Model Laws Not Making Model Process

LAWFUEL – By Corrs Chambers Westgarth CEO John Denton – A critical element in the continuing competitiveness of the Australian economy is our commitment to the rule of law. The efficient operation of the rules governing legal practice are an essential element of that commitment. However, the legal profession, like many other businesses in Australia, suffers from unnecessary and overly complex regulation which is economically inefficient, constitutes a drag on economic growth and imposes excessive compliance costs.

Over the past decade, leaders of the profession, including the Law Council of Australia, have made significant efforts to harmonise the state and territory laws which regulate the legal profession through the National Legal Profession Model Laws Project, to facilitate and promote a truly national profession.

Notwithstanding these efforts, the profession is saddled with laws which are characterised by a high degree of non-uniformity, and are unnecessarily complex and prescriptive. Even putting aside that the model laws are not yet in force in three jurisdictions (some two years after NSW first enacted them), the model laws contain an inherent flaw which deems some provisions “core” and others “not core”. This has allowed local regulators to introduce many minute and unnecessary regulatory differences which serve no real purpose, but which are justified on the grounds of “local conditions”.

At the most practical level, it is still not possible, within a so-called national profession, to have a single form of costs agreement or tax invoice due to differing mandatory costs disclosure rules. It is not possible to operate a single, national trust money account. Minute differences apply in many other areas of daily practice. Some jurisdictions have introduced significantly different continuing professional development schemes.

For national firms, the reality of the costs and complexity of complying with the idiosyncrasies of each state and territory regime are daily reminders that we have not yet achieved the aims of national consistency and efficiency.

The issues, however, are not confined to the less than faithful implementation of the objectives of the model laws, which were to deliver national and uniform laws across Australia. The laws themselves are onerously prescriptive. The sheer volume of legislation, regulations and rules is breathtaking – each jurisdiction has either enacted or will enact more than 500 pages of legislation to regulate the profession. One of many examples of micro-regulation is the detailed rules governing how bills are to be drawn, signed and delivered to the client. Electronic delivery of bills is only permitted for so called “sophisticated clients”, and then only if specifically requested. The costs assessment, complaints and disciplinary provisions are exhaustively detailed and differ widely between the jurisdictions.

Professional conduct rules impose a second layer of “back door” regulation which is particularly problematic. Many of the rules differ between jurisdictions, merely restate the general law and some rules even stray into certain aspects of carrying on business which are either inappropriate or unnecessary.

The Standing Committee of Attorneys General is due to revisit Model Laws Project in the next year. The leaders of the legal profession, including the Law Council of Australia, should take that opportunity to call for a wholesale review and simplification of the regulation of the legal profession in this country.

Improving the regulation of the legal profession will lower costs and pave the way for achieving a truly national legal services market. Unless efforts are renewed, the profession will continue to be burdened by a costly and cumbersome regulatory regime, notwithstanding the significant efforts of the past decade.

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