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Update on National Legal Profession Reform

On 19 October, 2011  the Commonwealth Attorney-General announced that the new National Legal Services Board and National Legal Services Commissioner will be established in New South Wales under the proposed national legal profession reforms. The Law Society welcomed the announcement and will give the new Board and Commissioner every assistance in the discharge of their functions.

History of the reforms

Since 2004, nearly all States and Territories have enacted their legal profession legislation on the basis of a national Model Bill. However, variations between the jurisdictions meant that a single national framework for legal profession regulation was not achieved. It was in this context that the Council of Australian Governments (COAG) decided to bring regulation of the legal profession onto its microeconomic and regulatory reform agenda.

Following COAG’s decision in February 2009, the National Legal Profession Reform Taskforce was appointed to make recommendations and propose draft legislation. In addition to achieving uniformity, the Taskforce agreed that the reform process provided an opportunity to enhance the clarity and accessibility of consumer protection. Consumer protection has since become one of the recurring themes of this process.

The Taskforce started its consultation process with the release of seven Discussion Papers in late 2009. The result was a proposed new framework for national regulation embodied in a draft National Law and National Rules. These were released for a three month public consultation exercise starting in May 2010.

In November 2010, the Taskforce released an interim report which addressed, at a high level, some of the key issues raised during the consultation, and made recommendations on funding. Just before Christmas 2010, amended draft legislation was released which reflected the Taskforce’s revised views.

Proposed regulatory structure

The proposed new structure for regulation includes the creation of two new bodies – a National Legal Services Board and a National Legal Services Commissioner (who would also be Chief Executive Officer of the Board). While most regulatory powers would reside in these national bodies, many of the powers of the Board, and most of the powers of the Commissioner would actually be exercised locally by State and Territory regulators.

Each jurisdiction would need to consider how regulatory functions would be delivered at the local level, and by which regulatory bodies. It is expected that the Law Society will continue to be responsible for the administration of practising certificates and that we will continue to be a co regulator for compliance and complaints-handling functions in NSW.  Amendments in the revised legislation, and the report issued alongside it, make it clear that the National Commissioner's compliance functions can be exercised by professional associations.  Where professional associations already have these functions, such as the Law Society of NSW, they will continue to do so. 

Approach by the Law Society of NSW to the reforms

The Law Society has consistently supported the objectives of national regulation and has worked with the Law Council of Australia and the NSW Government to make improvements to the proposals. Three main themes have been repeated in the Law Society’s submissions:

• The Law Society supports regulation of the legal profession which is effective and affordable from the perspectives of those who consume, provide and regulate legal services. In particular, the Law Society agrees that there should be a national framework for regulation, with common standards applied consistently by State and Territory regulatory bodies operating locally, and a co-regulatory role for professional associations.
• However, regulation must respond proportionately to identified regulatory need and must impose requirements with which it is practicable to comply. Ineffective or unjustifiably burdensome regulation reduces productivity and increases the cost of regulation and the price of legal services.
• Finally, the cost of the new system should not exceed current funding levels and proposals must take into account the likely growth of the profession in future years.

Current status

A key step in constructing the national framework would be for the proposed legislation to be enacted by the Parliament of a host jurisdiction. It would then be adopted in identical terms in each of the other States and Territories.

At its meeting on 13 February, COAG “agreed in principle to settle reforms to legal profession regulation by May 2011 (with the exception of Western Australia and South Australia)”. By the end of May 2011, COAG had received a revised legal profession reform package but it was not made publicly available.  Following cancellation of its 15 July meeting, COAG was expected to finalise the reforms at its meeting on 19 August.  This did not eventuate and it was reported that Tasmania and the Australian Capital Territory also had reservations about the scheme. 

On 9 September 2011, the Commonwealth Attorney-General released the revised draft National Law following discussions between the Attorneys-General of the Commonwealth, New South Wales, Victoria, Queensland and the Northern Territory.  It appears as if the project is progressing notwithstanding the decision of the other States and the ACT not to commit. 

On 19 October, the Commonwealth Attorney-General announced that the new National Legal Services Board and National Legal Services Commissioner will be established in New South Wales. The Law Society welcomed the announcement and will give the new Board and Commissioner every assistance in the discharge of their functions. The Attorney-General also announced that Victoria will introduce the legislation to implement the reforms that will be replicated across participating jurisdictions. 
 

Latest media releases:

19/10/11 Law Society Media Release: NSW welcomes National Legal Profession Reform announcement

19/10/11 NSW Attorney General Media Release: NSW to be home for National Legal Board

19/10/11 Commonwealth Attorney-General Media Release: Host state for National Legal Profession Reform announced

For further information about the reforms please click here to access:

• National Legal Profession Reform Legislation - September 2011 (draft)
• National Legal Profession Reform - Report on key amendments made to the Legal Profession National Law since December 2010
• Attorney-General's Media Release 'National Legal Profession one step closer' - 9 September 2011