The push for a national system of regulation for the legal industry has taken one more step forward with the release of a draft bill.
The new laws remove the existing state-by-state based regulatory system by introducing a uniform set of rules and standards. “The primary driver is to promote efficiency and uniformity in the regulation of the national legal profession. There is a desire to ensure that the regulatory framework facilitates the provision of best practice at the best price and in a consistent way right around Australia,” said Mallesons Chief Executive Partner Robert Milliner, who is also chairman of the Large Law Firm Group.
One major change under the new laws is the replacement of existing state based practising certificates with a national practising certificate, allowing lawyers to be admitted in one jurisdiction but be able to practise in all jurisdictions of Australia.
Slater & Gordon managing director Andrew Grech says that while the new draft laws will streamline and reduce the 4500+ pages of legal regulation and instruments currently in place down to approximately 200-300 pages, the “devil is in the detail” of the legislation.
“The new law does make the lives of lawyers easier, but the most important thing is the cost imperative,” said Grech. “The draft laws reduce individual costs and deliver direct benefits to clients. But the main concern is in the details of the draft.”
Under the current draft, the new laws fail to deliver on a number of the original terms of reference including an independent National Legal Service Board to oversee the regulation of the legal profession along with State and Territory Supreme Courts, and to develop uniform national rules.
In the draft form, the power to make appointments to the Board largely resides with The Standing Committee of Attorneys-General (SCAG). This, according to the Council of Chief Justices and the Law Society of NSW, interferes with the independence of the judiciary. The industry has also called for greater representation of practising lawyers on the board and reconsideration of the level of non-legal professional representation. Milliner also said that it was unclear whether the reforms would preserve the independence of the profession and that it was also unclear whether the reforms would guarantee a consistent national regulatory framework. “The bill at the moment delegates significant powers back to the states but it doesn’t mandate who will [exercise] them or how this will be done,” said Milliner. “This could potentially leave [the powers to be exercised] by the state in a different way than initially intended. ” The current draft also fails to detail how the national regulatory system will be funded and whether the proposed new system will in fact cost less to run than the current state based system.
The bill’s broad definition of client as ‘a person to whom or for whom legal services are provided’, fails to distinguish between sophisticated commercial clients and private clients. By this definition, it appears that all legal clients will be governed by the same rules and receive the same level of protection under the legislation.
Milliner commented that this system did not recognise the capacity of sophisticated commercial clients to negotiate their own arrangements. “It’s important that the relationship between sophisticated commercial clients and their law firms is regulated in a way that notes that they have the ability to deal in a contractual sense, as opposed to smaller consumers who are a lot more dependent on the regulatory framework to provide comfort around their rights.”
The three month public consultation period on the draft legalisation ends on 13 August 2010.