Lawyers and Conveyancers Amendment Bill (No 2)

Hon DARREN HUGHES (Deputy Leader of the House) Link to this

I seek leave of the Committee for this bill to be considered as one question while we are in the Committee stage.

Hon ANNETTE KING (Minister of Justice) Link to this

The purpose of the Lawyers and Conveyancers Amendment Bill (No 2) is to amend the Lawyers and Conveyancers Act 2006 to allow unions, including health professional organisations and employer organisations, to continue their longstanding practice of using in-house lawyers to provide legal services to their members.

The bill was referred to the Justice and Electoral Committee on 17 June 2008. The committee heard the submissions on 26 June and tabled its report on 7 July. The bill completed its second reading on 24 July. It was during the second reading debate that the National Party and New Zealand First raised concern about the scope of the bill and that it may well be too wide. Since those issues were raised in the second reading, considerable negotiations have taken place between parties in this House to find a suitable amendment to the bill to make it within the scope of what this House intended. So tonight we have before us Supplementary Order Paper 216 in my name, along with Dail Jones’ amendment, which was the subject of the instruction to the Committee. The Supplementary Order Paper in my name addresses the concerns raised by other parties in this House and amends the bill to clarify that lawyers will continue to be guilty of misconduct if they provide legal advice to members on matters that are not relevant to employer organisations or a union.

DAIL JONES (NZ First) Link to this

I appreciate being able to speak on this matter immediately, and I thank the Minister in the chair, the Hon Annette King. I appreciate the amendment that has been put forward in her name. I expressed some concern when the bill was introduced. We always seem to be debating this bill rather late at night, but we are getting there. I believe that the Minister’s amendment will take care of the issue raised by the unions and the business association involved. New Zealand First will be supporting it.

As we are looking at the entire bill at this stage, I draw to your attention, Madam Chairperson, that we now have an amendment to add new clause 10. We do not just have clauses 1 to 9; we now have an amendment to add new clause 10. I will move now—because we are looking at the bill as a whole—that we accept new clause 10. I will not be proceeding with the amendments to clause 6 in my name, but only with the amendment to add new clause 10, which the House as a whole has given leave to be considered by this Committee. A clause on its own is otherwise not within the scope of the bill; hence the reason for my motion earlier on. So New Zealand First supports this matter and looks forward to its being completed as soon as possible.

CHRISTOPHER FINLAYSON (National) Link to this

The National Party will support Supplementary Order Paper 216, and, of course, it is supporting the Lawyers and Conveyancers Amendment Bill (No 2). The bill raises a small but very important issue about access to justice. It is extremely important that members of trade unions and members of organisations like the Nurses Organisation, Business New Zealand, and the Hospitality Association have access to lawyers in the employment of those bodies so that they can obtain swift and inexpensive advice on matters that are of great importance to them, particularly in the areas of employment, and on some of the matters that are set out in the Supplementary Order Paper. Perhaps it would be useful if I explain how exactly we got to this position.

The starting point is Part 1 of the Lawyers and Conveyancers Act, which sets out certain preliminary provisions. After dealing with the fundamental obligations of lawyers and conveyancers, there are then a number of sections that deal with misconduct. The important one for our purpose tonight is section 9, because it provides that “A lawyer is guilty of misconduct who, being an employee, provides regulated services to the public other than in the course of his or her employment—” and then the section sets out various categories—for example, an employee employed by a lawyer, by a community law centre, by the Legal Services Agency, or by the Public Trust—I will not go through the entire list. Although it appears that the issue was the subject of submissions at the select committee deliberating on the Lawyers and Conveyancers Bill, and Dr Worth will be able to deal with this in some detail because he was on the Justice and Electoral Committee between 2002 and 2005, the Act failed to address the issue of the position of those lawyers who are in the employment of either employer associations or unions. It became apparent to organisations like the New Zealand Amalgamated Engineering, Printing and Manufacturing Union and Business New Zealand that there was a problem, a potential gap, a potential ground for misconduct against certain lawyers if this matter was not addressed before the Act came into force on 1 August—we all know that the Lawyers and Conveyancers Act has had a very long transitional period between enactment and actually coming into force.

So that is the reason why the legislation was introduced, and all parties cooperated to get it to the select committee to receive submissions as quickly as possible. The submissions we received were very good ones, and at the conclusion of the select committee deliberations the National Party had a rider that it was going to give some thought as to whether a Supplementary Order Paper in the Committee of the whole House would be necessary. Mr Jones is the person who is to be commended because he prepared an amendment and, as a result of his good work, that gave rise to further discussions between the parties to reach the situation we are in tonight where the Supplementary Order Paper of the Minister in charge of the bill, the Hon Annette King, comes in.

Of course we will support the Supplementary Order Paper, because it sets out very well the meeting of the minds between the various parties so that although, under this bill, explicit provision can be made in clause 6 for those who are employed by employer organisations and unions, the scope of the work that they can undertake is defined very carefully and set out in the Minister’s Supplementary Order Paper very well. I refer to its proposed amendments to subclause (2) of clause 6, where there is a definition and an explanatory note that explains exactly the scope of what is sought to be achieved. I think it is a very good piece of work. The Supplementary Order Paper is very comprehensive—more comprehensive than the amendment that Mr Jones had drafted and my own effort, which I did not bother to table because I was satisfied with the Government Supplementary Order Paper. On that basis I think we can move fairly quickly through the Committee stage and support the Supplementary Order Paper so that this matter can be signed into law before 1 August.

The second aspect relates to the matter that Mr Jones raised shortly before we went into Committee. During deliberations on the submissions to the select committee it became apparent, as a result of submissions from the New Zealand Law Society, that there was a technical problem with section 107 as enacted. That section sets out the effective practice rules. For whatever reason, it appears that certain words are missing. There is no reference to incorporated law firms and former incorporated law firms. Instead, the section simply refers to lawyers and former lawyers. It was one of those matters that really did need to be tidied up, and I commend Mr Jones for facilitating the necessary amendments so that this matter can be cleaned up. All in all, it is very satisfactory. I want to thank my parliamentary colleagues for the work they have done on the bill. I think that, as a result, we have managed to reconcile all the interests and have not done great damage to the structure of the Act. With those brief comments in mind, the National Party indicates that it will support this legislation.

Dr RICHARD WORTH (National) Link to this

I was hoping that the Hon Rick Barker would take a call on this important legislation, but it seems we are to be denied the benefit of his attentive and close reading of this amendment bill.

Mr Finlayson has been laudatory of the Government in connection with this amendment, now that we see the Supplementary Order Paper, but perhaps he is being over-laudatory because there is a most unsatisfactory history, I would say, in connection with the course of events that have led to the Supplementary Order Paper. The starting point, of course, is that the explanatory note of the bill confined its scope to an “integrated prevention and advice service connected with employment matters.” Those are the words that appear in the general policy statement. But when the drafters came to translate that planned intent into action, they failed miserably. I was not a member of the Justice and Electoral Committee for the hearing of submissions on this amendment bill, but I was present at the briefing when the chairman of that committee said this was a technical change and reflected an oversight that had occurred when the substantive legislation, the Lawyers and Conveyancers Act, was going through the House.

Both of those statements are completely and utterly wrong. It is not technical—it makes a substantive change—and, moreover, it was not overlooked, because as others have said in earlier debates, the precise issue that is now before this Committee tonight was the subject of detailed submissions by a number of parties, including the trade union movement and also the New Zealand Law Society. It is very unsatisfactory when the chairman of a committee misleads members as to the purport of the material that was before the committee.

Of course, in the result, the select committee made no substantive change to the bill, at all, and the error in the bill continued to fester. Now we have a circumstance where, led by people like Mr Jones and Mr Finlayson, this glaring error has been discovered.

CHARLES CHAUVEL (Labour) Link to this

In my first reading speech on the Lawyers and Conveyancers Amendment Bill (No 2) I commended the bill to the House, but I did observe that one of the potentially desirable amendments to it might involve a narrowing of the scope of the legislation. I think, from memory, that I was the only member speaking at the time who made that observation.

The bill was duly referred to the Justice and Electoral Committee, so ably chaired by my friend and colleague Lynne Pillay. Mr Worth attended the select committee, as did Mr Jones, and we heard evidence by invitation from the New Zealand Council of Trade Unions, Business New Zealand, and the New Zealand Law Society. By the agreement of the select committee, submissions were restricted to those three bodies.

Very little, if any, evidence was heard at the select committee to merit limiting the application of the bill. I had wondered aloud during my first reading speech whether that might be desirable. In particular, no evidence was tendered to the select committee that, over some 20 to 30 years, the practice of unions and employers associations employing professionally qualified legal staff to provide access to justice for their members when they needed it had ever been abused. Indeed, the evidence was quite to the contrary—that the professionalism of these people and the dedication that they had displayed in common with their employers was able to be relied upon and counted on. We were told that if matters got too complicated or came outside the scope of the training or experience of legal officers employed by unions or employers associations, it was invariably the practice to brief the work to a barrister or to a law firm so that it could be dealt with at the appropriate level.

None the less, during the second reading speeches on this legislation Mr Jones and members of the National Party signalled their intention to move amendments to confine the bill—that is, to legislate for the voluntary restraint and professionalism already displayed over many years by the legal officers who will be affected by this legislation. I and other members on this side of the Chamber do not want this legislation to pass by a narrow majority. The regulation of the legal profession, and, indeed, of professions in general, should not be a matter of partisan politics. So, working with our exemplary Minister of Justice, Annette King, I was glad to conduct some consultations with the Council of Trade Unions and with Business New Zealand. We worked up the substance of the Supplementary Order Paper that the Minister has been pleased to table in her name.

I pay tribute to Mr Jones for the generosity that he has displayed by withdrawing the majority of his proposed amendments, except for the amendment to section 107(1) of the principal Act, to which I will turn in a moment. I also pay tribute to Ms Turei, to Mr Harawira, and to representatives of other parties in the Committee who have agreed to expedite the passage of the amendments that we are considering tonight, so as to allow the passage of the amendment bill in time for 1 August 2008, which lets it take effect at the same time as the principal Act. That is surely a desirable thing, and it is nice not to see game playing or silly procedural points being taken over something as important as this.

As Mr Jones has said, his amendment to insert a clause 10 into the amendment bill—his only effective surviving amendment—is before us. It was argued for by the New Zealand Law Society in the select committee. It is a sensible amendment; it should have been included in the Lawyers and Conveyancers Bill when it was considered by this Parliament. It is clearly proper that incorporated law firms—a new beast permitted by the legislation—should be able to be correctly regulated under the practice rules. Accordingly, Labour members are supporting Mr Jones’ amendment to section 107(1) of the principal legislation.

I say in conclusion that although I am happy to support the Minister’s Supplementary Order Paper, and proud to have assisted in its creation, I made it clear in my introductory comments—and I do so again—that I am supporting it only in the interests of multi-partisanship. I do not think that this legislation is necessary. The professionalism and the restraint shown by legal officers in unions and employers associations have been exemplary for many years. There is no reason to suppose that we might not continue to be able to rely on their exemplary professionalism, but there is no harm in providing that we should make rules to codify the excellent professionalism that they have shown. For that reason, and that reason alone, I support this amendment.

KATE WILKINSON (National) Link to this

I will take just a brief call during the Committee stage of the Lawyers and Conveyancers Amendment Bill (No 2). The explanatory note of the bill is quite clear that at present unions and employer organisations employ lawyers to provide legal services to their members, and they have done so for some time. The Act provides explicitly that lawyers employed by unions and employers organisations will be guilty of misconduct if they provide such services, and obviously the purpose of the bill is to allow lawyers employed by unions and employer organisations to continue to provide legal services to their members.

I think it is important when we are amending a principal Act, especially one that has not yet come into force, to remind ourselves of the purposes of that principal Act. In this case those purposes are to maintain confidence in the provision of legal services and conveyancing services, to protect the consumers of legal services and conveyancing services, to recognise the status of the legal profession, and to establish the new profession of conveyancing practitioners. Obviously, the conveyancing aspect of the principal Act is not as relevant in terms of this amendment bill.

When we look at the lawyers and conveyancers regime, we cannot help but make comparisons with the proposed real estate agents regime. This justifies the relatively long lead-in period for a regime such as this when it is going to be changed. The Lawyers and Conveyancers Act, of course, had a lead-in period of some 2 years. At the moment the lead-in period for the Real Estate Agents Bill is suggested as being some 6 months. When we are changing the regime of a whole profession, it is important to realise that sometimes these long lead-in periods give the practitioners and the participants in those professions and industries time to assimilate the proposed changes, and time to sort out some of those issues and errors before the Act comes into force. There are certainly lessons to be learnt, both in terms of that lead-in period but also in terms of the consultation that takes place. Throughout the progress of the Lawyers and Conveyancers Act there was certainly considerable consultation. When I was a practising lawyer we thought that the Lawyers and Conveyancers Bill would never happen. Again, that is in stark contrast to the consultation and cooperation that seems to have occurred with the Real Estate Agents Bill.

Supplementary Order Paper 216 limits the jurisdiction to legal services that are relevant to a person’s membership of that employer organisation or union. Again, for the sake of the record, it is prudent to specify what those legal services are. The explanatory note of the Supplementary Order Paper states that those services relate to “the member’s rights, obligations, or liabilities in his or her capacity as a member or as an employer or employee: any matter concerning or arising out of an employment relationship, as defined in the Employment Relations Act 2000.”—as my colleague Dr Worth has already mentioned—“That term covers a number of relationships that are relevant in the context of employment law, such as relationships between a union and an employer, between unions bargaining for the same collective agreement, or between employers bargaining for the same collective agreement:”. The cooperation that is seen in many fields between the Council of Trade Unions and Business New Zealand is certainly a model that we can also take lessons from.

Those legal services also relate to “any claim or action under an enactment specified in section 236 of the Employment Relations Act 2000. That section allows employers and employees to be represented by any person of their choice in claims and actions brought under a number of enactments listed in the section.” Obviously, we certainly support that choice. The explanatory note continues: “The right to wider representation applies if the other party is the party’s employer or employee or if the action is taken in the Employment Relations Authority or the Employment Court.” The legal services also relate to “compliance with any enactment or other requirement governing the performance of duties of the member in the conduct of the member’s normal business or profession …”—for example, the statutory duties—and “any question … concerning the member’s professional liability,”. We support both the Supplementary Order Paper and the bill.

The CHAIRPERSON (Hon Marian Hobbs) Link to this

I will now put the final question on the bill. For the information of members, I note that the question will be that clauses 1 to 9 as amended stand part, even though a new clause 10 has been agreed to. That new clause is regarded as an amendment.