Lawyers and Conveyancers Bill

Dr RICHARD WORTH (National) Link to this

This is resumed debate in Committee of the Lawyers and Conveyancers Bill. It is fair to say it is a bill that, certainly in terms of its progress through the House, has had a substantially delayed passage. As the Chairman commented but a short moment ago, we last looked at the legislation on 30 March 2005, with the start of the Committee stage. It is a substantial bill, to some extent because of the way it is drafted in some 11 parts. It effects major change to the legal profession—to the way legal business is done, and to issues such as the provision of complaints and disciplinary measures for the legal profession at large.

I will speak briefly, in respect of Part 1, on an issue that is concerned with the fundamental obligations of a lawyer. I pose the question of what those fundamental obligations might be. I suggest that a good starting point is one that has been picked up by the Federation of Law Societies of Canada. The federation says that lawyers should practise law ethically and competently. In particular, it says, first, that lawyers should be honest and courteous. Second, they should keep clients informed, respond promptly to phone calls and letters, and work in a timely fashion. Third, they should respect client confidences. Fourth, they should safeguard clients’ funds and property, and account for money entrusted to them. Fifth, they should maintain adequate skills to represent clients effectively. Finally—and perhaps obviously—lawyers should not act in a conflict of interest, such as improperly acting against a former client or improperly sharing a business interest with a client. Those obligations are able to be translated into action by dint of the passage of the bill, not only as a result of provisions appearing on the face of the bill, which, when enacted, will be binding on the legal profession, but also because of the ability to make practice rules in a wide range of circumstances.

In looking at issues of fundamental obligation, three questions arise. I put them as follows. First of all, what are the bounds of the rule of law? Second, what is the duty of care concept that underpins fundamental obligations? Finally, do ethical duties transcend legal obligations to the client? Time does not permit me to expound on the bounds of the rule of law, but I will say something about the duty of care.

The duty of care is a concept used in the law both to define the existence of a legal relationship and to establish a benchmark for a standard of professional care and skill. Of course, failure to meet the benchmark creates legal liability. So the concept is inextricably linked to considerations of quality. There is a need for the client to understand the advice that he or she is receiving. There is also a need for that advice to be pragmatic, in the sense that it is workable and properly related to the factual framework.

I think we all know there are some dangers, of course, in the provision of advice that is too dominated by pragmatism. It is very easy for lawyers to be drawn into meeting a client’s need for sign-off on a transaction, and not sufficiently consider the black-letter law position, or to be drawn into meeting the needs of the client by glossing the black-letter law position in a way that might have consequences for both the law firm and the client.

It is also a reality—perhaps unlike surgery—that much legal work is not subject to absolute judgments as to quality. Just to give an illustration of that, it is only for transactions where the commercial relationship between the parties breaks down that the document wording will be reviewed to determine the respective rights and interests of the parties. The vast majority of transactions are implemented without a close focus on those issues. If legal work is perceived as satisfactory, the parties rest content on that, albeit the reality may be otherwise.

And so it is that this bill clearly provides for a regime where quality systems need to be implemented and maintained.

CHRISTOPHER FINLAYSON (National) Link to this

My colleague Dr Worth has briefly outlined the legislative history of this bill so I will take that as read. I, too, wish to address some comments to clause 4, which is a new clause—it not having appeared in the current Act, the Law Practitioners Act 1982—and I particularly wish to say something about subclause (d). This clause sets out the fundamental obligations of lawyers, and on its face looks to be a reasonably anodyne clause. First, there is the obligation to uphold the rule of law and facilitate the administration of justice. No one would disagree with that. Secondly, no one could take any issue, either, with the all-important “obligation to be independent” in providing regulated services to one’s clients. Thirdly, there is the recognition that all barristers and solicitors have both “fiduciary duties and duties of care” when they carry out their tasks on behalf of clients and, fourthly, there is the obligation to protect the interests of clients—but it does not stop there—“subject to his or her overriding duties as an officer of the High Court …”.

That is something unique to the legal profession, and it has implications for that profession in a very real way that does not impact on other professionals. For example, a surgeon who is operating on a person has a very clear and overriding duty to do the best he or she can for the patient. In the case of lawyers, however, there can be conflicting duties. There is an overriding duty to the court that supervenes the duty required to be shown to the lawyers’ clients. A good example of that arises when one is making submissions to a court. The duty to the court may necessitate all relevant authorities being placed before the judge, even if those authorities are not necessarily favourable to the client. I make that statement because later in the course of this debate we will be considering clause 104, which discusses the immunities of barristers. I will be putting forward a Supplementary Order Paper to the Committee because in my opinion the twofold nature of the duty to both the client and the court has to be recognised by a change to clause 104.

Generally, the interpretation clause is reasonably straightforward. There are a couple of changes introduced by this bill that I consider to be most useful. Under the Law Practitioners Act, reference was made simply to professional misconduct. Under this bill we have two concepts—first, misconduct and, second, unsatisfactory conduct. I understand that it was the disciplinary provisions of the Law Practitioners Act that gave rise to this reform, because many of the complaints made by disgruntled clients relate not necessarily to professional misconduct but to unsatisfactory conduct. Under the present Act, the test of professional misconduct is high, and the cases that have dealt with professional misconduct have shown there is a very high threshold.

That concept of professional misconduct is repeated in clause 7, but we have this new concept of unsatisfactory conduct that addresses conduct that may fall short of the standard of competence but not quite reach the standard of professional misconduct. Those tests of misconduct and unsatisfactory conduct will flow through to other parts of the bill—which we will be considering later in the day and tomorrow—as to the way in which the Law Society’s Standards Committee will be able to deal with those problems. That is all I want to say on Part 1. I stress the importance of recognising the fundamental obligations of the practitioner and, in particular, the provision in subclause (d) of clause 4 that deals with the practitioner’s overriding duties to the court, which will need to be reflected in a change I am about to introduce. I also welcome the introduction of the terms “professional misconduct” and “unsatisfactory conduct”, which I think will go a long way to addressing the real needs of clients who complain to the Law Society about suboptimal conduct on the part of practitioners.

SUE MORONEY (Labour) Link to this

I move, That the question be now put.

KATE WILKINSON (National) Link to this

I rise to speak in relation to Part 1 of the Lawyers and Conveyancers Bill and, having been a conveyancing lawyer for 26 years, I think I have some authority on the matter, as well. It is important to reiterate the purposes of the whole bill, the first of which is to maintain public confidence in the provision of legal and conveyancing services. That public confidence is vital in a profession where practitioners receive people’s money, their lifelong savings, to enable them to realise their Kiwi dream of purchasing a home. The second purpose is to protect those consumers, those clients of legal services, and to recognise the status of the legal profession. That is very important. As my learned colleague Mr Finlayson said, the legal profession is a very old and respected profession. It is vital that its integrity and status is maintained and not watered down, perhaps, by the introduction of a new breed of licensed conveyancers.

In general terms, this bill replaces the Law Practitioners Act. It is a bill of huge volume, and I know that its gestation period has taken some years. I was involved in the legal system when lawyers were looking at selling real estate as a knee-jerk reaction to this bill, and I can tell members that that was many years ago. I am pleased to say that, the bill having gestated for that time, I think it is now generally agreed and accepted that it is the right way to go, so it is pleasing that it is finally before Parliament.

Conveyancing, as we all know, is defined as the act of transferring the ownership of property from one person to another, and it includes deeds of assignment, leases, other assurances, and deeds of any property. It does not include the drafting of wills, in the old English legislation. Until now, of course, only solicitors could practise conveyancing; under this bill a new breed has been hatched—that of conveyancers. Part 1 provides for the various fundamental obligations of both professions, if you like. The obligations are similar for lawyers and for conveyancers, although lawyers still have the added obligation and responsibility—as well they should—to act as officers of the High Court, to uphold the rule of law, as previously mentioned, and to facilitate the administration of justice. That goes a lot further than merely the conveyancing of property.

As the corollary to those obligations, the bill defines what would constitute misconduct by both lawyers and conveyancers. A difficulty, however, is that although misconduct in relation to a lawyer is, among other things, defined as that which would reasonably be regarded by lawyers of good standing as “disgraceful or dishonourable”, in relation to a conveyancing practitioner, which is a new breed, misconduct is also defined as that which would be regarded by conveyancing practitioners of good standing as “disgraceful or dishonourable”. But, of course, we do not actually have any longstanding conveyancing practitioners as yet, let alone any who are yet of good standing. Although I appreciate that that will happen, we are setting the standard now, and it is vital that that standard dovetails with the high standards set by the New Zealand Law Society in relation to lawyers.

As members will be aware, the Law Society has well-established and very well-regarded rules of professional conduct for barristers and solicitors—in fact, those rules cover some 135 pages. Lawyers know the required standards that must be met. Conveyancing practitioners do not have that same advantage, and they must evolve such rules if they are to have any credibility, and, to go back to the purpose of the bill, if they are to inspire confidence in our conveyancing practitioners. I suggest that the rules for conveyancing practitioners should be pretty similar to those for lawyers.

One further aspect of the bill that I would like to comment on relates to the ability of law firms to incorporate, which is warmly welcomed by lawyers. That provision is very timely, considering that Mr Power’s member’s bill, having finally been drawn out of the ballot, is to the same effect. Such incorporation allows the proprietors of law firms to structure their businesses in a similar fashion to other businesses. Until now lawyers have practised in partnership, and as partners they were jointly and severally liable for the wrongdoings of their other partners—not a prudent or sensible way to structure a business. Certainly, as a commercial lawyer, I would advise clients to form incorporated companies, rather than to have that joint and several liability. But incorporation does not necessarily mean a total limited liability for lawyers. It is important that we stress and emphasise that, so that clients can still have the confidence and trust in the professionalism of their lawyers that is so necessary when lawyers are in the unique and privileged position of receiving clients’ hard-earned moneys and having to spend them in accordance with those clients’ wishes.

Lawyers cannot, in total, hide behind what is commercially known as the “corporate veil”. Lawyers, of course, can still be held to have been negligent; they will not be able to hide behind the protection of incorporation from that. There are other Acts on the statute book that the directors of companies cannot hide behind, either—the Resource Management Act is one such example. Directors can still be held liable for the negligence of their own misdeeds. So clients will still have, notwithstanding the incorporation of law firms, their normal rights against any negligent and dishonest action by a lawyer—and I know those actions are rare—or against the negligence or dishonest action of any conveyancing practitioner. Similarly, in relation to the fidelity fund, if a client loses money by reason of the theft of any money that has been entrusted to a lawyer, then, again, the lawyer cannot hide behind the corporate veil. The lawyer, or a director of the legal company, is still personally liable to repay that money to the client. So there is no hiding behind the corporate veil. But, by allowing incorporation, this bill certainly brings law firms into the 21st century. It allows lawyers to structure their affairs and to incorporate—to form a more sensible and commercial business structure.

Although I cannot agree with certain parts of the bill, there are certainly other parts that I concur with.

LINDSAY TISCH (Senior Whip—National) Link to this

We note that the Committee is voting on amendments to a number of clauses. We seek leave to have the votes on the amendments, of which there are a number, to clauses 7, 7A, and 7B—which we will come to after clause 6—taken as one vote. Similarly, we seek leave to have the votes on the amendments to clauses 10A and 10B taken as one vote.

Hon MARK BURTON (Minister of Justice) Link to this

I seek clarification. A number of amendments relate to some of those clauses, some of which are Government amendments and some of which are not. Therefore we may need differential voting on those amendments. I am a little unclear as to what the member proposes.

LINDSAY TISCH (Senior Whip—National) Link to this

The Minister may have amendments; I am referring only to the amendments put forward by Dr Worth. In the case of amendments from other members, or from the Government, we would look to accommodate whatever course of action they wish to take.

The CHAIRPERSON (Hon Clem Simich) Link to this

There is also, in relation to clause 6, an amendment in the name of Dr Richard Worth set out on Supplementary Order Paper 344 to omit paragraph (a)(ii) of the definition of course of study. Those who agree with that amendment please say “Aye”, of the contrary opinion “No”. The Noes have it.

LINDSAY TISCH (Senior Whip—National) Link to this

I raise a point of order, Mr Chairperson. Before the vote is put, I just ask for your indulgence. We are voting on clause 6, and the related Supplementary Order Paper, which my colleague Dr Worth and I are looking at, is 344. We have just voted on clause 6, and now you are mentioning another amendment to clause 6—am I mistaken—on Supplementary Order Paper 344.

Hon MARK BURTON (Minister of Justice) Link to this

All of Mr Worth’s amendments?

LINDSAY TISCH (Senior Whip—National) Link to this

I raise a point of order, Mr Chairperson. We have already voted on one of those amendments to clause 6. I am asking whether that stands alone, and the balance of those amendments will be voted on as one question. Maybe the Clerk can help us with that interpretation.

Hon MARK BURTON (Minister of Justice) Link to this

I raise a point of order, Mr Chairperson. This is probably the right time to seek similar accommodation from the Committee for dealing with Government amendments to remaining clauses—that all amendments dealing with any particular clause be dealt with as a single question.

Hon MARK BURTON (Minister of Justice) Link to this

Part 2 of the bill contains the title protection provisions. It will be an offence to use the term “lawyer” or “law practitioner” if one is not entitled to do so. This part also defines the areas of work that are restricted to lawyers and licensed conveyancers. The Government Supplementary Order Paper amendments clarify that the bill will not prevent State sector non-lawyer employees from carrying out functions they currently perform legitimately. These amendments address concerns raised by the Inland Revenue Department in relation to the definitions of conveyancing and legal services. Government Supplementary Order Papers also clarify that patent attorneys can continue to undertake intellectual property conveyancing functions. These amendments are supported by the New Zealand Law Society and the New Zealand Institute of Patent Attorneys.

Dr RICHARD WORTH (National) Link to this

National supports the Lawyers and Conveyancers Bill and has done so from the outset, with some reservations that are contained in the report that forms part of the commentary reported back by the Justice and Electoral Committee. I want to indicate, against the background of some 14 amendments that have been made by Supplementary Order Paper, that National’s contribution to those amendments is in only three areas.

The first area, as members of the Committee will have heard in comments relating to those amendments in connection with Part 1, is all about the New Zealand Society of Conveyancers. The amendments seek to strike from this bill reference to that particular organisation. National members have seen that as a very principled response. Let me explain why. This bill is called the Lawyers and Conveyancers Bill. For our money, it would only have been called—and should only have been called—the “Lawyers Bill”. But instead, the Government has decided that there is to be brought into existence a new class of statutory creature—the New Zealand Society of Conveyancers. As members will have noted from the number of amendments to Part 1, the legislation reeks of reference to this New Zealand Society of Conveyancers.

Well, what is the planned stature of this organisation, the New Zealand Society of Conveyancers? Not much, I would say. The committee heard evidence from the New Zealand Law Society that there might be five or six such persons who would be qualified to join the society, and the faint possibility that Australian conveyancers might seek to join the society. So the likelihood is that there would be, in total, seven or eight such people. If that is right—and that is what the New Zealand Law Society tells us—then that clearly raises the justification for a highly prescriptive statutory regime and the impossibility of funding a realistic fidelity fund for such a limited occupational grouping.

Reference is made in other parts of the bill to the fidelity fund, and I am not going to deal with that now. But it is an amazing circumstance that this bill, which in its reported-back state runs to 346 pages, has so much stuff on the New Zealand Society of Conveyancers when it is intended that there might be only seven or eight such people belonging to it. Why is that? Well, it has an ideological history and it reflects the bias and determination of a former Minister of Justice when he was Labour’s spokesperson on justice. The Hon Phil Goff, who was not “the Hon” then, became absolutely convinced that the legal profession’s monopoly on conveyancing should be broken. He spared no effort to try to translate that plan into action. In fact, he sought to introduce into the Parliament a member’s bill to end that statutory monopoly. He said at the time that it was a move that would bring down the costs for homebuyers and sellers.

I shall quote what he said in that context. He said: “The privileged position enjoyed by lawyers in having the sole right to do conveyancing is imposed by law. Today, when most other services have been opened up to competition, there is no justification for continuing this protection. Lawyers have fought strenuously to preserve their monopoly power and undoubtedly will bitterly resist this change. In the end however the self-interest of lawyers cannot be allowed to prevail over the wider interests of ordinary New Zealanders who are consumers.”

It is surprising that the New Zealand Law Society has not been bold enough to stand against the inclusion of conveyancers in this bill. Certainly, some of its members would not wish to see conveyancers forming part of this legislation. The reality, of course, is that events have moved on. At the time when Mr Goff articulated those concerns, there were scales of charges for types of conveyancing transactions. Those scales of charges have now been swept away and the reality is that conveyancing operates on very much a cut rate and a cutthroat basis. So if there were a so-called premium to be taken from carrying out conveyancing work, that premium has now long gone.

In fact, in some ways the legal profession, in its pursuit of competitive interest, has so priced conveyancing that for many law firms it is simply not cost-effective to do that work. There also was, underlying the stance taken by the Minister, a naivety that conveyancing was no more than the simple transfer of property from one owner to another. But it is much more than that, and although lawyers in the conveyancing context are involved in the selling of land from seller to buyer, there is much subtlety in the conveyancing task. That subtlety and the work that is done in sophisticated leases, easements, and other interests of land was wholly overlooked.

That is why National has persisted, apparently against the wish of the New Zealand Law Society, to maintain this monopoly for lawyers—albeit many lawyers will not seek, and will never seek in the future, to carry out conveyancing work. But there it is. The New Zealand Society of Conveyancers, established by this bill, is to have pride of place alongside lawyers, and the seven or eight people will be tasked by this—in my view—unknowing and unwise Government to set up a structure of control, including a fidelity fund.

NICKY WAGNER (National) Link to this

Part 2 deals with restrictions on the provision of legal services and conveyancing services. But what will that mean to the public of New Zealand? As a layperson, I am not particularly interested in the law, or in lawyers and much of what they talk about. To me as a layperson, most of what lawyers do is not even vaguely relevant. But I, Joe Public, like the sound of a bill that states its purposes are to maintain public confidence in the provision of conveyancing and legal services, to protect the consumers of those services, to recognise the status of the legal profession, and to establish a new profession of conveyancing practitioners. I feel better when I think that someone is protecting my rights and that that person is a professional.

The chances are that the only time I will interact with lawyers is when I intend to buy a house, and when I do that I want the matter to be dealt with efficiently, effectively, and cheaply. I want someone to make sure I do not make a terrible mistake. I want to pay for, and get, what I am expecting. I do not want to pay the wrong person. I do not want to have the surprise of discovering that a motorway is to be built right next door, and I do not want my money to disappear during the transaction. I want to be very sure that in the future I will have a clear title to the property. Buying a house will probably be the biggest purchase of my life, and, up until now, like most New Zealanders, I have trusted a lawyer to do that for me. The system has worked pretty well. Sure, there have been glitches, but in comparison with land courts in other parts of the world, we do well.

Part 2 of the bill defines who can be a lawyer and how he or she can practice. It outlines the penalties for people who pretend to be something they are not. As a layperson, that is important to me. I need to know that those whom I employ are qualified to advise me well, and to protect me and my property. The bill also defines who can do my conveyancing services. As a layperson, it is all the same to me, as long as the job is done properly. The bill requires that both lawyers and conveyancers have a practising certificate, and as long as the New Zealand Law Society and the New Zealand Society of Conveyancers do the job properly and ensure the required standards are met, I am a happy consumer. From my point of view, I want to receive professional advice at the right time, at the right place, and without excessive cost.

LINDSAY TISCH (Senior Whip—National) Link to this

I seek leave for all Dr Worth’s amendments to clause 28 to be taken as one question, and not to have individual votes on them.

Hon MARK BURTON (Minister of Justice) Link to this

Briefly, Part 3 reflects Part 3 of the Law Practitioners Act and sets out the criteria for admission as a barrister and solicitor. Candidates for admission will continue to have to meet the criteria specified by the New Zealand Council of Legal Education.

CHRISTOPHER FINLAYSON (National) Link to this

As the Minister said, Part 3 replicates what is already contained in the Law Practitioners Act 1982. It deals with the admission and enrolment of barristers and solicitors, and there can be no objection to this part. Clause 40 deals with the right of every person who has satisfied the educational criteria and is of good character to be admitted as a barrister and solicitor. It is important to note that even if one chooses to practise as a barrister only, one is admitted as a barrister and solicitor. Clause 41 deals with the three categories of person who qualify for admission. The following clauses deal with evidence of qualifications and suitability.

Indeed, the only clause that is new to this part is clause 46A, which attempts to define who is a fit and proper person eligible for admission. The most important provision in that clause is paragraph (a) in subclause (1), which states that the Law Society can take into account whether the person is of good character. That term is not defined, nor can it reasonably be defined, because, in many instances, as the case law has indicated in the past, determining whether a person is of good character depends, obviously, on the particular circumstances.

With those brief comments in mind, I do not think the time of the Committee need be detained any further.

Hon MARK BURTON (Minister of Justice) Link to this

Part 4 makes provisions for the New Zealand Law Society. It significantly changes the society’s structure and sets out its regulatory responsibilities. Those regulatory responsibilities include overseeing the enforcement of the legislation, the admission and enrolment of law practitioners, and the implementation and enforcement of complaints and disciplinary procedures. The New Zealand Law Society will have to carry out a range of governance and constitutional tasks to bring this legislation into force. Until the New Zealand Society of Conveyancers is established when Part 5 comes into force, the New Zealand Law Society will regulate conveyancers.

Dr RICHARD WORTH (National) Link to this

As the previous speaker has commented, it is probably Part 4 of the Lawyers and Conveyancers Bill that represents the area of significant change and substantive lawmaking. Part 4 is headed “New Zealand Law Society”, and two subheadings identify the content of the part: first, the heading “Functions”, and, second, the heading “Powers”. Under both those headings, regulatory functions, representative functions, regulatory powers, and representative powers are described.

The part is far-reaching because the structure of the legal profession in New Zealand has the central role occupied by the New Zealand Law Society, but nevertheless a pivotal role, in substantive terms, occupied by a number of district law societies. Based on the make-up in part of the old provincial districts, some are strong—and I say that in terms of membership, as distinct from commitment—and others are less strong. First, if I take as an example the Auckland District Law Society, quite clearly the impacts of this bill on that society will be significant—I am not saying that they will be bad, but that they will be significant—because the society as presently constituted will dissolve. Second, district law societies will lose their statutory power to regulate practising lawyers within their districts, and, finally, district law societies will lose their compulsory membership rights.

It is a tribute to the executive director of the New Zealand Law Society, Mr Alan Ritchie, that he has been able, without any apparent effort, to lead district law societies to an easy recognition of the substantial gains that will accrue to them from surrendering their rights and responsibilities.

That said, it is thought that the district law societies in some form may continue to exist, and I express the hope that district law societies such as the Auckland District Law Society will still have a vital role to play in maintaining cohesion and a sense of professional commitment to the profession. I would say it is vital for the well-being of the profession as a whole that the districts remain active and strong.

My understanding is that the Auckland District Law Society has approximately 3,800 lawyer members. It certainly has substantial assets. When I last looked at the statement of financial position of the Auckland District Law Society, its assets exceeded $4 million, including a building known as Chancery Chambers in the Auckland central business district; law libraries in the Auckland and Whangarei High Courts, and 10 district courts throughout the district; and copyright in a number of Auckland District Law Society forms. There were substantial numbers of staff engaged in a professional standards department; a continuing legal education department; a library that managed not only the physical aspects of library work but also was involved in a major way in the production of databases; a commercial department and associated support and marketing facilities, such as a weekly newsletter, a website, a range of special interest committees; and a variety of other support and collegial activities. So we are talking about—certainly as it touches the Auckland District Law Society—a substantial enterprise in business terms.

It is also appropriate to record, as we look at those aspects of structure, an unsuccessful attempt by the New Zealand Institute of Legal Executives to gain some form of recognition in this legislation. There is a New Zealand Institute of Legal Executives; it has approximately 665 legal executives ranked in various categories, and it is administered by an elected council. It is a well-organised body with a code of ethics, procedures for disciplinary matters, paid staff, and a raft of tasks carried out within law firms throughout New Zealand that certainly enhance the efficiency and administration of the activities of those law firms. The New Zealand Institute of Legal Executives came to the Justice and Electoral Committee seeking recognition.

CHRISTOPHER FINLAYSON (National) Link to this

As both Dr Worth and the Minister in the chair, Mark Burton, have said, the Lawyers and Conveyancers Bill represents a major change from the Law Practitioners Act 1982. Under Part I of the 1982 Act both the New Zealand Law Society and the district law societies had a statutory basis. Under this bill the New Zealand Law Society continues, but it is “hail and farewell” to the provincial law societies as they existed, or have existed, from the time of the Law Practitioners Acts—both the 1982 one and its 1955 precursor, and other ones. From my point of view the move to have the New Zealand Law Society and to move away from a statutory basis for the provincial law societies is a good thing, because many of the problems with the 1982 Act centred on the fact that there were district law societies trying to do different types of jobs and provide different services for members of the public, and those services were provided in a very variegated way because of the different sizes of the law societies.

As Dr Worth has said, the Auckland District Law Society—comprising over half of the number of practitioners in this country—has been able to provide an excellent service to the public, which is most important, and to practitioners, because of its size. But it should be borne in mind that many district law societies in this country are very small, ranging from the Westland District Law Society through to the Marlborough District Law Society and others. They are very small indeed, and have not been able to do what is required to be done for the public in their area. In fact, I think it is a fact that the three largest law firms in this country would be larger than all but a very few of the district law societies as they are currently constituted.

The New Zealand Law Society continues and, as Dr Worth has observed, Part 4 outlines the distinction that is to be made between regulatory and representative functions, and between regulatory and representative powers. I observe in clause 56 the key point that membership of the society is voluntary and does not impose any liabilities on members, but, by virtue of having a practising certificate, barristers and solicitors will subject themselves to the regulatory functions.

The regulatory functions are spelt out in clause 57, and they are the key functions that are needed to keep the Law Society going. The only one I intend to comment on is paragraph (e), which deals with the function of assisting and promoting “for the purpose of upholding the rule of law and facilitating the administration of justice in New Zealand, the reform of the law.”, and I simply acknowledge the huge contribution to law reform made by, for example, the legislation committee of the Law Society over the years.

It is often thought, quite unfairly, that lawyers are in it only for the money, but the fact of the matter is that large numbers of practitioners over the years have made a very valuable contribution to law reform, and not just in the legislation committee. For example, last year, as a member of the High Court Rules Committee, I was involved in a rules reform project. We needed to obtain the services of around 60 practitioners in New Zealand, and we asked them to help with the reform of various parts of the High Court Rules. To a person, every practitioner approached about assisting with that law reform project actually got involved and made a very valuable contribution. That extremely important contribution to reform of the law will continue under the aegis of the continuing New Zealand Law Society body.

Clause 59 sets out the various regulatory powers, and there is no real magic in that. It can be compared to the 1982 Act. Clause 60 deals with representative powers, and, again, there is no real magic in any of those provisions. It provides for publications such as LawTalk to continue to be sent to practitioners, and for various periodicals and other things to be sent out, and there is no real problem with that, at all.

Clause 64A needs brief mention. That deals with practising fees. It is important, because the practising fee is to pay for the regulation; indeed, subclause (3) states that the sole purpose of the fee is to fund the regulatory functions and powers of the society, not the representative ones.

Clause 65 is, of course, necessary because it deals with extraordinary purposes. There may be a need for a levy to deal with an extraordinary regulatory function or power of the society. Clause 66 provides for subscriptions that deal with voluntary membership.

In summary, I think that these changes are good. We have a movement towards a 21st century structure for the legal profession in New Zealand. The provincial law societies may continue in a representative capacity as incorporated societies, but the statutory basis for them goes, although that for the New Zealand Law Society continues, and I welcome this change.

KATE WILKINSON (National) Link to this

I also rise in support of Part 4 of this bill. It is fairly much a basic, common-sense provision of the bill relating to continuing with the New Zealand Law Society basically as we have known it in the past. That does not really change, but, as my learned colleague Mr Finlayson has said, what does change is the effect of abandonment, if you like, of the district law societies, of which there were 15 throughout the country. Previously barristers and solicitors belonged to both the local law society and the national one. Now they will belong to the New Zealand Law Society and, if the local law society decides to continue, they may still belong to it. Under this part of the bill the national body, the New Zealand Law Society, will be the central body to regulate practising lawyers, and also to represent them. It centralises the society, and that makes some sense.

Interestingly enough, the biggest bone of contention in relation to this part is not the governing of the lawyers and the legal profession from Wellington, nor is it the lack of, if one likes, any particular local knowledge of any one district, but it seems to be the libraries. The question of district law society libraries is the main issue of contention: who will own them on the abandonment of the local law societies, and who will maintain them. Without the libraries and ready access to them, lawyers simply cannot do their jobs properly. It is vital that lawyers have the best possible access to the best possible legal information.

The law society in my area, Canterbury, has a very well-developed library, built up over 100 years, and I am sure that it is not alone in having done that. It has a huge value. In fact, a figure of over $3 million has been attributed as the value of the Canterbury District Law Society library. Under this part of the bill, the local law societies have 6 months to decide what to do with those libraries. Although the New Zealand Law Society may contribute to the funding of those law libraries, that is not mandatory but is discretionary, so they may be contributed to. It is vital that in the restructuring and in the bringing-in of this legislation, the library resource is not lost, never to be regained.

However, in addition to the issue of libraries, the New Zealand Law Society is vital in regulating and making the rules that bind its members and in representing members’ best interests. It sets the standard of behaviour, sets the rules, and makes sure that the rules are obeyed. For that regulation and representation, members pay their dues. They pay their levies, and that is fair. However, the counterpart in this bill to the New Zealand Law Society is the New Zealand Society of Conveyancers, and we must ensure that it sets the appropriate standards of behaviour. It is of no use to anyone if the respective rules of both professions are poles apart. Lawyers and conveyancers are being thrown together under this bill into the same barrel, whether or not they like it. If a conveyancer turns out to be a bad apple, that will taint not only all the other conveyancers but also all the other lawyers. Therefore, it is absolutely imperative that the good name of lawyers is not tainted by a bad conveyancer.

The rules and standards are crucial—they are critical. They must reflect the importance of maintaining the already good reputation of lawyers. My concern is that we must not build up the conveyancing profession by bringing down the law profession. The Law Society and the Society of Conveyancers will be critical in ensuring that standards are maintained. Again, if we go back to the purpose of the legislation, we find it is so that the consumer—the client—can have absolute confidence in his or her conveyancing professional.

Bearing that in mind, whilst we are talking about conveyancing professionals I point out that it is very easy to denigrate conveyancing and say it a form-filling exercise, and to say it is easy to tick the boxes. Conveyancing is a bit more complicated than that because, with the law becoming increasingly complex, conveyancers, whether they be lawyers or conveyancing practitioners, end up being experts on the Resource Management Act and on Building Act requirements. They even become experts on whether a gasfitters certificate is required in respect of gas appliances. Also, they are often asked for advice on business structures and on how to structure a purchase.

NICKY WAGNER (National) Link to this

As we have heard, Part 4 deals with the New Zealand Law Society. I am not a lawyer, but to me as a layperson it is very important that I have confidence in the workings of the New Zealand Law Society. I do not care about the details, but I do need to know that there is a regulatory body that will provide benchmarking for good legal practice in order to control the quality of lawyers, and that I can therefore rely on the professionalism of any lawyer whom I employ. As Joe Public I support the work of the Law Society in developing professional standards and practice notes that are consistent across the whole country. I will feel more secure in my choice of a lawyer because of the Law Society’s issuing of practising certificates and a database of those who have practising certificates. My lawyer may or may not choose to belong to the Law Society; that does not concern me—although I can see the benefits of that for lawyers—but I will feel more comfortable knowing that my lawyer is subject to the regulations of the Law Society.

NANDOR TANCZOS (Green) Link to this

I rise to speak not to the bill as a whole, because I think the Green Party’s position has been stated quite clearly in previous readings, but to an amendment in my name to clause 57, introducing new clause 57A. The amendment addresses an issue that is primarily dealt with in clause 106 in Part 6, but I rise to speak to it now because these two amendments are in conjunction and I thought I should speak at the earliest opportunity.

It relates to the issue of Queen’s Counsel and Senior Counsel. It is an issue that has been contentious in previous readings of the bill, and there has been a lot of discussion about it, although now that Dail Jones has gone the conversation might calm down a little bit. The Green Party supported the move away from the language of “Queen’s Counsel” towards “Senior Counsel” because we saw that terminology as being of more relevance in Aotearoa today, in the 21st century. However, during the discussions at the select committee I began to question the value of the grade at all. We heard a number of arguments for and against the idea of having either Queen’s Counsel or Senior Counsel. Some people were of the view that being appointed as a Queen’s Counsel simply meant one could put one’s fees up. The point was made that there occasionally were honorary appointments as Queen’s Counsel, as well. But I think it is also true that, by and large, it is genuine recognition of seniority and expertise, so it does have value in that sense.

The other point we heard is that it is not necessarily a fair measure in that although only very good lawyers become Queen’s Counsel or, if this bill passes in its current form, Senior—