March 19, 2015  |  Second reading speech

Legal Profession Uniform Application Amendment Bill 2015

Mr CARROLL (Niddrie) — It is my pleasure to rise to speak on the Legal Profession Uniform Law Application Amendment Bill 2015 and to follow the members for Ovens Valley, Essendon and Hawthorn. It is good that we have bipartisan support for the legislation.

The member for Ovens Valley said the process was commenced by the member for Box Hill. It actually commenced under the former member for Niddrie, Rob Hulls, and to be honest it stagnated under the member for Box Hill. To date only two states have signed up
to this process, being Victoria and New South Wales. You have to ask: what was the member for Box Hill doing in the term of the former government? I understand Queensland nearly signed up but dropped out. This is important legislation, but it could have been a lot further advanced had we had more cooperation at the Council of Australian Governments level and a lot more interstate support to push these important laws through.

I want to talk a little bit about the legislation, what it seeks to achieve and its importance. The legal profession is changing very much. We have law firms today which are listed on
the stock exchange. We have firms that are smaller. As local members of Parliament we all know how law firms are embedded in our electorates and what a great resource they are, particularly community legal centres. I am happy that the Attorney‑General has made it his ambition to ensure that community legal centres are funded appropriately.

On the matter of legal services, I note that the Minister for Public Transport today announced that she is going to set up a taxi services ministerial forum, and I am happy that the Taxi Services Commission is also funding some community legal centres to assist some of our most vulnerable community members who bought taxi licences and who are now in financial strife.

The legal profession is important, and it is important in the community. The bill is quite thick, and I have not read it all, but it is not just generalist legislation; it has some quite specific components that deal with trusts, costs and definitions. When we think of the legal institutions in New South Wales and Victoria we have to remember the architecture that sits under them. We have legal admissions boards, the Legal Services Commissioner, the Legal Services Council, practising certificates and foreign lawyers. I studied for a law degree and was then admitted. I am happy to declare that I went through the disclosure requirements and got through the fit and proper person test. I feel for young students who
are working hard. It is an important profession. In the 21st century having uniform law legislation so that we have a common market in Australia is very important. It was the global financial crisis in the United States of America in particular that saw a change in the way legal firms over there operated in terms of costs. Gone were the days when a law firm could bill in 1‑minute or 6‑minute increments. There was a transformation in how law firms billed. Now, rather like when you call a plumber, a law firm will quote you on what it
believes the total cost of the work might be. This is the way the profession is moving. The global financial crisis has seen a lot of changes in the way law firms operate. It is an important step, and Victoria is leading the way. With the progressive Attorney‑General we have today we are going to see a lot more reforms.

I was just having a look at my own copy of the Law Institute Journal, which came in the mail recently. The cover advertises an article headed ‘A uniform to fit everyone’, which states:

While some practitioners urge caution, the establishment of a nationwide set of rules is a step in the right direction.

This legislation is a step in the right direction, and I am sure that with the current Attorney‑General we are going to see a lot more bipartisanship across the different states and territories to get Australia signed up to these important national uniform laws.

This legislation will make similar rules to what we have seen under the Legal Profession Act 2004. It is very important that we remember that Victoria is the host jurisdiction. As the host jurisdiction we are very much leading the way. This legislation will correct minor errors and anomalies in the act prior to its commencement, the most significant of which will be to clarify the phrase ‘total legal costs’, using the requirements of the uniform law to ensure that costs are disclosed adequately. Clarification of the term will also help ensure that consumers receive consistent and appropriate disclosure of legal costs.

In relation to disclosure, the new Legal Services Council, which has been established under the scheme, is currently working with the legal profession over standard disclosures. The
amendments that we are making today will clarify the role of the Legal Services Council and ensure that we have appropriate standards going forward. I am proud to be serving under the Attorney‑General as the Parliamentary Secretary for Justice. I was also proud to speak in the Parliament yesterday on some important consumer affairs legislation introduced by the Minister for Consumer Affairs, Gaming and Liquor Regulation.

Law firms play an important community role, but it is not just about the delivery of the services. It is about the community and giving people appropriate advice. It is also important that when advice is given people know what the financial costs will be.
Hopefully costs will come down as a result of this legislation. We are all about trying to get rid of red tape. It is great that the Andrews government is taking an axe to red tape. We want a seamless legal profession working in harmony with the Parliament, the courts and other state jurisdictions. The new statutory authorities, including the Legal Services Council and the commissioner for uniform legal services regulation, which have already been established under the scheme, are now preparing for full commencement. I am
sure it will be a smooth transition.

Under this legislation we are going to see the roles of GST and disbursement made very clear in terms of legal costs. When should GST be applied? We often see that people do not
understand when GST and disbursement are applicable and when they should be excluded. This can lead to financial trouble and can result in a hearing in the Victorian Civil and Administrative Tribunal. This legislation is very important in terms of clarifying disbursement and GST.

I also want to talk a bit about the amendment circulated by the Attorney‑General today. He has proposed that a new clause be inserted after clause 4, inserting a new section 9A in the act, which will go to the heart and definition of a law firm. The amendment outlines the meaning of the term ‘law firm’, stating that it means a partnership consisting only of:

(a)    Australian legal practitioners; or

(b)   one or more Australian legal practitioners and one or more
Australian‑registered foreign lawyers; or

(c)    incorporated legal practices; or

(d)   one or more incorporated legal practices and one or more
Australian legal practitioners; or

(e)    one or more incorporated legal practices and one or more
Australian‑registered foreign lawyers; or

(f)    one or more incorporated legal practices, one or more Australian
legal practitioners and one or more Australian‑registered foreign
lawyers …

As I was saying before, having the meaning of the term ‘law firm’ adequately defined in legislation is very important. We have seen the proliferation of service industries, and there is a lot of criticism of the previous government for not having a jobs plan. One thing that was happening under the previous government, however, was the proliferation of service industries, particularly around Docklands et cetera. Companies were moving in different directions off their own backs. This has also been the case in the legal profession. Firms are becoming increasingly global in nature, and they are becoming service‑industry‑type companies. The Attorney‑General’s recommendation that we clarify the expanded definition of a law firm is an important one.

Finally, I want to congratulate the Attorney‑General on following the footsteps of my predecessor in this seat, the former member for Niddrie, Rob Hulls. I think he, in a
similar vein, will make sure that the legal profession does not just look after its lawyers but also consumers. It plays an important role in the community. This is an important piece of legislation. It will ensure that regulatory obligations and local performance go hand in hand.