Legal Profession and Public Notaries Amendment Bill 2012 Introduction Print EXPLANATORY MEMORANDUM General The Bill makes a number of amendments to the Legal Profession Act 2004 that are intended to commence prior to the expected repeal of the Act and its replacement with the nationally uniform Legal Profession National Law developed under the auspices of the Council of Australian Governments. The key amendment will enable corporate legal practitioners (in-house counsel) to engage in legal practice on a pro bono basis outside of a community legal centre, subject to a requirement to be covered by appropriate professional indemnity insurance on terms and conditions approved by the Legal Services Board. The Bill also amends the Public Notaries Act 2001 to clarify that an applicant for appointment as a public notary in Victoria must satisfy the Board of Examiners that he or she is a fit and proper person for appointment. Clause Notes PART 1—PRELIMINARY Clause 1 sets out the main purposes of the Bill. Clause 2 provides for the commencement of the Bill. The Bill comes into operation on a day or days to be proclaimed. If the Bill does not come into operation prior to 1 February 2013, it comes into operation on that day. 571205 1 BILL LA INTRODUCTION 29/2/2012 PART 2—AMENDMENTS TO THE LEGAL PROFESSION ACT 2004 Clause 3 substitutes a new definition of corporate legal practitioner in section 1.2.1 of the Legal Profession Act 2004. The substituted definition restates that a corporate legal practitioner means an Australian legal practitioner who engages in legal practice as an employee of a person who, or body that, is not an Australian legal practitioner, or an Australian-registered foreign lawyer, or a law practice. The element of the existing definition that provides that a corporate legal practitioner may only provide legal services to, and for the purposes of, his or her employer, will be moved to section 2.4.3 by clause 4 so that this restriction is located with the provisions that qualify it in relation to volunteering at community legal centres and engaging in other legal practice on a pro bono basis. Clause 4 inserts new subsections (5A) and (5B) into section 2.4.3 of the Legal Profession Act 2004. New subsection (5A) provides that a local legal practitioner whose practising certificate is subject to the condition that they are authorised to engage in legal practice as a corporate legal practitioner must provide legal services only to, and for the purposes of, his or her employer. This restriction is presently included in the definition of corporate legal practitioner. The restriction imposed by new subsection (5A) is qualified by new subsection (5B), which provides that a local legal practitioner whose practising certificate is subject to the condition that they are authorised to engage in legal practice as a corporate legal practitioner may also engage in legal practice as a volunteer at a community legal centre, as is provided for under existing section 2.4.3(6), and otherwise on a pro bono basis. The amendments made by this clause relate exclusively to local legal practitioners whose practising certificates are subject to the condition that they are authorised to engage in legal practice as a corporate legal practitioner. The practising entitlements of local legal practitioners that hold practising certificates subject to the other conditions set out in section 2.4.3(3) are unaffected. 2 Clause 5 inserts a new section 3.5.4A into the Legal Profession Act 2004 to require that corporate legal practitioners engaging in legal practice on a pro bono basis in Victoria are covered by professional indemnity insurance on terms and conditions approved by the Legal Services Board. This insurance must cover the civil liability of the corporate legal practitioner and any related administration of trusts. Clause 6 inserts a new paragraph (ba) into section 3.5.6(2) of the Legal Profession Act 2004, requiring the Legal Practitioners' Liability Committee to consider (amongst other existing considerations) the revenues of law practices when determining premiums and excesses in relation to contracts of professional indemnity insurance. The list of matters set out in section 3.5.6 that the Legal Practitioners' Liability Committee must consider when determining premiums and excesses is not exhaustive of the matters that the Liability Committee may consider. However, the inclusion of this additional ground clarifies that the Legal Practitioners' Liability Committee is authorised to consider the revenues of law practices when determining premiums and excesses, in accordance with prevailing industry practice. The clause also substitutes the existing section 3.5.6(2)(e) of the Legal Profession Act 2004, which provides that the Legal Practitioners' Liability Committee, when determining premiums and excesses in relation to contracts of professional indemnity insurance, must consider the cost and difficulty of differentiating between different classes of law practices. The new section 3.5.6(2)(e) will align with the wording of section 3.5.6(2)(a), and will oblige the Legal Practitioners' Liability Committee to consider the cost and difficulty of differentiating between the different types of legal practices of law practices, and the cost and difficulty of differentiating between the different types of matters handled by law practices. Clause 7 inserts a new subsection (3) into section 3.5.7 of the Legal Profession Act 2004 to authorise the Legal Services Board to exempt corporate legal practitioners (or a class of corporate legal practitioners) from the requirement, under new section 3.5.4A, as inserted by clause 5, to be covered by professional indemnity insurance when engaging in legal practice on a pro bono basis. Such a power already exists in respect of law practices, 3 community legal centres, and Australian-registered foreign lawyers, which are the types of entity presently required to obtain and maintain professional indemnity insurance when engaging in legal practice. Clause 8 substitutes a new paragraph (f) of section 4.2.10(1) of the Legal Profession Act 2004 to authorise the Legal Services Commissioner to summarily dismiss a disciplinary complaint in circumstances where the Commissioner, having considered the complaint, forms the view that it is not in the public interest to investigate the complaint because the subject of the complaint is an Australian legal practitioner whose name has been removed from the local roll. Removal from the local roll is the ultimate disciplinary sanction that may be applied to a practitioner, and the Commissioner may therefore consider that further action in respect of the same practitioner is unwarranted given the public resources that must be expended to pursue such action. The existing ground of summary dismissal, where the Commissioner, having considered the complaint, forms the view that the complaint requires no further investigation, is retained. Clause 9 amends section 4.4.12(1) of the Legal Profession Act 2004 to clarify that the obligation of the Legal Services Commissioner to conduct an investigation expeditiously, is subject to the new section 4.4.12A, which authorises the Legal Services Commissioner to suspend an investigation where proceedings to have the practitioner removed from the local roll have commenced. Clause 10 inserts new sections 4.4.12A, 4.4.12B and 4.4.12C into the Legal Profession Act 2004. New section 4.4.12A authorises the Legal Services Commissioner to suspend an investigation into a complaint in circumstances where the Commissioner considers it is in the public interest to do so, because either an application has been made to the Supreme Court for an order that the name of the practitioner complained of be removed from the local roll, or an application has been made to VCAT for an order recommending to the Supreme Court that the name of the practitioner complained of be removed from the local roll. 4 The Legal Services Commissioner may resume a suspended investigation at any time, and must resume a suspended investigation if the application to the Supreme Court or VCAT is unsuccessful. New section 4.4.12B empowers the Legal Services Commissioner to take no further action in relation to an investigation if he or she forms the view that it is in the public interest to do so because the practitioner's name has been removed from the local roll. New section 4.4.12C requires the Legal Services Commissioner to notify the complainant and the practitioner that is the subject of the complaint of a decision to suspend, resume or take no further action in relation to an investigation. Existing section 4.2.10(2) of the Legal Profession Act 2004 would require the Commissioner to notify a complainant if their complaint is summarily dismissed under the new ground inserted by clause 8. Clause 11 substitutes paragraph (g) of section 6.2.19(2) of the Legal Profession Act 2004, to permit the Legal Services Board to delegate specific functions under sections 3.5.3, 3.5.4, 3.5.4A(1) and 3.5.7 of the Act. Section 6.2.19(2) sets out functions that cannot be delegated by the Board under the general delegation power in section 6.2.19(1). Paragraph (g) provides that setting professional indemnity insurance requirements under Part 3.5 of the Legal Profession Act 2004 is a non-delegable function, other than in respect of the following— paragraph (g)(i) provides that the Board may delegate its powers under sections 3.5.3, 3.5.4(1), 3.5.4(2), and 3.5.4A(1) (as inserted by clause 5), to approve the terms and conditions of professional indemnity insurance obtained, maintained, or covering Australian-registered foreign lawyers, community legal centres and corporate legal practitioners engaging in legal practice on a pro bono basis; paragraph (g)(ii) provides that the Board may delegate its function, under section 3.5.7 of the Legal Profession Act 2004, of exempting individual law practices from the requirement to obtain professional indemnity insurance from, or maintain professional indemnity 5 insurance with, the Legal Practitioners' Liability Committee. Other functions in section 3.5.7, relating to, for example, exemptions from the general requirement to obtain or maintain professional indemnity insurance (rather than from the specific requirement to obtain or maintain insurance with the Legal Practitioners' Liability Committee) and issuing exemptions to classes of law practice or community legal centre, are to remain non-delegable. Clause 12 removes the legislative obligation on the Legal Services Board to report on whether it performed all of its legislative functions in the reporting year, on the basis that this reporting obligation is onerous and unnecessary. Clause 13 adds judicial education as a purpose for which the Legal Services Board may grant money from the Distribution Account of the Public Purpose Fund, with the approval of the Attorney-General. Clause 14 inserts transitional provisions to provide that the sections of the Legal Profession Act 2004 amended by clauses 8, 9 and 10 of the Bill apply to a disciplinary complaint or an investigation made or commenced before, on, or after the day on which those clauses come into operation. Clause 15 makes a number of statute law revisions to correct minor technical errors or to repeal unnecessary provisions in the Legal Profession Act 2004. Section 3.4.44B is amended to omit the superfluous word "Victorian" before "Costs Court". Sections 5.3.1(3), 5.4.1(3), 5.5.1(5) and 7.2.6(a) are amended to substitute references to "employee of the Board" with references to "employee referred to in section 6.4.1", reflecting that employees appointed for the purposes of the Board are employed by the Legal Services Commissioner under section 6.4.1. Corresponding amendments are made to notes at the foot of each of sections 5.3.1(4)(e), 5.4.1(4)(e) and 5.5.1(6)(d). Section 6.2.19(2)(h) and Part 9 of Schedule 2 are repealed, as they are redundant following the earlier repeal of Part 7.1, to which they relate. 6 Section 6.6.11(4)(c) is amended to correct the use of an incorrect term: "incorporated legal practice" is substituted for "incorporated practitioner". Section 6.7.24(2)(d) is amended to correct an incorrect cross-reference. PART 3—AMENDMENTS TO THE PUBLIC NOTARIES ACT 2001 Clause 16 inserts a new statutory ground of eligibility for appointment as a public notary into section 4 of the Public Notaries Act 2001, providing that in order to be eligible for appointment as a public notary a person must satisfy the Board of Examiners that they are a fit and proper person for appointment. Clause 17 amends section 5 of the Public Notaries Act 2001 to indicate the types of matters the Board of Examiners must have regard to when assessing the fitness and propriety of an applicant for appointment— whether the applicant has ever been suspended from legal practice; whether the applicant has been found guilty of unsatisfactory professional conduct or professional misconduct, as defined by the Legal Profession Act 2004, or under a corresponding law; whether the applicant is subject to any outstanding disciplinary complaints within the meaning of the Legal Profession Act 2004 or a corresponding law. Clause 18 inserts a transitional provision providing that the amendments made by clauses 16 and 17 apply only in respect of a person who applies for a certificate of eligibility after the commencement of those clauses. PART 4—REPEAL OF AMENDING ACT Clause 19 provides for the automatic repeal of the Bill on 1 February 2014. The repeal of the Bill does not affect in any way the operation of the amendments made by the Bill (see section 15(1) of the Interpretation of Legislation Act 1984). 7