Queensland Law Society
Annual Report 2009
Serving our members
© Queensland Law Society 2009
Queensland Law Society
Law Society House
179 Ann Street
Brisbane QLD 4000
telephone: 07 3842 5888
facsimile: 07 3842 5999
email: info@qls.com.au
website:
www.qls.com.au
Queensland Law Society
Notice of Annual General Meeting
Thursday, 19 November 2009
Law Society House, 179 Ann Street, Brisbane
Contents
From the President
From the Chief Executive Officer
The Executive Team
From the Immediate Past President
QLS Council
Audit Committee
QLS Profile
Statistics of the Legal Profession in Queensland
Member Services – An Overview of Key Activities and Outcomes
QLS Regional Snapshot
Symposium: Brisbane. Gold Coast. North Queensland.
Strategic Plan and Organisational Alignment
Department Reports
Advocacy and Accountability
Office of General Counsel
Finance
Member Central
People and Organisational Performance
Information Systems
Secretariat
Sections and Committees
QLS Business Supporters
QLS Member Benefit Providers
Senior Counsellors
Financial Information
Queensland Law Society Incorporated
Income Statement
Balance Sheet
Statement of Changes in Equity
Cash Flow Statement
Notes to and forming part of the Financial Statements
Declaration of Queensland Law Society Incorporated
Independent Auditors Report
Queensland Law Society Incorporated Legal Practitioners’ Fidelity Guarantee Fund
Income Statement
Balance Sheet
Statement of Changes in Equity
Cash Flow Statement
Notes to and forming part of the Financial Statements
Declaration of Legal Practitioners’ Fidelity Guarantee Fund
Independent Auditors Report
Queensland Law Society Incorporated Law Claims Levy Fund
Income Statement
Balance Sheet
Statement of Changes to Equity
Cash Flow Statement
Notes to and forming part of the Financial Statements
Declaration of Law Claims Levy Fund
Independent Auditors Report
From the President
Ian Berry
The Hon Cameron Dick MP
Attorney-General and Minister for Industrial Relations
GPO Box 149
BRISBANE QLD 4001
Dear Attorney
It is my privilege to submit the eighty-first Annual Report of Queensland Law Society covering the 2008/09
financial year.
At the outset of my term as President I saw member involvement as my prime focus and committed to visiting as
many members as I could. I have travelled the State on numerous occasions to fulfil my commitment and have
visited practitioners in Cairns, Townsville, Rockhampton, Bundaberg, Airlie Beach, Emerald, and Kingaroy.
On my travels I found a keen and responsive profession operating businesses in challenging times and being
subject to ever increasing regulatory burdens.
The tide of regulation and reform appears to be unrelenting. Now that we have digested what were to be permanent
arrangements under the Legal Profession Act 2007, on 30 April 2009, the Prime Minister and the Federal AttorneyGeneral announced that COAG had agreed on a plan to achieve national regulation of the legal profession.
A specialist National Regulation Task Force has been appointed to make recommendations and draft legislation for
consideration by the end of April 2010, and a Consultative Group, chaired by the Hon Michael Lavarch, has been
appointed. The QLS CEO has been appointed to the Consultative Group, which has the role of identifying issues,
providing advice and developing recommendations.
QLS staff are also actively involved in the national committee which is developing the draft national professional
standards. This is an initiative which I feel is greatly important, not only for the desired outcome of a truly national
profession but also ensuring that it is the legal profession and the courts which set the standard for professional
conduct.
During the year we have also seen great success in our advocacy which demonstrated by practical victories that the
voice of the Queensland legal profession is being heard. Most notably we were successful through our local
lobbying and by instigating matters at the Law Council of Australia in receiving an exemption from the Wholesale
Deposit Guarantee Charge for solicitors trust accounts with balances over $1 million. I understand that this
provides deposit guarantee coverage for firms which would have otherwise cost $1.5 million a year to the
Queensland profession alone.
QLS has seen successes lobbying in the formation of the Queensland Civil and Administrative Tribunal which will
impact on the practices of so many of us. I must also celebrate the Bligh Government’s announcement to bring
welcome reform the Property Agents and Motor Dealers Act 2000 – a matter on which the QLS has consistently
lobbied for many years and is a matter of concern to a majority of firms. It is pleasing to see the Society’s call for
reform being met.
I must note my gratitude to those friends of the profession without whose support we would be unable to be a
vibrant Society: the judiciary led admirably by the Chief Justice; our learned friends of the Bar, our colleagues at
the Law Council of Australia; Ministers and officers of the Government and most importantly the contribution of
members themselves. A Society of members is, after all, what the members make it.
For me, this report highlights the very great contribution of members to their Society and the irreplaceable
assistance of the Society’s hard-working staff, led by CEO Noela L’Estrange following on from Mr Peter Carne. If
maintaining QLS as a leading legal professional association were a race, it would be a relay and while the distance
may be long I would be proud to be leading a stage for the team.
I commend the Annual Report for 2008/09 to you.
Yours sincerely
Ian Berry
President 2009
From the Chief Executive Officer – CEO’s Review 2008/09
Noela L’Estrange
This has been a year of substantial change for QLS. QLS now bases its strategic planning on a balanced scorecard
approach, with the four areas of focus for planning and actions being: Financial, Membership, Processes and
Systems and People and Resources. These areas underpin all key decisions about investment, and are also used as
part of the reporting process on projects undertaken.
Our agreed core values continue:
•
integrity
•
innovation
•
service
•
courage and fearlessness
•
–
independence with sound judgement
–
leadership
passion
QLS’s longer term aspirational goal is to be:
•
a strong, viable, independent, representative professional membership organisation
•
acknowledged publicly as a major contributor to discussions on legal matters
•
a vital organisation that engenders membership participation.
Importantly, the planning process led by Peter Carne also identified that QLS needed to undertake an organisational
realignment, to support the linking of our structure, strategy and delivery. There is now an Executive Team of five,
including the new position of Director of Information Systems working together to implement the agreed alignment
and strategies.
Peter Carne resigned as CEO on 6 February 2009 to take up the position of the Public Trustee of Queensland. Peter
Lyons, Director Member Central took up the role of Acting CEO from 7 February 2009 whilst Council undertook
the recruitment process.
I was appointed by Council as the CEO of the QLS, and commenced in the position on 11 May 2009. I have begun
to re-energise the organisational realignment to ensure that we complete the process, and that we have in place
performance plans which align to our Strategic Plan and strategies. This will give us a firm basis for moving
forward, and planning for the coming year.
We also undertook additional member surveys, which have confirmed that many of our activities are highly valued
by our members. After analysing the results, we have built into our strategies for the coming year changes based on
strengthening our delivery of knowledge and skills development, the standing of members and providing leadership
for the profession.
The executive reports provide details of our successful work over the past year. It is pleasing, in a year of worldwide economic downturn, for QLS to report on a small profitable result.
Lexon Insurance Pte Ltd continues to provide professional indemnity insurance to solicitors in practice in
Queensland. Lexon is wholly owned by QLS and I am one of two QLS-appointed directors on the Board. QLS
provides accounting and information technology services to Lexon.
QLS financially supports QPILCH, the Queensland Public Interest Clearing House, which enables solicitors to
register for pro-bono work. We also include QPILCH information in the QLS Update, and in Proctor.
QLS continues to support LAWASIA, through provision of accommodation and through a grant to support its
operations.
In December 2008, QLS Council agreed to undertake a refurbishment of Law Society House, which is the
Society’s major asset, and which has not had a refurbishment since it was built 20 years ago. This will be a major
project, but will result in improved member services, including a new member lounge, meeting, mediation and
board rooms and auditoria. It will also provide QLS staff with improved working conditions and amenity, including
open area working. We will also take the opportunity, within the approved budget, to install ‘greener’ lighting
options.
I would like to thank President Ian Berry, Immediate Past President Megan Mahon and Council members for their
support and guidance.
I also thank all QLS staff for their ongoing enthusiasm and willing participation in a changing environment.
Noela L’Estrange
Chief Executive Officer
The Executive Team
Noela L’Estrange BA (Hons) LLB MAdmin FAICD FAIM
Chief Executive Officer
Noela commenced as the Chief Executive Officer on 11 May 2009.
Noela has extensive experience in the legal profession, and has been a practitioner in both private and public
practice, an academic, HR lawyer, strategic Consultant and immediately prior to this appointment, the Director of
Legal Practice Support for the Australian Government Solicitor in Canberra.
She has been a director of public and private companies, and has been a national Director of the Australian
Corporate Lawyers’ Association and a Councillor for the ACT for the Australian Institute of Company Directors.
She is a Director of Lexon Insurance Pte Ltd and The College of Law Queensland Pty Ltd. She is a Fellow of both
the Australian Institute of Company Directors and the Australian Institute of Management.
Malcolm Hinton LLB (Hons) LLM and Grad Cert App Mgt
General Counsel and Director, Advocacy and Accountability
Malcolm Hinton completed his Bachelor of Laws and Masters of Laws at QUT and has been admitted to Supreme
Court of Queensland, New South Wales and the Australian Capital Territory.
Malcolm has worked as a solicitor in private practice, as a government legal officer and as a corporate lawyer and
has served as a police officer in Queensland and East Timor.
Prior to his current appointments, Malcolm was the Manager of Legal Investigations and Prosecutions and Director
of Professional Standards for the Society
Patricia Linn DipBusSHRM DipBusPMER
Director, People and Organisational Performance
Patricia Linn has over 20 years’ experience in human resources both in consulting practice and in management
roles in both New Zealand and Australia. Patricia has special expertise in strategic human resource management,
change management and organisational development having worked across a broad spectrum of organisations both
in the public and private sector. Patricia has introduced a blend of strategic and best practice to the Society and has
an interest in providing members with support in growing strong businesses based on sound human resource
principles.
Peter Lyons LLB LLM MA (Justice Studies)
Director, Member Central
Peter Michael Lyons has over 30 years’ experience within the legal services industry, both within the private and
public sector. He began in his current position with the Society in 2008 and has previously been Deputy General
Counsel and Manager, Investigations. He has held positions with the Crime and Misconduct Commission and was a
practitioner for ten years in private practice.
In his current position as Director, Member Central, he has developed a keen interest in the activities and values of
professional associations particularly in the areas of governance, strategic planning and membership motivation and
engagement. These interests have led to him undertaking a MBA in Philanthropic and not for profit studies at QUT.
Peter and his membership team are committed to providing relevant and cost-effective services and products to
members.
Scott Rowan BCom CA
Director, Information Systems
Scott Rowan commenced as Director, Information Systems on 17 December 2008.
Scott completed a Bachelor of Commerce degree at the University of Queensland with a focus on Information
Systems. Scott is also a Chartered Accountant. Prior to joining QLS, Scott had over 11 years experience working in
private practice providing information systems consulting services to clients. Scott brings a strong project
management skill set to QLS and is a certified Practitioner in the Prince2 project management methodology.
Scott joined QLS to drive an alignment between the Society’s business needs and information systems in order to
achieve the Society’s strategic goals.
Anthony Walduck CA
Group Chief Financial Officer
Anthony Walduck completed a Bachelor of Commerce at the University of Queensland and has been a member of
the Institute of Chartered Accountants since 1994. Prior to joining the Society, he spent seven years working for a
chartered accounting firm and six years in commerce, holding senior finance roles for various insurers. Anthony
has been at the Society since November 2005.
Secretary to the Society
Bernie O’Donnell LLB
Secretary to the Society
Bernie O’Donnell is a graduate of Victoria University, Wellington, New Zealand. He was admitted as a Barrister
and Solicitor of the High Court of New Zealand in 1973 and the Supreme Court of Victoria in 1984. He was
admitted as a Solicitor of the Supreme Court of Queensland in 1985. He practised as an employed solicitor, a sole
practitioner, a partner in private practice and as the Officer-in-Charge of the Legal Aid Office at Maroochydore
prior to joining the Society in 1989 as a solicitor in the Law Claims department. He became Assistant
Secretary/Insurance Manager in 1996, Deputy Secretary of the Society in 1998 and Secretary in 2002.
From the Immediate Past President
Megan Mahon
I am proud to say that the Society’s advocacy role has increased significantly and as the voice of the profession, not
only on behalf of our members, but the greater community of Queensland as well. Our advocacy included a
plethora of policy submissions made to the State and Federal Governments, as well as the frequent and considered
comment on issues of interest and concern on almost every conceivable subject from national electronic
conveyancing to the national profession project, from transit officers to terrorism laws.
The extensive advocacy work undertaken on behalf of our profession and the Queensland community could not
have been achieved without our own members who volunteer their time and expertise and make themselves
available, often at short notice, for providing comment, drafting reports and contributing to the submissions that we
make. Much, of course, is unheralded and unreported, but every member should feel proud that acknowledged
experts in every area of practice have stepped forward to do this work.
During my term, there were both scheduled and occasional meetings with the then Attorney-General, Kerry Shine
MP, on a whole raft of issues, and at all times he was unfailingly courteous and gave our submissions careful
consideration. Of course, not every submission that we made to government was accepted, but at least we know
that our informed voice was heard and the Attorney and other Ministers with whom we met, including the
Treasurer and the Police and Corrective Services Minister, listened to us and respected our expertise and our
candour.
At the culmination of my term, I was satisfied that QLS was regarded by many to be a professional organisation
that is prepared to reach out to the community and to make considered and informed comment.
The end of 2008 saw the delivery of the highly anticipated Clarke Report, which dealt with the handling of the
appalling treatment handed out to former Gold Coast medico Dr Mohamed Haneef. We will all eagerly await the
outcome of that Report and whether the recommendations are implemented fairly and without any undue delay.
While notably public, our support of Mr Peter Russo, during his unwavering defence of his client Dr Haneef,
wasn’t anything that should have been seen as unusual – I have always taken the view that the QLS is here for its
members and that every single member is entitled to our protection and defence unless, of course, they fall foul of
the law and betray their oath and duties as officers of the Court.
Our membership has continued to climb and now totals more than 7,500, and women practitioners, by the end of
2008 were 41.1 per cent of our membership. Full membership increased by 14 per cent, associate membership by
41 per cent and student membership by an astounding 52 per cent – as we signed up our 1,000th student member.
The number and percentage of women members will no doubt continue to climb, with female graduates
outnumbering male graduates pretty much the norm and I can only hope that the gender balance will soon be
reflected at all levels of our profession.
Our role, functions and responsibilities could not begin to be discharged adequately without the unstinting cooperation and accessibility of the judiciary led by the splendid example of the Chief Justice, the Honourable Paul
de Jersey AC, our friends and colleagues at the Bar Association of Queensland, our professional colleagues
interstate, the Law Council of Australia and LAWASIA and various government agencies.
It is vital that QLS continues to be courageous in its responsibilities and duties as a member organisation and
continue to stand up for what is fair and right.
QLS Council
The Society is governed, under the Legal Profession Act 2007, by an elected Council of not less than seven and not
more than twelve members namely
•
the President, Deputy-President and Vice-President
•
members of the Society, elected or appointed under a society rule, and
•
an Australian legal practitioner appointed by the Minister.
Council is responsible for the development and continual review of the Society’s strategic plan. This incorporates
setting the organisational goals, developing the strategies to achieve those goals and setting performance indicators
to measure the Society’s performance against those goals. It is also responsible for setting the annual budget and
the financial management of the Society’s affairs.
In addition to the members listed above, the Immediate Past President is a council member for the year following
that person’s presidency.
Elections for Council are held in October every second year, with full Society members eligible to vote. The
President is elected for a term of one year commencing on 1 January, with the Deputy-President succeeding to the
office of the President at the beginning of the second term.
Council meets regularly throughout the year and provides the policy directions for the Society. A network of
Sections/Committees in a wide range of areas assists Council in the performance of its duties.
QLS Council 2008/09 – Meetings attended
Ian Berry (President)
7
Peter Eardley (Vice-President)
7
Megan Mahon (President)
7
Don Armit
5
Annette Bradfield
6
Jeremy Chenoweth (Attorney-General’s appointed member)
4
Bruce Doyle
7
Raoul Giudes
6
David Meara
4
Tony Pattinson
6
Ted Skuse
3
Brett Smith
3
Executive Committee
The Executive Committee has traditionally included the President, Deputy-President, Vice-President and the
Immediate Past President. However, the Council resolved on 5 February 2009 to elect two (2) additional Council
Members to the Executive Committee.
The Committee usually meets every second month or when necessary. The role of the Executive Committee is to
assist Council with administration of the Society and implementation of Council’s directions.
The Executive Committee members for 2007/08 as at 1 July 2008 were:
Megan Mahon (President)
Ian Berry (Deputy-President)
Peter Eardley (Vice-President)
The Executive Committee members for 2009 as at 5 February 2009 were:
Ian Berry (President)
Peter Eardley (Vice-President)
Megan Mahon (Ex-Officio Member)
Bruce Doyle
Raoul Giudes
Audit Committee
The Audit and Investment Committee is responsible for overseeing the financial reporting process to ensure the
balance, transparency and integrity of published financial information and investment of surplus funds in
accordance with the approved Investment Policy Statement. This committee met three (4) times during the year.
The members of the Audit Committee at year end were:
Bill East (Chairman)
Ian Berry (President)
Peter Eardley (Vice President)
Megan Mahon (Immediate Past President)
Annette Bradfield (Counsellor)
Noela L’Estrange (CEO)
QLS Profile
Queensland Law Society is the professional association for more than 7000 solicitors in Queensland. It is
incorporated under an Act of Parliament – the Legal Profession Act 2007 – and is governed by a Council, which is
elected by the membership.
While the Society is defined as a statutory authority in the Financial Administration and Audit Act, it remains an
independent professional body, subject to the governance of its elected Council. The Attorney-General is
represented by a nominee who is a Queensland solicitor in private practice.
The Society is funded from a number of sources, including annual fees paid by its members. Any Australian legal
practitioner or Australian-registered foreign lawyer is eligible for full membership of the Society. Associate
membership is also available.
The Society has specific statutory responsibilities in relation to the regulation and discipline of solicitors in
Queensland.
The functions and responsibilities of the Society include:
•
issuing of practising certificates and maintaining records relating to solicitors
•
providing continuing legal education for solicitors
•
providing services and support to members
•
researching and making submissions to government on matters of legal importance
•
investigating complaints of unsatisfactory professional conduct against solicitors referred to it by the Legal
Services Commission
•
administering the Fidelity Guarantee Fund
•
trust account controls and receivership of trust property
•
providing a public referral service for solicitors and mediators.
Our vision
To provide leadership of the Queensland legal profession through:
•
promoting, supporting and protecting members’ interests
•
advocating for members’ rights
•
assisting members to conduct their practice profitably and efficiently
•
upholding the rule of law for the protection of the community
•
facilitating standards of professional and ethical conduct.
QLS also supports the public through advocating the rule of law, promoting and supporting the provision of pro
bono services, making submissions to government recommending improvements to the law, and improving public
access to the law.
The Society conducts ongoing programs to inform the community about the law and the legal profession including
the Schools and Community Education Service and promotion of pro bono (free) work undertaken by the many
solicitors who provide legal advice to charities, other organisations and individuals.
Our stakeholders include:
•
our members
•
the legal profession
•
the Queensland Government
•
the judiciary
•
the people of Queensland
•
government agencies
•
advocates for law reform
•
legal educators
•
law students.
Statistics of the Legal Profession in Queensland
as at 30 June 2009
Statistics collated by the Membership and Records sections illustrate the composition of QLS members based on
age, gender, geographical distribution, field of practice and membership status. The number of Practicing
Certificates issued and number of Admissions to Practice in 2008/09 are also illustrated.
Age
Age group
<24
211
25-29
1753
30-34
1394
35-39
1373
40-44
1001
45-49
958
50-54
927
55-59
658
60-64
452
65-69
194
>70
132
Membership
Type of membership
Members
7781
Associate members
538
Student Members
1602
Complimentary members
56
Honorary members
23
Total
10,000
Practising certificates issued
Category of practising certificate
Unrestricted Principal
2496
Restricted Principal
4
Limited Principal
22
Conditional
2090
Employee
3598
Volunteer
14
Restricted Volunteer
28
Total
8252
Admissions to practise in Queensland
year
2006
784
2007
896
2008
874
2009
903
Geographical distribution of solicitors in Queensland
region
Bundaberg
Central Queensland
Caboolture
City
Downs/South West
Fraser Coast
55
108
51
3949
211
60
Far North
321
Gladstone
30
Gold Coast
846
Gympie
32
Ipswich district
112
Logan/Beenleigh
134
Mackay
120
North Brisbane suburbs
345
North Queensland
39
North West Queensland
32
Redcliffe/Petrie
96
South Burnett
31
Sunshine Coast
323
South Brisbane suburbs
618
Townsville
264
Status/field of solicitors in Queensland
Status/field
Academic
61
Barrister
33
Cost assessor
9
Community legal
175
Consultant
259
Corporate
797
Employed solicitor
ILP solicitor + director
Government
3615
12
364
Government agency/commission
44
ILP legal practitioner director
84
ILP legal practitioner director (main)
169
ILP non director partner
18
Interstate solicitor
58
Judicial
18
Law administrator
78
Legal aid
164
Local government
56
Locum tenens
26
Managing partner
MDP partner (main)
289
2
MDP partner
38
Not practising
703
Partner
965
Retired
69
Sole practitioner
Student
988
35
University lecturer
6
Volunteer solicitor
43
Member Services – An Overview of Key Activities and Outcomes
In late 2008, QLS commissioned targeted, member market research, to obtain some more specific feedback on our
members’ understanding of our current offerings, to support us to identify how we might improve our existing
services and to provide information about possible new ones.
We held a planning day on which the Council, management and staff discussed expectations and issues of
importance, and set up a teamwork approach. Based on this information, the research focused on:
•
what stakeholders know and appreciate about QLS and its services
•
what feedback can be obtained to aid service design/delivery (including packaging), communications,
pricing and positioning decisions
•
what are the key demographic, behavioural and attitudinal characteristics that can help QLS better
understand groups and their main needs.
The research was conducted by Di Marzio Research in early 2009, and I was gratified that 630 members
participated in the survey, through phone and personal interviews. We received the report in May 2009.
Generally, our results are very strong, particularly in the following areas:
QLS Market Research – Opinion of Vision Dimensions1
Statement
per cent agree
QLS promotes, supports and protects members’ interests
82
QLS advocates members’ rights
79
QLS upholds the rule of law for the protection of the
community
83
QLS is a member-oriented body
82
QLS facilitates standards of professional and ethical
conduct
93
QLS is the leader of the legal profession in Queensland and
is an organisation I like to belong to
almost 80
QLS understands the needs of our members
81
QLS will remain relevant to members
91
QLS keeps members up to date with needed information
83 (rate
positively)
1
Di Marzio Research Pty Ltd, Part 1: Market Test. Quantitative Market Research, Study No. 08/10/1311(b), May 2009
Additionally, through other research information, QLS rated in the top five associations on responsibility for ethical
matters.
However, there are five key areas on our report card that indicate we need to do more work. They are in the
following categories:
•
consistency of our member service
•
improved services required for particular segments of our membership
•
more demonstration of practice management and business development support
•
website redevelopment for content relevance, ease of use, design and functionality, and
•
more targeted communications.
Some of these issues may require new service developments, and certainly some process improvements, but many
of them are because members simply don’t know about all of our services, which supports us adopting a strategy of
improving and targeting our communications.
Participating members have provided a lot of very valuable information through this research which will serve as
our reference in prioritising the solutions to the issues raised, and informing the further defining of our Strategic
Plan into the coming years. This will include scoping the business requirement for an IT platform to support and
service member needs.
The key to us becoming a stronger member organisation is to ensure that we meet our members’ stated desire for
affiliation and information.
Our valued services
QLS continues to make substantial and important submissions on a range of issues. I acknowledge and thank the
members of Sections and Committees for their valuable contributions to these activities. Our CLE, Specialist
Accreditation and Professional Development services are some of the most highly regarded in Australia. Again,
many members contribute to both the content and delivery of many of these sessions, and rural and regional
members can attend many of them via our video-conferencing.
The QLS Vincents’ Symposium was a notable success again this year, with increased numbers, despite the global
economic situation.
More than 1200 members renewed their membership on line this year, a big increase on last year. We hope to
improve further the process, and encourage greater participation next year.
QLS Regional Snapshot
Members throughout Queensland participated actively in their legal communities and District Law Associations
(DLAs) during the year. Some highlights of the events, meetings and discussions that informed and shaped 2008/09
for regional practitioners are reported on below.
Central Queensland Law Association (CQLA)
In January 2009, Lance Rundle became President of the Central Queensland Law Association (CQLA), taking over
from the previous President Nici Schmitt.
The CQLA held its annual ten CPD-point conference at Capricorn Resort north of Yeppoon in November 2008,
with attendees including Chief Justice Paul de Jersey AC and Supreme Court Justice McMeekin plus over 90
solicitors and barristers. The event was a great success. The CQLA conference will be held again in 2009 from 1618 October at the Capricorn Resort.
A school debating competition was held in August 2008 and July 2009, with schools from within the Central
Queensland region invited to participate in debating legal topics in the Supreme Court before adjudicators who
included: Justice McMeekin of the Supreme Court, Magistrate Hennessy, Magistrate Baldwin and Richard
Pointing, Senior Prosecutor of the Office of the Director of Public Prosecutions.
The debates provided students with an opportunity to work with a local solicitor, get a feel for speaking in a court
room and meet members of the Judiciary. In 2008 Nici Schmitt visited high schools in Central Queensland to
discuss study and career options in law. Lance intends to follow her lead in 2009.
Gladstone
The Gladstone Law Association continued to be a productive and relevant force in its region, maintaining a focus
on local matters and supporting its members. The association met in alternate months and held a dinner in May
2008.
Some local matters of interest that received consideration during the year included:
•
Office of State Revenue reduction of staff
•
s24, Legal Practitioners Act
•
Fly-in fly-out magistrates
•
Titles office presentation
•
Pro-active support for a CLE seminar at Gladstone held on 19 February 2009
•
Matters to be raised at Convocation for District Law presidents
•
Loan irregularities – referred to QLS
•
Bossichix v Martinek
•
s365, PAMDA
•
Office of State Revenue in-house stamping matters
•
Volume of matters in the magistrates court
•
QLS school lectures for local high schools
•
Committee formed for a Gladstone seminar with respect to PAMDA
•
Blue card requirements if existing school groups were hosting work experience candidates.
In an effort to tailor the CLE Gladstone seminar held in February to meet members’ needs, the program was
carefully designed through extensive collaboration between the Association and QLS programmers. It was well
supported by members who have indicated a preference for having a local, annual CLE event in February each
year.
Townsville District Law Association (TDLA)
The TDLA has continued to increase its profile among local practitioners and third parties, and the committee is
continuing to establish itself as the liaison point between the Townsville legal profession and Queensland Law
Society (QLS), the courts, the James Cook University (JCU) Law School, community organisations and our
individual members.
The TDLA held numerous social functions for members and commenced the publication of a monthly newsletter
which receives input from a wide range of sources including the Courts, community groups, QLS, Practical Legal
Training providers, individual members and other government departments, and provides the TDLA with a simple
platform to disseminate information to members.
The TDLA has continued to assist members with their professional development requirements by coordinating a
CPD DVD library as well as lobbying for and coordinating CPD seminars.
The TDLA has further developed its relationship with the JCU Law School. Representatives of the TDLA and the
JCU Law School meet regularly to discuss issues of mutual interest. The TDLA was invited to provide input into
the development of the JCU Law Degree and JCU students attended a number of legal profession functions this
year.
Annual General Meeting
Gerard Meade stepped down as President, Joanne Meade stepped down as Vice-President and a vote of thanks was
extended to both for their tireless involvement with the TDLA. Local practitioner Patrick Sutton of Mackey Wales
Law retired after many years associated with the TDLA. A new committee was elected for the 2009/10 year, now
led by President Angela Lowe.
The new committee hopes to continue with the aims of the 2008/09 committee in representing and assisting
members of the local legal profession, bringing members of the profession closer together and continuing to
develop the relationship with the JCU Law School.
Other noteworthy events for regional members included the opening of a new Courthouse in Mareeba and a new
Legal Aid Office in Townsville. Additionally, The Law Council of Australia, in association with its constituent
bodies – including QLS – conducted a survey of lawyers in regional, rural and remote Australia – highlighting
many of the issues faced by these practitioners. It is anticipated that the detailed findings in the report will be used
to improve access to legal services for community members and the ability of practitioners to provide them.
Symposium: Brisbane. Gold Coast. North Queensland.
47th Annual Vincents’ Symposium
667 delegates, speakers and sponsor representatives attended the 47th Annual QLS Vincents’ Symposium at the
Brisbane Convention and Exhibition Centre on 27-28 March 2009. The comprehensive program of over 60 sessions
was developed in collaboration with the dedicated QLS Specialist Accreditation Committees. Delivered by
Queensland’s leading legal experts and an impressive array of interstate and international speakers, the theme of
‘Challenges’ underpinned diverse discussions on access to justice and human rights, navigating the current
economic climate and ‘Climbing Your Own Mt Everest’ in practice, delivered by keynote speaker Cheryl Bart.
Delegate feedback –
I believe the entire Symposium was both well organised and executed with the topics being relevant to daily
practise and well delivered by the speakers.
Douglas Stockley, Stockley Furlong
Overall it was well organised and had a good variety of interesting topics. A few times it was difficult to decide
which presentation I would attend.
Bruce Provan, Harrington Family Lawyers
Bringing Symposium to the regions
In 2008/09, the Queensland Law Society held two successful regional Symposium roadshows in Cairns (Palm
Cove, 17-18 October 2008) and the Gold Coast (22-23 May 2009), the two largest regional membership hubs. The
objective was to provide regional members with the opportunity to attend quality, cost-effective, local conferences
without incurring the time and expense associated with travelling to Brisbane to meet their professional
development requirements. Registration was offered at a subsidised rate, enabled by the support of the Queensland
Law Foundation and vital event sponsorship.
Delegate feedback –
Inaugural QLS Far North Queensland Symposium
Overall, a very successful conference with a diverse and relevant series of presentations.
I enjoyed the conference, the topics were interesting and as I am new to Cairns it was a great way to meet other
practitioners.
2nd Annual QLS Gold Coast Symposium
Venue, organisation, length of presentations, presenters – it was really excellent this year.
The social networking opportunities including the welcome drinks and dinner were great.
Strategic Plan and Organisational Alignment
The Society’s new strategic plan was adopted by the QLS Council on 29 May 2008, came into effect on 1 July, and
was officially launched to QLS staff on 30 July.
Our goal is:
•
a strong, viable, independent, representative professional membership organisation
•
acknowledged publicly as a major contributor to discussions on legal matters
•
a vital organisation that engenders membership participation
•
as it is the driver for all strategic plans, QLS needed to evolve its strategic planning process as it is critical
that QLS has a concise, commercial plan which incorporates and drives strategic goals in order to deliver on
its commitment to members
•
a key focus of implementing this plan is ensuring all Society staff take responsibility for the quality of
service delivery. This service ethic will be demonstrated through the day-to-day activities of each staff
member and how this contributes to the overall goals and vision of the Society
•
in order to achieve our core values, purpose and brand promise to our members, QLS adopted a balanced
scorecard model which focuses on developing strategies around:
Financial: What are the financial goals of the organisation and how do we meet stakeholder expectations?
Membership: What are the needs and expectations of members?
Processes and systems: What systems do we need to enable us to operate a sustainable business that is
meeting our strategic goals?
People and resources: What culture and environment do we need to enable QLS (our people) to achieve our
strategies? What resources do we need to deliver on our business model?
Following a lengthy process of strategic planning, QLS embarked on translating strategies to one-year targets and
then into actions for each quarter which were comprised of projects. Over the last year, QLS has been delivering on
strategically linked projects.
The QLS brand promise:
QLS will represent and meet its members’ needs.
Departmental Reports
As the practice of law has become more specialised, so too has the role of the Society in meeting the different
needs of its members.
It should not be forgotten that the members truly make up the QLS. The provision of improved benefits to members
is constantly being assessed and explored.
Advocacy and Accountability
Malcolm Hinton – Director
The Society’s focus has been on leading the profession and being recognised as the ‘voice of the profession’. It has
achieved this through advocating for, and representing, members’ interests and alerting members to developments
as they happen.
Advocacy – Sections and Committees
In partnership with the Sections and Committees and the Legal Practice Consultant, the Advocacy team has achieved the
following successes:
•
at the Society’s instigation and in concert with the Society, the LCA lead advocacy to receive an exemption
from the Wholesale Deposit Guarantee Charge for solicitors trust accounts with balances over $1 million
(potentially saving Queensland practitioners $1.5 million per annum)
•
adoption by the LCA of the Society’s Anti-Money Laundering/Counter Terrorism Advance Guidance as a
national guidance document
•
Suncorp reversing its regional property sale settlement policy and recommencing settling outside of Brisbane
•
the Registrar of Births, Deaths and Marriages implemented a dedicated email service for practitioners to
expedite their requests for certificates and special identification arrangements for solicitor applicants
•
an increase in interview room facilities and an ongoing review of the facilities at Arthur Gorrie Correctional
Centre
•
QCAT legislation was narrowed in relation to representation by unqualified advocates
•
a commitment from the Government to review the Property Agents and Motor Dealers Act to provide much
needed reform in this major area of practice
•
changes to the new Supreme and District Court plans to accommodate face-to-face lawyer client confidential
interviews
•
changes to telephone interception legislation to require involvement by the Public Interest Monitor
•
change to the Oaths Act and Uniform Civil Procedure Rules to permit affidavits to be taken in foreign
jurisdictions, and
•
adoption by the LCA of the Society’s position regarding the Model Spent Convictions Bill, which position
was recommended to the relevant Commonwealth Parliamentary Committee.
The 2008/09 year has seen a record number of submissions made to government and other entities and a significant
increase in the number of notices to members advising of developments, as indicated in the following tables.
Results overview
2008/09
2007/08
QLS Update notices, Newsflash and Proctor articles
produced
168
82
Policy submissions sent
134
113
Consultative events attended
84
66
Section/Committee meetings held
122
116
Requests for comment received
113
107
Submissions 1990/91 to 2008/09
Financial year
Number of submissions
1990/91
52
1991/92
97
1992/93
74
1993/94
95
1994/95
81
1995/96
85
1996/97
111
1997/98
94
1998/99
106
1999/00
116
2000/01
88
2001/02
41
2002/03
44
2003/04
25
2004/05
32
2005/06
39
2006/07
100
2007/08
111
2008/09
134
Ethics
The Society has also undertaken a concerted effort to raise awareness of ethical issues and to provide leadership
and support to our members in this vital area of practice. In pursuit of these objectives, the Society’s Ethics strategy
includes the provision of ethics education (with over 50 seminars delivered throughout the State), the proposed
development of an Ethics Centre to provide leadership in this area and active participation in the development of a
National Conduct Rule (as part of the National Legal Profession Project).
A new Ethics website is currently being developed. This service to members will be highly informative and
interactive and will include sections on the solicitors conduct rule, frequently asked questions, a blog and a host of
other resources.
Professional Standards
Professional Standards comprises Complaint Investigations and Trust Account Investigations (which includes
External Interventions and administration of the Fidelity Guarantee Fund (FGF) scheme). In the discharge of its
statutory functions, it is assisted by the Professional Conduct Committee (overseeing the investigative functions of
the area) and the Committee of Management (managing the FGF scheme).
During the reporting period, Professional Standards was responsible for investigating 473 complaints and finalised
310 investigations. The Legal Services Commissioner made decisions in respect of 245 recommendations made to
him by the Society. On all but three occasions (less than one and a half per cent), the Commissioner agreed with the
Society’s recommendation as to whether disciplinary action should be taken. In each of those three instances, the
Society recommended that disciplinary action be taken but the Commissioner decided to dismiss the complaints
because he considered it was not in the public interest to take disciplinary action.
The Trust Account Investigation team continues to provide assistance to members by providing guidance
concerning implementation of practices and procedures that represent best practice in relation to the keeping of the
trust accounting records. The team received approximately 2,400 calls from law practices and 900 calls from
external examiners and completed 117 audits during the year.
Legal Practice Consultant
The Legal Practice Consultant (LPC) continued to provide practice management advice and support to members
through a variety of activities. These included seminar presentations throughout the State and the development of
fact sheets and guidance materials on ‘Practice Structures’, ‘Supervision’, ‘Client Service’, ‘Costs, Billing &
Profitability’ and appropriate management systems for ILPs and MDPs. These materials are available to members
on the Society’s website.
The LPC also revised the Society’s application to the Professional Standards Council (PSC) for approval of a
scheme to cap the liabilities of members, which was submitted in December 2008. The Society is currently working
with the PSC and other Law Societies to ensure consistency between the proposed Queensland scheme and current
or proposed schemes in other States. Subject to the PSC’s determinations, the Society anticipates implementing its
scheme from 1 July 2010.
Dispute Management Centre
The DMC continues to be responsible for:
•
managing and promoting the activities of the Society in its role as an Authorised Nominating Authority
(ANA) under the Building and Construction Industry Payments Act 2004
•
accrediting, managing, administering, and promoting the activities of the Society as a Recognised Mediation
Accreditation Body (RMAB) under the Australian National Mediator Standards, and
•
responding to requests for the appointment of experts, arbitrators and valuers.
Legal Practitioners Admission Board
The Society continues to provide administrative support to the Legal Practitioners Admission Board through the
provision of personnel, accommodation, IT and support services.
The Society is a ‘public authority’ for the purposes of the Public Records Act 2002 (the Act) and maintains its
records in accordance with the requirements under that Act. The Society also maintains its own Queensland
Disposal Authority Number (QDAN) which has been approved by the State Archivist for the destruction of
records. The Office of General Counsel manages the Society’s destruction records and logs in accordance with the
obligations under the Act.
Record Keeping
The Society is a ‘public authority’ for the purposes of the Public Records Act 2002 (the Act) and maintains its
records in accordance with the requirements under that Act. The Society also maintains its own QDAN which has
been approved by the State Archivist for the destruction of records. The Office of General Counsel manages the
Society’s destruction records and logs in accordance with the obligations under the Act.
The Society is currently reviewing its QDAN and its record keeping practices to ensure compliance with the Act
and with its obligations under the Legal Profession Act 2007.
Office of General Counsel
Malcolm Hinton – General Counsel
The Office of General Counsel provided in-house legal advice to the Council, Chief Executive Officer and staff on
a broad range of issues affecting the Society’s operations, commercial activities, discharge of its public functions
and minor litigation.
In addition, the Office oversaw the development of a supplementary submission to the Australian Securities and
Investment Commission (ASIC) in further support of an earlier LCA Application seeking permanent relief for the
Society and Lexon from the financial services regime of the Corporations Act 2001 (Cth). In May 2009, the
Society was advised that ASIC had determined to grant permanent relief to both entities, and the relevant Class
Orders were issued on 14 July 2009.This represents a significant cost saving to the Society, Lexon and members.
Finance
Anthony Walduck – Group Chief Financial Officer
The consolidated results include the Society’s membership activities, insurance activities (Lexon Insurance Pte Ltd
and Law Claims Levy Fund), and the regulatory responsibilities it carries out under legislative requirements. The
financial statements in conjunction with the departmental reports provide a detailed overview of the Society’s
results and financial position.
Finance Overview
While the group is reporting a loss for the year of $8.997m through the income statement, net assets increased
$5.879m.
At the end of the year, unrealised losses on financial assets have been reported in the income statement. This is a
change from prior years where unrealised investment movements were recorded in the fair value reserve in the
balance sheet. The income statement includes $9.8m of losses which were included in the balance sheet in the prior
year. This movement is a disclosure reallocation only.
The movement in net assets is represented by:
Parent Entity
$’000
Reported surplus/(loss)
Insurance
Scheme
$’000
Consolidated
$’000
354
(9,351)
(8,997)
–
9,815
9,815
354
464
818
Revaluation of Law Society
House
5,061
–
5,061
Movement in net assets
5,415
464
5,879
Unrealised investment losses in
prior year balance sheet
Adjusted surplus
The key financial highlights for the year include:
Parent entity, Queensland Law Society Incorporated
An operating surplus of $354, 000 was achieved. The departmental reports provide detailed analysis of the
performances for the respective areas. The key movements from the prior year include:
•
an increase in membership fees from $350 to $360 combined with a growth of over 300 members increased
membership revenues by $185,000
•
membership services and events income outperformed prior year, but was largely offset by increased costs:
–
Seminar income grew $240,000, offset by additional costs of $120,000
–
Specialist Accreditation, PMC and resources income decreased $45,000, with an increase in costs of
$40,000
–
sponsorship income increased $60,000 with the introduction of a dedicated sponsorship officer
–
other membership functions decreased $95,000 (net of expenses), largely due to a fall in Proctor
advertising combined with increased distribution costs
•
investment income fell $130,000, largely due to falling interest rates
•
additional consulting costs (which include professional fees) largely relating to refinements to strategic
planning and organisational realignment.
•
increased information technology spend due to the outsourcing of management for half the year offset by a
reduction in hardware, software and project expenditure.
•
additional staffing costs of 13.8 per cent comprising:
–
wage indexation
–
market adjustments to a number of positions following a salary review performed by Mercers
–
while staff numbers remained constant at period ends, the prior year included five staff who
commenced toward the end of that year. The full impact of the new staff occurred in the current year.
There were also three additional staff for the majority of the year. At year end, there were 97 staff
members or 92 full-time employees (FTEs). Staff turnover during the year equated to 16.5 per cent.
We had a revaluation of Law Society House which took effect from 30 June 2009. Even with the fall in property
market values, an overall increase of $5,061,000, was booked to the asset revaluation reserve. During the coming
year, Law Society House will undergo its first major refurbishment, with an expected cost of approximately $5.5m
(prior to any funding grants). It should be noted that the depreciation which has been charged each year has built
capital reserves to allow for this capital expenditure. In May 2009, we purchased level three of Law Society House
for $4.5m.
Insurance Scheme (comprising Lexon Insurance Pte Ltd and Law Claims Levy Fund)
The insurance scheme reported a loss of $9.4m in the income statement. As mentioned above, $9.8m of investment
losses were reported in the prior year’s balance sheet. Adjusting for this accounting reclassification, the result
would have been a surplus of $464,000.
As in the 2007/08 year, 2008/09 again proved to be a year of poor investment returns. Taking into account actual
distributions and market movements for the year, Lexon returned negative $1,243,000 on an average of funds under
management of $73,649,000 (average of month end balances); the Law Claims Levy Fund returned negative
$695,000 on average funds under management of $34,614,000 (average of month end balances), resulting in
returns of -1.7 per cent and -2.0 per cent respectively. In light of the prevailing economic conditions, these results
were better than may have otherwise been achieved, as the losses were minimised as a result of the group
significantly reducing its equity exposures (for cash) through active management of the portfolio early in the
2008/09 year.
The Audit and Investment Committees remain actively involved in reviewing and implementing financial policy to
ensure the Group continues to be managed responsibly. Part of that process includes regular reviews of the
composition of investment allocations which are determined with the assistance of investment experts. The scheme
has a conservative investment mandate which targets 70 per cent of investment balances to be in ‘income
securities’ (including cash) with only 30 per cent in equities and property. At year end the scheme held in excess of
70 per cent in income securities.
Claims are recorded in the accounts at discounted values (ie present value of expected future cash outflows). As a
result of the significant falls in the cash rates, the discount rate for the 2008/09 year fell from 7.8 per cent to 4.6 per
cent. This compares to the 2007/08 year where discount rates increased from 6.8 per cent to 7.8 per cent.
The scheme’s greatest claims exposure relates to movements in discount rates. While the 2007/08 year had an
increase in the discount rates resulting in a favourable discount rate adjustment (reduced claims expense), the
significant fall in discount rates in 2008/09 has resulted in an unfavourable discount rate adjustment (increased
claims expense) as a result of prior year’s discounts reversing. Given the scheme is managed with a ‘stop loss’
policy, movements on an undiscounted net basis are in line with expectations.
The scheme continually works with its actuaries to determine appropriate capital levels which ensure solvency
levels are met at all times. This is critical to the long-term viability of the scheme and its capacity to deal with
potential changes in reinsurance and other costs, so that the full effect of these changes does not need to be passed
on to members.
Even after the significant shocks of the year, the scheme remains in a robust position.
Overseas Travel Expense for FY09
Name
Position
Destination
Reason for travel
Kuala Lumpur
LAWASIA Conference
Amount
Megan Mahon
President
Ian Berry
Deputy President
Peter Carne
CEO
Megan Mahon
President
USA/Japan/Vietnam Study Tour
Ian Berry
President
Hong Kong
Legal New Year
Conference
14,868.39
Megan Mahon
President
Fiji
Fiji Law Society
7,669.48
Raoul Guides
Council member
41,208.95
23,842.05
Member Central
Peter Lyons – Director
The ability of QLS to provide timely and cost effective services, support and products to its members is vital to
ensuring the relevance of QLS to today’s practitioners. This has best been recognised by the creation of Member
Central.
The growth of the profession in the last five years has created unique challenges for QLS in its goal to meet the
professional, educational and social networking requirements of a changing membership. For example in 2004,
Queensland Law Society had total membership of 6,746. In 2008, membership of the Society totalled 9,435, an
increase of some 39 per cent. The challenge for the Society has been to ensure resources are targeted to guarantee
member’s gain value for their membership subscription, whether they are a junior practitioner, associate, director or
partner of a law practice. Equally, in the last two years, QLS has acknowledged the importance of engaging the
practitioners of the future by introducing of student membership for tertiary students.
As the practice of law has become more specialised, so too has the role of the Society in meeting the different
needs of its members. The desire of QLS to better understand its members, their needs and expectations of QLS is
best illustrated in its commitment to undertake targeted market research of the profession to ensure the delivery of a
diverse range of relevant member services. This market research sought the assistance of members in undertaking a
number of surveys and focus groups. The results of such market research has reinforced my existing view that QLS
must maintain constant engagement with the profession to ensure the most suitable member services are provided
to the member.
Recent research on professional associations clearly suggests the traditionally held view that ‘one size fits all’ is
outdated and advances in communication, technology and expectations of members have changed. The challenge
for QLS is to ensure it is not left behind and that it develops services, support and products that are relevant to the
individual practitioner.
Through the last half of 2008, the QLS Council, senior management and staff participated in an organisational
alignment project. Organisations like QLS need to have dynamic systems and, like all other systems, they function
best when their components are designed to work together smoothly and efficiently. Any change we introduce to an
organisation, then, must be aligned to fit the existing system – or must modify the system to accept the change. The
relationship between QLS and the value proposition of membership highlighted the need to ensure the internal
delivery of services, support and products continued with the member being the ‘centre’ of such ongoing service.
With this delivery of targeted and valuable member services, support and products being central to ensuring
engagement with the membership, a number of previously disparate services within QLS have now been grouped
under the one department, ‘Member Central’. In recognition of QLS commitment to ensure members value their
membership, Member Central will develop a fully integrated, member-focused approach to the development and
delivery of the services to members. Member Central will bring together the following currently existing functions
within the QLS:
•
Continuing Legal Education (CLE)
•
Professional Development (Specialist accreditation, PMC and resources)
•
Member Relations (including CPD)
•
Client Relations Centre – including ethical advice
•
Ethics
•
Records
•
Marketing and Communications (including Schools and Community Education Service)
•
part of the services provided by Corporate Services.
Highlights of the 2008/09 Year
The dedicated team at Member Central continue to provide relevant and cost effective services to QLS members. A
snapshot of these activities is:
•
The Society’s Professional Development team continues to provide a first class, relevant and cost effective
continuing legal education program to the profession. A 70 per cent increase in sponsorship revenue for CLE
is a significant achievement in light of the economic downturn and the valued support of our sponsors is
fundamental in the provision of cost-effective CLE for our members. Over 6,000 practitioners and others
attended 135 seminars and conferences throughout the State. The Society’s Symposium continues to grow
and for the first time regional symposiums were held on the Gold Coast and North Queensland. The
involvement of District Law Associations continues to assist the Society in its local program development.
The success of the conferences is due, in part, to a continual review and implementation of topics and
speakers (as suggested by members in electronic delegate feedback) directly into CLE programs, along with
regular review of the detailed monthly Supreme Court Library research statistics.
•
Members continue to participate in peer assessment and the mentoring of fellow practitioners through the
specialist accreditation and practice management courses. The continued involvement of members in
providing of their time and experience is greatly appreciated and is indicative of the value of QLS
membership in that it provides a forum for members to give back to the broader legal community and assist
in maintaining the high standards of the profession. It should not be forgotten that the members truly make
up QLS. Without your involvement in the affairs and services the Society provides, the essence of the
Society and the people it seeks to serve is lost.
•
The Society seeks to provide worthwhile member benefits to its members. The development and introduction
of the Society’s recruitment service, Legalstaff.com.au, has been taken up by the membership and continues
to provide an alternative method of recruitment. The provision of improved benefits to members is
constantly being assessed and explored. We seek your feedback on the benefits currently being provided and
those benefits you would like the Society to provide.
•
To ensure that the Society continues to meet the needs of its members it undertook a significant market
research project in early 2009. The results of this market research will greatly impact on the delivery of
member services and benefits into the future. In particular, the research findings will drive the way in which
the Society seeks to engage its membership, ensure that relevant services are communicated and delivered to
the appropriate member segment and that ongoing research will be conducted to ensure member benefits
continue to be relevant to the members.
•
The QLS magazine, Proctor, continued to be popular with members and finished the year with a profit. Once
again it is believed to be the only Australian law society magazine that remains profitable. Members
continued to support their magazine with a vast range of contributions. Market research results also showed
that many members favour e-communications, which QLS has further developed and redesigned in the past
twelve months to ensure members are informed quickly of breaking legal news and upcoming events in a
format that is convenient and easy to access.
The Schools and Community Education Service supported QLS members by improving and strengthening the
services offered under the program; launching a dedicated website; developing a comprehensive program to
maintain understanding of teachers’ needs in relation to legal education in the classroom; and increasing grant
funding to continue promoting the law and legal profession in Queensland.
People and Organisational Performance
Patricia Linn – Director
The purpose of this division is to enable strategy through best practice organisational design, strategic
development, excellence in customer service and the strategic management of human and environmental capital.
This division is responsible for the functions of human resources, training, strategic planning support,
organisational design and development, welfare health and safety, facilities and corporate services. Our focus is
both internally and externally for members, implementing practices and processes that strengthen and enable QLS
to be an outstanding membership organisation.
The team is proud to continue involvement with members through the publication of monthly Proctor articles –
People and Performance and Wellbeing. The aim is to use our experience and networks to develop thought
provoking, contemporary articles to assist our members to think broadly about the human perspectives of life and
work.
LawCare is the QLS’ Employee Assistance Program (EAP) and is a specialist advisory service funded through
QLS. These services are provided to all QLS members, their immediate family and support staff free of charge.
The benefits of providing LawCare are:
1
reducing the number of negligence claims (Lexon Insurance has identified human factors such as stress and
depression are a driver in 30 per cent of negligence claims). It can also be assumed that stress and depression
are a major factor in complaints and poor service generally
2
providing practical assistance for managers in dealing with people issues
3
providing practical assistance to legal practice employees in the avoidance, identification and treatment of
life or work stresses.
The ongoing management and relaunch of the LawCare program in response to member feedback was conducted
by the HR team. Assure Programs was selected to provide this service.
Part of the Society’s vision is to assist members to conduct their practice profitably and efficiently. To be able to
attain this vision, QLS is continuously searching for ways in which they can provide products or services that assist
members to conduct their practice profitably and efficiently. The team continues to support and monitor our online
recruitment service.
LegalStaff.com.au was introduced as a leading-edge solution to provide legal professionals and employers with a
cost effective system that semi-automates the recruitment process. It allows employers to source qualified legal
talent quickly at a low-cost and gives legal professionals the opportunity to confidentially search for potential roles.
In response to member needs the team worked with Hays to develop and launch the inaugural Queensland Salary
Survey. This survey was developed to capture information useful for our members when determining appropriate
salary and benefit packages. Two surveys were required to capture this information; one for employers (ie partners,
human resources practitioners and office managers) and one for employees. This survey focused on segmenting
Queensland at a level not done by current survey providers in order to provide more relevant information. Each
year this survey will grow and expand. The report sits on the QLS website under For the Profession and can also be
accessed from a direct link on the QLS home page.
The Society’s Call Centre is our frontline customer service team handling 23,940 calls from members seeking
information or assistance during the past financial year. A further 34,637 calls were received from the public
seeking solicitor referrals.
In excess of 4,900 referrals were given for matters concerning civil litigation, 4,961 family law referrals and a
further 3,584 referrals for IR/employment law matters.
The top ten referral areas are:
Area of law
percentage
Family
19
Civil litigation
18
IR/employment
14
Criminal
11
Personal injuries
11
Residential conveyancing
7
Succession
7
Insurance
5
Building and construction
4
Medical negligence
4
Information brochures:
In excess of 54,000 information brochures were issued to members, community health centres, hospitals and aged
care facilities. A breakdown of the individual brochures dispatched can be seen below.
Brochure title
Number of
brochures
dispatched
Alternative dispute resolution
1,259
Buying and selling a residential property
7,617
Buying and setting up a small business
5,448
Leasing premises for a business
4,694
Making a will
14,248
Enduring power of attorney
13,307
Injured at work
3,383
Motor vehicle accident
4,433
Information Systems
Scott Rowan – Director
The Information Systems department have had a very busy year in 2008/09, with a number of staff (including
myself) joining the Society during the year.
In last year’s Annual Report, the Society announced some projects in the area of Information Systems. The projects
identified were:
Server Hardware Acquisition and Implementation
•
This project has been completed. This project saw the expansion of our server room to allow additional
space, acquisition and implementation of new server hardware, installation of independent and redundant air
conditioning and uninterrupted power supply (UPS) support for our environment. This project has provided
improved stability, redundancy, and future growth capacity for QLS’ information system needs.
Citrix/Internal IT Environment
•
With the hardware implementation project, the Society’s internal usage of Citrix was upgraded to provide
increased stability and scalability.
Website Stability and Member Login
•
The Society executed a short term solution to overcome stability issues with the Society’s external website.
This has resulted in a significant increase in the availability of the Society’s website. Longer term, the
Society is looking at its requirements of its web presence and will be making moves to deliver greater
functionality to you.
•
Work was also completed with a third party to help resolve member login issues to the website.
Reliable Backup of Network
•
New policies, procedures, software and hardware have been implemented to ensure the reliability of the
Society’s backups and the ability to restore such.
With a stable framework in place, the Information Systems department is now working on developing and
executing its Information Systems Strategy with the goal of being an integral partner in the achievement of QLS’
overall strategic vision through the application of appropriate information systems to support the Society’s business
needs.
Priorities for the Information Systems team and myself for the coming year include:
Refurbishment
•
Supporting the Society’s refurbishment; the Information Systems team will play a critical role in ensuring the
delivery of improved facilities for members and a better work environment for QLS staff. A key goal is to
complete the refurbishment with minimal downtime of staff and systems.
Web Presence
•
In the coming year you will see the current QLS website redesigned in both the look and feel of the site, as
well as the implementation of a new information architecture to improve the logical grouping and navigation
of content. This project is focused on implementing recommendations from an external information
architecture specialist arising from a review of our current website design and structure.
•
Also in the coming year, you will see the launch of a content rich Ethics website. Ethics is one of many rich
topics under management at QLS. The development of the Ethics subsite will support our members in their
ethical decision making and also inform the development of other rich topic areas of content for our
members.
System Requirements Review
•
QLS will undertake an internal review of its requirements of its information systems with a goal of providing
increased member services.
•
The outcome of the review will allow us to strategically consider the suitability of our current information
systems and the surrounding processes.
•
Key projects selected from the review will focus on providing greater value to members.
I look forward to keeping you informed of our advancements.
Secretariat
Bernie O’Donnell – Secretary
The Secretariat, headed by the Secretary, Bernie O’Donnell, provides compliance advice to the Society, undertakes
numerous regulatory functions and maintains member records.
Under the Legal Profession Act 2007 and ancillary legislation, the Secretary’s responsibilities include regulatory
obligations such as the issuing of practising certificates and related matters dealing with Practice Management
Course and Continuing Professional Development requirements, maintaining the roll of members, conducting
Council elections, conducting the Society’s Annual General Meeting and liaising with Lexon Insurance Pte Ltd in
respect of professional indemnity insurance matters.
The Secretary is the initial contact for the profession in respect of a wide range of issues related to practising law in
Queensland including opening and closing of legal practices, sharing of receipts, sharing of premises, certificates of
fitness, show cause notices relating to convictions and bankruptcy and general practice requirements.
One of the main functions of the Secretariat is to provide assistance to the Society’s Council and Executive
Committee in respect of Agendas and Minutes and co-coordinating meetings. The Secretariat has been assisted by
General Counsel, Malcolm Hinton in providing advice to the Society’s Council.
The Records section is a vital division of the Secretariat. It maintains the database of all Queensland Solicitors and
is responsible for the issuing and renewal of practising certificates, certificates of fitness and miscellaneous matters
involving membership/records.
The statistics from the Records section indicate as follows:
•
870 persons were admitted as legal practitioners in the Supreme Court of Queensland during the year
•
591 of those legal practitioners were issued by the Society with certificates to practise as solicitors
•
a total of 8,200 practising certificates were issued during the year being:
Practising certificates issued 2008/09
Principal practising certificates
Restricted principal practising certificates
Quantity
2,489
3
Unrestricted employee practising certificates
3,573
Restricted employee practising certificates
2,072
Limited practising certificates
21
Unrestricted volunteer practising certificates
14
Restricted volunteer practising certificates
28
The Records section continues to report to the Society’s Secretary in respect of statutory and regulatory issues and,
in particular, matters relating to practising certificates and ancillary issues. However, the Records section reports to
the Director of Member Central, in respect of membership, administration and management issues as part of the
Society’s Strategic Plan process.
The Secretariat has also provided administrative support to the Legal Practitioners Admissions Board, which is
located at Law Society House. However, this support has recently been taken over by the Society’s recently
established Advocacy and Accountability department as part of the Society’s Strategic Plan process.
The Secretariat’s main achievements during the 2008/09 year were:
•
organising the Society’s 2008 Annual General Meeting held on 20 November 2008
•
organising the 2008 District Law Associations’ Convocation held on 20 November 2008
•
organising the 2009/10 renewal of practising certificates/membership/professional indemnity insurance
online and manual processes
•
assisting Lexon Insurance Pte Ltd in the organisation of the 2009/10 professional indemnity insurance for the
profession
•
involvement in the FY2008/09–FY2011/12 QLS Strategic Plan process
•
liaising with the Society’s Marketing and Communications department and Membership/Corporate Services
in arranging for membership kits for new members and practice kits for new law practices
•
liaising with the IS department in respect of improvements to the QLS website, upgrading the practitioner
profile process and upgrading the online renewal of practising certificates process.
It has been a challenging year for the Secretariat with both internal and external changes continuing to flow from
the legal profession reform process and the Society’s Strategic Plan process.
Sections and Committees
QLS policy-focused sections and committees assist Council in leading the profession with expert advice and
ensuring, through advocacy, that the voice of Queensland practitioners is heard.
They provide a forum for raising and solving problems encountered in practice, acting as a professional reference
for members and contributing to professional development through articles, notices and QLS CLE seminars.
Access to Justice/Pro Bono Law Section
Pat Mullins
The Access to Justice/Pro Bono Law Section is chaired by Mr Bruce Doyle, Family Law Doyle Keyworth & Harris
who recently succeeded the Section’s longstanding Chair Mr Pat Mullins of Mullins Lawyers.
Highlights:
•
focused on building stronger relationships and information sharing between Legal Aid Queensland,
Queensland Public Interest Law Clearing House, National Pro Bono Research Centre and Queensland Law
Society
•
significantly increasing its membership in a bid to move the Section towards its new strategic focus for
2009/10
•
began planning for the National Access to Justice Conference to be held in Brisbane in mid 2010, and
•
considered issues such as the CMC review of police move on powers, cost recovery in pro bono litigation
and access to the Queensland Civil and Administrative Tribunal.
Accident Compensation/Tort Law Section
Gerry Murphy AM
The Accident Compensation/Tort Law Section is chaired by Mr Gerry Murphy AM of MurphySchmidt Lawyers.
Highlights:
•
submitted comments on the draft Victims of Crime Assistance Bill 2009 calling for appropriate levels of
common law compensation for criminal injuries victims
•
maintained advocacy within the Law Council of Australia working group regarding the harmonisation of
workers compensation legislation to ensure that a national position includes common law claims and
appropriate aspects of the existing Queensland system
•
attended the annual actuarial presentation for the Compulsory Third Party Insurance Scheme and advocated
directly to the Motor Accidents Insurance Commission Board on behalf of practitioners regarding increases
in premium levels, and
•
met with Disability Services Queensland regarding s220 of the Disability Services Act 2006 as it relates to
the impact of compensation payments on the allocation of disability services funding.
ADR Section
Phil Scott
The Alternative Dispute Resolution (ADR) Section is chaired by Mr Phil Scott of Crouch & Lyndon.
Highlights:
•
enabling the QLS to meet requirements and formally certify as a Recognised Mediation Accreditation Body
on 1 August 2008 under the Australian National Mediators Standards (NMS)
•
implementing National Accreditation of QLS mediators – 43 members accredited
•
representing the QLS in May 2009 and making numerous submissions on implementing the Standards to the
National Mediator Accreditation Committee (NMAC)
•
participating and contributing to two CLE seminars and three workshops that have enabled mediators to
accredit under the NMS
•
providing a submission to the Supreme Court on abolition of Court Register of Mediators and Case
Appraisers
•
liaising with QPILCH on obtaining Nationally Accredited Mediators for their panel, and
•
considering and informing members on aspects of ADR in QCAT.
Banking and Finance Law Committee
Randal Dennings
The Banking and Finance Law Committee is chaired by Mr Randal Dennings of Clayton Utz.
Highlights:
•
continued national leadership in advocacy on the Commonwealth Personal Properties Securities legislation
•
prepared in exceedingly tight timeframes substantive responses to the proposals for National Consumer
legislation and regulation of credit providers, and
•
contributed a banking and finance related article to Proctor in every edition
•
maintained a strong high level liaison with ASIC and the Office of Fair Trading with respect to credit
providers, and
•
examined closely mortgagor identification requirements in property transactions.
Business Law Section
David Grace
The Business Law Section is chaired by Mr David Grace of Cooper Grace Ward Lawyers.
Highlights:
•
at Business Law Section instigation and in concert with QLS locally, the LCA leads advocacy to receive an
exemption from the Wholesale Deposit Guarantee Charge for solicitors trust accounts with balances over $1
million (potentially saving Qld practitioners $1.5 million per annum)
•
Business Law Section contributes to QLS Anti-Money Laundering/Counter Terrorism Advance Guidance
adopted by LCA as national guidance document
•
member update session conducted in November 2008 on Anti-Money Laundering and Counter Terrorism
Financing laws development, and
•
Section coordinated several committees and reinvigorated the Revenue Law Committee to advocate with the
Office of State Revenue on behalf of members.
Children’s Law Section
Graham Quinlivan
The Children’s Law Section is chaired by Mr Graham Qunlivan.
Highlights:
•
after sustained advocacy Qld Government commits to decriminalise altruistic surrogacy in Queensland
•
made comprehensive submissions to the Crime and Misconduct Commission’s review of police move-on
powers which were endorsed by Logan Youth Services
•
maintained advocacy to government regarding adoption which aided in the formation of the Adoption Bill
2009
•
formed a dialogue with the government regarding the appointment of more Children’s Court Magistrates
•
made comprehensive submissions regarding model non-consensual genetic testing offences, some of which
were supported by the Law Council of Australia, and
•
held a well attended practical workshop for all practitioners regarding bail and sentence reviews for young
people.
Company Law Section
Rowena McNally
The Company Law Section is chaired by Ms Rowena McNally.
Highlights:
•
sits as both Law Council Qld Corporations Committee and QLS Company Law Section
•
active participant in the organisation and running of the very successful QLS and ACLA: Company Law and
In-House Counsel conference
•
contributed to numerous national submissions at the Law Council level relating to executive remuneration
regulation proposals, the ban on short selling, the inclusion of margin loans in credit regulation reform, the
CAMAC paper on schemes of arrangement and trading halts
•
established and maintained excellent relationships with the ASX and ASIC. Senior ASIC staff including a
Commissioner attended an early 2009 Section meeting and spoke about ASIC’s strategic realignment.
Construction and Infrastructure Law Committee
Ross Williams
The Construction and Infrastructure Law Committee is chaired by Mr Ross Williams of HWL Ebsworth.
Highlights:
•
conducting meetings in conjunction with the Construction Section of the Law Council to improve and
promote communication between the bodies
•
providing a representative on the Building Industry Consultative Group which reports to the deputy premier
on building issues – recently, pool safety regulations were considered
•
participating and contributing to CLE updates and seminars, and
•
internal review of QLS ANA adjudicator decisions.
Criminal Law Section
Glen Cranny/Sean Reidy
The Criminal Law Section is chaired by Glen Cranny of Gilshenan & Luton Legal Practice, who recently
succeeded the Section’s longstanding Chair Mr Sean Reidy of Carne Reidy Lawyers.
Highlights:
•
drafting 40 submissions throughout the year, being 30 per cent of the total submissions produced by the
Society’s policy sections and committees
•
advocacy resulting in an increase in interview rooms and ongoing review of the facilities at Arthur Gorrie
Correctional Centre and other correctional institutions
•
successfully obtaining changes to new Supreme and District Court plans, to accommodate an increase in
face-to-face lawyer client confidential interview rooms.
•
successfully obtaining changes to telephone inception legislation to require involvement by the Public
Interest Monitor
•
LCA adopted and recommended to the Parliamentary Committee the QLS position regarding the Model
Spent Convictions Bill proposed by Criminal Law Section
•
prepared lengthy and detailed submissions to the review of Civil and Criminal Justice System undertaken by
the Hon Martin Moynihan QC supporting the retention of committals.
•
submissions to the Attorney General regarding judge alone trials and majority verdicts of juries
•
strongly advocated, in conjunction with the Bar Association, on issues regarding:
–
the issuing of non-association orders in the foreshadowed anti-motorcycle gang legislation
–
the review of the Excuse of Accident and Defence of Provocation, including the introduction of a
defence of battered persons
–
the Queensland Law Reform Commission paper, A Review of Jury Directions, and
•
maintained a continual liaison on behalf of members with Legal Aid Queensland and Queensland Corrective
Services through regular participation in the Prisoners Legal Services Working Group and the Queensland
Legal Assistance Forum.
Elder Law Section
Brian Herd
The Elder Law Section is chaired by Mr Brian Herd of Carne Reidy Herd Lawyers.
Highlights:
•
maintained advocacy to government for appropriate reform of the Retirement Villages Act and
inconsistencies in its operation with other property regulating legislation
•
wrote submissions to the Minister for Ageing regarding the Age Care Complaints Investigations Scheme
•
maintained advocacy to the Minister for Tourism and Fair Trading regarding the interplay between the
Retirement Villages Act 1999 and Body Corporate and Community Management Act 1997
•
wrote a comprehensive submission to the Queensland Law Reform Commission regarding issues of capacity
in the review of Queensland’s Guardianship Legislation, and
•
formed a working group to plan the Elder Law Conference 2009 which was attended by 69 delegates.
EOL Committee
Terry Hutchinson
The Equalising Opportunities in the Law Committee (EOL) is chaired by Ms Terry Hutchinson of the Queensland
University of Technology.
Highlights:
•
coordinated a successful Indigenous Leaders Forum, in which various interest parties met to discuss the
expansion of the Law Link Program and ways in which the legal profession may better interact with and
assist the indigenous community
•
evaluated nominees and selected the annual 2008 Employer of Choice recipient, Carter Newell
•
involvement in a free member seminar for practitioners regarding practice management in uncertain
economic times, with a focus on recruitment and retention, managing workplace stress and depression in the
legal practice
•
considered funding requests made by students from various Queensland universities, and
•
formation of a working group to consider the development of guidance regarding best practice in
employment, practice management and diversity issues.
Family Law Section
Julie Harrington
The Family Law Section is chaired by Ms Julie Harrington of Harrington Family Lawyers.
Highlights:
•
maintained a continual liaison on behalf of members with the Family and Magistrates Courts to identify and
resolve systemic issues faced by practitioners
•
involvement in planning the 2009 Family Law Residential to be held at the RACV Royal Pines Hotel in
September
•
advocacy on behalf of practitioners regarding a number of issues including:
–
the Family Law Amendment (De Facto Financial Matters and Other Measures) Bill 2008
–
the Family Law Court Review, Improving Access to Justice: a better framework for the Federal
Courts, and
–
the Joint Costs Advisory Committee’s 2009 Inquiry into the Quantum of Costs for Legal Practitioners.
Franchising Law Committee
Derek Sutherland
The Franchising Law Committee is chaired by Mr Derek Sutherland.
Highlights:
•
Committee developed an action plan for activities in 2009/10 focusing on publications, submissions and
specialist accreditation
•
closely monitored developments in the ongoing review of the franchising code and conduct and compiled a
detailed and significant submission on the reforms proposed by the Joint Committee on Corporations and
Financial Services
•
maintained a liaison with the ACCC with respect to franchising matters, and
•
developing materials for the profession to assist solicitors in complying with the technicalities of the
franchising code of conduct.
Government and Corporate Lawyers Section
Patrick Wedge
The Government Lawyers Section is chaired by Mr Patrick Wedge, Deputy Public Trustee, Department of Justice
and Attorney-General.
Highlights:
•
hosted several wine and cheese evenings, offering networking opportunities for government lawyers from a
variety of departments to get to know each other, while at the same time listening to key note speaker/s on
topics specifically relevant to them
•
assisted with the programming of yet another successful government lawyers conference, and
•
involved in encouraging and promoting the benefits of associate membership.
Industrial Law Committee
Anne Milner
The Industrial Law Committee is chaired by Ms Anne Milner.
Highlights:
•
the Committee considered existing delays in obtaining anti-discrimination decisions in both State and
Federal arenas
•
favourably assessed new workplace and industrial relations legislation to ensure that rights for legal
representation were maintained, and
•
flagged issues for law practices when staff are employed by a corporate service trust under the
Commonwealth jurisdiction and a partnership under the State jurisdiction.
Insolvency Law Committee
Richard Cowen
The Insolvency Law Committee is Chaired Mr Richard Cowen of Tucker Cowen Lawyers and is part of the Law
Council of Australia
Highlights:
•
sits as both Law Council Qld Insolvency Committee and QLS insolvency committee
•
advocated for a single jurisdiction for insolvency matters flowing from the reforms of the Federal Courts
•
analysed and commented on the CAMAC paper on the Sons of Gwalia decision
•
called for reform of Australia’s stringent insolvent trading rules which incline directors to put their
companies into administration too early, and
•
identified issues for general creditors when the Commissioner issues garnishee notices.
Intellectual Property and IT Law Committee
Peter Bolam
The Intellectual Property and IT Law Committee is chaired by Mr Peter Bolam of Bolam Lawyers who succeeded
the Section’s previous chair, Ms Jacquelyn Rigby-King of Rigby-King Lawyers.
Highlights:
•
conducted a significant action planning process to direct the committee in the next two years
•
continued national leadership in advocacy on the developing Commonwealth Personal Properties Securities
legislation in conjunction with the Banking and Finance Committee
•
held a successful event entitled the ‘ABC of Innovation’ Law, run as part of the CitySmart Festival which
was well attended by the profession and the public
•
committee made submissions regarding the merger of the general Federal Law jurisdiction of the Federal
Magistrates Court with the Federal Court
•
committee made submissions regarding the extension of the jurisdiction of the Federal Magistrates in trade
mark and design matters, and
•
ran a well-attended session at QLS Symposium 2009 as part of the Business Law Stream.
International Law/Relations Section
Russell Thirgood
The International Law/Relations Section is chaired by Mr Russell Thirgood of McCullough Robertson Lawyers.
Highlights:
•
facilitated session on models for a national charter of rights at the QLS Symposium 2009 informing the
profession of issues in this debate
•
conducted a significant action planning process to direct the committee in the next two years
•
made various submissions to the negotiating teams for the China and Japan Free Trade Agreements to
improve access to those markets for Queensland practitioners
•
maintained advocacy with respect to the death penalty, and
•
made significant contributions to Proctor, including features and headline stories.
Litigation Rules Section
Justin McDonnell
The Litigation Rules Section is chaired by Mr Justin McDonnell of Mallesons Stephen Jaques, who succeeded the
Section’s longstanding chair Mr Peter Eardley during the year.
Highlights:
•
successfully obtained a change to the Oaths Act and Uniform Civil Procedure Rules to permit affidavits to be
taken in foreign jurisdictions
•
Contributed to the Civil and Criminal Justice System review conducted by the Hon Martin Moynihan QC
regarding changes in the monetary limits of the civil court jurisdiction
•
Prepared substantive comments and proposals in response to the formation of QCAT, with particular regard
to the setting aside of Costs Agreements
•
Engaged in discussions with Queensland Courts regarding the electronic setting down of matters and the
electronic distribution of Supreme and District Court orders
•
Submissions to the Law Council of Australia and Deputy Registrar of the Federal Court of Australia
regarding legal practitioners costs, and
•
Engaging the Attorney General regarding the ability of firms to contract out of proportionate liability
legislation.
Planning and Environment Law Committee
Russell Bowie
The Planning and Environment Law Section is chaired by Mr Russell Bowie of Minter Ellison.
Highlights:
•
through direct representation, the Committee advocated for better representation rights for practitioners
building related tribunals
•
engaged government directly in the drafting of the Sustainable Planning Bill 2009, and
•
in submissions the Committee commented on:
–
proposals for the expansion of the jurisdiction of the Building and Development Tribunal, and
–
legal and structural issues in connection with the Vegetation Management Regrowth Clearing
Moratorium.
Practice Management and Development Law Section
Raoul Giudes
The Practice Management and Development Law Section is chaired by Raoul Giudes of Giudes & Elliott who
succeeded the previous chair, Ms Annette Bradfield of Fox Bradfield Lawyers.
Highlights:
•
Section received a number of new members with broad experience to complement its existing capabilities
•
supported the ongoing development of practice management guides by the Society’s legal practice consultant
•
considered in detail issues surrounding best practice debtor management for legal practices informed by the
decision of the Legal Practice Tribunal in LSC v Sing
•
Continuing to explore a subsidised program of marketing assistance to legal practices, and
•
has endorsed a liberalisation of Legal Profession Act restrictions on emailing bills.
Property and Development Law Section
Paul Newman
The Property and Development Law Section is chaired by Mr Paul Newman of Allens Arthur Robinson.
Highlights:
•
Section contributed to 30 submissions or 22 per cent of total QLS policy submissions during the year
•
after sustained advocacy Qld Government finally committed to review Property Agents and Motor Dealers
Act for implementing reform
•
Suncorp reversed its regional property sale settlement policy and recommencing settling outside of Brisbane
•
Section made many submissions to the Office of State Revenue about their Revenue Management System
changes, some issues being raised in Parliamentary debate
•
continued engagement and made multiple submissions regarding the proposed National Electronic
Conveyancing System
•
advocated to government regarding the review of Queensland’s swimming pool safety laws
•
the Law Council of Australia adopted many of our suggestions in their submission on minor Native Title
amendments
•
sustained strong liaisons with the Office of State Revenue and the Department of Energy, Resources and
Mines
•
Section made submissions to government regarding improving sustainable housing in Queensland, and
•
Section made submissions to government regarding the treatment of rebated purchase price clauses in
contracts.
Revenue Law Committee
Scott Hay-Bartlem
The newly invigorated Revenue Law Committee is chaired by Scott Hay-Bartlem of Cooper Grace Ward.
Highlights:
•
Committee reformed and re-invigorated during the year and a new chair appointed
•
extensive liaison with the Office of State Revenue in the lead up to commencement of OSRConnect system
•
raised concerns about changes to the regime for self-assessors in the Revenue and Other Legislation
Amendment Bill 2009
•
advocated on behalf of practitioners to OSR to reduce the burden of present audit targeting and practices, and
•
established an ongoing communication channel with OSR for raising issues on behalf of members.
Succession Law Section
John De Groot
The Succession Law Section is chaired by Dr John de Groot of de Groots Wills & Estate Lawyers.
Highlights:
•
after QLS advocacy, Registrar of Births, Deaths and Marriages implements a dedicated email service for
practitioners to expedite their requests for certificates
•
after QLS advocacy, the Registrar of Births, Deaths and Marriages implements special identification
arrangements for solicitor applicants seeking certificates on behalf of clients, and
•
maintained a dialogue regarding review of the Probate rules within the UCPR
•
commenced a review of Supreme Court Practice Direction Number 8 of 2001 concerning family provision
applications, and
•
made contributions to QLS Symposium 2009 and formed a working group to prepare the agenda and
speakers for the Succession Law Conference.
Young Lawyers Section
Genevieve Dee
The Young Lawyers Section is chaired by Genevieve Dee of Carne Reidy Herd Lawyers who succeeded the
Section’s previous Chair, Mr Mark Metzeling, during the year.
Highlights:
•
held a successful and informative series of ‘Thursday session’ events, providing young lawyers with useful
speakers and networking opportunities
•
held a number of Henry Scott Newly Admitted Functions, welcoming newly admitted solicitors to the
profession
•
development of networking opportunities for young lawyers in regional areas
•
publication of a variety of articles in Proctor providing practical advice to young lawyers in practice, and
•
progression of the Young Lawyer Fiji Exchange Program and expressing the Society’s solidarity with the
Fijian Legal Profession.
QLS Business Supporters
Accounting
•
Calabro Consulting
•
MPW Forensic
•
Vincents Chartered Accountants
Archive and Document Storage
•
Total records Management (Aust) Pty Ltd
Expert Opinion
•
Mitchell Brandtman
Financial Institution
•
Ask Funding
Information Services
•
CITEC Confirm
Investigation/Process Serving
•
IDS Group
Investigation/Risk Management
•
Phoenix Global
IT Services
•
IBS InfoTech
IT Support and Computer Services
•
Law Support
Legal Publishing
•
Smokeball
Legal Software
•
Leap Legal
Multi-Function Copier/Printer/Fax/Scanners
•
Toshiba
Property Advisors
•
Herron Todd White
Restaurant
•
325 on George
Risk Management
•
Verus Consulting
Search Agencies
•
Sun City Legal Services
QLS Member Benefit Providers
•
ACE Global Protect Travel Insurance
•
AMP Home Loan Package
•
ING Income Protection e-Plan
•
ING Professional Life Plan
•
HCF Health Insurance
•
Qantas Club
•
Hertz
•
QLS American Express® Platinum Credit Card
•
QLS American Express® Gold Credit Card
•
QLS American Express® Gold Business Card
•
Caltex Gold StarCard
•
Tyrrell Cars – Automotive Buying and Finance Service (ABFS)
•
Premium Wines Direct
Senior Counsellors
Senior counsellors are experienced practitioners available to advise a practitioner on any professional or ethical
problem.
Some of the areas a senior counsellor may be able to assist include:
•
advice on a professional or ethical problem
•
career advice on options such as employment and partnership offers
•
whether to report a particular situation to the Society
•
whether a notification should be made to a professional indemnity insurer
•
acting as an intermediary between the Society and a practitioner wishing to remain anonymous.
Communication between a practitioner and a senior counsellor attracts the same degree of confidentiality as
communications between a solicitor and client
Set out below are details of the senior counsellors and their locations for 2008/09 as at 30 June 2009.
Senior Counsellors – Brisbane
J R Byrne
James Byrne & Rudz
GPO Box 900 BRISBANE 4001
P D Carne
Public Trust Office
PO Box 1449 BRISBANE 4001
M B Conroy
Conroy & Associates
PO Box 586 TOOWONG DC 4066
P L Cooper
Cooper Grace & Ward
GPO Box 834 BRISBANE 4001
F M Fitzpatrick
Blake Topping
PO Box 597 ASHGROVE 4060
R V Forgione
Forgione Lawyers
PO Box 5116 ALGESTER 4115
G C Fox
Fox Bradfield Lawyers
PO Box 3078 SOUTH BRISBANE 4101
G J Hutchinson
Cooke & Hutchinson
PO Box 130 REDCLIFFE 4020
J P Kelly
Corrs Chambers Westgarth
GPO Box 9925 BRISBANE 4001
M O Klug
Clayton Utz
GPO Box 55 BRISBANE 4001
A MacGillivray AM
Lex MacGillivray
4/98 Cunningham Street TARINGA 4068
J G Mann AM
McCullough Robertson
GPO Box 1855 BRISBANE 4001
M A Miller
Quinlan Miller & Treston
GPO Box 2500 BRISBANE 4001
G A Murphy AM
MurphySchmidt
PO Box 7042 RIVERSIDE CENTRE 4001
J A Nagel
John Nagel & Co
PO Box 44 MOUNT GRAVATT 4122
T A Nulty
Phillips Fox
PO Box 7804 WATERFRONT PLACE 4001
T P O’Gorman AM
Robertson O’Gorman
PO Box 13026 GEORGE STREET POST,
SHOP 4003
R G Perrett
Clayton Utz
GPO Box 55 BRISBANE 4001
W T Purcell
W T Purcell Chadwick & Skelly
PO Box 958, BRISBANE 4001
G J Vickery AM
Deacons
GPO Box 407 BRISBANE 4001
Senior Counsellors – Regional
AIRLIE BEACH
J C Ryan
Whitsunday Law
PO Box 295 CANNONVALE 4802
Lilley Grose & Long
PO Box 156 ATHERTON 4883
ATHERTON
F J Liston
AYR
B J Baxter
Ruddy Tomlins & Baxter
PO Box 590 AYR 4870
R J Beer
MacDonnells Law
PO Box 5046 CAIRNS 4870
A L English
Bottoms English
PO Box 5196 CAIRNS 4870
R J Reaston
Reaston Lawyers
PO Box 395 BUNGALOW 4870
G R Smith
Mellick Smith & Associates
PO Box 627 CAIRNS 4870
R B Attwood
Richard Attwood
PO Box 264 TWEED HEADS 2485
W G Jones
Jones Mitchell Lawyers
PO Box 2552 SOUTHPORT BC 4215
W M Potts
Potts Lawyers
PO Box 455 SOUTHPORT DC 4215
Chris Trevor & Associates
62 Goondoon Street GLADSTONE 4680
Neilson Stanton & Parkinson
PO Box 356 GYMPIE 4570
Vandeleur & Todd
PO Box 862 INNISFAIL 4860
P M Fallu
Dale & Fallu
PO Box 30 IPSWICH 4350
R Zande
Richard Zande & Associates
PO Box 42 IPSWICH 4305
A P Ghusn
Macrossan & Amiet
PO Box 76 MACKAY 4740
G C Paterson
Macrossan & Amiet
PO Box 76 MACKAY 4740
J C Taylor
Taylors Solicitors
PO Box 687 MACKAY 4740
Carswell & Company
PO Box 127 MARYBOROUGH 4650
A R Batts
Connolly Schirmer & Batts
PO Box 309 ROCKHAMPTON 4700
V N Jackson
South & Geldard
PO Box 560 ROCKHAMPTON 4700
J L Shaw
Swanwick Murray Roche
PO Box 111 ROCKHAMPTON 4700
CAIRNS
GOLD COAST
GLADSTONE
C A Trevor
GYMPIE
G R Neilson
INNISFAIL
V J Vandeleur
IPSWICH
MACKAY
MARYBOROUGH
T W Young
ROCKHAMPTON
SUNSHINE COAST
M D Bray
Bradley & Bray
PO Box 243 NAMBOUR 4560
G W Ferguson
Ferguson Cannon Lawyers
PO Box 5851 MAROOCHYDORE BC 4558
M O Richardson
Cartwrights Lawyers
PO Box 132 NOOSA HEADS 4567
T M Sullivan
Davidson & Sulllivan
PO Box 599 TOOWOOMBA 4350
K M Walker
Walkers
PO Box 1514 TOOWOOMBA 4350
R C Barnes
James Cook University
PO Box 6 JAMES COOK UNIVERSITY
4811
P G B Mackey
Mackey Wales Law
PO Box 6080 TOWNSVILLE 4810
Maxwell Solicitors
PO Box 200 WARWICK 4370
TOOWOOMBA
TOWNSVILLE
WARWICK
N D Maxwell
Financial Information
Queensland Law Society Incorporated
Income Statement
for the year ended 30 June 2009
Consolidated
NOTE
Parent Entity
2009
2008
2009
2008
$
$
$
$
Revenue
Membership and practitioner fees
6
Department of Justice and Attorney-General
grants
6,632,249
6,211,351
6,632,249
6,211,351
2,519,902
2,754,767
2,519,902
2,754,767
Rent and administration revenue
7
508,522
474,496
820,522
725,746
Membership services and events
8
4,343,693
4,099,487
4,343,693
4,099,487
5(a)
6,917,728
12,755,367
750,164
882,923
451,794
551,703
451,794
551,703
28,754,585
28,803,298
–
–
127,107
254,893
127,107
254,893
50,255,580
55,905,362
15,645,431
15,480,870
Investment income
Commissions and funding
Insurance premiums, levies and deductibles
Other income
Total revenue
Expenses
Administration expenses
9
15,306,218
13,196,719
11,842,869
10,641,810
Membership services and events
8
2,089,223
1,854,906
2,089,223
1,854,906
Council and committee costs
10
606,966
589,019
606,966
589,019
751,519
696,281
751,519
696,281
4,828,300
4,373,400
–
–
Law council capitation fees
Reinsurance costs
Claims paid
11
18,926,751
14,455,706
–
–
Movement in outstanding claims
11
10,710,885
444,744
–
–
Claims handling expense
11
552,000
214,000
–
–
Movement in reinsurance recoveries
11
(8,863,000)
768,000
–
–
Reinsurance recoveries received
11
(191,058)
(29,890)
–
–
Realised losses – available-for-sale financial
instruments
5(b)
11,026,860
2,084,255
–
–
Unrealised losses – available-for-sale financial
instruments
5(b)
10,094,192
–
–
–
160,000
150,000
–
–
65,998,856
38,797,140
15,290,577
13,782,016
(15,743,276)
17,108,222
354,854
1,698,854
6,745,646
(1,104,077)
–
–
(8,997,630)
16,004,145
354,854
1,698,854
Brokerage fees
Total expenses
Operating surplus before income tax
Income tax expense
21
Operating surplus after income tax
The accompanying notes form part of these statements.
Queensland Law Society Incorporated
Balance Sheet
as at 30 June 2009
Consolidated
NOTE
Parent Entity
2009
2008
2009
2008
$
$
$
$
Current assets
20(a)
85,090,648
54,706,558
15,457,603
17,421,107
12
1,733,692
1,726,750
1,029,198
1,251,079
86,824,340
56,433,308
16,486,801
18,672,186
–
–
19,000,000
9,000,000
5(b)
57,042,667
87,665,442
–
–
Property, plant and equipment
14
24,186,426
14,578,101
24,136,691
14,555,541
Current income tax asset
22
996,853
–
–
–
Deferred tax assets
23
6,345,834
3,248,031
–
–
Insurance contract liabilities ceded
11
16,677,000
7,814,000
–
–
Total non-current assets
105,248,780
113,305,574
43,136,691
23,555,541
TOTAL ASSETS
192,073,120
169,738,882
59,623,492
42,227,727
Cash and cash equivalents
Receivables and prepayments
Total current assets
Non-current assets
Investment in Lexon Insurance Pte Ltd
Available-for-sale financial assets
4
Current liabilities
Payables
13
40,587,756
35,399,364
12,078,688
10,267,088
Current income tax liabilities
22
–
490,390
–
–
Accrued employee benefits
16
644,096
589,989
560,492
492,996
Provision for outstanding claims
11
17,665,000
16,110,846
–
–
58,896,852
52,590,589
12,639,180
10,760,084
Total current liabilities
Non-current liabilities
Accrued employee benefits
16
590,164
481,808
574,699
473,824
Deferred income tax liability
23
81,516
92,067
–
–
Insurance contract liabilities
11
58,817,350
48,766,000
–
–
59,489,030
49,339,875
574,699
473,824
118,385,882
101,930,464
13,213,879
11,233,908
73,687,238
67,808,418
46,409,613
30,993,819
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Retained surplus
15
56,814,355
65,811,985
29,536,730
19,181,876
Reserves
15
16,872,883
1,996,433
16,872,883
11,811,943
73,687,238
67,808,418
46,409,613
30,993,819
TOTAL EQUITY
The accompanying notes form part of these statements.
Queensland Law Society Incorporated
Statement of Changes in Equity
for the year ended 30 June 2009
Parent Entity
NOTE
Opening Balance – 1 July 2007
Asset
Revaluation
Reserve
Fair Value
Reserve
Retained
Profits
TOTAL
$
$
$
$
11,260,548
–
17,483,022
28,743,570
–
–
1,698,854
1,698,854
551,395
–
–
551,395
11,811,943
–
19,181,876
30,993,819
Operating surplus for the period
–
–
354,854
354,854
Transfer from LCLF for purchase of Lexon Shares
–
10,000,000
10,000,000
Operating surplus for the period
Revaluation of strata title building
Closing balance – 30 June 2008
15
Revaluation of strata title building
Closing balance – 30 June 2009
Consolidated
15
NOTE
Opening Balance – 1 July 2007
5,060,940
–
–
5,060,940
16,872,883
–
29,536,730
46,409,613
Asset
Revaluation
Reserve
Fair Value
Reserve
Retained
Profits
TOTAL
$
$
$
$
11,260,548
3,167,785
49,807,840
64,236,173
Operating surplus for the period
–
–
16,004,145
16,004,145
Fair value movements on available for sale
financial assets
–
(19,630,160)
–
(19,630,160)
Realised gains on available for sale financial
assets
–
2,084,255
–
2,084,255
Tax effect of fair value movements on available
for sale financial assets
–
4,562,610
–
4,562,610
551,395
–
–
551,395
11,811,943
(9,815,510)
65,811,985
67,808,418
–
–
(8,997,630)
(8,997,630)
Revaluation of strata title building
Closing balance – 30 June 2008
Operating surplus for the period
15
Fair value movements on available for sale
financial assets
–
(8,100,554)
Realised losses on available for sale financial
assets
–
11,026,861
–
11,026,861
Tax effect of fair value movements on available
for sale financial assets
–
(3,204,989)
–
(3,204,989)
Transfer to income statement
–
10,094,192
–
10,094,192
5,060,940
–
–
5,060,940
16,872,883
–
56,814,355
73,687,238
Revaluation of strata title building
Closing balance – 30 June 2009
15
(8,100,554)
The accompanying notes form part of these statements.
Queensland Law Society Incorporated
Cash Flow Statement
for the year ended 30 June 2009
Consolidated
NOTE
Parent Entity
2009
2008
2009
2008
$
$
$
$
Cash flows from operating activities
49,423,695
44,119,650
13,662,266
15,551,702
2,526,796
2,869,785
2,526,796
2,869,785
(21,178,376)
(20,710,232)
(16,976,924)
(17,622,519)
Receipts collected for Society entities
–
–
35,074,829
28,618,454
Payments to Society entities
–
–
(32,065,714)
(28,217,026)
2,592,963
2,291,964
2,592,963
2,291,964
(2,608,515)
(2,386,668)
(2,608,515)
(2,386,668)
Reinsurance recoveries
191,058
29,890
–
–
Reinsurance payments
(4,828,300)
(4,373,000)
–
–
(19,442,561)
(14,455,706)
–
–
2,941,802
2,100,343
890,902
834,771
–
–
–
–
(1,054,940)
(4,298,046)
–
–
8,563,622
5,187,980
3,096,603
1,940,463
(6,000,000)
(2,000,000)
3,000,000
(500,000)
–
(21,500,000)
–
–
26,938,662
9,463,681
–
–
Distribution from LCLF for purchase of Lexon
shares
–
–
10,000,000
–
Purchase of Lexon shares
–
–
(10,000,000)
–
(5,118,194)
(54,751)
(5,060,107)
(52,214)
Net cash provided by/(used in) investing
activities
15,820,468
(14,091,070)
(2,060,107)
(552,214)
Net increase/(decrease) in cash held
24,384,090
(8,903,090)
1,036,496
1,388,249
Receipts from the profession
Receipts from department of justice
Payments to suppliers and employees
Receipts collected for Legal Practitioners’ Fidelity
Guarantee Fund
Payments to Legal Practitioners’ Fidelity
Guarantee Fund
Claims & claims related payments
Interest received
Interest paid
Income tax paid
Net cash provided by/(used in) operating
activities
22
20(c)
Cash flows from investing activities
Net term deposits
Purchase of investments
Proceeds from investment redemptions
Payments for property, plant and equipment
14
Cash at the beginning of the period
20(a)
44,706,558
53,609,648
11,421,107
10,032,858
Cash at the end of the period
20(a)
69,090,648
44,706,558
12,457,603
11,421,107
The accompanying notes form part of these statements.
Queensland Law Society Incorporated
Notes to and forming part of the Financial Statements
for the year ended 30 June 2009
Objectives and principal activities
The Queensland Law Society Incorporated (the Society) is the professional association for solicitors in Queensland
and continues in existence under the Legal Profession Act 2007 (the Act). While the Society is defined as a
statutory body under the Financial Administration and Audit Act 1977, it remains an independent professional
body, subject to the governance of its elected Council.
These accounts include the Society, other funds and subsidiaries and when combined are referred to as ‘the Group’.
The Group is responsible for issuing of practicing certificates, providing continuing legal education, investigating
complaints of unsatisfactory professional conduct against solicitors, administering funds under the control of the
Group, providing services and support to members and the general public and providing general insurance and
services as licensed under the Singapore Insurance Act. Major sources of income for the Society include annual
fees paid by its members, contributions from the Department of Justice and Attorney-General, continuing legal
education to the profession, investment income, and Insurance Premiums.
1.
Summary of significant accounting policies
The significant accounting policies which have been adopted in the preparation of the Group’s financial statements
are:
a.
Basis of accounting
The financial report is a General Purpose Financial Report which has been prepared in accordance with Australian
Accounting Standards (including Australian Accounting Interpretations) of the Australian Accounting Standards
Board and comply with the Treasurer’s minimum reporting requirements for the year ending 30 June 2009, and
other authoritative pronouncements
The financial report has also been prepared on the basis of historical cost and except where stated does not take into
account changing money values. Comparative information has been restated where necessary to be consistent with
disclosures in the current reporting period and amounts in the report have been rounded to the nearest dollar.
b.
The reporting entity
The financial statements include the values of all revenues, expenses, assets, liabilities and equity of the Society
and the entities that it controls where they are material.
The Society controlled the following entities at reporting date:
Law Claims Levy Fund (This Fund was wholly controlled for the whole period).
Lexon Insurance Pte Ltd (formerly QLS Insurance Pte Ltd). This Company was established on 23 June 2001 in
Singapore and is 100 per cent owned by the Society. This Company was wholly controlled for the whole period.
c.
Principles of consolidation
The financial statements of controlled entities are included in the consolidated financial statements from the date
control commences to the date control ceases. In the process of reporting the Society as a single economic entity,
unrealised gains and losses, inter-entity balances resulting from transactions with or between controlled entities are
eliminated on consolidation where material. The accounting policies have been consistently applied by each entity
in the consolidated entity.
d.
Taxation
Income tax is recognised on consolidation.
The Queensland Law Society Inc (parent entity) is exempt from income tax by virtue of section 50-25 of the
Income Tax Assessment Act 1997 with the exception of Fringe Benefits Tax (FBT) and the Goods and Services Tax
(GST). Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the ATO. In these circumstances, the GST is recognised as part of the cost of
acquisition of the asset or as part of the expense. Receivables and payables are stated with the amount of GST
included.
The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the
balance sheet. Cash flows are included in the statement of cash flows on a gross basis. The GST components of
cash flows arising from investing activities and financing activities which are recoverable from, or payable to, the
ATO are classified as operating cash flows.
Lexon Insurance Pte Ltd (formerly QLS Insurance Pte Ltd) is registered in Australia for income tax and GST. The
company has dual tax residency in Australia and Singapore. In relation to offshore insurance business, the
Company has been granted tax exempt status for a period of 10 years from 17 February 2006 to 16 February 2016
under the tax exemption scheme for captive insurers by the Monetary Authority of Singapore.
Current income tax is recognised at the amount expected to be paid to or recovered from the tax authorities.
Deferred income tax is recognised for all temporary differences except when the deferred income tax arises from
the initial recognition of an asset or liability affects neither accounting nor taxable profit or loss at the time of the
transaction.
Current and deferred income tax is measured using the tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date, and are recognised as income or expenses in the income statement,
except to the extent that the tax arises from a transaction which is recognised directly in equity.
Deferred tax on temporary differences arising from the fair value gains and losses on available-for-sale financial
assets and are charged or credited directly to equity in the same period the temporary differences arise.
e.
Revenue recognition
i.
Premium income
Premium income is recognised as revenue at the commencement of the risk period covered by the policy and
accrued proportionally over the period of coverage.
ii.
Interest income
Interest income is accrued on a time-proportion basis using the effective interest method.
iii.
Other income
Revenues are recognised at fair value of the consideration received net of any amount of GST payable to the ATO.
Practitioner fees are recognised when payment is received. Interest revenue is recognised as it accrues, taking into
account the effective yield on the financial asset and is also recognised net of bank charges. Premium revenue is
recognised in the financial statements at the commencement of the risk period covered by the policies.
iv.
Grants and other contributions
Grants, donations and gifts that are non-reciprocal in nature are recognised as revenue in the year in which the
Society obtains control over them. Where grants are received that are reciprocal in nature, revenue is accrued over
the term of the funding arrangement.
v.
Recovery of expenditure
Under the rules of the Act, certain operating expenses of the Society are recoverable from the Legal Practitioners’
Fidelity Guarantee Fund. The gross amounts recovered are disclosed as income. Expenses incurred on behalf of the
Fund form part of the administration expenses incurred by the Society.
vi.
Insurance contracts
Contracts under which the Group accepts significant insurance risk from another party (the policyholder) by
agreeing to compensate the policyholder or other beneficiary if a specified uncertain future event (the insured
event) adversely affects the policyholder or other beneficiary are classified as insurance contracts.
f.
Operating leases
Payments made under operating leases (net of any incentives received from the lessor) are taken to the income
statement on a straight-line basis over the period of the lease.
When an operating lease is terminated before the lease period has expired, any payment required to be made to the
lessor by way of penalty is recognised as an expense in the financial year in which termination takes place.
g.
Cash and cash equivalents
For the purposes of the Balance Sheet and Cash Flow Statement, cash assets include all cash and cheques receipted
but not banked at 30 June as well as deposits on call with financial institutions. The Cash Deposit Account is an
interest bearing account which is readily convertible to cash on hand at the Groups option.
h.
Reinsurance contracts
Contracts entered into by the Group with reinsurers under which the Group is compensated for losses on one or
more contracts issued by the Group where significant insurance risk is transferred are classified as reinsurance
contracts.
The benefits to which the Group is entitled under its reinsurance contracts are recognised as reinsurer’s share of
insurance liabilities. These assets consist of short-term balances due from reinsurers as well as longer term
receivables that are dependent on the expected recovery. Reinsurance liabilities are primarily premiums payable for
reinsurance contracts and are recognised as expenses when due.
The Group assesses its reinsurance assets for impairment at each balance sheet date. Such assets are deemed
impaired if there is objective evidence, as a result of an event that occurred after its initial recognition, that the
Group may not recover all amounts due and that the event has a reliably measurable impact on the amount that the
Group will receive from the reinsurer.
The Group ceded reinsurance in the normal course of business for the purpose of limiting its net loss potential
through the diversification of its risks. Reinsurance arrangements do not relieve the Group from its direct
obligations to its policyholders.
i.
Financial assets
The Group classifies its financial assets as loans and receivables and available-for-sale financial assets.
Management determines the classification at initial recognition and re-evaluates this designation at every reporting
date.
i.
Receivables
Receivables include trade and other receivables in the balance sheet.
These financial assets are initially recognised at fair value plus transaction cost and subsequently carried at
amortised cost using the effective interest method. They are presented as current assets, except for those maturing
later than 12 months after the balance sheet date which are presented as non-current assets.
The Group assesses at each balance sheet date whether there is objective evidence that these financial assets are
impaired and recognises an allowance for impairment when such evidence exists. Allowance for impairment is
calculated as the difference between the carrying amount and the present value of estimated future cash flows,
discounted at the original effective interest rate.
ii.
Financial assets, available-for-sale
These financial assets are initially recognised at fair value plus transaction cost and subsequently carried at fair
value. Changes in the fair value are recognised in the fair value reserve.
These financial assets are recognised/derecognised on the date which the Group commits to purchase/sell the asset.
They are presented as non-current assets unless management intends to dispose of the assets within 12 months after
the balance sheet date.
The Group assesses at each balance sheet date whether there is objective evidence that these financial assets are
impaired. If there is evidence of impairment, the cumulative loss that was recognised in the fair value reserve is
transferred to the income statement. Impairment losses on available-for-sale equity securities are not reversed
through the income statement.
These financial assets are derecognised when the rights to receive cash flows from the financial assets have expired
or have been transferred and the Group has transferred substantially all risks and rewards of ownership. On
disposal, the difference between the carrying amount and the sale proceeds is recognised in the income statement.
Any amount in the fair value reserve relating to that asset is transferred to the income statement.
Unrealised gains and losses arising from changes in the fair value of available-for-sale financial assets are
recognised in the fair value reserve within equity. When investments classified as available-for-sale are sold or
impaired, the accumulated fair value adjustments in the fair value reserve within equity are included in the income
statement.
j.
Property, plant and equipment
i.
Acquisition of assets
All assets acquired are recorded at their cost of acquisition at the date of acquisition, being the fair value of the
consideration provided plus incidental costs directly attributable to the acquisition. All assets acquired are expensed
unless the initial cost exceeds $5,000. All library acquisitions are expensed in the year of purchase.
The Society has followed the Queensland Treasury guidelines in relation to intangible assets and as such expenses
all software purchases less than $100,000.
ii.
Depreciation
All assets including strata title buildings have limited useful lives and are depreciated using the straight line method
over their estimated useful lives, taking into account estimated residual values.
Assets are depreciated from the date of acquisition. Any expenditure that increases the originally assessed capacity
or service potential of an asset is capitalised and the new depreciable amount depreciated over the remaining useful
life of the asset. Depreciation rates and methods are reviewed annually for appropriateness. When changes are
made, adjustments are reflected prospectively in current and future periods only.
The depreciation rates used for each class of asset are as follows:
2009
2008
Asset Class
Strata Title Building
2.5 per cent
2.5 per cent
Plant and Equipment
5 per cent – 33 per cent
5 per cent – 33 per cent
Computer Equipment
33 per cent – 100 per cent
33 per cent – 100 per cent
iii.
Impairment of non-current assets
Plant and equipment are reviewed for impairment whenever there is any objective evidence or indication that these
assets may be impaired.
For the purpose of impairment testing of the assets, recoverable amount (ie the higher of the fair value less cost to
sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows
that are largely independent of those from other assets. If this is the case, recoverable amount is determined for the
cash-generating-unit (CGU) to which the asset belongs.
If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying
amount of the asset (or CGU) is reduced to its recoverable amount. The difference between the carrying amount
and recoverable amount is recognised as an impairment loss in the income statement.
An impairment loss for an asset is reversed if, and only if, there has been a change in the estimates used to
determine the assets’ recoverable amount since the last impairment loss was recognised. The carrying amount of
the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying
amount that would have been determined (net of depreciation) had no impairment loss been recognised for the
assets in prior years. A reversal of impairment loss for an asset is recognised in the income statement.
iv.
Revaluations
The strata title building is measured at fair value and is independently revalued every five years to ensure the
carrying amount does not materially differ from the fair value at reporting date. In between independent valuations,
the Society uses the Implicit Price Deflator for non-residential buildings indices to index the carrying amount of the
building where there has been a material variation in the index. Revaluation increments are recognised in the asset
revaluation reserve except where amounts reversing a decrement previously recognised as an expense are
recognised as revenues. Revaluation decrements are only offset against revaluation increments and any excess is
recognised as an expense.
k.
Insurance liabilities
Insurance liabilities comprise of outstanding claims provision and unearned premiums provision.
i.
Outstanding claims provision
Full provision is made for the estimated cost of all claims admitted or intimated but not settled at the balance sheet
date, less reinsurance recoveries, using the best information available at that time.
In addition, provision is made for claims incurred but not reported (IBNR) at the date of the balance sheet based on
claims experience and industry statistics.
ii.
Unearned premiums provision
The portion of premiums that relates to unexpired risk at the balance sheet date is reported as the unearned
premium liability. Unearned premiums are calculated based on the 1/365 method applied to the net premiums
written for the financial year.
iii.
Liability adequacy test
At each balance sheet date, liability adequacy test is performed to ensure the adequacy of the contract liability. In
performing this test, current estimates of future contractual cash flows and claims handling and administration
expenses, as well as investment income from assets backing such liabilities, are used. Any deficiency is
immediately charged to general insurance revenue account by establishing a provision for losses arising from
liability adequacy tests.
l.
Payables
Trade creditors are recognised on receipt of the goods or services and are carried at actual amounts, gross of
applicable trade and other discounts. Amounts are unsecured and are generally settled on 30 day terms.
m.
Provisions
A provision is recognised when there is a legal, equitable or constructive obligation as a result of a past event and it
is probable that a future sacrifice of economic benefits will be required to settle the obligation, the timing or
amount of which is uncertain.
n.
Employee benefits
i.
Annual leave
Current annual leave entitlements represent present obligations resulting from services provided by employees up
to balance date, calculated at undiscounted amounts based on remuneration rates that the entity expects to pay as at
reporting date including related on-costs, such as, employer superannuation contributions, workers compensation
insurance and payroll tax.
ii.
Sick leave
Prior history indicates that on average, sick leave taken each reporting period is less than the entitlement accrued.
This is expected to recur in future periods and therefore it is unlikely that existing accumulated entitlements will be
used by employees and no liability for unused sick leave entitlements is recognised.
iii.
Long service leave
The provision for employee benefits to long service leave represents the present value of the estimated future cash
outflows to be made resulting from employees’ services provided to reporting date.
The provision is calculated using expected future increases in remuneration rates including related on-costs and is
based on experience of employee departure per year of service. Long service leave expected to be paid in the next
12 months is recorded as a current liability in the Balance Sheet. Long service leave expected to be paid later than
one year is recorded as a non-current liability and is discounted using the Commonwealth Bond rate at the reporting
date which most closely matches the terms of maturity of the related liabilities.
o.
Foreign currency
Foreign currency transactions are translated to Australian currency at the rate of exchange ruling at the dates of the
transactions. Amounts receivable and payable in foreign currencies at reporting date are translated at the rates of
exchange ruling on that date. Foreign exchange gains and losses resulting from the settlement of such transactions
and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in the
Income Statement.
p.
Legal Profession Act 2007
The Legal Profession Act 2007 (Qld) came into effect on 1 July 2007. The provisions contained within the Act
cover a range of matters including the establishment of the Legal Services Commission, Legal Practice Tribunal
and Committee and the Legal Practitioners’ Admissions Board, together with a number of technical measures
including those relating to transitional provisions to facilitate the transfer to the new legislation.
q.
Issuance of financial statements
The financial statements are authorised for issue by the Council of the Queensland Law Society Inc at the date of
signing the management certificate.
r.
New and revised accounting standards
No Australian accounting standards and interpretations issued or amended and applicable for the first time in the
2008/09 financial year have an effect on the Group. Also, the Group has not voluntarily changed any of its
accounting policies.
The Group is not permitted to early adopt a new accounting standard ahead of the specified commencement date
unless approval is obtained from the Treasury Department. Consequently, the Group has not applied any Australian
accounting standards and interpretations that have been issued but are not yet effective. The Group will apply these
standards and interpretations in accordance with their respective commencement dates.
All other Australian accounting standards and interpretations with future commencement dates are either not
applicable to the Group, or have no material impact on the Group.
2.
Critical accounting estimates and judgements in applying accounting policies
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by
definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
discussed below.
Management has considered the development, selection and disclosure of the Group’s critical accounting policies
and estimates and the application of these policies and estimates. Certain critical accounting judgements in
applying the Group’s accounting policies are related to the policyholder claims.
a.
Actuarial methodology for estimate for policyholder claims
The Group’s estimates for reported and unreported losses and establishing resulting provisions and related
reinsurance recoverables are continually reviewed and updated, and adjustments resulting from this review are
reflected in the income statement. The process relies upon the use of external advisers (lawyers, actuaries and loss
adjustors) and the assumption that past experience is an appropriate basis for predicting future events. In estimating
the outstanding claims liability, projected future claims payments are discounted to the calculation date for each
claim year.
The projected future claims payments for each claim year are based on the claim estimates and an allowance for the
development of claims (Incurred But Not Enough Reported – IBNER) especially for the recent claim years in
respect of which limited claims information is available and estimates are therefore the most subjective; and an
allowance for accident cases, which had incurred but have not yet been reported (Incurred But Not Reported –
IBNR).
The IBNER and IBNR estimate has been calculated using a combination of the Incurred Claims Development
(ICD) and Bornhuetter-Ferguson (BF) methods.
b.
Key assumptions
The following key valuation assumptions have been used to estimate future projected payments and outstanding
claims liabilities:
•
The ICD basis allows for ten per cent development beyond the ninth development half-year.
•
The average cost per solicitor (used in the BF method) adopted is $4,400.
•
We allow for three per cent development in claim numbers beyond the ninth development half-year.
•
We have assumed reinsurance recoveries will be fully recoverable on a prompt basis.
•
We have applied the zero-coupon yield for Commonwealth Government bonds to the expected future
cashflows. This has resulted in a uniform discount rate of 4.6 per cent.
•
We have assumed future inflation will be the same as past inflation, to the extent that it has been captured by
the claims development data.
•
We have used market benchmarks to include an allowance for claims handling expenses (CHE).
•
While we have calculated a central estimate, we have applied a risk margin at a 90 per cent level of
sufficiency to gain comfort with the adequacy of reserve.
There have been no significant changes in the business underwritten by the Company or the way the insurance
liabilities are estimated. As such no significant amendments have been made to the assumptions.
c.
Sensitivity analysis of key estimates
While the gross ultimate costs are sensitive to valuation assumptions, the net results are much less sensitive due to
the aggregate limits that apply which reduces the net exposure.
The net impacts on our estimated total provision due to changes in assumptions are:
•
Reserve underestimation: The gross undiscounted unused exposure for all years totals $8.3 million. A 10 per
cent reserve under estimation results in an additional discounted reserve of $2.2 million or 4.4 per cent of the
discounted net central estimate.
•
Reserve overestimation: If our estimated reserves on all years improved by 10 per cent then the total net
provision would decrease by $2.1 million or 4.3 per cent of the discounted net central estimate.
•
Discount rate: A half a percentage point increase in discount rate (from 4.6 per cent to 5.1 per cent) would
reduce our provision by $0.5 million or one per cent of the discounted net central estimate.
3.
Management of insurance and financial risk
A subsidiary, Lexon Insurance Pte Ltd is a captive insurer and issues a single insurance contract to its holding
corporation that transfers insurance risks of its holding corporation to itself. This section summarises these risks
and the way the Company manages them.
Group’s accounting policies are related to the policyholder claims.
a. Insurance Risk
The risk under any one insurance contract is the possibility that the insured event occurs and the uncertainty of the
amount of the resulting claim. By the very nature of an insurance contract, this risk is random and therefore
unpredictable.
The primary insurance activity carried out by the entity assumes the risk of loss from persons that are directly
subject to the risk – professional indemnity liability. Such risk may relate to liability that may arise from an
insurable event. As such, the entity is exposed to the uncertainty surrounding the timing and severity of claims
under the contract. The entity also has exposure to market risk through its insurance and investment activities.
The entity manages its insurance risk through underwriting guidelines, centralised management of reinsurance and
monitoring of emerging issues.
i.
Underwriting strategy
The entity is unable to provide a diversified portfolio of similar risks due to its licensing arrangement. The entity
currently only underwrites the risk of its holding corporation. Such a focus on one ‘insured’ group does create a
wider variability of outcome than a balanced portfolio.
ii.
Reinsurance strategy
In considering the purchase of reinsurance protection, the entity’s philosophy is twofold, namely:
•
to reduce risk, and
•
to stabilise solvency.
To achieve such objectives, the entity will consider the placing of reinsurance protection at appropriate levels with
reinsurance carriers of a proven financial record. Specific reinsurance placements should reflect the appropriate
balance between retention and reinsurance commensurate with the nature and complexity of the risk, all within
acceptable exposure limits to the entity.
Ceded reinsurance contains credit risk, and such reinsurance recoverables are reported after known deductions for
insolvencies and uncollectible items. The entity monitors the financial condition of reinsurers on an ongoing basis
and reviews its reinsurance arrangements periodically. The entity’s Board of Directors are responsible for setting
the minimum security criteria for acceptable reinsurance.
iii.
Terms and conditions of insurance contracts
The terms and conditions of insurance contracts that have a material effect on the amount, timing and uncertainty
of future cash flows arising from insurance contracts are set out below.
The following gives an assessment of the entity’s main product – professional indemnity liability and the ways in
which it manages the associated risks.
(i)
Product features
The entity writes professional indemnity liability and under these contracts, monetary compensation awards are
paid for any description of civil liability whatsoever incurred in connection with the Law Practice.
Professional indemnity liability is generally considered a long tail line, as it takes a relatively long period of time to
finalise and settle claims for a given accident year. The speed of claim reporting and claim settlement is a function
of the specific coverage provided, the jurisdiction and specific policy provisions.
This line is typically the largest source of uncertainty regarding claims provisions. Major contributors to this
provision estimate uncertainty include the reporting lag, the number of parties involved in the underlying action,
the potential amounts involved and whether such claims were reasonably foreseeable and intended to be covered at
the time the contracts were written. Claims with longer reporting lag will result in greater inherent risk.
(ii)
Management of risks
The key risks associated with this product are underwriting risk and claims experience risk. Underwriting risk
includes the risk of higher claims costs than expected owing to the random nature of claims and their frequency and
severity and the risk of change in legal or economic conditions or behavioural patterns affecting reinsurance pricing
and conditions of reinsurance cover. This may result in the entity having either too little premium for the risks it
has agreed to underwrite and hence, has not enough funds to invest and pay claims, or that claims are in excess of
those expected.
Claims development history – Lexon Insurance Pte Ltd and Law Claims Levy Fund
Gross discounted
In A$
Underwriting year
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
2002/03
2003/04
2004/05
2005/06
2006/07
2007/08
2008/09
Total
Estimate of ultimate claims
Costs:
– at end of reporting year
13,447
15,417
15,324
19,628
18,112
16,945
– one year later
16,482
15,417
23,329
19,751
19,994
14,383
– two years later
19,683
15,743
19,117
16,978
19,978
– three years later
21,505
13,359
17,461
16,573
– four years later
18,233
13,395
21,259
– five years later
19,187
12,141,
– six years later
21,053
Current estimate of cumulative claims
Cumulative payments to date
Liability recognised in the balance
sheet
23,801
21,053
12,141
21,259
16,573
19,978
14,383
23,801
129,188
(17,033)
(10,786)
(13,021)
(10,703)
(7,348)
(2,836)
(905)
(62,632)
4,020
1,355
8,238
5,870
12,630,
11,547
22,896
66,556
Liability in respect of prior years
3,093
Risk margin
2,629
Provision for claims handling
4,204
Total outstanding claims included in
the balance sheet
76,482
Estimate of ultimate claims
Costs:
– at end of reporting year
13,447
15,417
15,324
15,559
15,417
13,626
– one year later
16,482
15,417
16,722
16,167
16,718
14,383
– two years later
19,683
15,743
17,205
16,587
17,178
– three years later
17,925
13,359
17,358
16,573
– four years later
17,842
13,395
17,758
– five years later
18,462
12,141
– six years later
17,986
Current estimate of cumulative claims
Cumulative payments to date
Liability recognised in the balance
sheet
16,492
17,986
12,141
17,758
16,573
17,178
14,383
16,492
112,511
(17,033)
(10,786)
(13,021)
(10,703)
(7,348)
(2,836)
(905)
(62,632)
953
1,355
4,737
5,870
9,830
11,547
15,587
49,879
Liability in respect of prior years
3,093
Risk margin
2,629
Provisions for claims handling
4,204
Total outstanding claims included in
the balance sheet (refer note 11)
59,805
Insurance risk is managed primarily through sensible pricing, product design, appropriate investment strategy and
reinsurance. The entity therefore monitors and reacts to changes in the general economic and commercial
environment in which it operates. The entity also assesses the need to minimise its underwriting risks by retaining
part of the risks underwritten for its own account and reinsuring the remainder.
b.
Reinsurance risk
The entity cedes insurance risk to limit exposure to underwriting losses under agreements that cover risks or group
risks on yearly renewable terms. These reinsurance agreements spread the risk and minimise the effect of losses.
The amount of risk retained depends on the entity’s evaluation of the risk. Under the terms of the reinsurance
agreements, the reinsurer agrees to reimburse the ceded amount in the event the claim is agreed and paid. However,
the entity remains liable to its policyholders with respect to ceded insurance if any reinsurer fails to meet the
obligations it assumes.
When selecting a reinsurer, the entity considers their relative security. The security of the reinsurer is assessed from
public rating information.
c.
Concentration risk
The concentration of insurance risk before and after reinsurance is solely in Australia.
d.
Financial risk
The entity’s activities expose it to a variety of financial risks: market risk (currency risk, price risk and interest rate
risk), credit risk and liquidity risk.
i.
Currency risk
The entity is not exposed to significant foreign currency risk in relation to its functional currency as the majority of
the entity’s transactions, assets and liabilities are denominated in Australian dollars.
The entity holds minor cash balances in Singapore, and units in unit trusts which hold some minor unhedged
positions.
The entity outsources its investment activities to respected fund managers who use defined risk management
techniques as part of the funds mandates.
All investments in income securities are fully hedged where a currency exposure exists.
As part of the entity’s investment mandate it holds units in one fund which holds unhedged international securities.
Any unhedged position is in accordance with the strategic asset allocation, and is monitored regularly by
management and the Board.
ii.
Price and interest rate risk
The Company is exposed to equity securities price risk arising from the investments classified as available-for-sale.
These securities are held with Australian fund managers.
•
Group funds seek to reduce risk by diversifying across a range of securities, maturities and counterparties.
Investments of the funds are subject to the risk control limits and constraints:
Duration and Tracking Error Limits (interest rate management)
•
The Modified Duration of the funds are constrained within a specified period either side of the Modified
Duration of the Benchmark.
•
Rolling year ex post tracking error will be limited to a specified number of basis points. The ex-ante tracking
error of the funds are not expected to exceed a specified number of basis points.
Sector Exposure Bands
•
The weighting of each sector (eg domestic, international – government, non government) within the funds
will be maintained in specified limits.
Credit Limits
•
The funds will be invested in a broad and diversified range of securities across the credit spectrum.
Credit Risk Limits for Individual Security Investments
•
Individual security limits apply for direct physical holdings based on their credit rating and inclusion
in the benchmark.
Management and the Board regularly review the performance and ensure all investments held are within the
approved mandate.
Interest Rate sensitivity
The following interest rate sensitivity depicts the outcome to the profit and loss if the interest rates were to increase
by 1 per cent linearly from the year end yield curve applicable to the company’s financial assets and liabilities
which are subject to interest movements. With all other variables held constant, the company would have decrease
of $796,204 (2008: $266,973). A linear decrease of interest rates by one per cent would result in an increase of
$796,204 (2008: $266,973).
Price sensitivity
The following price sensitivity depicts the outcome to the profit and loss if all equity investments moved an
average of five per cent from the year end values. With all other variables held constant, the company would record
an unrealised gain of $697,810 (2008: $2,888,911) for a five per cent increase in market values and an unrealised
loss of $697,810 (2008: $2,888,911) for a five per cent decrease in market values.
iii.
Credit risk
There is no significant credit risk with respect to the collectability as funds are collected in advance of the year
from the profession.
Credit risk arising on funds placed with external fund managers and on reinsurance activities is managed by
established policies to ensure that the counter-parties have adequate financial ratings and appropriate credit history.
Financial assets that are neither past due or impaired
At the balance sheet date no financial assets are past due or impaired other than trade receivables noted below.
Cash and cash equivalents are neither past due nor impaired are placed with reputable financial institutions with
high credit ratings and no history of default.
Financial assets, available-for-sale are redeemable on demand. These are placed with reputable fund managers.
Within the current holdings there are two funds that have frozen redemptions as a result of the Global Financial
Crisis (this is detailed below).
No insurance recoveries are past due. All reinsurance contracts are placed in accordance with the group’s
reinsurance policy which ensures appropriate credit rating of individual reinsurers and concentration risk is reduced
to acceptable levels.
Financial assets that are past due and/or impaired
The group has trade debtors relating to excesses which are due in relation to claims.
Excesses include $341,375 of balances which are due in excess of one month. Of this, $195,000 is overdue less
than one month. There is a provision of $153,875 on these outstanding balances.
Credit ratings
The following table shows the investment grades of balances due:
Investment grade
(AAA to BBB)
Not rated
Total
At 30 June 2009
Cash and cash equivalents
85,090,648
–
85,090,648
Insurance receivables
16,677,000
–
16,677,000
Other receivables
–
709,312
709,312
Financial assets
–
57,042,667
57,042,667
54,706,558
–
54,706,558
7,814,000
–
7,814,000
Other receivables
–
518,420
518,420
Financial assets
–
87,665,442
87,665,442
At 30 June 2008
Cash and cash equivalents
Insurance receivables
While the financial assets are in unrated funds, the fund managers are all reputable. Each fund manager performs
internal ratings of each of the individual holdings and works within predefined credit risk parameters as defined in
the individual mandates.
Financial asset investments are placed with the following fund managers:
•
Queensland Investment Corporation
•
UBS Global Asset Management
•
AMP Capital Investors
•
BNP Paribas Investment Partners
•
BlackRock Investment Management
•
Russell Investments
•
Tasman Asset Management (Tyndall)
iv.
Liquidity risk
In the management of liquidity risks, the group monitors and maintains a level of cash and cash equivalents deemed
adequate by management to finance the group’s operations and mitigate the effects of fluctuations in cash flows.
The group also constantly reviews its investment to ensure that there are sufficient cash and liquid deposits to meet
its estimated outflows from its insurance contract.
The group manages its expected cash flow requirements using the latest actuarial valuations detailing projected
cash flows. These are monitored in conjunction with available cash and investments readily convertible to cash.
The group holds units in two funds which have frozen redemptions as a result of the global financial crisis. These
are property funds and redemptions would require disposal of real property which may be to the detriment of
remaining unit holders. The funds are accounted for at fair value. These funds are not required for liquidity
purposes.
A maturity analysis of insurance liabilities is provided in note 11.
v.
Capital risk
The entity’s objectives when managing capital are to ensure that the entity is adequately capitalised, and assessing
shortfalls between reported and required capital levels on a regular basis. The entity will issue or redeem additional
equity and debt instruments when necessary.
Lexon is required under the Singapore Insurance Act, Cap.142 and the relevant Regulations made there under to
meet and maintain at all times during the course of each financial year that it carries on insurance business,
minimum fund solvency and capital solvency requirements. As at balance sheet date, Lexon has met the funds
solvency requirement for its Offshore Insurance Fund and the minimum capital adequacy requirement of
SGD400,000.
Management of the entity and subsidiaries monitor the capital position using a risk based capital model. The model
has been developed in conjunction with the group actuaries to ensure the group maintains a robust level of solvency
at all times.
4.
Investment in Lexon Insurance Pte Ltd (formerly QLS Insurance Pte Ltd)
In June 2001, Lexon Insurance Pte Ltd was incorporated in Singapore as the captive insurer of the Society. The
company was capitalised with $9,000,000 via surplus funds from the Society controlled Law Claims Levy Fund. A
further $10,000,000 was issued in May 2009. The $19,000,000 share capital of the company is fully owned by the
Society and the company is a controlled entity of the Society. Share capital is eliminated on consolidation.
5.
Investments
a.
Investment income
Consolidated
Parent
2009
2008
2009
2008
$
$
$
$
Distributions from available-forsale financial assets (net of fees)
4,089,253
10,633,325
–
–
Interest income
2,828,475
2,122,042
750,164
882,923
6,917,728
12,755,367
750,164
882,923
b.
Available-for-sale financial assets
Consolidated
Parent
2009
2008
2009
2008
$
$
$
$
87,665,442
84,418,387
–
–
Additions
4,416,441
32,579,316
–
–
Disposals
(37,965,523)
(12,124,164)
–
–
2,926,307
(17,208,097)
–
–
57,042,667
87,665,442
–
–
Beginning of financial year
Fair value adjustments
End of financial year
At balance sheet date, the fair value of available for sale financial assets was $10,094,380 below cost. This amount
has been transferred to the Income Statement in accordance with note 1(i).
The proceeds from disposals (as shown in the cash flow statement) have been invested in cash and cash equivalent
investments.
Market value consists of initial cost of purchase plus/(less) market movements and can be reconciled as follows:
Consolidated
Parent
2009
2008
2009
2008
$
$
$
$
Beginning of financial year – cost
100,686,129
79,696,803
–
–
Beginning of financial year –
unrealised movements
(13,020,687)
4,721,584
–
–
87,665,442
84,418,387
–
–
Additional at cost
4,416,441
32,579,316
–
–
Disposals at cost
(37,965,523)
(12,124,164)
–
–
11,026,861
2,618,429
–
–
–
(534,174)
–
–
Market movements
(8,100,554)
(19,826,526)
–
–
End of financial year – cost
67,137,047
100,686,129
–
–
(10,094,380)
(13,020,687)
–
–
57,042,667
87,665,442
–
–
Opening market value
Realised loss/(gain) on disposal –
current year
Transfer between cost and
unrealised adjustment
End of financial year – unrealised
movements
Closing market value
6.
Membership and practitioner fees
Consolidated
Parent Entity
2009
2008
2009
2008
$
$
$
$
Practising certificate fees
3,529,464
3,307,990
3,529,464
3,307,990
Member fees
2,809,502
2,613,500
2,809,502
2,613,500
Certificate of fitness
16,773
17,191
16,773
17,191
Late application levy
3,820
5,360
3,820
5,360
272,690
267,310
272,690
267,310
6,632,249
6,211,351
6,632,249
6,211,351
Corporate marketing levy
7.
Rent and administration revenue
Consolidated
Parent Entity
2009
2008
2009
2008
$
$
$
$
Management fees
–
–
292,000
251,250
Law Claims Levy Fund
–
–
20,000
–
48,000
48,000
48,000
48,000
Legal Practitioners Fidelity Guarantee
Fund
Legal Practitioners Admissions Board
Rent
Car parking
8.
239,361
277,602
239,361
277,602
96,801
61,680
96,801
61,680
124,360
87,214
124,360
87,214
508,522
474,496
820,522
725,746
Membership services and events
Consolidated
Parent Entity
2009
2008
2009
2008
$
$
$
$
Income
411,791
400,039
411,791
400,039
50,154
49,622
50,154
49,622
QLS diary
212,643
249,224
212,643
249,224
Seminars
2,073,876
1,828,182
2,073,876
1,828,182
College of Law commission
279,225
236,316
279,225
236,316
Specialist accreditation
124,012
245,894
124,012
245,894
Resources, texts and course material
406,014
341,544
406,014
341,544
School and student services
40,495
33,838
40,495
33,838
Events and functions
66,317
21,500
66,317
21,500
Proctor advertising and subscription
456,569
527,889
456,569
527,889
Marketing and sponsorship
222,597
165,439
222,597
165,439
4,343,693
4,099,487
4,343,693
4,099,487
–
95,651
–
95,651
Practice management course
74,191
76,926
74,191
76,926
QLS diary
83,429
106,266
83,429
106,266
Seminars
998,692
879,933
998,692
879,933
10,839
23,227
10,839
23,227
153,699
102,989
153,699
102,989
School and student services
48,171
40,462
48,171
40,462
Events and functions
90,717
51,903
90,717
51,903
Membership product and services
286,717
200,896
286,717
200,896
Proctor expenses
335,002
273,383
335,002
273,383
7,766
3,270
7,766
3,270
2,089,223
1,854,906
2,089,223
1,854,906
Practice management course
Publications
Direct expenditure (exclude staff
costs)
Library services resources
Specialist accreditation
Resources, texts and course material
Marketing and sponsorship
9.
Administration expenses
Consolidated
Parent Entity
2009
2008
2009
2008
$
$
$
$
73,613
130,351
73,613
130,351
Actuarial fees
101,181
127,452
–
–
Audit fees
143,556
132,978
67,902
90,968
Bad debts
2,819
5,452
2,819
5,452
Advertising
Captive managers fee
85,000
70,000
–
–
Catering, functions and entertainment
73,278
77,602
65,338
72,857
Complaint investigations
1,992
1,553
1,992
1,553
Depreciation – computers
8,573
31,261
8,573
6,499
Depreciation – plant and equipment
137,238
101,483
106,326
101,483
Directors fees
302,100
143,025
–
–
District law association sponsorships
12,815
1,500
12,815
1,500
Electricity
91,806
78,775
91,806
78,775
Fringe benefits tax
146,899
104,132
129,148
92,406
Fees and charges
75,697
76,799
75,697
74,885
Foreign exchange
(30,347)
4,572
–
–
Insurance
269,255
250,154
182,805
184,875
Information technology and related costs
716,208
671,940
716,208
622,734
Investment managers fees
97,562
138,322
–
–
Law Asia
75,000
100,000
75000
100,000
Body corporate levies
204,459
156,390
204,459
156,390
Depreciation – strata title building
425,000
426,106
425,000
426,106
Rates and taxes
71,294
103,051
71,294
103,051
Lease payments
174,178
159,332
–
–
9,042
11,392
9,042
11,392
75,325
77,209
75,325
77,209
436,502
349,534
353,487
349,534
Postage
97,315
129,208
97,315
124,714
Presentations, donations and gifts
56,233
32,002
56,233
32,002
Provision for doubtful debts
153,875
(97,500)
–
–
Printing and stationery
206,567
180,230
181,893
155,712
1,079,965
701,426
685,643
448,272
84,895
96,332
66,063
64,435
180,940
204,704
180,940
204,704
8,328,565
7,221,462
6,898,209
6,053,305
33,796
44,812
–
–
2,696
12,051
2,696
12,051
35,050
32,821
32,129
32,821
970
2,532
970
2,532
Staff amenities
19,837
16,746
15,301
16,746
Staff training
74,019
50,104
43,955
50,104
Sundry expenses
64,939
35,413
34,358
30,745
Superannuation
722,658
623,931
607,610
540,996
Tax consulting
29,403
40,227
–
–
Taxis and couriers
24,555
32,163
24,555
32,163
Telephone
103,041
103,391
77,944
82,701
Travelling expenses
210,314
191,263
71,866
56,751
Trust account audits
16,540
13,036
16,540
13,036
15,306,218
13,196,719
11,842,869
10,641,810
Law society house
Motor vehicle expense
Offsite storage
Payroll tax
Professional and consulting fees
Registrations and subscriptions
Repairs and maintenance
Salaries and wages
Secretarial fees
Solicitors complaints tribunal
Staff – other costs
Staff advertising
10.
Council and committee costs
Consolidated
Parent Entity
2009
2008
2009
2008
$
$
$
$
Travel and accommodation
205,223
160,118
205,223
160,118
Honorarium
290,667
290,667
290,667
290,667
4,317
7,480
4,317
7,480
103,596
133,917
103,596
133,917
606,966
589,019
606,966
589,019
Convocation
Catering and functions
11.
Provision for outstanding claims
Consolidated
Parent Entity
2009
2008
2009
2008
$
$
$
$
Opening gross outstanding claims
64,876,846
64,218,102
–
–
Claims incurred
29,980,255
14,900,450
–
–
(18,926,751)
(14,455,706)
–
–
552,000
214,000
–
–
Closing gross outstanding claims
76,482,350
64,876,846
–
–
Opening reinsurance recoveries
(7,814,000)
(8,582,000)
–
–
Movement in reinsurance recoveries
(9,054,058)
738,110
–
–
191,058
29,890
(16,677,000)
(7,814,000)
–
–
Net outstanding claims
59,805,350
57,062,846
–
–
Current liability
17,665,000
16,110,846
–
–
Non-current liability
58,817,350
48,766,000
–
–
(16,677,000)
(7,814,000)
–
–
59,805,350
57,062,846
–
–
895,000
921,846
–
–
58,910,350
56,141,000
–
–
59,805,350
57,062,846
–
–
29,980,255
14,900,450
–
–
Movement in excesses due
(342,619)
–
–
–
Claims paid during the year
(18,926,751)
(14,455,706)
–
–
10,710,885
444,744
–
–
Movement in reinsurance recoveries
(9,054,058)
738,110
–
–
Recoveries received during the year
191,058
29,890
–
–
Claims paid during the year
Movement in claims handling provision
Reinsurance recoveries received
Closing reinsurance recoveries
Non current recoveries
Law Claims Levy Fund
Lexon Insurance Pte Ltd
Movements in profit and loss account:
Outstanding claims
Claims incurred
Reinsurance recoveries
(8,863,000)
–
768,000
–
The Law Claims Levy Fund has stop loss insurance that capped the fund’s liability at $5,000,000 for payments
made after 1 July 2002.
Lexon Insurance Pte Ltd and the Law Claims Levy Fund has assessed the provisions for outstanding claims based
upon an independent actuarial assessment as at 30 June 2009 by Mr. Andrew Cohen (FIAA) and Mr. Kane Bolton
(FIAA), of Finity Consulting Pty Ltd. The key assumptions are detailed in note 2.
Less than 1 year
Gross central estimate
Over 5 years
Total
18,287,000
39,792,000
11,570,350
69,649,350
(622,000)
(7,337,000)
(8,718,000)
(16,677,000)
17,665,000
32,455,000
2,852,350
52,972,350
Reinsurance recoveries
Net central estimate
1 to 5 years
Risk margins
2,629,000
Claims handling
4,204,000
Net claims outstanding
12.
59,805,350
Receivables and prepayments
Consolidated
2009
2008
2009
2008
$
$
$
$
863,187
518,420
205,312
203,164
(153,875)
–
–
–
709,312
518,420
205,312
203,164
1,024,380
1,208,330
823,886
1,047,915
1,733,692
1,726,750
1,029,198
1,251,079
Accounts receivables
Less: provision for doubtful debts
Prepaid expenses and other receivables
13.
Parent Entity
Payables
Consolidated
2009
2008
2009
2008
$
$
$
$
347,060
190,887
341,340
190,887
36,848,340
31,093,492
8,762,621
6,311,895
3,392,356
4,114,985
2,974,727
3,764,306
40,587,756
35,399,364
12,078,688
10,267,088
Creditors
Income in advance
Parent Entity
Other payments and accruals
Income in advance relates primarily to receipts for insurance, membership fees and practicing certificates received
prior to year end during the renewal period for the upcoming year.
14.
Property plant and equipment
Parent Entity
Strata Title
Building
$
Plant and
Equipment
$
Computer
Equipment
$
Total
$
2007/08
Cost or valuation
At the beginning of the year
Additions
Revaluations/other
17,044,225
–
688,024
1,108,783
30,410
–
365,187
21,804
–
18,518,195
52,214
688,024
At the end of the year
Depreciation
17,732,249
1,139,193
386,991
19,258,433
At the beginning of the year
Charge for the year
Revaluations/other
At the end of the year
Net book value at 30 June 2008
(2,958,560)
(426,106)
(136,629)
(3,521,295)
14,210,954
(712,758)
(101,483)
–
(814,241)
324,952
(360,856)
(6,500)
–
(367,356)
19,635
(4,032,174)
(534,089)
(136,629)
(4,702,892)
14,555,541
At the beginning of the year
Additions
Revaluations/other
At the end of the year
Depreciation
17,732,249
4,993,550
1,114,646
23,840,445
1,139,193
38,814
–
1,178,007
386,991
27,744
–
414,735
19,258,433
5,060,108
1,114,646
25,433,187
At the beginning of the year
Charge for the year
Revaluations/other
At the end of the year
Net book value at 30 June 2009
(3,521,295)
(425,000)
3,946,295
–
23,840,445
(814,241)
(106,326)
–
(920,567)
257,440
(367,356)
(8,573)
–
(375,929)
38,806
(4,702,892)
(539,899)
3,946,295
(1,296,496)
24,136,691
At valuation
At cost
17,732,249
–
17,732,249
–
1,139,193
1,139,193
–
386,991
386,991
17,732,249
1,526,184
19,258,433
Depreciation
(3,521,295)
14,210,954
(814,241)
324,952
(367,356)
19,635
(4,702,892)
14,555,541
At valuation
At cost
23,840,445
–
23,840,445
–
1,178,007
1,178,007
–
414,735
414,735
23,840,445
1,592,742
25,433,187
Depreciation
–
23,840,445
(920,567)
257,440
(375,929)
38,806
(1,296,496)
24,136,691
2008/09
Cost or valuation
Property, plant and equipment is stated as
follows:
30 June 2008
30 June 2009
Consolidated
Strata Title
Building
$
Plant and
Equipment
$
Computer
Equipment
$
Total
$
2007/08
Cost or valuation
At the beginning of the year
Additions
Revaluations/other
At the end of the year
Depreciation
17,044,225
–
688,024
17,732,249
1,181,378
30,410
–
1,211,788
438,625
24,341
–
462,966
18,664,228
54,751
688,024
19,407,003
At the beginning of the year
Charge for the year
Revaluations/other
At the end of the year
Net book value at 30 June 2008
(2,958,560)
(426,106)
(136,629)
(3,521,295)
14,210,954
(740,568)
(126,245)
–
(866,813)
344,975
(434,294)
(6,500)
–
(440,794)
22,172
(4,133,422)
(558,851)
(136,629)
(4,828,902)
14,578,101
At the beginning of the year
Additions
Revaluations/other
At the end of the year
Depreciation
17,732,249
4,993,550
1,114,646
23,840,445
1,211,788
96,901
–
1,308,689
462,966
27,744
–
490,710
19,407,003
5,118,195
1,114,646
25,639,844
At the beginning of the year
Charge for the year
(3,521,295)
(425,000)
(866,813)
(137,238)
(440,794)
(8,573)
(4,828,902)
(570,811)
2008/09
Cost or valuation
3,946,295
–
23,840,445
–
(1,004,051)
304,638
–
(449,367)
41,343
3,946,295
(1,453,418)
24,186,426
At valuation
At cost
17,732,249
–
17,732,249
–
1,211,788
1,211,788
–
462,966
462,966
17,732,249
1,674,754
19,407,003
Depreciation
(3,521,295)
14,210,954
(866,813)
344,975
(440,794)
22,172
(4,828,902)
14,578,101
At valuation
At cost
23,840,445
–
23,840,445
–
1,308,689
1,308,689
–
490,710
490,710
23,840,445
1,799,399
25,639,844
Depreciation
–
23,840,445
(1,004,051)
304,638
(449,367)
41,343
(1,453,418)
24,186,426
Revaluations/other
At the end of the year
Net book value at 30 June 2009
Property, plant and equipment is stated as
follows:
30 June 2008
30 June 2009
An independent valuation of the strata title building was carried out as at 30 June 2009 by Mr S Fox AAPI and was
on the basis of the open market value of Law Society House in vacant possession with all units combined.
The Society has plant and equipment with an original cost of $778,356 written down value of zero still being used
in the provision of services.
15.
Reserves
Asset revaluation
Fair value
Retained surplus
Closing balance at end of year
16.
Consolidated
2009
2008
$
$
16,872,883
11,811,943
–
(9,815,510)
56,814,355
65,811,985
73,687,238
67,808,418
Parent Entity
2009
2008
$
$
16,872,883
11,811,943
–
–
29,536,730
19,181,876
46,409,613
30,993,819
Accrued employee benefits
Consolidated
Parent Entity
2009
2008
2009
2008
$
$
$
$
Current
Annual leave – opening balance
589,989
520,097
492,996
471,083
(787,737)
(470,803)
(490,373)
(421,789)
Leave accrued
841,844
540,695
557,869
443,702
Annual leave – closing balance
644,096
589,989
560,492
492,996
481,808
433,332
473,824
431,858
(6,586)
(36,905)
(6,586)
(36,905)
Leave accrued
114,942
85,381
107,461
78,871
Long service leave – closing balance
590,164
481,808
574,699
473,824
97
97
Leave taken
Non–current
Provision for long service leave
Leave taken
Number of parent entity employees at
year end
17.
Commitments
a.
Operating leases
Consolidated
Parent Entity
2009
2008
2009
2008
$
$
$
$
Within one year
169,082
170,026
8,785
16,315
One to five years
161,029
321,324
–
–
330,111
491,350
8,785
16,315
b.
Capital leases
Capital expenditure contracted for at 30 June 2009 but not provided for was nil (2008 – nil).
We are currently negotiating for an office refurbishment which has an anticipated cost of $5.5m.
18.
Related party transactions
a.
The following significant transactions took place between the Consolidated Group and related parties during
the financial period on commercial terms agreed by the parties concerned.
2009
2008
$
$
Management fees paid by Lexon Insurance Pte Ltd to
parent entity
247,000
240,000
Management fees paid by Law Claims Levy Fund to
parent entity
20,000
–
Directors fees paid by Lexon Insurance Pte Ltd to parent
entity
45,000
11,025
19,655,000
21,500,000
– Coyne & Associates
675,161
675,446
– Flower & Hart
117,189
162,627
22,284
10,569
1,365
84,240
79,958
21,412
85,000
70,000
160,000
150,000
9,800
9,830
10,000,000
–
–
32,728
Gross premiums received by Lexon Insurance Pte Ltd
from Law Claims Levy Fund
Professional fees paid to a firm of which a director is a
member
Legal fees in the provision of claim defence costs:
– Ferguson Cannon
Other non claim professional advice provided:
– Coyne & Associates
– Flower & Hart
Management fees paid to a firm of which a director is a
member – AON Insurance Managers (Singapore) Pte Ltd
Brokerage fees paid to a firm of which a director is a
member – AON Re Australia Limited
Commissions derived from renewal of insurance policies
– RJ Neville & Associates
Purchase of additional shares in Lexon Insurance Pte Ltd
Secondment of staff from Coyne & Associates
b.
Key management personnel compensation
Consolidated
Directors fees
Parent Entity
2009
2008
2009
2008
$
$
$
$
302,100
143,025
–
–
290,667
290,667
290,667
290,667
1,624,110
1,344,421
973,512
952,327
130,236
119,067
84,555
90,474
Honorarium fees paid to President and Deputy President
Other officers:
– Salaries and other short term employment benefits
– Superannuation
During the year the parent entity management personnel were:
Ms Noela L’Estrange – Chief Executive Officer (appointed 11 May 2009)
Mr Peter Lyons – Director of Member Central
Mrs Patricia Linn – Director of People and Organisational Performance
Mr Anthony Walduck – Group Chief Financial Officer
Mr Scott Rowan – Director of Information Technology
Mr Malcolm Hinton – General Counsel
Mr Peter Carne (resigned 6 February 2009)
The consolidated results include the following Lexon Insurance Pte Ltd management personnel:
Mr Michael Young – Chief Executive Officer
Mr David Durham – Risk Manager
Mr Nick Burkett – Claims Counsel
Mr David Pitt – Underwriter
19.
Contingent liabilities
All known insurance claims have been actuarially assessed and expected liabilities have been brought to account as
Provision for Outstanding Claims.
There are no other known contingent liabilities of a significant nature at balance date.
20.
Notes to the statement of cash flows
a.
Reconciliation of cash
For the purposes of the cash flow statement, cash includes cash on hand and in banks and investments in money
market instruments, net of outstanding bank overdrafts. Cash at the end of the financial year as shown in the
statement of cash flows is reconciled to the related items in the balance sheet as follows:
Consolidated
Parent Entity
2009
2008
2009
2008
$
$
$
$
Cash at bank
21,508,655
26,608,018
1,279,069
599,393
Cash deposit accounts
47,581,993
18,098,540
11,178,534
10,821,714
Cash included in cash flow
statement
69,090,648
44,706,558
12,457,603
11,421,107
Term deposit
16,000,000
10,000,000
3,000,000
6,000,000
Total cash & cash equivalents
85,090,648
54,706,558
15,457,603
17,421,107
b.
Financing facilities
The Society has no credit facility with any financial institution to meet any financing requirements.
c.
Reconciliation of net cash provided by operating activities to the surplus/(deficit) for the year
Consolidated
Surplus/(deficiency) for the year
Parent Entity
2009
2008
2009
2008
$
$
$
$
(8,997,630)
16,004,145
354,854
1,698,854
16,704,799
(8,756,641)
–
–
570,811
558,850
539,899
534,088
(1,807)
37,163
221,881
128,922
5,182,957
(952,190)
2,003,656
2,029,698
162,462
63,879
168,371
63,879
–
–
(192,058)
(2,514,978)
2,742,504
1,426,744
–
–
Tax related balances
(7,800,474)
(3,193,970)
Solicitors deductibles
–
–
–
–
8,563,622
5,187,980
3,096,603
1,940,463
Adjustments for:
Investment income
Add/(less) non–cash items
Depreciation
Change in assets and liabilities
(Increase)/decrease in assets
Accounts receivables
Increase/(decrease) in liabilities
Accounts payables & unearned
income
Employee benefits
Collections for society entities
Provision for outstanding claims
Net cash provided by/(used in)
operating activities
21.
Income tax expense
Consolidated
Parent Entity
2009
2008
2009
2008
$
$
$
$
Tax expense attributable to profit is made
up of:
Current income tax
Deferred income tax (Note 23)
–
982,651
–
–
(6,313,343)
(34,000)
–
–
(6,313,343)
948,651
(432,303)
155,426
–
–
–
–
–
–
(6,745,646)
1,104,077
–
–
(Over)/Under Provision in preceding
financial years
Current income tax
Deferred income tax (Note 23)
Lexon Insurance Pte Ltd has dual tax residency in Australia and Singapore. In relation to offshore insurance
business, the Company has been granted tax exempt status for a period of ten years from 17 February 2006 to
16 February 2016 under the tax exemption scheme for captive insurers by the Monetary Authority of Singapore.
The tax expense on profit differs from the amount that would arise using the standard tax rate due to the following:
Consolidated
Profit/(loss) before tax
Parent Entity
2009
2008
2009
2008
$
$
$
$
(15,743,276)
17,108,222
–
–
(4,722,983)
5,132,467
–
–
(1,888,759)
(3,768,972)
–
–
(10,551)
(38,208)
–
–
–
–
–
–
432,303
–
–
–
(123,353)
(376,636)
–
–
(6,313,343)
948,651
–
–
Tax calculated at a tax rate of 30 per cent
(2008: 30 per cent)
Effects of:
Income not subject to tax
Tax free distributions on investments
(Note 23)
Utilisation of tax losses previously
unrecognised
Expenses not deductible for tax
Franking credits available
22.
Current income tax liability
Consolidated
2009
2008
2009
2008
$
$
$
$
Income tax at the beginning of the
financial year
Income tax paid
Prior year under/(over) provision
490,390
3,650,359
–
–
(1,054,940)
(4,298,046)
–
–
(432,303)
155,426
–
–
–
982,651
–
–
(996,853)
490,390
–
–
Current year income tax
Income tax at the end of the financial
year
23.
Parent Entity
Deferred income tax balances
The movement in the deferred income tax accounts are as follows:
Consolidated
Parent Entity
2009
2008
2009
2008
$
$
$
$
Net balance at beginning of the
financial year
3,155,963
(1,440,647)
–
–
Current year tax charge to income
statement
6,313,343
34,000
–
–
–
–
–
–
(3,204,988)
4,562,610
–
–
6,264,318
3,155,963
–
–
Prior year tax charge to income
statement
Charged to fair value reserve
Net balance at end of the financial
year
The balance comprises temporary differences attributable to:
Consolidated
Parent Entity
2009
2008
2009
2008
$
$
$
$
Deferred tax assets
– Balance at beginning of the
financial year
3,248,031
47,250
–
–
(25,742)
43,043
–
–
– Income losses carried forward
1,431,163
–
– Capital losses carried forward
2,784,093
–
– Unrealised investment losses
2,067,124
–
(3,204,988)
3,204,988
46,153
(47,250)
–
–
6,345,834
3,248,031
–
–
(92,067)
(1,487,897)
–
–
–
1,357,622
–
–
10,551
38,208
–
–
(81,516)
(92,067)
–
–
6,264,318
3,155,964
–
–
Charge to income statement
– Other timing differences
– Gain/(loss) in fair value of
investments
– Allowance for impairment of
receivables
Deferred tax liabilities
– Balance at beginning of the
financial year
Charge to equity
– Gain/(loss) in fair value reserve
Charge to income statement
– Tax-free distribution on
Investments
Net balance at end of the financial
year
Declaration of Queensland Law Society Incorporated
The general-purpose financial report has been prepared pursuant to section 46F(5) of the Financial Administration
and Audit Act 1977 (the Act) and other prescribed requirements. In accordance with section 46F(3) of the Act we
certify that in our opinion:
(a)
the foregoing financial statements with other information and notes to and forming part thereof are in
agreement with the accounts and records of the Queensland Law Society Incorporated and its controlled
entities, and
(b)
in our opinion –
(i)
the prescribed requirements in respect of the establishment and keeping of accounts have been
complied with in all material respects, and
(ii)
the foregoing financial statements have been drawn up so as to present a true and fair view in
accordance with prescribed accounting standards of the transactions of the Queensland Law Society
Incorporated and its controlled entities for the period 1 July 2008 to 30 June 2009 and of the financial
position as at the close of that period.
President
Ian Berry
Chief Executive Officer
Noela L’Estrange
31 August 2009
Independent Auditors Report
To the Council of the Queensland Law Society Incorporated
Matters Relating to the Electronic Presentation of the Audited Financial Report
The audit report relates to the financial report of Queensland Law Society Incorporated for the financial year ended
30 June 2009 included on Queensland Law Society Incorporated web site. The Council members are responsible
for the integrity of the Queensland Law Society Incorporated web site. We have not been engaged to report on the
integrity of Queensland Law Society Incorporated web site. The audit report refers only to the statements named
below. It does not provide an opinion on any other information which may have been hyperlinked to/from these
statements. If users of the financial report are concerned with the inherent risks arising from electronic data
communications they are advised to refer to the hard copy of the audited financial report, available from
Queensland Law Society Incorporated, to confirm the information included in the audited financial report presented
on this web site.
These matters also relate to the presentation of the audited financial report in other electronic media including CD
Rom.
Report on the Financial Report
I have audited the accompanying financial report of Queensland Law Society Incorporated, which comprises the
balance sheet as at 30 June 2009 and the income statement, statement of changes in equity and cash flow statement
for the year ended on that date, a summary of significant accounting policies, other explanatory notes and
certificates given by the President of the Council and officer responsible for the financial administration of the
consolidated entity comprising the Queensland Law Society Incorporated and the entities it controlled at the year’s
end or from time to time during the financial year.
The Council’s Responsibility for the Financial Report
The Council is responsible for the preparation and fair presentation of the financial report in accordance with
prescribed accounting requirements identified in the Financial Administration and Audit Act 1977 and the
Financial Management Standard 1997 including compliance with applicable Australian Accounting Standards
(including the Australian Accounting Interpretations). This responsibility includes designing, implementing and
maintaining internal controls relevant to the preparation and fair presentation of the financial report that is free
from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies;
and making accounting estimates that are reasonable in the circumstances.
Auditor’s Responsibility
My responsibility is to express an opinion on the financial report based on the audit. The audit was conducted in
accordance with Auditor-General of Queensland Auditing Standards, which incorporate the Australian Auditing
Standards. These Auditing Standards require compliance with relevant ethical requirements relating to audit
engagements and that the audit is planned and performed to obtain reasonable assurance whether the financial
report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial report. The procedures selected depend on the auditor’s judgment, including the assessment of risks of
material misstatement in the financial report, whether due to fraud or error. In making those risk assessments, the
auditor considers the entity’s preparation and fair presentation of the financial report in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control, other than in expressing an opinion on compliance with prescribed
requirements. An audit also includes evaluating the appropriateness of accounting policies and the reasonableness
of accounting estimates made by the Society, as well as evaluating the overall presentation of the financial report
and any mandatory financial reporting requirements as approved by the Treasurer for application in Queensland.
I believe that the audit evidence obtained is sufficient and appropriate to provide a basis for my audit opinion.
Independence
The Auditor-General Act 2009 promotes the independence of the Auditor General and QAO authorised auditors.
The Auditor-General is the auditor of all Queensland public sector entities and can only be removed by Parliament.
The Auditor-General may conduct an audit in any way considered appropriate and is not subject to direction by any
person about the way in which audit powers are to be exercised.
The Auditor-General has for the purposes of conducting an audit, access to all documents and property and can
report to Parliament matters which in the Auditor-General’s opinion are significant.
Auditor’s Opinion
In accordance with s40 of the Auditor-General Act 2009 –
a.
I have received all the information and explanations which I have required, and
b.
in my opinion –
i.
the prescribed requirements in respect of the establishment and keeping of accounts have been
complied with in all material respects, and
ii.
the financial report has been drawn up so as to present a true and fair view, in accordance with the
prescribed accounting standards of the transactions of the Queensland Law Society Incorporated and
the consolidated entity for the financial year 1 July 2008 to 30 June 2009 and of the financial position
as at the end of that year.
GARY PAUL SMITH FCPA
Appointed Auditor
As Delegate of the Auditor-General of Queensland
Brisbane
GPS Business Services
Certified Practising Accountants
Suite 3 118 Vulture Street
South Brisbane Qld 4101
31 August 2009
Queensland Law Society Incorporated
Legal Practitioners’ Fidelity Guarantee Fund
Income Statement
for the year ended 30 June 2009
NOTES
2009
2008
$
$
Revenue
Practitioner fees
Interest on investments
2
2,434,386
2,311,866
531,336
494,688
Costs recovered
3
Total revenue
10,994
1,876
2,976,716
2,808,430
145,324
132,199
1,209,278
87,243
569,138
59,733
27,983
5,939
36,000
36,000
117,577
12,702
2,105,300
333,816
871,416
2,474,614
Expenses
Administration expenses
4
Claims approved for payment
Notified claims
Claim costs
Expenses reimbursed to the Queensland Law
Society
5
Receivership costs
Total expenses
Operating surplus
The accompanying notes form part of these statements.
Queensland Law Society Incorporated
Legal Practitioners’ Fidelity Guarantee Fund
Balance Sheet
as at 30 June 2009
NOTES
2009
2008
$
$
Current assets
Cash and cash equivalents
11,901,586
9,582,298
52,671
81,640
Total current assets
11,954,257
9,663,938
Total assets
11,954,257
9,663,938
Receivables
11(a)
6
Current liabilities
Payables
7
786,255
100,734
Income in advance
8
2,207,167
2,048,590
Provision for notified claims
9
2,332,631
1,763,492
Accrued employee benefits
10
13,157
10,885
5,339,210
3,923,701
29,331
25,937
29,331
25,937
Total liabilities
5,368,541
3,949,638
Net assets
6,585,716
5,714,300
Total current liabilities
Non-current liabilities
Accrued employee benefits
Total non-current liabilities
10
Equity
Retained surplus
6,585,716
5,714,300
Total equity
6,585,716
5,714,300
The accompanying notes form part of these statements.
Queensland Law Society Incorporated
Legal Practitioners’ Fidelity Guarantee Fund
Statement of Changes In Equity
for the year ended 30 June 2009
2009
2008
$
$
Balance at 1 July 2008
5,714,300
3,239,686
871,416
2,474,614
6,585,716
5,714,300
Operating surplus for the period
Balance at 30 June 2009
The accompanying notes form part of these statements.
Queensland Law Society Incorporated
Legal Practitioners’ Fidelity Guarantee Fund
Cash Flow Statement
for the year ended 30 June 2009
NOTES
2009
2008
$
$
Inflows
(Outflows)
Inflows
(Outflows)
Cash flows from operating activities
Contributions by practitioners and cost recoveries
2,592,962
2,371,116
Claim payments and administration expenses
(834,323)
(323,145)
560,649
468,600
2,319,288
2,516,571
Net increase/(decrease) in cash held
2,319,288
2,516,571
Cash at the beginning of the financial year
9,582,298
7,065,727
11,901,586
9,582,298
Interest received
Net cash provided by/(used in) operating
activities
Cash at the end of the financial year
11(c)
11(a)
The accompanying notes form part of these statements.
Queensland Law Society Incorporated
Legal Practitioners’ Fidelity Guarantee Fund
Notes to and forming part of the Financial Statements
for the year ended 30 June 2009
Objectives and Principal Activities
The Queensland Law Society Incorporated (‘the Society’), pursuant to s359 of the Legal Profession Act 2007 (‘the
Act’) is required to continue the existence of a fund called the Legal Practitioners’ Fidelity Guarantee Fund (the
‘Fund’) as was required under s12 of the Queensland Law Society Act 1952. The Fund has been established for the
purposes of providing a source of compensation for defaults by law practices arising from acts or omissions of
associates of the law practices. The major source of income for the Fund is contributions from legal practitioners.
1
Summary of significant accounting policies
(a)
Basis of accounting
The financial report is a General Purpose Financial Report which has been prepared in accordance with Australian
Accounting Standards (including Australian Accounting Interpretations) of the Australian Accounting Standards
Board and comply with the Treasurer’s minimum reporting requirements for the year ending 30 June 2009, and
other authoritative pronouncements.
The financial report has also been prepared on the basis of historical cost and except where stated does not take into
account changing money values. Comparative information has been restated where necessary to be consistent with
disclosures in the current reporting period and amounts in the report have been rounded to the nearest dollar.
(b)
Taxation
The Fund is exempt from income tax by virtue of section 50-25 of the Income Tax Assessment Act 1997 with the
exception of Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred
is not recoverable from the ATO. In these circumstances, the GST is recognised as part of the cost of acquisition of
the asset or as part of the expense.
The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the
Balance Sheet.
Cash flows are included in the cash flow statement on a gross basis. The GST components of cash flows arising
from investing activities and financing activities which are recoverable from, or payable to, the ATO are classified
as operating cash flows.
(c)
Revenue
Revenues are recognised at fair value of the consideration received net of any amount of GST payable to the ATO.
Practitioner Fees are recognised when payment is received. Interest revenue is recognised as it accrues, taking into
account the effective yield on the financial asset and is also recognised net of bank charges.
(d)
Use and revision of accounting estimates
The preparation of the financial report requires the making of estimations and assumptions that affect the
recognised amounts of assets, liabilities, revenues and expenses and the disclosure of contingent liabilities. The
estimates and associated assumptions are based on historical experience and various other factors that are believed
to be reasonable under the circumstances, the results of which form the basis of making the judgements about
carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ
from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period or in the period of
the revision and future periods if the revision affects both current and future periods.
(e)
Cash and cash equivalents
For the purposes of the Balance Sheet and Cash Flow Statement, cash assets include all cash and cheques receipted
but not banked at 30 June as well as deposits on call with financial institutions. The Cash Deposit Account and
Term Deposit Account are interest bearing accounts which are readily convertible to cash on hand at the Society’s
option. These investments are brought to account at fair value as indicated in note 11(a).
(f)
Receivables
Interest receivable represents interest accruals for amounts received in the month after balance date.
The Fund has brought to account Fines and Cost Recoveries receivable from practitioners. These receivables have
been recognised on an accrual basis and are carried at actual amounts and the collectability of trade debtors is
assessed at reporting date and with provision being made for impairment.
(g)
Payables
Trade creditors are recognised on receipt of the goods or services and are carried at actual amounts, gross of
applicable trade and other discounts. Amounts are unsecured and are generally settled on 30 day terms.
(h)
Employee benefits
Annual leave
Annual leave entitlements represent present obligations resulting from services provided by employees up to
balance date, calculated at undiscounted amounts based on remuneration rates that the entity expects to pay as at
reporting date including related on-costs, such as, employer superannuation contributions, and payroll tax.
Sick leave
Prior history indicates that on average, sick leave taken each reporting period is less than the entitlement accrued.
This is expected to recur in future periods and therefore it is unlikely that existing accumulated entitlements will be
used by employees and no liability for unused sick leave entitlements is recognised.
Long service leave
The provision for employee benefits for long service leave represents the present value of the estimated future cash
outflows to be made resulting from employees’ services provided to reporting date.
The provision is calculated using expected future increases in remuneration rates including related on-costs and is
based on experience of employee departure per year of service. Long service leave expected to be paid in the next
12 months is recorded as a current liability in the Balance Sheet. Long service leave expected to be paid later than
one year is recorded as a non-current liability and is discounted using the Commonwealth Bond rate at reporting
date which most closely match the terms of maturity of the related liabilities. The unwinding of the discount is
treated as long service leave expense.
(i)
Provision for notified claims
Claims are brought to account in the year they are notified.
(j)
Income in advance
Income in advance relates to Fidelity Fund Levies collected from the profession in relation to the upcoming
financial year (ie current year levies in advance relate to collections for the financial year 1 July 2009 to 30 June
2010).
(k)
Judgements and assumptions
The entity has made no judgements or assumptions which may cause a material adjustment to the carrying amounts
of assets and liabilities within the next reporting period.
(l)
New and revised accounting standards
No Australian accounting standards and interpretations issued or amended and applicable for the first time in the
2008/09 financial year have an effect on the Fund. Also, the Fund has not voluntarily changed any of its accounting
policies.
The Fund is not permitted to adopt a new accounting standard ahead of the specified commencement date unless
approval is obtained from the Treasury Department. Consequently, the Fund has not applied any Australian
accounting standards and interpretations that have been issued but are not yet effective. The Fund will apply these
standards and interpretations in accordance with their respective commencement dates.
All other Australian accounting standards and interpretations with future commencement dates are either not
applicable to the Fund, or have no material impact on the Fund.
2
Practitioner fees
With a view to ensuring that the Fund is able to meet its financial commitments when they fall due, the Council of
the Queensland Law Society Incorporated resolved to levy each practitioner $335 (2008 – $330) in accordance with
s156 of the Act.
3
Costs recovered
2009
2008
$
$
Defaulting practitioners
4
10,994
1,876
10,994
1,876
Administration expenses
Audit fees – Fidelity
Fund
2009
2008
$
$
9,500
9,110
120
121
4,770
4,785
Professional fees
12,150
6,280
Rent and electricity
12,000
12,000
Salaries
97,795
91,130
8,292
7,912
697
861
145,324
132,199
Bank charges
Payroll tax
Superannuation
Telephone
5
Expenses reimbursed to the Queensland Law Society Incorporated
The Fund, pursuant to s152 of the Act, is required to reimburse the Society for all costs and expenses incurred in
the administration of the Fund. The Society performs all managerial and administrative tasks on behalf of the Fund.
2009
2008
$
$
Administration fees
6
36,000
2008
$
$
52,052
81,365
619
275
52,671
81,640
Payables
2009
2008
$
$
Approved claims
Other payables and
accruals
775,756
88,834
10,499
11,900
786,255
100,734
Income in advance
2009
2008
$
$
Fidelity guarantee fee
for upcoming year
9
36,000
2009
GST receivable
8
36,000
Receivables
Interest receivable
7
36,000
2,207,167
2,048,590
2,207,167
2,048,590
Provision for notified claims
Notified claims
2009
2008
$
$
2,332,631
1,763,492
2,332,631
1,763,492
Notified claims represent the estimated liability in relation to claims which have been notified but not yet admitted
as a claim. Once the claim has been admitted, they are disclosed as approved claims included in note 7.
10
Accrued employee benefits
2009
2008
$
$
Current
Provision for annual leave
13,157
10,885
13,157
10,885
29,331
25,937
Non-current
Provision for long service leave
29,331
25,937
1
1
Number of employees at year end
11
Notes to the cash flow statement
(a)
Reconciliation of cash
For the purposes of the cash flow statement, cash includes cash on hand and in banks and investments on money
market instruments, net of outstanding bank overdrafts. Cash at the end of the financial year as shown in the cash
flow statement is reconciled to the related items in the balance sheet as follows:
2009
2008
$
$
Cash assets
2,291,007
1,518,399
Cash deposit account
2,035,305
3,513,899
Term deposit account
7,575,274
4,550,000
11,901,586
9,582,298
(b)
Financing facilities
The Fund has no external non-cash financing or any standby credit facilities or any other loan facilities.
(c)
Reconciliation of net cash provided by/(used in) operating activities to the operating
surplus/(deficit) for the year
Operations surplus/(deficit)
2009
2008
$
$
871,416
2,474,614
(Increase)/decrease in
receivables
28,969
(24,711)
(Decrease)/increase in
creditors & claims
1,413,237
63,446
(Decrease)/increase in
employee entitlements
5,666
3,222
2,319,288
2,516,571
Changes in assets and
liabilities:
Net cash provided by/(used
in) operating activities
12
Contingent liabilities
There are no known contingencies at balance date (2008 – nil).
13
Operating lease expense commitments
The Fund has no operating lease commitments (2008 – nil).
14
Financial risk
The Fund’s activities expose it to a variety of financial risks: market risk (currency risk, price risk and interest rate
risk), credit risk and liquidity risk.
(a)
Currency risk
The Fund is not exposed to any foreign currency risk.
(b)
Price and interest rate risk
The funds are invested reputable Australian banks. Investments included fixed term deposits which are not subject
to interest rate or price risk.
(c)
Credit risk
There is no significant credit risk with respect to the collectability of levies as the levy is compulsory. All levies are
paid up front at the commencement of the period.
Credit risk arising on funds placed on term deposit is managed by ensuring funds are only placed with reputable
institutions.
(i)
Financial assets that are neither past due or impaired
At the balance sheet date no financial assets are past due or impaired.
(ii)
Financial assets that are past due and/or impaired
No financial assets are past due
(d)
Liquidity risk
In the management of liquidity risks, the Fund monitors and maintains a level of cash and cash equivalents deemed
adequate by management to finance the Fund’s operations and mitigate the effects of fluctuations in cash flows.
The Fund also constantly reviews its investment to ensure that there are sufficient cash and liquid deposits to meet
its estimated outflows.
As at balance sheet date, the Fund’s financial liabilities are all current.
(e)
Interest Rate Sensitivity
The fund does not hold any financial instruments subject to interest rate variability.
(f)
Fair value
The carrying amount of cash and cash equivalent, receivables, payables and lease liabilities approximate their fair
value and are not disclosed separately.
Declaration of Legal Practitioners’ Fidelity Guarantee Fund
The foregoing financial statements have been prepared pursuant to s365 of the Queensland Legal Profession Act
2007 and other prescribed requirements and we certify that –
(a)
the foregoing financial statements with other information and notes to and forming part thereof are in
agreement with the accounts and records of the Legal Practitioners’ Fidelity Guarantee Fund, and
(b)
in our opinion –
(i)
the prescribed requirements in respect of the establishment and keeping of accounts have been
complied with in all material respects, and
(ii)
the foregoing financial statements have been drawn up so as to present a true and fair view in
accordance with prescribed accounting standards of the transactions of the Legal Practitioners’
Fidelity Guarantee Fund for the financial period 1 July 2008 to 30 June 2009 and of the financial
position as at the close of that period.
President
Ian Berry
Chief Executive Officer
Noela L’Estrange
31 August 2009
Independent Auditors Report
To the Legal Practitioners Fidelity Guarantee Fund
Matters Relating to the Electronic Presentation of the Audited Financial Report
The audit report relates to the financial report of Legal Practitioners’ Fidelity Guarantee Fund for the financial year
ended 30 June 2009 included on Queensland Law Society Incorporated web site. The Council members are
responsible for the integrity of the Queensland Law Society Incorporated web site. We have not been engaged to
report on the integrity of Queensland Law Society Incorporated web site. The audit report refers only to the
statements named below. It does not provide an opinion on any other information which may have been
hyperlinked to/from these statements. If users of the financial report are concerned with the inherent risks arising
from electronic data communications they are advised to refer to the hard copy of the audited financial report,
available from Queensland Law Society Incorporated, to confirm the information included in the audited financial
report presented on this web site.
These matters also relate to the presentation of the audited financial report in other electronic media including CDROM.
Report on the Financial Report
I have audited the accompanying financial report of Legal Practitioners Fidelity Guarantee Fund which comprises
the balance sheet as at 30 June 2009, the income statement, statement of changes in equity and cash flow statement
for the year ended on that date, a summary of significant accounting policies, other explanatory notes and
certificates given by the officer responsible for the financial administration of Legal Practitioners’ Fidelity
Guarantee Fund.
The Council’s Responsibility for the Financial Report
The Council is responsible for the preparation and fair presentation of the financial report in accordance with
prescribed accounting requirements identified in the Financial Administration and Audit Act 1977 and the
Financial Management Standard 1997, including compliance with applicable Australian Accounting Standards
(including the Australian Accounting Interpretations). This responsibility includes designing, implementing and
maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from
material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and
making accounting estimates that are reasonable in the circumstances.
Auditor’s Responsibility
My responsibility to express an opinion on the financial report based on the audit is prescribed in the AuditorGeneral Act 2009. This Act, including transitional provisions, came into operation on 1 July 2009 and replaces the
previous requirements contained in the Financial Administration and Audit Act 1977.
The audit was conducted in accordance with Auditor-General of Queensland Auditing Standards, which
incorporate the Australian Auditing Standards. These Auditing Standards require compliance with relevant ethical
requirements relating to audit engagements and that the audit is planned and performed to obtain reasonable
assurance whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial report. The procedures selected depend on the auditor’s judgment, including the assessment of risks of
material misstatement in the financial report, whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report in
order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity’s internal control, other than in expressing an opinion on compliance with
prescribed requirements. An audit also includes evaluating the appropriateness of accounting policies and the
reasonableness of accounting estimates made by the fund, as well as evaluating the overall presentation of the
financial report including any mandatory financial reporting requirements as approved by the Treasurer for
application in Queensland.
I believe that the audit evidence obtained is sufficient and appropriate to provide a basis for my audit opinion.
Independence
The Auditor-General Act 2009 promotes the independence of the Auditor General and QAO authorised auditors.
The Auditor-General is the auditor of all Queensland public sector entities and can only be removed by Parliament.
The Auditor-General may conduct an audit in any way considered appropriate and is not subject to direction by any
person about the way in which audit powers are to be exercised.
The Auditor-General has for the purposes of conducting an audit, access to all documents and property and can
report to Parliament matters which in the Auditor-General’s opinion are significant.
Auditor’s Opinion
In accordance with s40 of the Auditor-General Act 2009 –
(a)
I have received all the information and explanations which I have required, and
(b)
in my opinion –
(i)
the prescribed requirements in respect of the establishment and keeping of accounts have been
complied with in all material respects, and
(ii)
the financial report has been drawn up so as to present a true and fair view, in accordance with the
prescribed accounting standards of the transactions of the Legal Practitioners’ Fidelity Guarantee Fund
for the financial year 1 July 2008 to 30 June 2009 and of the financial position as at the end of that
year.
GARY PAUL SMITH FCPA
Appointed Auditor
As Delegate of the Auditor-General of Queensland
Brisbane
GPS Business Services
Certified Practising Accountants
Suite 3 118 Vulture Street
South Brisbane Qld 4101
31 August 2009
Queensland Law Society Incorporated
Law Claims Levy Fund
Income Statement
for the year ended 30 June 2009
NOTES
2009
2008
$
$
Revenue
Insurance levies
2
Additional levies
Investment income
Total revenue
28,582,085
28,668,298
172,500
135,000
1,821,620
2,493,823
30,576,205
31,297,121
103,362
80,184
20,200
4,950
19,655,000
21,500,000
98,352
6,256
(26,846)
(6,256)
(191,058)
(29,890)
1,608,316
–
3,203,836
–
24,471,162
21,555,244
6,105,043
9,741,877
Expenses
Administration expenses
Audit fees
Insurance expense
2
Claims
Claims paid
Movement in outstanding claims
4
Reinsurance recoveries
Realised investment losses
7
Unrealised investment losses
Total expenses
Operating surplus
The accompanying notes form part of these statements.
Queensland Law Society Incorporated
Law Claims Levy Fund
Balance Sheet
as at 30 June 2009
NOTES
2009
2008
$
$
Current assets
Cash and cash equivalents
Receivables
7(a)
5
Total current assets
35,499,423
31,466,845
36,245
78,336
35,535,668
31,545,181
17,397,062
19,657,456
17,397,062
19,657,456
Non-current assets
Other financial assets
Total non-current assets
7(b)
Total assets
52,932,730
51,202,637
28,085,719
24,781,597
42,550
31,980
895,000
921,846
Total current liabilities
29,023,269
25,735,423
Net assets
23,909,461
25,467,214
23,909,461
27,804,418
–
(2,337,204)
23,909,461
25,467,214
Current liabilities
Income in advance
3
Creditors and accruals
Provision for outstanding claims
4
Equity
Retained surplus
Fair value reserve
Total equity
The accompanying notes form part of these statements.
Queensland Law Society Incorporated
Law Claims Levy Fund
Statement of Changes to Equity
for the year ended 30 June 2009
Retained profits
Reserve movement
Total
$
$
$
Opening Balance – 1 July 2007
18,062,541
–
18,062,541
Operating surplus for the period
9,741,877
–
9,741,877
–
(2,337,204)
(2,337,204)
27,804,418
(2,337,204)
25,467,214
6,105,043
–
6,105,043
Fair value reserve movement
–
(2,474,948)
2,337,204
Realised losses
–
1,608,317
–
Transfer to Income Statement
–
3,203,836
–
(10,000,000)
–
(10,000,000)
23,909,461
–
23,909,461
Fair value reserve movement
Closing Balance – 30 June 2008
2008/09
Operating surplus for the period
Transfer to QLS for purchase of Lexon Shares
Closing Balance – 30 June 2009
The accompanying notes form part of these statements.
Queensland Law Society Incorporated
Law Claims Levy Fund
Cash Flow Statement
for the year ended 30 June 2009
2009
2008
NOTES
$
$
Inflows
(Outflows)
Inflows
(Outflows)
Cash flows from operating activities
Receipts from the profession
32,058,707
28,166,520
Claim payments
(98,352)
(6,256)
Reinsurance recoveries
191,058
29,890
(19,766,659)
(21,575,054)
910,882
808,742
13,295,636
7,423,842
736,942
–
–
(20,500,000)
(10,000,000)
–
(9,263,058)
(20,500,000)
4,032,578
(13,076,158)
27,466,845
40,543,003
31,499,423
27,466,845
Payments to suppliers
Interest receipts
Net cash provided by/(used in) operating
activities
6(c)
Cash flows from investing activities
Proceeds from disposal of Investments
Purchase of Investments
Transfer to QLS for purchase of Lexon Shares
Net cash flows from investing activities
Net increase/(decrease) in cash held
Cash at the beginning of the financial year
Cash at the end of the financial year
6(a)
The accompanying notes form part of these statements.
Queensland Law Society Incorporated
Law Claims Levy Fund
Notes to and forming part of the Financial Statements
for the year ended 30 June 2009
Objectives and principal activities
The Queensland Law Society Incorporated (‘the Society’), pursuant to s232 of the Legal Profession Act 2007 (‘the
Act’) is authorised to establish and maintain a fund for the purposes of providing insurance to the legal profession
of Queensland.
The Law Claims Levy Fund (‘The Fund’) was created in 1987 to provide professional indemnity insurance to
Queensland solicitors. The Fund is responsible for the management of professional indemnity claims of
practitioners for the years 1987 to 1995, and the administration insurance matters (jointly with Lexon Insurance Pte
Ltd) in accordance with the Queensland Law Society Indemnity Rule 2005.
1
Summary of significant accounting policies
(a)
Basis of accounting
The financial report is a General Purpose Financial Report which has been prepared in accordance with Australian
Accounting Standards (including Australian Accounting Interpretations) of the Australian Accounting Standards
Board and comply with the Treasurer’s minimum reporting requirements for the year ending 30 June 2009, and
other authoritative pronouncements.
The financial report has also been prepared on the basis of historical cost and except where stated does not take into
account changing money values. Comparative information has been restated where necessary to be consistent with
disclosures in the current reporting period and amounts in the report have been rounded to the nearest dollar.
(b)
Revenue
Additional levies may be imposed in accordance with the indemnity rules and are accounted for separately and
disclosed as income of the Fund. Interest revenue is recognised as it accrues, taking into account the effective yield
on the financial asset and is also recognised net of bank charges.
(c)
Taxation
The Fund is exempt from income tax by virtue of sections 50-25 of the Income Tax Assessment Act 1997 with the
exception of Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred
is not recoverable from the ATO. In these circumstances, the GST is recognised as part of the cost of acquisition of
the asset or as part of the expense.
The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the
balance sheet.
Cash flows are included in the cash flow statement on a gross basis. The GST components of cash flows arising
from investing activities and financing activities which are recoverable from, or payable to, the ATO are classified
as operating cash flows.
(d)
Cash and cash equivalents
For the purposes of the Balance Sheet and Cash Flow Statement, cash assets include all cash and cheques receipted
but not banked at 30 June as well as deposits on call with financial institutions. Short term deposits are an interest
bearing account which is readily convertible to cash on hand at the Society’s option and is subject to a low risk of
change in value. Investments are brought to account at fair value as indicated in Note 6(a).
(e)
Other receivables
Interest receivable represents interest accruals for amounts received in the month after balance date.
The Fund has brought to account solicitors’ deductibles and penalties receivable from practitioners. These
receivables have been recognised on an accrual basis and are carried at actual amounts. The collectability of trade
debtors is assessed at reporting date with provision being made for impairment. All known bad debts were writtenoff as at 30 June.
(f)
Provision for outstanding claims
Claims are actuarially assessed and the movement in the actuarial assessment is disclosed in the income statement
as movement in outstanding claims. Actual claim payments are separately disclosed.
(g)
Other financial assets
i.
Recognition and derecognition
Purchases and sales of investments are recognised on trade-date – the date on which the Fund commits to purchase
or sell the asset. Other financial assets are recognised when there is a contractual right to receive cash or financial
assets; or to exchange financial instruments with another enterprise.
Investments are derecognised when the rights to receive cash flows from the financial assets have expired or have
been transferred and the Fund has transferred substantially all risks and rewards of ownership.
ii.
Initial measurement
Investments are initially recognised at fair value plus transaction costs.
iii.
Subsequent measurement
Investment assets are subsequently carried at fair value. Loans and receivables are carried at amortised cost using
the effective interest method.
Unrealised gains and losses arising from changes in the fair value of investments are recognised in the income
statement.
iv.
Determination of fair value
The fair values of quoted investments are based on investment intermediaries’ quotes at the balance sheet date. The
carrying amounts of current receivables and payables are assumed to approximate their fair values. The fair value
of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the
current market interest rate that is available to the Fund for similar investments.
v.
Impairment
The Fund assesses at each balance sheet date whether there is objective evidence that an investment or a group of
investments is impaired. The amount of the allowance is the difference between the asset’s carrying amount and the
present value of estimated future cash flows, discounted at the original effective interest rate. The amount of the
allowance is recognised in the income statement.
In the case of equity investments classified as investments, a significant or prolonged decline in the fair value of the
investments below its cost is considered in determining whether the investments are impaired. If any such evidence
exists for investments, the cumulative loss – measured as the difference between the acquisition cost and the
current fair value, less any impairment loss on that investment previously recognised in profit or loss – is removed
from the fair value reserve within equity and recognised in the income statement. Impairment losses recognised in
the income statement on equity investments are not reversed through the income statement, until the equity
investments are disposed of.
(h)
Income in advance
Income in advance relates to insurance levies collected from the profession in relation to the upcoming insurance
year (ie current year levies in advance relate to collections for the insurance year 1 July 2009 to 30 June 2010).
(i)
Payables
Trade creditors are recognised on receipt of the goods or services and are carried at actual amounts, gross of
applicable trade and other discounts. Amounts are unsecured and are generally settled on 30 day terms.
(j)
Employee Benefits
The fund has no employees and as such no benefits outstanding.
(k)
Professional indemnity insurance
The Queensland Law Society Incorporated entered into a Master Policy agreement with Professional Indemnity
Insurers to limit the maximum liability of the Fund for both individual claims and aggregate amounts. The Fund
incurs all expenses up to a prescribed amount per individual claim until such time as the aggregate amount has been
reached at which time the Professional Indemnity Insurers incur all future costs. The respective individual liability
per claim is listed in note 8.
(l)
Judgements and assumptions
Full provision is made for the estimated cost of all claims admitted or intimated but not settled at the balance sheet
date, less reinsurance recoveries, using the best information available at that time.
The entity has made no other judgements or assumptions which may cause a material adjustment to the carrying
amounts of assets and liabilities within the next reporting period.
(m)
New and revised accounting standards
No Australian accounting standards and interpretations issued or amended and applicable for the first time in the
2008/09 financial year have an effect on the Fund. Also, the Fund has not voluntarily changed any of its accounting
policies.
The Fund is not permitted to adopt a new accounting standard ahead of the specified commencement date unless
approval is obtained from the Treasury Department. Consequently, the Fund has not applied any Australian
accounting standards and interpretations that have been issued but are not yet effective. The Fund will apply these
standards and interpretations in accordance with their respective commencement dates.
All other Australian accounting standards and interpretations with future commencement dates are either not
applicable to the Fund, or have no material impact on the Fund.
2
Insurance levies and premium
All insurance levies collected via the Queensland Law Society (QLS) renewal process were transferred to the Law
Claims Levy Fund. The surplus collection can only be used in accordance with the Indemnity Rules for insurance
purposes.
The fund continues to accumulate reserves in accordance with actuarial assessments for the benefit of all
practitioners.
The insurance expense represents the amount payable under the master policy in accordance with the Indemnity
Rules.
3
Income in advance
Income in advance relates to insurance levies collected from the profession during the renewals cycle which relate
to insurance cover to be provided post the end of the financial year.
Income in advance
Levies received in advance
4
2009
2008
$
$
28,085,719
24,781,597
Provision for outstanding claims
Opening balance at start of reporting
period
2009
2008
$
$
921,846
928,102
71,506
–
Claims paid
(98,352)
(6,256)
Closing balance at end of reporting
period
895,000
921,846
Claims incurred
2009
Current liability
Non-current liability
2008
$
$
895,000
921,846
–
–
895,000
921,846
The Fund has a stop loss policy with Lexon Insurance Pte Ltd (formerly QLS Insurance Pte Ltd) which initially
capped its liability for future payments at $5,000,000 at 1 July 2002.
5
Receivables
2009
2008
$
$
35,605
76,364
640
1,972
36,245
78,336
Current
Interest receivable
GST receivable
6
Notes to the cash flow statement
(a)
Reconciliation of cash
For the purposes of the cash flow statement, cash includes cash on hand and in banks and investments on money
market instruments, net of outstanding bank overdrafts. Cash at the end of the financial year as shown in the cash
flow statement is reconciled to the related items in the balance sheet as follows in note 7.
(b)
Financing facilities
The Fund has no external non-cash financing or any standby credit facilities or any other loan facilities.
(c)
Reconciliation of net cash provided by operating activities to the operating surplus/(deficit) for the
year
2009
2008
$
$
6,105,043
9,741,877
3,860,655
(1,687,085)
Decrease/(increase) in accounts
receivables
42,091
4,249
Increase/(decrease) in provision
for outstanding claims
(26,846)
(6,256)
Increase/(decrease) in accounts
payables
10,570
7,835
Increase/(decrease) in income in
advance
3,304,123
(636,778)
Increase/(decrease) in solicitors’
deductibles
–
–
13,295,636
7,423,842
Surplus/(deficit) for the period
Adjustments for:
Net investment income
Changes in assets and liabilities:
Net cash provided by/(used in)
operating activities
7
Cash and financial assets
2009
2008
$
$
7(a) Current Assets:
Cash at bank
19,327,277
20,685,481
Short term deposits at cost
12,172,146
6,781,364
Cash included in cash flow
31,499,423
27,466,845
4,000,000
4,000,000
35,499,423
31,466,845
19,657,456
3,807,576
Additions
951,496
18,394,220
Disposals
(736,942)
–
Fair value adjustments (unrealised)
(866,631)
(2,544,340)
Realised loss on disposal
(1,608,317)
–
End of financial year
17,397,062
19,657,456
Term deposit
Total cash and cash equivalent
7(b) Non-current assets:
Other financial assets – Managed
funds (market value)
Beginning of financial year
Managed funds include units in various funds with the following managers:
•
Queensland Investment Corporation
•
UBS Global Asset Management
•
AMP Capital Investors
•
BNP Paribas Investment Partners
•
BlackRock Investment Management
•
Russell Investments
8
Contingent liabilities
Under the present insurance agreements the total liability of the Fund for the respective years of insurance is
limited to $100,000 (1987-1994) and $500,000 (1995) per individual claim and this amount is reduced by the
amount of the solicitors’ deductible. Also an aggregate limit per respective year of insurance applies and this limits
the total liability of the Fund.
Based on the actuarial advice in respect of the position of the Fund as at 30 June 2009 (Finity–August 2009), the
insurance in place with regard to the limits per file, and the overall Fund’s aggregate limit as at 30 June 2009, the
Society is of the opinion that the funds on hand together with future investment income and deductibles, and in
conjunction with Stop Loss cover (see note 4) will ensure that all future claims will be met as and when they fall
due.
9
Financial risk
The Fund’s activities expose it to a variety of financial risks: market risk (currency risk, price risk and interest rate
risk), credit risk and liquidity risk.
(a)
Currency risk
The Fund is not exposed to significant foreign currency risk as the majority of the Fund’s transactions, assets and
liabilities are denominated in Australian dollars.
The Fund outsources its investment activities to respected fund managers who use defined risk management
techniques as part of the funds mandates.
All investments in income securities are fully hedged where a currency exposure exists.
As part of the Fund’s investment mandate may hold units in funds which hold unhedged international securities.
Any unhedged position will be in accordance with the strategic asset allocation, and is monitored regularly by
management.
(b)
Price and interest rate risk
The Fund is exposed to equity securities price risk arising from the investments classified as other financial assets.
These securities are held with Australian fund managers.
The Fund’s fund managers seeks to reduce risk by diversifying across a range of securities, maturities and
counterparties. Investments of the funds are subject to the risk control limits and constraints:
Duration and Tracking Error Limits (interest rate management)
•
The Modified Duration of the funds are constrained within a specified period either side of the Modified
Duration of the Benchmark.
•
Rolling year ex post tracking error will be limited to a specified number of basis points. The ex-ante tracking
error of the funds are not expected to exceed a specified number of basis points.
Sector Exposure Bands
•
The weighting of each sector (eg domestic, international – government, non government) within the funds
will be maintained in specified limits
Credit Limits
•
The funds will be invested in a broad and diversified range of securities across the credit spectrum.
Credit Risk Limits for Individual Security Investments
Individual security limits apply for direct physical holdings based on their credit rating and inclusion in the
benchmark
Management regularly review the performance and ensure all investments held are within the approved mandate.
(c)
Credit risk
There is no significant credit risk with respect to the collectability of levies as the levy is compulsory. All levies are
paid up front at the commencement of the period covered under the insurance policy.
Credit risk arising on funds placed with external fund managers is managed by established policies to ensure that
the counter-parties have adequate financial ratings and appropriate credit history.
(i)
Financial assets that are neither past due or impaired
At the balance sheet date no financial assets are past due or impaired.
Cash and cash equivalents that are neither past due nor impaired are placed with reputable financial institutions
with high credit ratings and no history of default.
Other financial assets are redeemable on demand. These are placed with reputable fund managers. The Fund holds
units in two funds which have frozen redemptions as a result of the Global Financial Crisis (this is detailed below).
(ii)
Financial assets that are past due and/or impaired
No financial assets are past due
(d)
Liquidity risk
In the management of liquidity risks, the Fund monitors and maintains a level of cash and cash equivalents deemed
adequate by management to finance the Fund’s operations and mitigate the effects of fluctuations in cash flows.
The Fund also constantly reviews its investment to ensure that there are sufficient cash and liquid deposits to meet
its estimated outflows.
The Fund manages its expected cash flow requirements using the latest actuarial valuations detailing projected cash
flows. These are monitored in conjunction with available cash and investments readily convertible to cash.
As at balance sheet date, the Fund’s financial liabilities are all current.
The fund holds units in two funds which have frozen redemptions as a result of the global financial crisis. These are
property funds and redemptions would require disposal of real property which may be to the detriment of
remaining unit holders. The funds are accounted for at fair value. These funds are not required for liquidity
purposes.
(e)
Interest rate and price sensitivity
The following interest rate sensitivity depicts the outcome to the profit and loss if the interest rates were to increase
by 1 per cent linearly from the year end yield curve applicable to the Fund’s financial assets and liabilities which
are subject to interest movements. With all other variables held constant, the Fund would have decrease of $46,197
(2008: $63,782). A linear decrease of interest rates by one per cent would result in an increase of $46,197 (2008:
$63,782).
The following price sensitivity depicts the outcome to the profit and loss if all equity investments moved an
average of five per cent from the year end values. With all other variables held constant, the company would record
an unrealised gain of $387,899 (2008: $426,750) for a five per cent increase in market values and an unrealised loss
of $387,899 (2008: $426,750) for a five per cent decrease in market values.
(f)
Fair value
The carrying amount of cash and cash equivalent, receivables, payables and lease liabilities approximate their fair
value and are not disclosed separately.
Declaration of Law Claims Levy Fund
The foregoing financial statements have been prepared in accordance with the provisions of the Financial
Administration and Audit Act 1977 (‘the Act’) and other prescribed requirements and we certify that in our opinion:
(a)
the foregoing financial statements with other information and notes to and forming part thereof are in
agreement with the accounts and records of the Law Claims Levy Fund, and
(b)
in our opinion –
(i)
the prescribed requirements in respect of the establishment and keeping of accounts have been
complied with in all material respects, and
(ii)
the financial statements have been drawn up so as to present a true and fair view, in accordance with
prescribed accounting standards, of the transactions of the Law Claims Levy Fund for the financial
year 1 July 2008 to 30 June 2009 and of the financial position as at the close of that year.
President
Ian Berry
31 August 2009
Chief Executive Officer
Noela L’Estrange
Independent Auditors Report
To the Law Claims Levy Fund
Matters Relating to the Electronic Presentation of the Audited Financial Report
The audit report relates to the financial report of Law Claims Levy Fund for the financial year ended 30 June 2009
included on Queensland Law Society Incorporated web site. The Council members are responsible for the integrity
of the Queensland Law Society Incorporated web site. We have not been engaged to report on the integrity of
Queensland Law Society Incorporated web site. The audit report refers only to the statements named below. It does
not provide an opinion on any other information which may have been hyperlinked to/from these statements. If
users of the financial report are concerned with the inherent risks arising from electronic data communications they
are advised to refer to the hard copy of the audited financial report, available from Queensland Law Society
Incorporated, to confirm the information included in the audited financial report presented on this web site.
These matters also relate to the presentation of the audited financial report in other electronic media including CDROM.
Report on the Financial Report
I have audited the accompanying financial report of Law Claims Levy Fund which comprises the balance sheet as
at 30 June 2009, the income statement, statement of changes in equity and cash flow statement for the year ended
on that date, a summary of significant accounting policies, other explanatory notes and certificates given by the
officer responsible for the financial administration of Law Claims Levy Fund.
The Council’s Responsibility for the Financial Report
The Council is responsible for the preparation and fair presentation of the financial report in accordance with
prescribed accounting requirements identified in the Financial Administration and Audit Act 1977 and the
Financial Management Standard 1997, including compliance with applicable Australian Accounting Standards
(including the Australian Accounting Interpretations). This responsibility includes designing, implementing and
maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from
material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and
making accounting estimates that are reasonable in the circumstances.
Auditor’s Responsibility
My responsibility to express an opinion on the financial report based on the audit is prescribed in the AuditorGeneral Act 2009. This Act, including transitional provisions, came into operation on 1 July 2009 and replaces the
previous requirements contained in the Financial Administration and Audit Act 1977.
The audit was conducted in accordance with Auditor-General of Queensland Auditing Standards, which
incorporate the Australian Auditing Standards. These Auditing Standards require compliance with relevant ethical
requirements relating to audit engagements and that the audit is planned and performed to obtain reasonable
assurance whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial report. The procedures selected depend on the auditor’s judgment, including the assessment of risks of
material misstatement in the financial report, whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report in
order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity’s internal control, other than in expressing an opinion on compliance with
prescribed requirements. An audit also includes evaluating the appropriateness of accounting policies and the
reasonableness of accounting estimates made by the Council, as well as evaluating the overall presentation of the
financial report including any mandatory financial reporting requirements as approved by the Treasurer for
application in Queensland.
I believe that the audit evidence obtained is sufficient and appropriate to provide a basis for my audit opinion.
Independence
The Auditor-General Act 2009 promotes the independence of the Auditor General and QAO authorised auditors.
The Auditor-General is the auditor of all Queensland public sector entities and can only be removed by Parliament.
The Auditor-General may conduct an audit in any way considered appropriate and is not subject to direction by any
person about the way in which audit powers are to be exercised.
The Auditor-General has for the purposes of conducting an audit, access to all documents and property and can
report to Parliament matters which in the Auditor-General’s opinion are significant.
Auditor’s Opinion
In accordance with s40 of the Auditor-General Act 2009 –
(a)
I have received all the information and explanations which I have required, and
(b)
in my opinion –
(i)
the prescribed requirements in respect of the establishment and keeping of accounts have been
complied with in all material respects, and
(ii)
the financial report has been drawn up so as to present a true and fair view, in accordance with the
prescribed accounting standards of the transactions of the Law Claims Levy Fund for the financial
year 1 July 2008 to 30 June 2009 and of the financial position as at the end of that year.
GARY PAUL SMITH FCPA
Appointed Auditor
As Delegate of the Auditor-General of Queensland
Brisbane
GPS Business Services
Certified Practising Accountants
Suite 3 118 Vulture Street
South Brisbane Qld 4101
31 August 2009