Lawyers and Conveyancers Bill

I want to take just a brief call on Part 7. This part is significant because it creates the new three-tier complaints and discipline system. I congratulate the Justice and Electoral Committee on the excellent work it did on this part and, indeed, on all parts of the legislation. Professional standards committees will be run by the New Zealand Law Society and the New Zealand Society of Conveyancers. An independent legal complaints review officer will provide oversight of standards committee decisions. A New Zealand Lawyers and Conveyancers Disciplinary Tribunal will hear and determine any charges against practitioners and any application for restoration of a practising certificate.

I noted comments made earlier about whether charges would be laid in cases of fraud. I refer members to page 2 of this morning’s Press, where, indeed, it is reported that a member of the local law society is up on charges for, I think, precisely the reasons expressed by a previous speaker from the National Party. Disciplinary processes are essentially a quid pro quo for professional status and the restriction placed on others doing work in this area. It is not an alternative to the consequences of the criminal law, but additional to those. I commend this part to the House.

As the Minister in the chair, the Hon Lianne Dalziel, has said, Part 7 is an extremely important part of the new legislation, and in general terms I am very happy with what is proposed here. The public must be able to have their complaints dealt with justly, above all, but also expeditiously. So I am very pleased to see that with the demise of the old district law societies the New Zealand Law Society will be responsible for establishing, and indeed has an obligation to establish, a complaints service.

The functions of the New Zealand Law Society in relation to the complaints service are usefully summarised in clause 111, and there are particular aspects of that clause I wish to emphasise. The complaints service must ensure throughout New Zealand both the consistency and the quality of the complaints service, and that has not always been the case with district law societies. As I said before the dinner break, sometimes very small law societies were simply incapable of providing that kind of consistent high-quality complaints service to the public. The second aspect is to provide assistance to lawyers standards committees and to the office of each such committee, and if it is basically centralised, even though there will be standards committees in other parts of the country, that assistance will be greatly appreciated by the committees. The third aspect is to provide to the legal complaints review officer copies of any complaints that the Law Society receives. So in general terms those functions are, I think, well expressed, and I believe that the new standards committees established by the Law Society will do a much better job than has hitherto been the case.

I want to say just one or two things about the Legal Complaints Review Officer. Personally I wonder whether, in fact, it is necessary to have such an officer. The essence of a profession is that it is self-regulating—it regulates itself. I wonder whether this adds an unnecessary layer to the complaints process. As I said, one of the key aims of a complaints process is to allow for an expeditious resolution of disputes, and there are an awfully large number of layers in this part dealing with complaints.

I note that the person who is to be the Legal Complaints Review Officer, as provided by clause 171, is not going to be a lawyer or conveyancing practitioner. Indeed, the criteria for appointment seem to contradict that. The Minister will have to have regard, when appointing such a person, to the person’s personal attributes—that is fair enough—the person’s knowledge of and experience in matters such as the law of New Zealand, and the provision of legal services. The job description for that person—and I would be grateful for the Minister’s comment—as set out in clause 172 would tend to point in the direction of a person who is legally qualified. So I wonder how effective a non-lawyer will be in carrying out these functions, and I wonder whether this part of the bill is absolutely necessary.

Then we have the New Zealand Lawyers and Conveyancers Disciplinary Tribunal. That essentially replicates, although there are some structural changes, what is already contained in the Law Practitioners Act. That is a very important body, and in the past it has carried out its functions very well. I have no doubt that this new tribunal will do exactly the same.

The provisions that relate to appeals to the High Court thence to the Court of Appeal are all quite straightforward, and I have no problems with them. I note that under section 66 of the Judicature Act, an appeal to the Court of Appeal on a point of law is going to be the final appeal.

The only other comment I wish to make is about clause 245, which seems to have gone through some changes when it was at the Justice and Electoral Committee. It talks about the inherent jurisdiction of the court—I think the words were changed from “summary”—and it provides that nothing shall affect the inherent jurisdiction and powers of the High Court and barristers and barristers and solicitors. In actual fact, the words “and powers” are totally unnecessary. The High Court has an inherent jurisdiction. An inferior court such as the District Court will have some inherent powers but does not possess an inherent jurisdiction, but it is completely otiose and an example of—

I feel that the member has contributed in a way that requires a response. He asked how somebody who was not a lawyer could be appointed as a Legal Complaints Review Officer and, indeed, when we look at the criteria for appointment, we see that all the attributes of a lawyer are what we would look for. However, a lawyer under this legislation means a person who holds a current practising certificate as a barrister or as a barrister and solicitor. That means I would be qualified for the position, as I no longer hold a practising certificate. I do not know whether the member still holds a current practising certificate but, if he does not, he would also be qualified for that position. I imagine there would be retired judges and others who would also be eminently qualified for those positions. So the member can be reassured that there will be no shortage of people available to undertake that role.

We have come to Part 7 of the Lawyers and Conveyances Bill, which National is supporting with reservations. Those outside the House who are listening to these events should be in no doubt that National has not rested in its labours to improve the bill. Indeed, the epithets “tireless” and “unflagging” would properly characterise the amendments of integrity that National has advanced in the course of this debate. But a stubborn Government in a crowded Chamber will have none of it. Much is the pity.

As will be apparent from the commentary on the bill, National has some reservations about this part, and Mr Finlayson has quietly indicated that, on behalf of National. I would like to pick up that theme, because what we say in the commentary is just this: “National is unpersuaded that the proposed structure is necessarily the best structure although it accepts that the proposal represents a significant improvement on the present system. National considers that the Legal Complaints Review Officer should be reconstituted as a Legal Ombudsman resourced by the legal profession and that there is no need for the proposed Disciplinary Tribunal. The consequence would be that serious cases of wrongdoing could be referred either by the Ombudsman or the proposed Standards Committee to the High Court on the basis that lawyers are officers of the court with obligations to the court. National believes that its proposals are more likely to gain public acceptance.”

It is interesting to consider the select committee process that prompted changes to Part 7 in the area I am talking about. As introduced, clause 107, which deals with the purposes of the part, does not have a ranking, and the Justice and Electoral Committee decided by majority that that was the preferred approach. What happened is that the majority of the committee ranked the purposes on a “one, two, three, four” basis, and the fourth, least-ranked purpose was to “preserve the inherent jurisdiction of the High Court to strike off the roll and discipline lawyers in their capacity as officers of the High Court.” From National’s perspective, we would have wished to see that purpose heightened, because one of the ways—and, I would suggest, quite a powerful way—to stiffen the resolve of lawyers to act with integrity is to remind them of the obligations they owe as officers of the court. But the Labour members could not see that, and in the end they ranked the purposes in the way I have described. “More fools they.”, I see the Minister in the chair, Lianne Dalziel, thinking, and she is so right.

Of course, as others have said, and it is appropriate to repeat it, there were major problems in the way district law societies dealt with disciplinary matters. That was not so in the case of the larger law societies, because they had the resources and, in particular, they had the numbers of people to constitute tribunals that acted with integrity and independence. But because there are a number of district law societies of varying population strengths, it was difficult for some of the more provincial district law societies to undertake the disciplinary functions—they were too small. Because of the camaraderie associated with those particular districts, the district law societies found themselves sitting in judgment on their close friends and neighbours. That makes incredibly difficult the task of judicial determination of what is conduct that crosses the line. National accepts that what is proposed in the bill is an improvement, but there could have been a much greater improvement, were there a more willing Government.

I would like to talk for a moment about the overriding nature of ethical obligations, because it is particularly relevant to Part 7. The Minister in the chair, the Hon Lianne Dalziel, is good enough to nod; I think she accepts that that too is a critical aspect of the bill that has not been given sufficient attention. I am sure she would agree it is implicit that in work activity that is characterised as a profession, mere compliance with legal obligations and duties falls short of the discharge of the professional function. For that reason, codes of ethics are very much a hallmark of the professions. To a significant extent, codes of ethics reflect self-interest, because of the damage—and, I would say, taint in the market place—that follows from ethical shortfalls. Such shortfalls often spring from the culture of a law firm—perhaps a law firm where the focus is on winning maximum profits off a client base. When that culture dominates decision making, then ethical shortfalls can readily arise. So quality work—and I have spoken about that in the context of the comments I made on the fundamental obligations of lawyers—the duty-of-care concept, and ethical conduct should dominate decision making, not, I would say, the blind pursuit of profit.

In June 2001 Japan released a voluminous report as a blueprint for remaking the country’s legal system. It stated that lawyers should be “persons with kind hearts who can deeply sympathize with the happiness and sorrows of people who are going through their one and only life.” That is truly an expansive ambition, and I sense that what we have done in Part 7 falls a little short of that hugely desirable objective.

That certainly does give one pause for thought about the application of the law to one’s “one and only life”. Those people who believe in the Hindu religion feel, of course, that they have successive lives.

I want to refer specifically to the structure of Part 7. It is, in essence, divided into two parts. The first part deals with the complaints of clients about the service they have received from lawyers, and the second part deals with the disciplinary procedures conducted by the New Zealand Law Society that could result in the suspension or revocation of the practising certificate of a lawyer. As my learned colleague Dr Worth has indicated, National members do not have a significant concern about the latter part. In fact, we acknowledge that it has been strengthened, because it has been moved from the district law societies, as it exists at present, through to the New Zealand Law Society, and that will give a much greater sense that complaints are being dealt with at arm’s length, and, accordingly, a much greater satisfaction or belief on the part of the community that there is not some kind of collusion—if I could put it that way—between the disciplinary authority and the person in question. I might add that that perception is, in fact, completely false. As with most professions, the legal profession is most hard on its own transgressors, for the self-evident reason that any transgressor taints the reputation and excellence of the rest of the profession. Certainly, those people who go before district law society disciplinary tribunals would feel they get no easy ride.

However, it is really the first part that I am concerned about, and, in particular, the issue that Dr Worth set out in the National minority report when he referred to our proposal to establish an ombudsman service, which would be a much more robust and much stronger system that would give confidence to clients that the lawyer is treating them properly in terms of quality of service, appropriateness of fees, and those sorts of things. I have been a practising lawyer, and since I have been a member of Parliament I have had a steady flow of complaints about the size of lawyers’ fees, and it would be fair to say that not too many of them are saying the fees should be higher—quite the contrary. The normal advice I would give to such a person is to make a complaint to the district law society, which has a cost revision committee that will deal adequately with the complaint. When one is looking at one’s constituent across the table, there is a scepticism, I guess, on the constituent’s part that that process will be satisfactory.

The advantage of having an ombudsman service is that it would provide an arm’s length approach for dealing with those kinds of issues. Certainly, on the ethical questions, there is broad acceptance that the disciplinary procedures are effective, and I think there is a lot of proof around that. There is a good deal less satisfaction about things such as cost revision, and that kind of thing does not ever get to the stage of formal disciplinary action. So we have the suggestion from my colleague of an ombudsman service, which has a hugely advantageous precedent in this country. The first Ombudsman was established as an Officer of Parliament in 1962, and that concept has been picked up on a voluntary basis by the banking industry and, indeed, the insurance industry, and has been very well accepted. People trust the Banking Ombudsman to hold banks to account. They know that it is on a voluntary basis, they know that a Banking Ombudsman has limited power, but they also know that the position is at arm’s length from the banks. That is where that sense of confidence lies—from the position being at arm’s length.

I shall quote from the committee’s report: “… National is unpersuaded that the proposed structure is necessarily the best structure although it accepts that the proposal represents a significant improvement …”. The disciplinary tribunal is an improvement. That is widely acknowledged and I do not have a problem with it. It is the first part that I have a problem with—essentially, the absence of an independent party, of an ombudsman such as we propose. That would have been a very effective means to build further levels of confidence. It would have been a relatively modest change to the overall structure. It certainly would not have perturbed the overall objective of the profession and the district law societies to restructure themselves to be a more modern and effective profession for the 21st century.

Of course, that is why National is broadly supporting the bill. We recognise that, notwithstanding the enormous complexity of the bill, it is intended to simplify things. There is quite a tautology there, I guess, but that is the truth of it; we have a statute of literally hundreds of pages to replace what was a much slimmer statute in the past. Nevertheless, putting aside the fact that modern drafting techniques seem to require every single thing to be copperplated, bulletproof, and appellate-proof—although, in truth, that is never actually achieved—rather than leaving a level of discretion to both the profession and, indeed, the courts, we accept that the new system will be more effective for the future.

But we say to the Government that we are disappointed with its response, both at the level of the select committee and, subsequently, at the level of the Ministry of Justice, to the sensible and prudent suggestions made by members on this side of the Chamber and based on their long experience in the legal profession. Dr Richard Worth was one of the managing partners of one of New Zealand’s largest law firms. He is on the Council of Legal Education, and was vice-chair of the Auckland District Law Society many years past. Judith Collins was vice-president of the New Zealand Law Society. [Interruption] The Minister in the chair, Lianne Dalziel, has never attained that level. She has never ever held a serious position in any part of the legal profession. I remind her that expertise in management of that profession does not exist on the Government benches. In this Chamber, it exists almost entirely on this side.

I have to raise—given that the Minister has now chosen to make an inopportune intervention—the matter of the complete politicisation of the appointment of silks in the last round. Outstanding candidates were presented to the Attorney-General at the time for consideration, and he applied a political approach to it. That will be forever a blight on his name. I would not in this environment wish to name people, but make only this observation: the previous Attorney-General is damaged politically. He almost single-handedly destroyed this Government through his Budget. He lost the confidence of the Prime Minister in his role as Attorney-General, and was summarily dismissed from that role at the time of the reorganisation of Cabinet. She desperately searched around for someone who had a limited level of legal practice, and alighted on David Parker—a man who lost his seat.

National has not attempted to politicise this bill, and I can only ask the Minister, with her interventions, to note the points that we make seriously when we mention that an ombudsman is the proper and correct way to deal with complaints from the public about the adequacy of service, the quality of fees, and so forth. So although this measure is an improvement, it gets maybe a C-minus and a “could do a great deal better”. Maybe the Minister should be aspiring to a B-plus.

Having heard that speech made by the previous member, who wanted to argue that his side is bigger than ours, I feel obliged to rise to my feet. I am one who has appeared as counsel on a number of occasions for various law societies and the New Zealand Law Practitioners Disciplinary Tribunal, and can only say that I welcome the change that consolidates all complaints going to a centralised authority, and that a standards committee will oversee those and set the procedures and protocols. Part 7 is really the powerhouse of the change, and it is one to be welcomed.

The talk of an ombudsman, of course, is talk from someone who does not really have an appreciation of the nature and quality of complaints that arise from the various disciplines, and more. Litigators, particularly criminal litigators, attract all sorts of sundry complaints. Those who deserve to be in prison complain the most. Those who do not deserve to be in prison are normally kept out, and they complain rarely. So we get the malcontents and those who are discontent hogging the time of the Ombudsman. If we brought that into the field of lawyers we would have a bureaucracy that even the political correctness investigator would find appalling.

I endorse Part 7. It is the powerhouse of the bill, and it will set the standards by which lawyers can judge themselves. There should be an objective set of standards that will be readily promulgated to the whole profession.

First, I thank the Minister, Lianne Dalziel, for explaining the rationale behind the Legal Complaints Review Officer. That was very helpful. I had not quite finished what I wanted to say about the jurisdictional aspects. I said that on page 214 a couple of points dealt with the jurisdiction of the High Court and Court of Appeal. Clause 245(1) appears to have been changed. The word “Summary” has been omitted by majority, and the word “inherent” substituted. Also—and in my respectful submission, rather strangely—the phrase “and powers” has been included. As I said in my earlier intervention, the High Court has an inherent jurisdiction but does not have inherent powers. Inferior courts have inherent powers, although they do not have an inherent jurisdiction. So if someone could explain to me exactly why that change was made, I would be most grateful.

Subclause (2) talks about the High Court in the exercise of its summary jurisdiction, which does not quite tie up with what is in subclause (1). Then, and it appears to be totally otiose, clause 247 states: “Except as provided in this Part, nothing in this Part limits the jurisdiction of the High Court.”, but we do not know whether it is the summary jurisdiction, the inherent jurisdiction, or whatever. If the Minister in the chair could explain those points—the interrelationship between clauses 245 and 247—I would be most grateful.

I seek leave that all the amendments to Part 7 on Dr Worth’s Supplementary Order Paper 344 be taken as one question.

The CHAIRPERSON (Ann Hartley): Leave is sought for that. Is there any objection? There is not.

The question was put that the amendments set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to Part 7 be agreed to.