The Legal Profession Uniform Law
(“Uniform Law”) is a new statutory and regulatory framework which will apply to
solicitors and barristers across NSW and Victoria from 1 July 2015. The Uniform
Law is the result of years of negotiations at an intergovernmental level, and
years of work by the National Legal Profession Reform Taskforce. At this
initial stage, only NSW and Victoria are participating in the harmonisation,
though it is expected other jurisdictions will adopt the Uniform Law after it
has been implemented in NSW and Victoria. Almost three quarters of Australia’s
lawyers work in NSW and Victoria, so this is a solid start to harmonisation. The
Uniform Law standardises areas including practicing certificates, billing
practices, complaints procedures, and continued professional development.
What is the purpose of the Uniform Law?
A main purpose behind the Uniform
Law is to cut costs for law firms and clients. The harmonisation of laws is
meant to make it easier and simpler for lawyers and firms practising across the
Eastern states. The current system is particularly challenging for small firms
operating in NSW and Victoria and the Uniform Law attempts to encourage the
growth of smaller law firms and businesses. Section 3 of the Legal Profession Uniform Law (NSW) outlines
the objects of the legislation as promoting the administration of justice and
an efficient and effective Australian legal profession by:
a. Providing
interjurisdictional consistency in law applying to the legal profession;
b. Ensuring
high ethical and professional standards in the provision of legal services;
c. Protecting
clients and the general public;
d. Empowering
clients to make informed choices about services and costs involved;
e. Promoting
efficient, effective, targeted and proportionate regulation of the legal
profession; and
f.
Providing a framework where the legal profession
has an appropriate level of independence from the executive arm of government.
Outline of the new statutory regime
1. Legal
Profession Uniform Law
The Uniform Law is incorporated
into the law of NSW by the Legal
Profession Uniform Law Application Act 2014 (NSW). It covers areas
including admission to practice, legal practice, practising certificates,
business practice and professional conduct, costs agreements, costs disclosure,
billing, costs assessment, professional indemnity insurance and fidelity cover.
The Uniform Law will replace the Legal
Profession Act 2004 (NSW).
2. Legal
Profession Uniform General Rules (“Uniform Rules”)
The Uniform Rules replace the Legal Profession Regulation 2005 (NSW),
and “flesh out” in detail requirements under the Uniform Law, such as the
threshold requirements for legal practice, trust accounting, legal costs, and
business management.
3. Legal
Profession Uniform Admission Rules (“Admission Rules”)
Under the new regime, admission
to practice rules have been separated into their own separate delegated
legislation.
4. Legal
Profession Uniform Law Australian Solicitors’ Conduct Rules (“Solicitors
Rules”)
The new Solicitors Rules replace
the Professional Conduct and Practice
Rules 2013 (NSW).
5. Legal
Profession Uniform Legal Practice (Solicitors) Rules (“Legal Practice Rules”)
The new regime also has a short
set of Legal Practice rules dealing with transfer of a solicitors practice,
debt collection, conducting another business, litigation lending, and loan and
security documents.
Uniform Law timeline
February 2009
|
COAG appoints the National
Legal Profession Reform Taskforce to propose draft uniform legislation and in
the process enhance the clarity and accessibility of client/consumer
protection.
|
May 2010
|
The Taskforce release a draft
National Law and National Rules. The three month public consultation period
began.
|
December 2010
|
The Taskforce release the
amended draft National Law.
|
19 October 2011
|
The Attorney General of NSW and
the Attorney General of Victoria commit their respective states to the
implementation of the Uniform Law.
|
3 October 2012
|
Queensland withdraw from the
harmonisation talks.
NSW and Victoria continue
reform discussions.
|
5 December 2013
|
NSW and Victoria sign an
Intergovernmental Agreement and formalise their participation.
|
10 December 2013
|
Legal Profession Uniform Law Application Bill (Vic) is introduced
into Victorian parliament.
|
25 March 2014
|
The Victorian Bill receives
assent.
|
27 March 2014
|
NSW introduce legislation
applying the Legal Profession Uniform Law.
|
20 May 2014
|
Legal Profession Uniform Law
receives assent in NSW.
|
1 July 2015
|
The new Legal Profession Uniform Law and Rules
will come into effect.
|
New bodies are created
The Law Society of NSW will
continue having the same regulatory functions such as monitoring trust
accounting and licensing. The Uniform Law creates the following new bodies:
1. Standing
Committee
The Standing Committee has a
general supervisory role, supervising the functions and duties of the Council,
Commissioner and local authorities such as the NSW Law Society (s391 Uniform
Law).
2. Legal
Services Council (“LSC”)
The Legal Services Council is
established by section 394 of the Uniform Law. Each Council is appointed for a
3 year term (s394). The LSC undertakes a number of functions including:
·
Rule making in accordance with the Uniform Law (s419);
·
Monitoring the implementation of the Uniform Law
to ensure consistent application in jurisdictions (s394);
·
Ensuring the framework remains efficient,
targeted and effective at promoting the maintenance of professional standards
(s394);
·
Ensuring the framework appropriately protects
clients (s394);
·
Monitoring and reviewing the exercise of the
Commissioner’s functions (s396);
·
Examining the Commissioner’s annual report
(s396); and
·
Recommending to the Standing Committee any
changes to the role of Commissioner (s396).
3. The
Commissioner for Uniform Legal Services Regulation (“Commissioner”)
The Commissioner has a range of
functions including promoting compliance with Uniform Laws and Rules, making
guidelines for dispute resolution and professional discipline, and raising
awareness about the Uniform Law and its objectives (s398). The Commissioner is
to act independently of the Council (s401).
4. Admissions
Committee
The primary function of the
Admissions Committee is to develop and maintain Admission Rules. The Admissions
Committee also has the role of advising the council about guidelines and
directions relating to admission (s402).
What are
some of the changes?
1. Changes to cost
disclosure protocols
There is a new “fundamental billing principle” in
section 172 that a legal practice must not charge more than what is “fair and
reasonable in all the circumstances”. In particular, the costs must be proportionately
and reasonably incurred and proportionate and reasonable in amount (s172). The
Uniform Law also introduces categories of disclosure:
a. No formal notification
of costs is required where the estimate is less than $750;
b. “Short disclosure” is
required where estimate of costs is between $750 and $3,000;
c. “Full disclosure” is
required where estimated costs exceed $3,000.
The system is still based on estimates, and law
firms will not be required to provide a binding fixed fee at the beginning of
the matter.
2. Changes to complaint
time limits
There is a reduction in the time
limits for complaints processes. Clients must make the complaint within 60 days
after the costs become payable or 30 days after receipt of the itemised bill
(itemised bills must be requested within 30 days of the costs becoming
payable). The time period can be extended by an additional 4 months. The purpose of these changes is to encourage
the quick resolution of matters at a lower cost to the client and the lawyer.
3. New
costs complaints vetting procedure
The relevant Regulator must
conduct a preliminary assessment of the complaint and has powers to close the
complaint if it is vexatious, misconceived, or lacking substance.
4. Firms
can now advertise their personal injury services
In NSW, legislation was
introduced in 2005 prohibiting the advertising of personal injury services. This
prohibition is not present in the Uniform Law. However, restrictions on false
and misleading advertising still apply.
5. Liability
of principals
There has been a subtle but
important change in the liability of principals. Under the current system a
principal is deemed liable unless they can prove otherwise under a legislative
exception. The Uniform Law has changed the onus of proof. Under the Uniform Law
a principal will only be liable for contravention by their law practice if:
·
The principal knowingly authorised/per mitted
the contravention; or
·
The principal was in or reasonably ought to have
been in a position to influence the conduct of the law practice relevant to the
contravention and failed to take
reasonable steps to prevent it.
6. Exemptions
for government and corporate (in-house lawyers)
Under the Uniform Law, government
and corporate lawyers will not have to contribute to the fidelity fund. This
makes sense, as they do not handle trust money. Government and corporate
lawyers will also be exempt from professional indemnity insurance requirements.
These lawyers may need professional indemnity insurance however if they
participate in pro-bono work or volunteer legal work.
This blog post is a short
overview of the new Uniform Law. The changes are substantial. For further
information, the Law Society of NSW website is a great starting point.
A great overview of the new Uniform Law. I think every attorney that deals with this topic should take a look at this analysis. Thanks!
ReplyDeleteThanks for the wonderful blog.David Dribbin & Michael Brown have a combined experience in excess of 40 years.
ReplyDeleteThey direct an enthusiastic team of lawyers from their Geelong office that regularly attend the Geelong Magistrates Court.
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