Mr CRISP (Mildura) —
The Legal Profession Uniform Law Application Bill 2013 is an important bill for The Nationals as it seeks to address some cross-border anomalies for representation in border areas.
Statement of compatibility
For Hon. E. J. O’DONOHUE (Minister for Liquor and Gaming Regulation), Hon. G. K. Rich-Phillips tabled following statement in accordance with Charter of Human Rights and Responsibilities Act 2006:
In accordance with section 28 of the Charter of Human Rights and Responsibilities Act 2006, (the ‘charter act’), I make this statement of compatibility with respect to the Legal Profession Uniform Law Application Bill 2013 (the application bill).
In my opinion, the Legal Profession Uniform Law Application Bill 2013, as introduced to the Legislative Council, is compatible with human rights as set out in the charter act. I base my opinion on the reasons outlined in this statement.
Overview
The central purpose of the application bill is to enact an applied law scheme to uniformly regulate the legal profession throughout participating jurisdictions in Australia. Schedule 1 of the application bill contains the Legal Profession Uniform Law (the uniform law), which will be enacted in Victoria as the host jurisdiction. Each participating jurisdiction will pass an applying act to apply the uniform law as a law of that jurisdiction. The application bill also provides for certain local matters to complement the uniform law, such as the establishment of local regulatory authorities and the fidelity fund. The application bill repeals the Legal Profession Act 2004 and makes the transitional arrangements and consequential amendments necessary to facilitate the new scheme.
Clause 6 of the application bill provides that the charter act has no application to both the uniform law set out in
schedule 1 (and applied in other jurisdictions) and the uniform law as applied in Victoria by part 2 of the bill. Section 31 of the charter act empowers Parliament to override the charter act in this manner. Pursuant to subsection 31(6), the effect of clause 6 is that the charter act has no application to the uniform law. As a result, the interpretive direction under section 32 does not apply to the uniform law, and the Supreme Court does not have the power to make a declaration of inconsistent interpretation under s 36 in relation to the uniform law. Further, clause 6(3) explicitly states that a body performing functions or exercising powers under the uniform law is not a public authority within the meaning of the charter act in respect of its performance of those functions or exercise of those powers.
The purpose of clause 6 is to guarantee uniformity in interpretation and application of the scheme across the participating jurisdictions. It is being implemented to avoid any risk of non-uniform application through other jurisdictions being required to interpret the uniform law consistently with the charter act. Its purpose is also to avoid the inconsistency that may arise if interjurisdictional bodies established under the uniform law, as well as regulatory bodies in other participating states or territories performing uniform law functions, are required to act compatibly with the charter act despite having no experience with its requirements. If the charter act were only partly excluded, so that it continued to apply in the Victorian context, there is a further risk that inconsistencies could arise in the interpretation and implementation of the uniform law between Victoria and other participating states and territories.
The charter act continues to apply to all other provisions of the application bill. Local regulatory authorities in Victoria will still be considered as public authorities under the charter act when performing functions or exercising powers under the application bill (other than those conferred by the uniform law) or any other act in Victoria.
By stating that section 31(7) is inapplicable to clause 6 of the bill provides that the override clause does not have an expiry date.
Human rights issues
The application bill
I have considered the application bill (excluding the uniform law in schedule 1) and I consider that there are no human rights protected by the charter act that are relevant to the bill.
The uniform law
I note that pursuant to subsection 31(6) of the charter act, the effect of clause 6 of the bill is that the charter act has no application to the uniform law. I also note that the purpose of the override is not focused on overriding a human right due to any potential issue of incompatibility; rather, the purpose of the override is to not apply the charter act in order to effect uniformity in an interjurisdictional scheme.
Notwithstanding, I have considered the compatibility of the uniform law with the charter act. In my opinion, the uniform law is compatible with human rights as set out in the charter act, for the reasons outlined below.
A number of human rights protected by the charter act are relevant to the uniform law, including the right to privacy (section 13), the right to property (section 20), the right to be presumed innocent (section 25(1)) and the protection against self-incrimination (section 25(2)(k)).
The uniform law employs a number of measures designed to protect consumers of legal services which relevantly affect the privacy of practising certificate-holders (Australian legal practitioners). Clause 95 of the uniform law provides that an applicant or holder of a practising certificate may be required to provide specified documents or information, submit to a medical examination, provide a report from police on criminal history or cooperate in any other required way when a regulatory authority is considering whether to make a determination about the status of a certificate. While these requirements may interfere with the privacy of persons, I consider them to be essential consumer safeguards necessary for ensuring that only competent persons hold certificates, and as such I do not consider any resulting interference of privacy to be arbitrary. Accordingly, I do not consider the right to privacy to be limited in this context.
Chapter 7 of the uniform law contains extensive investigatory powers, such as the power of investigators to search premises with the consent of the occupier or under the authority of a search warrant, and the power to search non-residential premises without consent or a warrant in limited circumstances where it is urgently necessary to prevent destruction or interference with relevant material (cl 374 of the uniform law). These powers may also interfere with the right to privacy. However, the entry and search powers are only exercisable for specified purposes (namely, in connection with trust records examinations and investigations, compliance audits and complaint investigations) and are subject to appropriate requirements regarding notification of search, announcement before entry and return of seized items, meaning any interference that may result will not occur arbitrarily. Further, persons taking on positions in the legal profession will not have an expectation of privacy in regards to their records and files being subject to audits and compliance checks. Accordingly, I consider that the right to privacy is not limited.
Investigators have wide-ranging powers while on premises including the power to require production of documents, to seize relevant material including computers and equipment, and to require any person on the premises to answer questions relevant to an investigation (cl 375(l)(j) of the uniform law). It is an offence to fail to comply with a requirement issued by an investigator under these powers (cl 387(2) of the uniform law) and a person is not excused from complying with a requirement on the ground that compliance may tend to incriminate that person (cl 466(3) of the uniform law). In relation to incorporated legal practices, part 7.4 of the uniform law gives investigators powers determined by reference to specified powers in the Australian Securities and Investments Commission Act 2001 as conferred on Australian Securities and Investments Commission investigators, to examine persons, inspect books and hold hearings. Any information or document obtained as a direct or indirect consequence of a person complying with a chapter 7 requirement is inadmissible in evidence against that person, except in proceedings for an offence against the uniform law, making a false or misleading statement or relating to a disciplinary matter. The rights to privacy, property and protection against self-incrimination are relevant to these powers.
I observe that these powers are common to regulated industries and I consider that they are of similar scope to the investigatory powers that were considered to be compatible with the charter act in the statements of compatibility to the Australian Consumer Law and Fair Trading Act 2012 and the Associations Incorporation Reform Act 2012. While the investigatory powers in the uniform law may interfere with, and in some cases limit, human rights protected by the charter act, I am of the view that any such interferences or limits are justified to enforce compliance with the scheme in relation to individuals who have voluntarily taken on positions of responsibility and privilege in a regulated industry, and have assumed duties and obligations in relation to legal practice. The information required to be produced and provided to investigators are those that are required to be kept as part of record-keeping obligations. The duty to provide this information is consistent with the reasonable expectations of persons who operate within the legal profession. Moreover, it is necessary for regulators to have access to information to ensure the effective administration of the regulatory scheme and that contraveners of the scheme do not escape liability. To excuse the production of such information where a contravention is suspected will allow persons to circumvent the record-keeping obligations of the uniform law and significantly impede the regulator’s ability to investigate and enforce compliance of the scheme. For these reasons, I consider the uniform law to be compatible with the relevant rights protected by charter act.
Finally, a number of regulatory offences within the uniform law impose an evidential onus on a defendant to adduce or point to evidence that goes to an exception, excuse or defence (for example, clauses 148, 387, 388 and 364 of the uniform law). However, in my view, these provisions do not transfer the burden of proof, because once the defendant has adduced or pointed to some evidence, the burden is on the prosecution to prove beyond reasonable doubt the absence of the exception raised. Furthermore, the burdens do not relate to essential elements of the offences and are only imposed on the defendant to raise facts that support the existence of an exception, defence or excuse. Courts in other jurisdictions have generally taken the approach that an evidential onus on a defendant to raise a defence does not limit the presumption of innocence. However, even if these provisions limit the right to be presumed innocent in section 25(1) of the charter act, the limitation would be reasonable and justifiable under s 7(2) of the charter act because the defences and excuse provided for relate to matters within the knowledge of the defendant.
Edward O’Donohue, MP
Minister for Liquor and Gaming Regulation Minister for Corrections
Minister for Crime Prevention
Override statement
Hon. G. K. RICH-PHILLIPS (Assistant Treasurer) — I wish to make a statement pursuant to section 31 of the Charter of Human Rights and Responsibilities Act 2006 explaining the exceptional circumstances that justify the inclusion of an override declaration.
The Legal Profession Uniform Law Application Bill 2013, as introduced to the Legislative Council, contains a clause — clause 6, the ‘override declaration’ — that overrides the application of the Charter of Human Rights and Responsibilities Act 2006, the ‘charter act’, to the Legal Profession Uniform Law, as set out in schedule 1 to the bill.
Section 31(3) of the charter act requires that a member of Parliament who introduces a bill containing an override declaration must make a statement to the relevant house of Parliament explaining the exceptional circumstances that justify the inclusion of the override declaration. Accordingly, I make the following statement.
The Legal Profession Uniform Law is template legislation intended to be implemented in multiple states and territories in the same form for the purpose of standardising regulation of the legal profession across all participating states and territories.
In order to maximise the degree of uniformity across participating states and territories, the uniform law will be enacted as an ‘applied law’. The uniform law will be passed as a substantive law of Victoria with other participating states and territories to then ‘apply’ the uniform law as a law of their own jurisdiction.
The uniform law will therefore be Victorian legislation, even where it is ‘applied’ by an act of another state or territory. Consequently, Victorian acts relating to oversight and interpretation, including the charter act, would ordinarily apply to the uniform law. If the charter act were not expressly overridden in the bill, there is a risk that other jurisdictions would be required to interpret the uniform law consistently with the charter act, despite having no experience with its requirements. Similarly, the interjurisdictional bodies established under the uniform law, as well as regulatory bodies based in other participating states or territories and performing uniform law functions, may be required to act compatibly with the charter act, at least in respect of those specific functions.
If the charter act were only partly excluded so that it continued to apply to Victorian regulatory authorities in respect of functions they perform under the uniform law, there is a risk that inconsistencies could arise in the implementation of the uniform law between Victoria and other participating states and territories. Regulatory authorities in Victoria would be required to act compatibly with the charter act when performing functions under the uniform law, whereas regulatory authorities in other participating states and territories would not be similarly obliged.
The features that distinguish the bill and constitute ‘exceptional circumstances’ that justify the inclusion of the override declaration are the prevailing objective of interjurisdictional consistency that applies to the uniform law, the ‘applied law’ model that is used to achieve that objective, the fact that the uniform law will be passed as a substantive law of Victoria, and the framework of interjurisdictional and local regulatory bodies that will each be performing elements of the uniform law.
Subclause 6(1) of the bill provides that the charter act has no application to schedule 1 of the bill, which contains the Legal Profession Uniform Law, and to the Legal Profession Uniform Law (Victoria). It is necessary to provide for both the uniform law as it will be applied in other jurisdictions (i.e. schedule 1) and as it is applied in Victoria (i.e. the Legal Profession Uniform Law (Victoria)).
Although not necessary for the formal override of the charter act, subclause 6(2) disapplies section 31(7) of the charter act in order to exclude the need to re-enact the override in five years time, recognising that the factors necessitating the override will still be present in five years.
Subclause 6(3) is included for the avoidance of doubt and provides that a body performing functions under the uniform law is not a public authority when carrying out those functions. Victorian bodies established or continued by the bill will be subject to the charter act when carrying out non-uniform law functions specific to Victoria.
Finally, I note that notwithstanding this override statement and the reasons for it, the statement of compatibility for this bill states that the bill’s provisions are compatible with the actual rights contained in the charter act.
Costs disclosure
The specialised nature of legal work means that many clients are likely to have limited capacity to determine whether proposed legal work is necessary or valuable. Under part 4.3 of the uniform law, law practices will be required to take all reasonable steps to satisfy themselves that their client has understood and given consent to the proposed course of action for the conduct of their matter and the proposed costs.
In practice, this will require law practices to make reasonable inquiries to ensure that, after mandatory written disclosure has been made, clients understand the basis on which legal costs will be charged, how the initial estimate was calculated, factors likely to alter the estimated legal costs, and their rights in relation to challenging legal costs. Legal practitioners will be expected to exercise professional judgement regarding the level of detail needed by a client to understand the options available and costs involved.
At the same time, the uniform law recognises that for many inexpensive or routine matters, extensive and detailed disclosure would not be justified. For matters that are likely to cost less than a prescribed ‘lower threshold’ a law practice will not be required to comply with a specified form of disclosure requirement. The bill retains a lower threshold of $750 but allows for adjustment of the threshold by the Legal Services Council.
For matters that are likely to cost less than a prescribed ‘higher threshold’, a law practice will only need to comply with a basic requirement to provide a client with a standard disclosure form. The standard form disclosure is intended to be a short document that is the same for all clients with estimated costs in this band and to include basic information such as the client’s rights in respect of costs. Importantly, it is intended that this standard disclosure will also include a statement that the client may not be charged more than the amount of the higher threshold without receiving full disclosure from the law practice.
The details of the standard form disclosure will be developed by the new Legal Services Council and incorporated in uniform rules prior to commencement of the uniform law. The higher threshold is set at $3000 but, as for the lower threshold, may be varied by the Legal Services Council after public consultation.
Charging only reasonable legal costs
One of the uniform law’s most significant reforms, also under part 4.3, is the express requirement that a law practice should charge no more than fair and reasonable legal costs. Placing this obligation on law practices will better protect consumers as, even where consumers do not have the ability to judge what is a fair and reasonable price for legal services, law practices will be obliged to ensure that they do not take advantage of the information asymmetry between lawyers and clients.
The provision requires a law practice, in charging legal costs, to charge costs that are no more than fair and reasonable in all the circumstances and that are proportionately and reasonably incurred and proportionate and reasonable in amount, having regard to prescribed factors, which include the urgency of the matter and the level of experience of the lawyers concerned.
The new Legal Services Council will be able to provide guidelines for law practices on how to comply with this requirement.
Professional discipline and dispute resolution
An important feature of the uniform law is its complaint handling and disciplinary framework, set out in chapter 5, which aims to be efficient and low cost and to deliver appropriate outcomes. The framework seeks to facilitate the timely and efficient resolution of consumer disputes, while still providing a rigorous framework for dealing with serious disciplinary matters.
The uniform law provides for new powers for the local regulatory authority administering complaints handling, which for Victoria will be the legal services commissioner, to make binding determinations in resolution of consumer matters, including the power to make compensation orders of up to $25 000.
The commissioner will also have expanded jurisdiction to deal with costs disputes in matters where the costs in dispute are up to $100 000. The commissioner’s jurisdiction will provide an inexpensive alternative to a formal costs assessment. The commissioner will have a new power to make a determination about costs that are payable in relation to matters where the costs in dispute are up to $10 000.
The uniform law also establishes a determinative power to facilitate the efficient resolution of certain low-level disciplinary complaints without recourse to a lengthy and potentially costly process through a court or tribunal. The commissioner will be empowered to make findings of unsatisfactory professional conduct, which is the lesser of two conduct findings, the more serious being professional misconduct.
With respect to jurisdictional oversight of complaints handling, the uniform law requires that each participating jurisdiction nominate an ‘independent entity’, not including a professional association, to perform the complaints-handling functions of the uniform law within that jurisdiction. In Victoria, the existing legal services commissioner is nominated for this purpose. Jurisdictions that do not presently have an independent complaints-handling authority may exempt themselves from the requirement for a period of three years.
Victorian position
I am pleased that, as one of the two initial participating jurisdictions in the uniform scheme, Victoria intends to adopt the uniform law almost without variation.
Conclusion
In partnership with NSW, the government is pleased to lead the implementation of this important reform to the regulation of the legal profession as it continues to expand into new markets.
I would like to acknowledge the significant contributions to the development of this legislation made by the Legal Services Board, the legal services commissioner, the Council of Legal Education, Board of Examiners and Legal Practitioners Liability Committee, as well as those made by the courts, especially the Supreme Court, and by representatives of legal consumers. I would also like to acknowledge the support from the profession in Victoria and its representative bodies, the law institute and the Victorian Bar. All of these bodies have assisted greatly to make this next phase of legal professional regulation a reality.
The uniform law offers the prospect of significantly reduced interstate barriers to seamless national legal practice, while improving consumer protections and safeguarding an independent legal profession.
I commend the bill to the house.
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