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Michael McGarvie explains how the Legal Profession Uniform Law will affect lawyers in NSW and Vic.

Michael McGarvie explains how the Legal Profession Uniform Law will affect lawyers in NSW and Vic.

The Uniform Law will create a common legal services market across NSW and Victoria, which will affect the vast majority (almost 75%) of Australia’s lawyers.

This article, while detailing how the Uniform Law will affect lawyers in Victoria and NSW, is not a comprehensive guide. Without the subordinate legislation (the Uniform Rules under development) it is impossible to provide guidance beyond the text of the law. There are also a few differences between the law in Victoria and NSW which are outside the scope of this article.

Rules may be made for almost any matter in the law. Bear in mind the breadth of this provision.

 

Regulatory structure

Existing local regulators will perform all operational/regulatory functions. They will be overseen by a Legal Services Council and a Commissioner for Uniform Legal Services Regulation which will set inter-jurisdictional policy. Local regulators will also perform functions specific to each state.

 

What won’t change in participating jurisdictions

Transitional arrangements will minimise disruption, e.g. practising certificates granted under the current law will still have effect.

Beyond transition, many rights and responsibilities are re-affirmed. Lawyers will still lodge practising certificate applications as they currently do. Conditions authorising the certificate holder to engage in legal practice as a principal or employee, a CLC volunteer, or a corporate lawyer will be maintained.

Lawyers must still have approved insurance. Most lawyers (apart from barristers, government and corporate lawyers) will still pay fidelity fund contributions.

Practices may not promote or operate managed investment schemes. This will apply in Victoria after a transitional period. Practices cannot generally provide legal services in relation to such schemes where an employee or partner has an interest. Incorporated legal practices will be prohibited from conducting such schemes from commencement.

 

What will change in participating jurisdictions

Legal costs must be fair and reasonable. They must be proportionately and reasonably incurred and proportionate and reasonable in amount.

Providing a costs disclosure document is still not required for matters unlikely to exceed $750 in total costs. The Council may change this amount.

For matters above $750 but unlikely to exceed $3,000, practices will need only provide a standard disclosure form (to be developed by the Council) instead of full disclosure. If a practice hasn’t made a disclosure because costs were unlikely to exceed $750, or if it made a standard disclosure because costs were unlikely to exceed $3,000, and the estimate changes, the practice must disclose or risk having their fees wholly or partly reduced.

When predicted thresholds change the practice must inform the client in writing of the expected change and make the required disclosure at that point. Non-compliance will void a costs agreement and can amount to misconduct.

If a practice receives or holds money that isn’t trust money or payment of legal costs due to it, a practice must give the person who provided the money written notice that:

•           the money won’t be treated as trust money;

•           the money isn’t subject to the Uniform Law provisions relating to trust money, and

•           a claim against the fidelity fund cannot be made in respect of the money.

 

Government lawyers will need practising certificates

As in NSW, a practice’s compliance with the Uniform Law may be audited if there are reasonable grounds to do so. In determining whether such grounds exist, the regulator may consider complaints made about the practice’s lawyers.

 After an audit, the regulator may issue management system directions.

Directions will:

•           require a practice to maintain appropriate management systems to enable it to comply with the Uniform Law; and

•           oblige a practice to provide reports to the regulator on the management systems maintained by it and on its compliance with those systems.

Regulators may (discretionary) make binding determinations in consumer matters which includes cautioning the lawyer, requiring the lawyer redo the work in question for free or waive or reduce the associated fees and requiring the lawyer undertake training, education, counselling or to be supervised.

The lawyer can also be ordered to compensation up to $25,000 where the loss results from the lawyer’s conduct.

The regulator may order mediation (as in NSW), and close a complaint if the complainant doesn’t participate in good faith. It may handle costs disputes where the bill is less than $100,000 (or more if the disputed amount is less than $10,000), and determine costs payable where the disputed amount is less than $10,000.

 

Next steps

As well as ensuring the Victorian Board and Commissioner are prepared for commencement, my NSW counterparts and I are undertaking a collaborative educational campaign, engaging those with interests in the legal profession (including consumers) across both states.

The Victorian Board and Commissioner’s website contains the latest information. Bulletins and fact sheets will be published for lawyers and consumers. My NSW colleagues and I will work to minimise disruption to your practice and to client services.

 

Michael McGarvie (pictured) is the Victorian Legal Services Commissioner and the Chief Executive Officer of the Legal Services Board. More information on Uniform Law can be found here

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