Page 5077 - Week 14 - Tuesday, 17 November 2009
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . . Video
suspension of a practice certificate or a recommendation that the lawyer’s name be struck from the role of practitioners.
Under the existing legislation, lawyers who have been investigated can claim compensation for expenses incurred during the investigation. This is a broad-scale liability beyond what other regulated industries are able to claim compensation for. This liability for expenses incurred by the lawyer during an investigation is inappropriate and is the major area addressed by the amendment bill.
The Greens believe there are two key reasons why this broad-scale liability is inappropriate. Firstly, many investigations will resemble a standard audit. This is particularly the case for investigations into a law firm’s trust accounts. Trust accounts represent money that clients have forwarded to their lawyers on trust. The money is provided on the understanding that it is to be spent on the legal matter and in accordance with the instructions of the client. For the lawyers to prove that they have handled the trust moneys appropriately, they need to provide copies of trust account ledgers and paperwork to the investigator. This compliance activity is similar to an audit. It is inappropriate for a law firm to be able to claim back expenses incurred during an audit. These costs should represent a cost of business and should not be something to be compensated for.
The broad-scale liability is also inappropriate because of where the funds would come from to make a compensation payout. The ACT Law Society maintains the society statutory interest account. It is the interest account that would foot the bill for any compensation payout. In 2008-09 the interest account provided $1.9 million in funding, and that went to the Legal Aid Commission of the ACT and also to three community legal centres: the Welfare Rights and Legal Centre Ltd, the Women’s Legal Centre and the Environmental Defenders Office. These public interest legal services would be adversely impacted if payouts from the interest account were to occur.
At this point it is important to note that there have been no payouts to lawyers from the interest account in many years. In raising the issue I do not want to suggest that community legal centres are in imminent danger of having their funding cut because of lawyers making compensation claims. What we are discussing today is an amendment that will close down the ability to apply for compensation for expenses incurred.
The amendment will limit compensation claims to situations where loss or damage is suffered due to an investigator acting unlawfully or unreasonably. The Greens believe this sets the right balance. Lawyers should have access to compensation where an investigator acts unlawfully or unreasonably. What they should not have access to is compensation for mere expenses incurred during a legal investigation. The new compensation provisions get the balance right, and, on that basis, we will be supporting them.
The remainder of the amendments clarify that the Law Society may appoint an investigator subject to conditions. The general right to make appointments subject to conditions may have applied, but these amendments remove any doubt. The need for
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . . Video