked reasonably well for while. But strains began emerging a few decades ago, prompting the need for a rethink about the way the legal profession and the provision of legal services was being regulated. Some common themes were: an inability to practise outside one s home jurisdiction unless the practitioner went through the process of admission and grant of a practising certificate in each jurisdiction he or she wanted to practice in; the costs and complexity of complying with the different legal profession regulatory laws, practices and processes; and inconsistent levels of consumer protection. In the 1990s, new factors emerged to drive the need for an even more substantial re-think in Australia about legal practice and regulation of the legal profession: domestic public policy in Australia began embracing concepts of open markets and competition, and so a view emerged that Australia should see legal services as a single national market, rather than eight separate domestic markets; and international policy began embracing globalisation of economies through general and bi-lateral free trade agreements, and so a view emerged that Australia needed a regulatory system that would facilitate our participation in the international legal services market National Legal Profession Reform in Australia.docx Page 2

3 The Law Council of Australia was a driving force in convincing governments that a national approach needed to be taken to regulation of the legal profession. During the period from around 2002 to 2006 State and Territory Attorney- Generals, with the support of the Commonwealth Attorney-General, sponsored a National Legal Profession Model Laws Project under which the states and territories and Law Council developed template legislation which we call the Model Bill which was aimed at facilitating national legal practice and the development of the national legal services market through legislative uniformity of some areas of regulation and harmonisation of standards in other areas. The template legislation developed by the Model Laws Project formed the basis of new Legal Profession Acts which were, by the end of 2008, enacted in all but one jurisdiction. By all accounts the National Legal Profession Model Laws Project was a significant milestone toward achieving a consistent national regulatory framework that would enable legal practitioners to practice in any Australian state and territory as participants in a national legal services market. However, by the end of 2008 it had become increasingly apparent that the Legal Profession Acts based on the Model Bill were not as sufficiently uniform or harmonised as they needed to be to support a seamless national legal services market and to facilitate Australia s participation in the international legal services market. Recognising the importance of the contribution of the legal services market to the Australian economy, the Prime Minister announced in March 2010 that legal profession reform would be added to the Council of Australian Government s micro-economic reform agenda. The reform objective identified by the Council of Australian Governments which is known as COAG - is the establishment of system of clear and efficient national legal profession regulation. In April 2009 the Commonwealth Attorney-General appointed a Taskforce to prepare draft uniform legislation to regulate the Australian legal profession, and to make recommendations to COAG outlining a proposed national regulatory framework. The Secretary-General of the Law Council of Australia was appointed as member of the Taskforce On 14 May 2010 the Taskforce released a Consultation Package which included a draft Legal Profession National Law, draft Legal Profession National Rules; a Consultation Regulatory Impact Statement and a Consultation Report National Legal Profession Reform in Australia.docx Page 3

4 The period for public consultation on the package runs from 14 May 2010 until 13 August Taskforce Proposals National regulatory framework The COAG Taskforce has put forward what it considers to be a simpler, shorter, national law and national regulatory system which it says offers the best prospect of ongoing national uniformity. Two new national bodies are to be established - a National Legal Services Board, and National Legal Services Ombudsman to regulate the profession along with the Supreme Courts and relevant disciplinary tribunals. The Board will be the national rule-setter and will oversee admissions and licensing. The Ombudsman will be the complaints-handler and will have significant regulatory functions relating to trust records examinations and compliance auditing. Many of the functions of the national bodies will be performed in practice by local representatives within States and Territories in many cases, existing regulatory bodies which will have the power to further delegate functions. The Standing Committee of Attorneys-General (SCAG) will have a key role, including in recommending Board appointments, overseeing rule-setting and giving policy directions to the Board. In essence, what is being proposed is a co-regulatory model, with professional associations continuing to be engaged in regulatory activities under delegation. Benefits for the profession Admission in one Supreme Court would be automatically recognised in all Supreme Courts doing away with unnecessary paperwork and facilitating greater mobility. The creation of a single Australian practising certificate with standard conditions defining practising entitlements. A new Australian Legal Profession Register is proposed, components of which would be publicly-accessible National Legal Profession Reform in Australia.docx Page 4

5 Lawyers with overseas qualifications and experience may be exempted from academic or practical legal training requirements for admission and may have the option of conditional admission. Foreign lawyers would also have a central point of contact (the National Legal Services Board) and would be subject to a single registration process to practise foreign law in Australia. Reduced regulatory burden for the profession National uniformity of regulatory requirements facilitates greater mobility for all lawyers and eliminates duplication for multi-jurisdictional law practices of all sizes. The option of maintaining a single general trust account for multi-jurisdictional law practices. Legal services will be able to be delivered under any form of business structure, subject to any applicable requirements in the Law or Rules (possibly including approval of the Board). Law practices will only be required to obtain professional indemnity insurance in one jurisdiction to cover all their practitioners and will not need to seek exemptions in other jurisdictions. Next steps The Law and Rules will be reviewed by the Taskforce following the results of consultation errors, anomalies or major policy issues. An intergovernmental agreement will be drafted in collaboration with all jurisdictions, which will set out how the national scheme will operate. The aim is to return to COAG with a final product before the end of the year. Law Council s position It supports the legislative package released by the Taskforce. It support many of the reform proposals including: nationally-uniform and simplified legislation and rules to deliver national consistency in regulatory standards; a number of important areas of the new national regulatory framework remaining within the control of existing State and Territory bodies; and National Legal Profession Reform in Australia.docx Page 5

6 the Taskforce proposals in the area of the admission of overseasqualified and experienced legal practitioners to the Australian legal profession as well as the ability of the National Legal Services Board to enter mutual recognition arrangements with overseas legal profession regulatory bodies. However, there are concerns with parts of the Taskforce proposals. The Law Council has prepared a comprehensive submission dealing with areas of concern with the proposals and will be submitting this to the Taskforce shortly. Some of the major concerns include: 1. The Composition of the National Legal Services Board The Law Council s submission is that the Taskforce model for the appointment and composition of the Board is flawed. Our opposition is based on a matter of deeply-held principle that an independent legal profession is fundamentally important to the Australian community and must be preserved. The Law Council submits that the seven-member Board must consist of three members nominated by the legal profession, three members nominated by Standing Committee of Attorneys-General and one member nominated by Council of Chief Justices, who would also chair the Board. 2. Powers of the Standing Committee of Attorneys One of the powers of SCAG, as envisaged by the Taskforce, would be to give direction on policy matters that are relevant to the operation of the Board and the Ombudsman. The Law Council is strongly opposed to this proposal because it means the National Board would not be truly independent in its regulation of the legal profession. The Law Council s position is that the operation of the National Law and its administration should not be altered by policy directions from SCAG. If the laws are to be altered, it should be for the Parliaments of the States and Territories to determine this. There are many other matters raised in the Law Council submission, but, in my view, these are the two most important. Notwithstanding concerns over some of the detail in the Taskforce s consultation package, the Law Council is fully supportive of the COAG initiative and will work cooperatively with the Taskforce and COAG to bring this project to a successful completion National Legal Profession Reform in Australia.docx Page 6

7 It is in the interests of the Australian legal profession, consumers of legal services and the Australian community for there to be an Australian legal profession, governed by national and simplified law with a reduced regulatory burden for the profession and enhanced consumer protection for consumers. We will get there. Disclaimer: This document remains the property of the Law Council of Australia and should not be reproduced without permission. Please contact the Law Council to arrange a copy of this speech. Vanessa Kleinschmidt Director, Communications and Stakeholder Relations m e. vanessa.kleinschmidt@lawcouncil.asn.au National Legal Profession Reform in Australia.docx Page 7