Lawyers and Conveyancers Bill

This is the start of a marathon debate that will involve an exhaustive examination of a number of key provisions. It involves issues of significance not only for the legal profession but also for the people of New Zealand. It is an unhelpful start when the MP for Whanganui, in her typical way, catcalls across the Chamber. But I am hoping that this may be one of those very rare debates in which she is prepared to make some substantial contribution. [Interruption] I doubt it; she laughs. I think we probably all doubt it. It is important, as we look at this legislation, that it be a topic of exacting review, if for no other reason than the fact that there are multiple last-minute amendments from the Minister of Justice. I hope the newly appointed Attorney-General—and we have not had a non - legally qualified Attorney-General since 1933—will himself participate in this debate.

In dealing with the first part of this bill, I would like very briefly to sketch an outline of the New Zealand Law Society. I will not be doing that for the benefit of the member for Whanganui, because I think that her ability to absorb information is well and truly past. I will be doing it for those who take a genuine interest in the rule of law in New Zealand, because it is a critical aspect of this legislation that lawyers stand as a bulwark against the infringement of human rights, and stand for the advancement of society in a careful and constructed way. The New Zealand Law Society was established by statute in 1869, so it is a long-running organisation.

💬 Simon Power: It seems more recent than that.

Mr Power says that it seems more recent than that, but, no, it was established in 1869. We are looking at a review of the Law Practitioners Act. That statute did a number of things. It set out the society’s name, membership structure, and general functions, and also the society’s powers and duties. It made provision for a number of district law societies. So the existing structure, which is now not to be, is made up of the New Zealand Law Society and a number of district law societies: Auckland, Canterbury, Gisborne, Hawke’s Bay, Manawatū, Marlborough, Nelson, Otago, Southland, Taranaki, Waikato - Bay of Plenty, Wanganui, Wellington, and Westland. These are not branches of the New Zealand Law Society; they are independent bodies with their own statutory powers. So we have a situation where the district law societies and the New Zealand Law Society operate in a federal structure.

To flesh out the comments that I hope will be the subject of multiple calls on Part 1, I will say that the New Zealand Law Society is governed by a council of 29 or 30 members. The council has a president, four vice-presidents, a treasurer elected by the council, 23 members elected by the district law societies—up to four each, depending on the number of members—and a president-elect, if any. The council meets at least once a year. There is a board, which acts as the executive body managing the affairs of the society, exercising all the functions and powers of the council except those that are specifically reserved. These issues are of interest to me—I say this as Mr Barker goes back to the chair to provide a semblance of constitutionality to the Committee stage of this bill—because I was the treasurer of the New Zealand Law Society for a number of years, and I was also on the board.

There is much in this bill that can be commended. There are some aspects, as will emerge in the course of this debate, that can be subject to criticism. The New Zealand Law Society board comprises 13 or 14 members: the president, the four vice-presidents, and eight members of the society, elected by the council. The term of office of the elected board members is 2 years, with a two-term maximum. As members in the Chamber will know, the New Zealand Law Society has a number of special committees, and also numerous ad hoc committees. My understanding is that at the moment there are three specialist sections: the Corporate Lawyers Association of New Zealand, the property law section, and the family law section.

I follow in the wake of a member of the Bar in New Zealand who has had a long and distinguished career as a solicitor. In the final years of the time before Richard Worth arrived in Parliament he was the chairperson of Simpson Grierson, New Zealand’s largest law firm. So he comes to this debate with a unique perspective on these matters, not only as a practising lawyer, but also as somebody who rose through the hierarchy of district law societies and the New Zealand Law Society to become the treasurer of the New Zealand Law Society for some time. I served merely as a humble member of the social committee for the Manawatū District Law Society. I look forward to working our way through the 11 parts, plus the schedules, title, and commencement clauses, of this bill.

It is worth recognising one issue right upfront. It relates to clause 3, “Purposes”. Clause 3(1)(c) states that one of the purposes of the bill is: “(c) to recognise the status of the legal profession …”, but, more important, clause 4 sets out the fundamental obligations of lawyers. Clause 4(b) states that a lawyer has: “(b) the obligation to be independent in providing regulated services to his or her clients:”. During the second reading of this bill I indicated that I have grave reservations—as do many members in this Chamber—about the removal of Queen’s Counsel from the legal profession. I have them for this reason: Queen’s Counsel have a job to do in maintaining the independence referred to in clause 4(b), particularly at a level that involves taking on the State or the establishment, as it were, on behalf of a client. I would have thought that members of the Labour Government would think that that was a noble cause for a lawyer to undertake.

The thing that worries me about that particular aspect of the purposes clause and its effect on QCs is that, if we are now to have the designation of Senior Counsel bestowed upon lawyers in large law firms that act for corporate clients or, more particularly, large Government departments, Crown entities, and the like, one has to question—at least in a superficial way—the independence of those lawyers and the overall context of their relationship with the Government where the Government provides a number of larger clients to those law firms. The whole point of having Queen’s Counsel was that a senior member of the Bar could stand aside from any of those perceived conflicts that may have arisen by him or her being in a big firm that acted for big Government departments, Crown entities, and the like. By removing QCs, this bill actually undermines the obligations contained in clause 4(c). That worries me, because Queen’s Counsel have always had a special role in maintaining the independence of their advice and representation on behalf of clients who do not have the backing of the powerful State—which is becoming more powerful these days, I must say—and they do not have the backing of big law firms that act for those types of clients. I think it will be a grave loss if this part of the legislation passes through this House. Having said that, there are aspects of this bill that the National Party strongly agrees with, and we will work our way through those aspects.

I must say that I am concerned about the number of late amendments, particularly around the definition of incorporated conveyancing firms—a controversial area that is part of this legislation. When we glance at the Table, we can see 16 different amendments and Supplementary Order Papers that have been placed on it at the last minute. One would have thought that, after the length of time that this bill has been in the Justice and Electoral Committee and the length of time that Phil Goff has put his heart and soul into getting this legislation through the House, the select committee might have got it right, and that we would not need these last-minute amendments and Supplementary Order Papers filed on the Table. For an issue like the regulation and statutory framework of the legal profession, those people who access it—whether that be accessing Queen’s Counsel, large legal firms, or community law centres—deserve better from lawmakers than these scrappy, last-minute attempts by way of amendments and Supplementary Order Papers laid on the Table. Some of them, like those tabled by Dail Jones and Richard Worth, will no doubt have their merits, but the Government has had this legislation in its hands for a long period of time. It should do better by the users of legal services in New Zealand than to table amendments and Supplementary Order Papers at the last minute. So we will look closely at those definitions as we work our way through this legislation.

I will finish my first of four contributions on Part 1 by saying that members should remember that the point of regulating the legal profession is to protect the client. For that reason, the removal of silks from the legal profession—in my view and in the view of many members of this House—undermines the clients’ ability to access quality, independent legal advice that is not in any way tarnished by the relationship a large firm may have in acting for clients that may be Government departments, ministries, Crown businesses, or the like. That is a fault in this legislation, and I am determined to see that point put on the record under my name.

I look forward to contributing in a small way to the contributions that have been made by my far more learned colleagues Dr Wayne Mapp, Dr Richard Worth, and Georgina te Heuheu, all of whom have legal experience in one forum or another—whether it be the Waitangi Tribunal, a major law firm, or a university in Dr Mapp’s case—that far outweighs my own. All I offer to the debate is a humble 5½ years of practice in criminal courts, and some commercial and property work. I must say that I thoroughly enjoyed that short period of time. But that does not undermine in any way the weight or seriousness that I place on the amendments coming before the profession or, more important, what it will mean for their clients.

As the preceding speaker mentioned, I have lodged a couple of amendments on behalf of New Zealand First. One is to do with the retention of Queen’s Counsel, and the other is to do with the attack this bill imposes on banks and the extra charges that the clients of law firms will face as a result of the reduction in the interest made available to the banks. The preceding speaker, Mr Simon Power from the National Party, made a good point about clause 4. In subclause (b) of that clause there is a fundamental obligation on lawyers to be independent in providing regulated services to their clients. With regard to lawyers being independent, I say that speaking broadly, there is nothing more independent than the independent Bar, which consists of the Queen’s Counsel. This Government is proposing to remove that independent Bar and bring it to an end. That is a contradiction in this legislation. Clearly this Government has something against Queen’s Counsel, and I will be going into that in greater detail later.

I will look, in terms of Part 1, at the role that a conveyancer will have to play as a result of this legislation. Let us remember that this legislation was brought about by the Hon Mr Goff in around 1997, when he was an Opposition member of Parliament. He came up with a brilliant idea, and I am sure that Mr Goff will take many calls tonight, because, obviously, he is extremely interested in this legislation. It was brought about by his wishes, and I look forward to hearing about his support for this bill. I oppose the bill in certain part, although generally New Zealand First will be giving it support. I look forward to hearing Mr Goff’s comments on it, as I am sure do all conveyancers and members of the New Zealand Law Society. This bill is 346 pages long. The part we are considering is some 30 pages long, and is mainly to do with interpretation. We are creating a lawyers’ and conveyancers’ way of looking at legal work—in particular, in so far as conveyancers are concerned, with regard to property matters. That is speaking very broadly, for the benefit of members of the public.

First of all in this bill, we come up with a definition of a conveyancer, who is then given a conveyancers society inspectorate by this legislation. I am sure that when conveyancers thought of having their own legislation, one of the things that would not have occurred to them was the need for a conveyancers society inspectorate to be established by the New Zealand Society of Conveyancers. I look at that from the point of view of a conveyancer, and at the administration costs that this legislation will impose on a conveyancer. Then we have the Conveyancing Practitioners’ Fidelity Fund, something else that conveyancers will have to face. One wonders whether they can possibly afford one. Again, this bill sets up conveyancing practitioners standards committees, to be established pursuant to clause 114 of the bill. That is another cost on conveyancers that this legislation will require. Then there is also a disciplinary tribunal, the New Zealand Lawyers and Conveyancers Disciplinary Tribunal. If I were a conveyancer—and I understand there may be only about eight of them—I would be shuddering in my shoes already to think that the eight conveyancers will have to pay for an inspectorate, to have a fidelity fund, to have standards committees, and to have a disciplinary tribunal for all eight of them. I wonder whether conveyancers had expected this legislation to affect them in that way when they wanted a separate freedom to carry on their conveyancing work.

The other type of definition is that of the Lawyers and Conveyancers Disciplinary Tribunal, which is referred to in clause 206. There is also going to be a New Zealand Society of Conveyancers. The conveyancers will probably have to get a lawyer to set up all those things for them. I just wonder how many thousands of dollars they will have to pay lawyers, as a result of all the various things they will be required to do before they can even get under way.

The Lawyers and Conveyancers Bill is relatively unique in that the organisation—the Law Society—is seeking the change. The impetus for the change has come from the profession itself. There is general agreement on the bill. I am very interested to read, despite the comments made by some members, that National supports the bill but has a number of reservations. So on the general points, the majority of this Committee is in agreement on the bill. We heard some comments made by Simon Power in the first humble speech that I have heard from him in this Chamber—and I look forward to more of them.

💬 Simon Power: I raise a point of order, Mr Chairperson. That type of comment is unnecessary. It is well known that my maiden speech was also humble.

The CHAIRPERSON (Hon Clem Simich): I thank the member for reminding us of that.

I apologise to the member. His maiden speech must have been forgettable, although I did remember the second one. But there is general agreement on this bill.

The essence of the legislation, for the benefit of those who are not very familiar with it and who may be listening to this debate, is the separation of the regulatory and advocacy powers of the Law Society. Currently the structure is such that the society has to be both a regulator and an advocate, and it seems that that is not a particularly good structure. But the bill maintains that the obligations of lawyers to their clients are to be exactly the same as they are at present. We are just looking at changing the structure. The major issue is going to be the addition of conveyancers. That is a significant step, and Mr Dail Jones is correct when he says that it comes from the 1997 Conveyancers Bill initiated by Phil Goff. It is true that there are other jurisdictions around the world where conveyancers are treated in the same way as lawyers. New Zealand is different in that regard. I accept that there will be a difference of opinion about that, as there will be a difference of opinion—and this is clear from reading the Justice and Electoral Committee’s report—on the status of Queen’s Counsel. People have made their views known on that. Those are the issues, but in general terms I would expect to see a high degree of unanimity as we go through the bill, although we will disagree over some of the points.

I take issue with Simon Power, in that I do not think it is necessarily a bad thing to see a number of amendments on the Table. I think that is, in fact, a positive thing that people are clearly thinking about the legislation, are going through it piece by piece, and are making sure that we do work assiduously in order to get it as correct as we can. That is the duty of the Committee today, and it is the only time that a number of people will have the option to do that. I think this will be an interesting debate. I do not think it will be particularly protracted, because there is general agreement about the reform.

As I was saying before, conveyancers are going to have some great difficulties in complying with the requirements of this legislation. If I were a conveyancer I would be having second thoughts about what it was I had let myself in for because conveyancers are going to have to compete with lawyers on a relatively even playing field. That was one of the requirements that New Zealand First would have wanted if there was to be a situation where lawyers lost their so-called monopoly on conveyancing. So many lawyers are doing conveyancing today at such small rates that one would wonder how anyone could possibly say there was a monopoly. But that is fair enough. As a lawyer who did a lot of conveyancing I have no problems with conveyancers coming in and doing conveyancing, provided it is done on a level playing field, and provided that they are largely separated from lawyers. The last thing a lawyer would want would be to be subjected to any losses resulting from the way in which conveyancers might try to interpret a complicated agreement for sale and purchase. Bearing in mind the way land agents prepare agreements for sale and purchase, which are often totally unintelligible even to the land agents and to the clients, somehow the two lawyers involved on both sides have to bring some sense to it and bring a reasonably quick and efficient and cheap resolution to the problems created by agents—problems that never go before the courts because lawyers are interested in just acting in the best interests of their clients. So that will be interesting.

One other thing I am pleased with in looking at Part 1 is the creation of and the reference to the incorporated law firm. It will be of considerable interest to lawyers and the Law Society to see how they work out. Of course, there will be incorporated conveyancing firms as well, so when we talk about the costs associated with setting up a conveyancing firm, that is another cost that they will have to think about, and there will be another bonus for a lawyer probably in setting up the incorporated conveyancing firm for a conveyancer.

But I tell the public too, generally, that they will now have to be a lot more careful in who they instruct to do their conveyancing. Because an incorporated conveyancing firm, and an incorporated law firm, being incorporated, will have a different form of liability in many ways than the ordinary law firm, whether it is a single lawyer on his or her own—virtually a sole trader, as we would say—or lawyers in partnership whose personal assets are up for grabs if any partner does something wrong.

One of the problems that might be experienced is that if there are too many claims on a lawyer they may lose their legal negligence protection. Then if they do something wrong and they are an incorporated law firm, for example, what will be the amount that any client could ever get out of that incorporated law firm? The same goes for an incorporated conveyancing firm as well, considering the question of legal negligence liability policies with which Dr Worth is very familiar.

The bill is an interesting piece of legislation. New Zealand First will support the aspects of the bill that say it can proceed in its present form as far as lawyers and conveyancers are concerned. But for the future I would be looking at another piece of legislation that would split lawyers from conveyancers. But for the time being we will go along with this bill as it is. It is the best of a bad job at the moment. The Law Society has said that it wants it, and I emphasise in this first call that the main reason we are supporting this bill is that the Law Society says it wants this bill in this form. I think every lawyer knows that this is not the best form of the legislation, and lawyers do not want to be associated with conveyancers. It is like midwives and general practitioners being forced into the same relationship. Midwives and general practitioners in past times did not get on very well at all, and in a similar way lawyers and conveyancers have not got on very well. But I suspect that once this legislation is passed, and conveyancers can go their own way and lawyers can go their own way and do their conveyancing, that situation might improve.

I am very pleased to line up with my caucus legal colleagues tonight. They are all honourable members: Richard Worth, Wayne Mapp, Judith Collins, and Simon Power. Phil Heatley is sitting here encouraging us, supporting his legal colleagues in the caucus. As I say, I am very pleased to line up tonight and to make a contribution—one of many that I will make as this bill proceeds through the Committee stage.

I want to make a comment about my colleague Simon Power, who was so complimentary of the rest of us here tonight. He characterised himself as having come most recently to the law, with only 5 years’ practice. I can say about Simon Power, however, that he has been more recently in the law, certainly in the practice of the law, than I have. That will count for a lot, and we shall all see that as this debate proceeds.

Of course, Mr Chairperson, the Hon Clem Simich, is also a lawyer and from the National Party, as well, so I think this is a really fine evening when we are in the Chamber debating a bill that, as the Minister quite rightly says, the legal profession has wanted, and has wanted for a very long time. I do not know that the Minister necessarily had to comment on that as being unique, because, with the legal profession having sought those changes, it shows its members’ professionalism. It is a noble profession that we are part of. As I say, the Law Society and the profession itself have, by and large, been waiting for these changes, and it is very good that we are finally here tonight to wend our way through this rather large piece of legislation.

Those who are listening can take heart from the purposes of the bill. As one of my colleagues rightly said, they are largely for the protection of clients and users of legal services. The opening paragraph under the purposes clause, clause 3, states: “(1) the purposes of this Act are—(a) to maintain public confidence in the provision of legal services and conveyancing services:”. That is why, of course, the legal profession would have sought that provision, because there is a need to ensure that the profession is viewed as having value, of being worthy, and of being the protector of rights of New Zealanders when they need to resort to the law. So it is a very worthy purpose and that is why the National Party is pleased to support this bill.

As the Minister has already recognised, we will have various issues, which we will raise as the debate goes on. We will have some reservations about those, but we also welcome this stage of the bill and look forward to its passing in due course.

I do implore the Minister to think very seriously about the comments that my colleague Simon Power made about the removal of the independent bar—the removal of Queen’s Counsel—which is to be replaced by Senior Counsel. That action does fly in the face of the second obligation that the bill points out is attributable to lawyers—the obligation to be independent. The public has a right, and certainly an expectation, when accessing services from the legal profession, to expect that those services will be exercised in a fully independent manner.

Simon Power outlined the purpose behind the institution of the Queen’s Counsel. I hope that this Government is not getting rid of that as another of its actions in line with the move to republicanism—an action to get rid of concepts and things of tradition that have worked well for centuries, and that have served the practice of law well, not only in this country but in England and other places, as well.

So far, I have not heard of any good reason why the Government should move in that manner. I hope that before we leave Part 1 or, indeed, before we complete the Committee stage of this bill, the Minister will tell us why the Government is moving in that way.

I fear that it must be nauseating for the few who are listening to this debate tonight to hear the lawyers all chummily congratulating each other, and apologising mildly for being willing to go along with a disgraceful piece of so-called reform. In the previous stages of this bill some National Party members made quite strong speeches pointing out the reasons why the bill should not go through. We have had the Minister in the chair, the Hon Rick Barker, say, in effect, that he did not see any reason why we are doing this, except that the Law Society asked us to. That is effectively what Mr Barker said.

For ACT, I can say that we will not go along with legislation that is an embarrassment to everyone. We are not like Phil Goff, who came here in 1997 or 1998 and introduced a bill that said: “Let’s increase competition. Let’s deregulate this little cosy conveyancing area.”, and who, 6 years later, has ended up saying limply—with 330 pages of deregulation—“We’ll hand over what the Law Society wants.”

We are now on Part 1, which alone, I think, is longer than the entire bill regulating the accounting profession. I am not certain, but I think that Part 1 probably has more prescription in its definitions than in the definitions of the last four professional regulation bills that have gone through this House. That is a disgrace. It is a throwback to the days of the two, cosy, fat old parties deciding that it did not really matter what the quality of the law was, but if it was convenient to an interest group they wanted to suck up to, or if it was convenient to the Law Society, they would push it through even though they thought it was pretty disgraceful—and this bill is.

I shall read for the Committee a simple summary that relates to Part 1, from a very entrepreneurial and, I understand, efficient law firm, which says it is being inhibited in its operations in New Zealand compared with its operations in Australia. This is Sanderson Weir: “I believe this bill has been drafted as a cop-out to the profession that does not want competition. Many in the profession, including all of the law societies, have fearlessly engaged in a bit of patch protection. So far they’ve been successful. In Australia, that practice was disparagingly called the ‘dingo fence syndrome’. In those days it was to keep the nasty southerners from New South Wales and Victoria from entering the Queensland market. What competition does is force lawyers to look critically at their business processes and the value of what they really deliver to their clients.”

That firm is saying that the incorporation model set up under Part 1 is a crock of rubbish. That firm came before the Justice and Electoral Committee and asked us to consider that in New South Wales law firms have incorporated for years now, without any of the pages of nonsense that go along with incorporation in this bill. In New South Wales, apparently without difficulty, a law firm was acquired by a public listed company. Attorneys-General in all the Australian states and territories have agreed that the New South Wales model will be adopted and permitted uniformly across Australia, in due course.

I have also had another of the major New Zealand law firms draw to my attention something that I believe the Minister should have drawn to the attention of this Committee, which is the UK report on the Regulatory Framework for Legal Services in England and Wales, dated 15 September 2004. It has very similar proposals to those we see in Australia.

Accordingly, amongst the many amendments I have proposed in Supplementary Order Paper 339, I have put forward some very simple ones to simplify incorporation. I propose simply to delete subclauses (3), (4), and (5) of clause 7, which state that it is misconduct for one’s lawyer to share with any person other than another lawyer or incorporated law firm the income from a business involving the provision of regulated services to the public. In other words, that relates to the multi-disciplinary practice panic and the incorporated law firm panic.

Clauses 10A and 10B can be omitted. Those regulate, in pages of detail, who can be the directors and shareholders of incorporated firms. There is a very simple formula: it is simply that regulation of lawyers should apply to lawyers. Regulating who they work for is the most cumbersome and foolish way of regulating we could conceive.

The regulations should apply to lawyers in the same way they apply to doctors, whether employed by a hospital board, a pharmaceutical company, a chemist, or another practice of doctors, or working on their own in their own practice. The ethical obligations and the obligations to protect the public should apply to the lawyer, not to the firm.

So what we have in this piece of nonsense that is Part 1 is an elaborate patch-protection, anti-competitive success by the Law Society. And we have had that acknowledged. We have had speaker after speaker from the National Party say: “I don’t like this bill very much, but the Law Society wants it so I’ll go along with it.” Dail Jones for New Zealand First said precisely the same thing: “I think it’s grubby; I don’t like it; but it’s the best thing that is there. The Law Society wants it, and we’ll go along.” The Labour Minister in the chair, the Hon Rick Barker, said: “It is very, very long and very complicated. There are some things one could have different views on, but we will go along with it because the Law Society wants it.”

I see Mr Robson waving. Do I take it that at least one other lawyer in the Committee is prepared to stand up and say that this should have been a deregulation in the interests of consumers—or a regulation in the interests of consumers—and that this should have been a bill with enough quality in it so that members did not have to get up and excuse themselves by saying that whatever the Law Society wanted they went along with? That is exactly the situation of this bill.

Let us also look at clause 4, a set of fundamental obligations that are oriented specifically to lawyers in private firms, in private practice. What does it mean to impose a legal duty on lawyers for a Government department, a company, a trade union, or Federated Farmers to be independent in providing services to their clients—independent of what? Should they be independent of the interests of the body that employs them? Who is the client? They are employees, for goodness’ sake! Those lawyers working for those companies are there to serve the trade union or the company—so they are independent of whom?

We asked at the select committee what that independence meant. I think the drafters had in mind being without prejudicial conflict of interest. But because the Law Society asked for it, they got something else. Because the Law Society Council is pursuing a vision of practice as being practice in private law firms, we still have this legislated nonsense of a set of mandatory duties we do not know the meaning of.

What about the obligation to facilitate the administration of justice in New Zealand? Does that mean that a lawyer should not facilitate pleading not guilty, when all that will do is slow things down? Does that mean it is not appropriate to act in the interests of the client in offering tactical obstacles to the other side? No one knows. This set of obligations is aspiration written into law, and it can create only problems.

Under clause 4(c), does “the obligation to act in accordance with all fiduciary duties and duties of care owed by lawyers …”—it begs the question what they are—mean that no one can contract out? When someone rings and says: “I just want a top-of-the-head view; I don’t want a book; I don’t want you to send me a bill for $400 for 2½ hours’ work. Just give me an impression of what you think the law is likely to be, even if you’re not an expert.”, does clause 4(c) mean that the lawyer is prohibited from doing that, and that the lawyer must say: “No, I’m sorry; I have to act in accordance with all fiduciary duties and duties of care?” “Duties of care” would suggest an objective standard.

Does that mean we cannot contract out? No one knows, because this legislation was drafted by the dinosaurs of the legal profession in an attempt to hold back the tide. It was drafted by a Government that had given up, for a Minister who, to his shame, had not trusted officials for so long that he had had to let it go ahead, despite misgivings.

I know the previous speaker is forthright in his views as to why this is bad legislation, and he has moved numerous amendments. One of the interesting things about this legislation is that there are rather a large number of amendments on the table, covering a wide variety of issues.

I want to refer to two in particular that have been moved by my colleagues, in particular I would like to acknowledge Dr Worth, who was a managing partner of one of New Zealand’s largest firms. I would also like to acknowledge my colleague Judith Collins who is the vice-president of the New Zealand Law Society. I know that Mr Franks might feel it is rather excessive that I do, but I do so for quite a deliberate reason. We are voting for this legislation, and we are doing so because, frankly, it is the right thing to do. It may not be a perfect bill, and I acknowledge that, but it is the bill we are actually confronted with and have to deal with. It has been in gestation—as has been well acknowledged—for many, many years. I know the select committee worked long and hard to improve it in many particular ways. The two issues I wish to refer to are noted in clause 3 in particular, and in clause 6 in relation to conveyancing.

I know that the genesis of this legislation by Mr Goff was actually to get the conveyancing profession regulated, to be permissible. But as time has gone on, and a lot of time has gone on now—nearly a decade—the reality is that there is actually no real demand. I think that is acknowledged not just by my colleagues, but by the Government itself. It is passing legislation for conveyancers, notwithstanding there being no realistic demand any more. There might have been a few years ago, but there is not now. The field is fundamentally more competitive, and it has reduced any potential demand for the roll. So that is why it is now fundamentally misplaced to pass legislation about conveyancers, when what we are really trying to do is to deal with the legal profession, and to make sure that the rules around the legal profession are correct. If there is a need for legislation around conveyancers, then I would have to acknowledge that the correct way to do that now would be the way suggested by Mr Dale Jones, which was essentially to have a separate piece of legislation. I suspect there would be no real demand or expectation for that. What seemed a worthy motive nearly a decade ago simply does not stack up now as a realistic approach for the future.

I noted with interest the very knowledgable comments made by Mr Franks around incorporation. I think those issues do have merit, and I would advise the Government to think seriously about incorporating those amendments into the legislation. The Law Society wants the opportunity of incorporation. This is surely an opportunity to harmonise our law with that of Australia. One of the goals of legislation under CER—and it was just the 20th anniversary of that last year—is in fact to harmonise legislation. If it is the case—and I know Mr Franks has done a great deal of study on this—that all Australian states are adopting a simplified approach, then now is the opportunity to do the same here in our own legislation.

I know that Mr Franks is going to say that even if that happens, we should still be voting against the bill. I think that would be unrealistic—totally unrealistic.

I acknowledge to Mr Franks that the legislation is not ideal. It has significant deficiencies. My colleague Dr Worth has moved many, many amendments because of that. I know that Mr Franks has also moved many, many amendments because of that. Many of them do have merit and I suggest we pass this bill for the benefit of the profession.

It is with great pleasure that I speak on this bill, and in referring to Part 1 I would like to deal with some of the issues so well put by my colleagues Dr Richard Worth, Dr Wayne Mapp, and the Hon Georgina te Heuheu, and also with the comments made by Dail Jones and Stephen Franks. One of the concerns of the legal profession, when it was first being mooted that it should be deregulated or that it should have conveyancers as part of the profession, at least in a pseudo way, was the fact that conveyancers as a profession would not necessarily come under the same rules and conditions, and therefore terms of business, as lawyers do. That related in particular to the fidelity fund and to the fact that lawyers who had practices were all personally responsible for not only their own actions—because they could not have limited liability companies—but also the actions of their business partners and staff. That was not only in terms of mistakes—and most lawyers would take out insurance for that—but in relation to dishonesty, for which lawyers often could not get any insurance. The dishonesty was in relation to the fidelity fund, a fund that the legal profession has paid into for years and years, ever since the 1930s, to cover the cost of theft by lawyers or their staff.

The conveyancers, who were at that stage being championed by the current Minister of Justice, the Hon Phil Goff, were not expected to have any of the same impediments to business as lawyers did. They were going to set up under completely different rules, and, of course, they did. They were absolutely allowed to act in a manner contrary to the Law Practitioners Act of 1982, which was the law at the time. They were encouraged to do so by the person who is now the Minister of Justice, the Hon Phil Goff. They were championed and held up as the little Daniel in the lion’s den, or as David fighting against Goliath. What we saw in the legal profession was two sets of rules. Conveyancers were able to undercut the legal profession, based on the fact that they did not have to pay into the fidelity fund and on the fact that they did not have to have certain standards about who could work in their offices. In fact, they were undercutting lawyers in a very unfair way. So when it was proposed at that stage that conveyancers be allowed a de jure right to practice, it was very important to the legal profession that they be able to do so under the same rules as, or similar rules to, lawyers working in the same sort of practice.

That is actually one of the good things about Part 1. The good thing is that we can actually get some form of the same rules for the same sort of work. I think that is something we should be positive about, because to my way of thinking not everything in the bill is positive. Certainly, when we look at some of the structures that are set up, we see one of the problems is that the legal profession has spent a huge amount of money over the years, through the Law Society, on restructuring itself. I remember well the consternation of the legal profession—particularly of the board of the New Zealand Law Society, which I think I was on at that stage—when the E-DEC report came out. It was a report written by a bunch of economists who had clearly worked in Treasury and who therefore wanted to slim the regulations down. They thought we could have the same sort of situation as accountants, but the legal profession could not cope with the thought of that.In many ways I think that was a shame. In many ways I think that accountants are people who have taken the bull by the horns and done very, very well for themselves, whereas unfortunately the legal profession has often become somewhat tied by its own need to regulate everything. But that having been said, we certainly need to have a modification within the legal profession. One of the areas, as I have said, that needs to be dealt with is that of conveyancing.

We in the legal profession thought, when the change was being mooted back in the 1990s, that there would be conveyancers coming out of our ears. What has happened, of course, is that with the thought of being sued—lawyers have always been able to be sued, certainly in the conveyancing area—and with the thought of having to pay for a fidelity fund for their colleague conveyancers and of having to front up for that, it now appears that there is a miniscule number of conveyancers practising. I think the number would be fewer than the fingers on my left hand. One of the things we have seen in the conveyancing area is that once people realised there was not a lot of money to be made in it, then of course the interest fell off.

One of the interesting things was watching the way some of the banks reacted to conveyancers. I remember the ASB at one stage had a problem. The bank was very concerned about being forced into taking on a conveyancer as the bank’s legal adviser on documents. What I mean by that is that nowadays quite often with regard to mortgage documents, the bank that is lending the money instructs the lawyer who is acting for the borrower to act on behalf of the bank as well. So there is an inherent conflict of interest, although the banks can rely very much on the facts that, firstly, the lawyer is normally insured—and most of the banks require the lawyer to be insured—and secondly, the lawyer is covered by the Law Society’s rules, so that if the lawyer does anything wrong, he or she will end up losing his or her practising certificate. I can certainly remember the ASB being very concerned that it had one particular conveyancer, whom I shall not name, hassling it because the bank did not think it should give the same benefits to the client of a conveyancer as it gave to the client of a lawyer. And that was fair enough, too. But the bank was being threatened that it would be sued. Of course, we do not need that sort of thing.

One of the interesting things with regard to conveyancing is that we used to have a scale of fees for it; certainly when I first started to practise law, we used to have that. Mr Jones remembers that well, does he not?

💬 Dail Jones: Those were the days.

As Mr Jones says, those were the days. That was when the fees made it worthwhile to do conveyancing work. What people forget—and it is quite good to remind the Committee of this—is that those conveyancing fees paid for what is now legal aid.

💬 Dail Jones: That’s right.

Mr Jones confirms that. In those days, before we had a State-funded legal aid system, law firms cross-subsidised legal aid work—pro bono work we used to call it—with that sort of money. That happened all the time. It is an amazing thing that matters were still dealt with in the courts, because that is what lawyers did. In those days to be a litigator in a law firm was to be very much a poor cousin, because the litigators of criminal matters and family matters within a law firm were seen as handling the charitable cases that did not bring in the fees that the conveyancers working in commercial practice and the commercial litigators brought in.

Since the freeing up of the conveyancing market and the massive reduction in fees, who now picks up the tab for legal aid? The taxpayer does. That is actually what has happened. Instead of lawyers keeping the costs down within their own firms, and acting as the gatekeeper towards the fees and the work that is done, we now have a very open-ended legal aid system. One of the things that people around the country are concerned about is the complete blowout in legal aid, almost every year.That is not to say that we need to return to a fee-scale system, but it is good occasionally—Mr Jones says, ugh, I am being tough but, no, I do not think we need to do that—to remember that in fact there was justice before there was a legal aid system.

There was an ability for people to have their time in court. In fact, many lawyers and former lawyers would say that in those days there was far more of a professional attitude towards the practice of law than some of us have seen in the not so distant past.

One of the things we need to be aware of, and one of the good things in this part, however, is the ability of law firms, of people who practise law¸ and of conveyancers, to set up in a limited liability company. One of the reasons for that is that the practice of law has changed so significantly. We now have very, very large law firms. We also have very small law firms, and the vast majority of lawyers in this country practise in one or two-partner firms—in other words, in sole practice or in two-partner firms. I guess most people in New Zealand would have no idea about that fact. Most people think lawyers are in big firms, but they are not.

The problem we are facing in this Committee tonight, as the Government finally tries to take some action on this legislation, is the enormous number of amendments referred to earlier on by Dr Worth of the National Party. The time one is taking to try to go through some of those amendments will obviously delay the vote on Part I, because as I look at the most recent one that has come to hand, dated Tuesday, 29 March 2005, I think that the bill has been out of the Justice and Electoral Committee for about 6 months. Yet the Government is still producing Supplementary Order Papers—

💬 Dr Richard Worth: More to come.

DAIL JONES:—with more to come, probably. Yes, for sure. We are even looking at an amendment to clause 13, in a Supplementary Order Paper, which is an amendment to a provision in an earlier Supplementary Order Paper. So as this bill hangs around, we are getting amendments in Supplementary Order Papers to provisions in earlier Supplementary Order Papers, and I ask how many more of those amendments to amendments we will get during the course of this debate on the legislation. [Interruption] Well, the Minister in the chair, the Hon Rick Barker, would not know. As I said earlier, I still look forward to Mr Goff making a contribution, because this legislation is all his fault.

💬 Judith Collins: Don’t hold your breath.

I will not hold my breath, at least not today, but no doubt he is thinking about this bill from where he is at the present time, and he is very happy to be where he is rather than being in the Chamber at the moment. But this legislation is Mr Goff’s fault, and it is the reason why lawyers and conveyancers have been thrown together. We also have an amendment to clause 6. Do I have to give my civil union speech all over again?

💬 Dr Wayne Mapp: Just go for it!

I will just go for it, because clause 6 is really a civil union amendment, is it not? That is the only reason we have clause 6. Once again, Helen Clark passed that earlier legislation just for the benefit of the coterie of lesbians and homosexuals who are behind it. But this is a special reference for Sue Bradford of the Greens: the last time I made my speech about Helen Clark and her coterie of lesbians and homosexuals, Sue Bradford said to me, in high dudgeon: “Oh, but we’ve got a lot of lesbians and homosexuals. Why don’t you accuse us of having them, too?”. So, by special request of the Greens, this amendment—and I am looking at the amendment to clause 6 in Supplementary Order Paper 338—is being passed, not only for Helen Clark and her coterie of homosexuals and lesbians, but also for the Greens and their coterie of homosexuals and lesbians. That is by special request.

💬 Hon Member: Don’t pass it for us.

No, it is just by the special request of Sue Bradford that I make that point tonight. I am sure she will be very, very happy that I have put her in the same basket, and those members are in the same sort of basket that applies there. So that is the particular point that I had to raise.

Now we will have to decide how we will vote on this. At some stage, Mr Chairman, you may have to rule on whether there will be a personal vote on this particular issue, and on whether that will delay it.

Progress reported.

Report adopted.

The House adjourned at 9.56 p.m.