Lawyers and Conveyancers Amendment Bill (No 2) — Third Reading 
Lawyers and Conveyancers Amendment Bill (No 2) — Third Reading 
[Volume:648;Page:17633] 
Lawyers and Conveyancers Amendment Bill (No 2) 
Third Reading 
Hon DARREN HUGHES (Deputy Leader of the House) 
 on behalf of the  
Minister of Justice 
: I move  
That the Lawyers and Conveyancers Amendment Bill (No 2) be now read a third time 
. Ensuring that all parties involved in the labour market understand and can meet their obligations is vital to the market’s proper functioning and is critical to the future productivity of New Zealand. Unions and employer organisations provide a timely practical and cost-effective relevant service that educates and supports people in meeting these obligations. This bill will amend the Lawyers and Conveyancers Act 2006 to enable lawyers who are employed by employer or union organisations to continue the longstanding practice of providing vital legal services to their members. This practice has enabled integrated prevention and advice services which includes legal services. It has contributed to New Zealand’s growth and to people’s access to justice—particularly working people. 
The Lawyers and Conveyancers Act 2006 will come into force tomorrow being 1 August. The Act represents a major reform of the way in which legal services are provided in New Zealand and it will provide more effective regulation of legal professionals and much greater consumer focus and protection. However as enacted the Act will prevent unions and employer organisations from continuing their practice of using in-house lawyers to provide legal services to their members. This is because the Act makes the provision of legal services to the public by in-house lawyers—in other words lawyers employed by non-lawyers—an act of professional misconduct. It is essential that we correct this unintended consequence before the Act comes into force tomorrow. 
This bill amends the Act to ensure that employer organisations and unions continue to be able to provide this invaluable service to their members. This practice will ensure that members continue to have access to practical cost-effective and timely legal services that they might otherwise be unable to afford. Supplementary Order Paper 216 in the name of the Hon Annette King maintains this objective in the bill by clarifying that lawyers will continue to be guilty of misconduct if they provide legal advice to members on matters that are not relevant to the employer organisation or union. 
New clause 10 is a further amendment to the bill. It was adopted from an amendment put forward by the New Zealand First member Dail Jones and is a positive addition to the bill. Clause 10 amends section 107(1) of the Act to make the practice rules of the New Zealand Law Society binding on current and former incorporated law firms. 
This bill is important legislation that will ensure members of employer organisations and unions will continue to benefit by being able to access longstanding integrated prevention and employment advice services including legal services through their organisations and unions. It has been great to see the amount of support there is for this bill as people recognise the critical role that unions and employer organisations play in the effective functioning of the labour market. 
On behalf of the Minister the Hon Annette King I thank the Justice and Electoral Committee and the House for expediting this bill and particularly Mr Finlayson Mr Jones and Mr Chauvel for the work they have put into it. I also thank the chairperson of the committee and member for Waitakere Lynne Pillay who did a sterling job as always and the Committee of the whole House for its careful consideration of this bill. I commend the bill to the House for its third reading. 
CHRISTOPHER FINLAYSON (National) 
: 
 I am delighted to see that parliamentary history has been made this afternoon. That would be the first coherent speech the boy wonder from Otaki has ever made. I congratulate him on that excellent speech even if it was written out for him. 
As the Minister observed the Lawyers and Conveyancers Amendment Bill (No 2) is a small but important bill and it concerns as I said in the Committee stage certain people in trade unions and members of business organisations being able to get access to legal advice. The problem has been canvassed in both the second reading and the Committee stage so I do not think I need to dwell on it. I will make relatively few comments in this third reading speech because in a sense it has all been said. 
It is important that we get this measure through the House this afternoon. I do not know when it will be signed into law although I note that clause 2 provides that the Act will be deemed to have come into force on 1 August 2008 and that is important because the substantive legislation finally comes into force on that date after a 2-year transitional period. Some people may not realise that the Lawyers and Conveyancers Act comes into force then and that the Law Practitioners Act 1982 will finally be deemed to have been repealed tomorrow. 
The purpose of the legislation is to enable lawyers who are the employees of employer organisations and trade unions to be able to give a certain class of legal advice to members of unions and members of business associations. It is important to note that it is the clear parliamentary intention that those persons are not able to give general legal advice. For example lawyers employed by a trade union will not be able to give free-ranging advice on conveyancing transactions proceedings commenced under the Family Protection Act or mergers and takeovers; nor might I add can they give advice on matters related to the dreadful Electoral Finance Act even though at the moment they may be deemed to be third parties. 
What they will be able to advise their members on is a carefully defined series of matters and they are set out in clause 6. It is entirely reasonable that members of trade unions for example should be able to contact the lawyer employed by the Engineering Printing and Manufacturing Union or the Dairy Workers Union to ask for urgent and inexpensive advice on a matter relating to for instance the Employment Relations Act and to obtain that advice. We have no problem with that. As I said in the second reading everyone agreed with the principle; it was a question of making sure the words were right. 
It was interesting to observe that initially the Government was not very interested in having a Supplementary Order Paper to try to deal with these issues. Indeed the matter went through the select committee process very quickly indeed. The bill was referred to the Justice and Electoral Committee on 25 June dealt with immediately and reported back on 7 July. I have no complaint about that. However I did say on behalf of the National Party that we may have wanted to look at a Supplementary Order Paper if we thought there were issues of detail that needed to be addressed. That is why I was so pleased that during the Committee stage the Minister Annette King gave notice of her intention to introduce a Supplementary Order Paper. The work exemplified by that Supplementary Order Paper is contained in the amended clause 6 and I think it is a good piece of work. 
So I thank the Minister of Justice for being open—on this occasion at least—to the possibility of having a Supplementary Order Paper to address the concerns of various organisations. I also congratulate Mr Dail Jones on his work on this matter. He was a good member to work with on this issue which is one not of partisan politics but of getting the words right. I conclude by also congratulating Mr Jones on managing to persuade the Government that section 107(1) of the Lawyers and Conveyancers Act needed urgent amendment. That is what clause 10 of this bill is all about. Quite sensibly we dealt with that issue during the Committee stage as well. 
All in all I am satisfied that the legitimate interests of all the various players are properly addressed. I too congratulate those members who have worked very sensibly on this bill and I also thank those outside Parliament—in the Council of Trade Unions and the various unions in other organisations like Business New Zealand and in the New Zealand Law Society—for the good work they have done. With those relatively short comments I indicate that the National Party will support the third reading of this bill. 
Dr RICHARD WORTH (National) 
: 
 Mr Jones is certainly the toast of the day for his dogged pursuit of an important issue that he was simply not prepared to let go. The Government was eventually persuaded that remedial action was required which saw Supplementary Order Paper 216 dated 29 July 2008 in the name of the Hon Annette King form part of the Lawyers and Conveyancers Amendment Bill (No 2) which of course we now see in its final stage. The third reading of this bill which National supports is really the final brick in the wall. The bill enables all the issues touching the legal profession that have been the subject of the substantive legislation to now be resolved. 
The bill is of course part of a greater plan because strangely the Lawyers and Conveyancers Act 2006 is not yet in force. There are not too many illustrations on the statute book of legislation that is passed but not brought into effect until after such a substantial delay. There are a number of reasons for that delay—primarily centring round the myriad of rules and regulations that were required as part of the delegated legislation suite to be brought into place. So it was that the Regulations Review Committee last Wednesday looked at a number of those rules and regulations. The committee intends to follow a number of issues arising from its deliberation on those delegated materials. 
As I have said this third reading and the passage of this legislation is very much part of a greater plan because the substantive legislation affects every practising lawyer in this country—it changes how lawyers are regulated and how they are to practise. No longer will a lawyer get a practising certificate from a district law society; it will be secured directly from the New Zealand Law Society and a central register of lawyers will be maintained by the society. The practising year is to change from 1 February to 31 January in any period to 1 July to 30 June. Completely new rules have been in written in respect of the Lawyers and Conveyancers Act requirements reflecting the client-focused orientation of the new legislation and its associated rules and regulations. There are new rules that provide a reference point for considering complaints made to the new lawyers complaints service which will be run by the New Zealand Law Society and there are new rules to cover a whole host of issues ranging from fees billing arrangements complaints procedures indemnity cover to much more besides. Law firms will be able to incorporate and lawyers will be able to sell real estate. 
The substance of this bill was about dealing with a particular class of in-house lawyer—that is the lawyer employed by a union organisation or an employers’ association—and the intent was to regularise a practice that had built up over a number of years whereby the lawyers in those entities gave legal advice of a strictly constrained type. When this bill was initially introduced those constraints were not present. But the effect of Supplementary Order Paper 216 is to put those constraints back in place and in effect preserve the status quo position. Now in respect of the lawyers in those entities they will be able to give a range of advice to members of those organisations in those members’ capacities as members employers or employees. 
The effect of the substantive law change is not to be underestimated. For the first time in legislation the fundamental obligations of lawyers are spelt out. These issues in the past have really been the subject of common law rules conventions and law society provisions. The primary obligation which is spelt out in the substantive legislation is the obligation to uphold the rule of law and facilitate the administration of justice in New Zealand. There are other matters. There is an obligation to be independent in providing regulated services. There is an obligation to act in accordance with fiduciary responsibilities. There is an interesting dichotomy whereby there is a primary obligation owed to the court—lawyers are officers of the court—without of course compromising the relationship that exists between the lawyer and the lawyer’s client. 
National commends this legislation as it moves to its final stage. We simply note that the effect of the Lawyers and Conveyancers Act with this embellishment on it represents a period of convulsive change for the law profession as from 1 August—tomorrow. 
DAIL JONES (NZ First) 
: 
 When I stood up about 10 working nights ago to speak against the Lawyers and Conveyancers Amendment Bill (No 2) at about a quarter to 10 and New Zealand First was the only party speaking against the bill I wondered whether I had misread the legislation in some way or another and had got it wrong. But I am very pleased to say that I did have it right and although every other party in the House voted for the bill New Zealand First alone voted against it because I could see that there was something not quite right about it. The issue has been raised by the Minister who moved the third reading that it was not an unintended consequence of the Lawyers and Conveyancers Amendment Bill (No 2) that various provisions were made; we deliberately did what we did at the time and I was a member of the Justice and Electoral Committee. 
However reason prevails at the end of the day and to be a lawyer is to be ready to compromise to see the other person’s point of view and to reach a good conclusion to a problem. We sat down together and I was pleased with the support from the New Zealand Law Society which was the only submitter that opposed this legislation. With the information supplied by the society we came up with a solution that took the matter to the stage where the things the trade union movement and Business New Zealand wanted to do were covered by this bill rather than by extending it to those various other areas that I had mentioned during my first reading speech 10 working nights ago. That was the situation where a lawyer from a trade union or Business New Zealand might be asked to appear as counsel on a drink-driving matter or to give advice on a matrimonial property agreement a relationship property agreement or a trust and things like that. 
Eventually we worked out what the real problem was and what the real solution was. Putting aside what had happened in the discussions on the Lawyers and Conveyancers Act we came to a reasonable solution to the matter. I am pleased to have taken a part in it and New Zealand First of course will support this amendment. New Zealand First is always willing to work—as are so many of the MMP parties; the smaller parties—to reach a solution to a problem. However in this case we were all out on our own and we were able to work with the Minister. 
I thank the Minister for her cooperation and for getting the law draftsmen to prepare a very good amendment to the legislation rather than the stark one that I had put forward earlier on and the one that Mr Finlayson was so ably working on as well. I also thank the Minister—and the New Zealand Law Society thanks the Minister—and the House for allowing clause 10 to be inserted. It tidies up a minor drafting issue. Being lawyers we like to dot our i’s and cross our t’s and that just seemed to be one that had been missed over the last couple of years. 
New Zealand First supports this bill. The House’s support for the bill will be unanimous I understand. We are only too pleased to have taken part in what I think was an exemplary example of how quickly this Parliament can work in the best interests of the trade union movement Business New Zealand and the country generally. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 Tena koe. Tena tatou katoa e te Whare. When I first looked over this bill with Angeline Greensill the Maori Party candidate for Hauraki-Waikato she reminded me of one of the findings of the Waitangi Tribunal’s 1997 Muriwhenua report Wai 45 which mentioned the importance of decision makers giving equal weight to the Maori world view the Maori values system and Maori law and policies. The Treaty of Waitangi of course is based on the protection of Maori custom and cultural values and indeed the guarantee of rangatiratanga recognises the right of Maori to own and control their assets. Those principles are always at the forefront of our thinking in the Maori Party whenever we consider any legislation including this bill the Lawyers and Conveyancers Amendment Bill (No 2). 
So when we look at this bill introduced some 5 years ago to make the legal profession more accountable give clients more protection and enable lawyers employed by organisations to provide services to their members Derek Fox the Maori Party candidate for Ikaroa-Rawhiti said we should always look to see whether Maori are given the opportunity to actively participate in defining the law whether Maori are encouraged to take responsibility for their own affairs whether Maori will benefit from transparency in the legal profession and whether this bill will realise the promise of article 3 of the Treaty by enabling Maori to be as involved in the legal profession as any other Kiwi. 
When the law was first changed it meant that lawyers employed by unions or employer groups could act only for the organisations themselves not for the members. So this bill is necessary to enable those lawyers to provide legal services to the members of those groups and to allow members access to legal advice on issues such as liability competency and employment and industrial law. Rahui Katene Maori Party candidate for Te Tai Tonga tells me that everyone no matter his or her background should have access to good legal advice and that this bill will enable those who can ill-afford it to get access to quality advice particularly workers in today’s increasingly difficult and legalised work environment. 
Ms Katene also pointed out a very serious flaw in the bill relating to Maori: that it had been drafted specifically for individual members and not for claimant groups. She insisted we record our concern that claimants before the Maori Land Court and the Waitangi Tribunal will not be disadvantaged by the passing of the Lawyers and Conveyancers Amendment Bill (No 2). Ms Katene also challenged the Minister to urgently review the legislation to ensure that claimants are not disadvantaged. 
Finally I cannot help but notice that the bill seems to have rocketed up the Order Paper particularly during these turbulent times of controversy swirling around the Chamber debates descending into nasty and vicious attacks and questions about the Government’s credibility. One would have thought a vote on confidence and supply would immediately put an end to questions about the Government’s inability to deal with the financial shenanigans of coalition partners. One would have thought the Government might settle this controversy once and for all by calling for a vote of confidence in the Government’s access to money by putting the Appropriation (2008/09 Estimates) Bill up for a vote—unless of course the Government were scared that it might lose the confidence motion and be forced to either call a snap election or turn power over to another coalition of parties. That would be a very interesting day in politics indeed. Instead these innocuous little bills get shunted up the programme. 
This is the second amendment to the original Lawyers and Conveyancers Act. We respectfully suggest that in future the Government gets greater consultation on its bills so that we do not have to do paper-over jobs like this one. 
The Maori Party will support this bill at third reading but with a challenge that claimants before the Maori Land Court and the Waitangi Tribunal not be disadvantaged. Kia ora tatou. 
CHESTER BORROWS (National—Whanganui) 
: 
 I rise in support of the Lawyers and Conveyancers Amendment Bill (No 2). The bill essentially extends the type of organisation that a lawyer is permitted to provide services to during the course of his or her employment. I agree with my parliamentary colleagues who in previous speeches on this bill have described it as highly technical. However as is often the case the devil is in the detail. Technical as it may be this amendment has important ramifications for those lawyers currently employed by unions employer organisations and health professional organisations to provide in-house advice to their employer’s members. Under the Law Practitioners Act corporate lawyers were prohibited in their capacity as in-house lawyers from providing legal services to anyone other than their employer. When the Lawyers and Conveyancers Act 2006 was passed Parliament decided to retain the status quo. The effect that that had on members of unions or members of organisations was that they then had to pay serious money to obtain the advice they needed given their circumstance. 
The Lawyers and Conveyancers Amendment Bill (No 2) will reverse the position stated in the Lawyers and Conveyancers Act. The bill seeks to regularise the position of lawyers employed by unions and other employer organisations that provide advice to their employer’s members. Up until now many in-house lawyers have been operating under the misconception that they were able to provide their employer’s members or clients with employment legal advice. In practical terms the benefits of this practice are fairly self-evident. The arrangement provides the in-house lawyer’s employer—say for instance the Engineering Printing and Manufacturing Union or Business New Zealand—with easy access to quality and cost-effective legal services for its members. 
I am pleased to see that with the cooperation of the House this matter has been clarified and will provide certainty to those lawyers who are employed by unions employer organisations and health professional organisations. I am equally pleased to see that during the Committee stage the House agreed to amendments allowing lawyers to provide legal services to members of an organisation or union only in so far as they relate to their membership of that organisation. That amendment clears up the anomalous situation whereby it could have been possible for a union lawyer who dealt primarily with employment matters to provide advice to members on anything from a drink-driving charge to a breach of a protection order or for anything else that they might find themselves before the beak on. 
Although I did not have the benefit of sitting on the Justice and Electoral Committee while it was considering the bill I understand that it was considered under a very tight time frame in order to pass it before the principal Act comes into force on 1 August. I have to say I am surprised and a little concerned that we are debating this issue on the day before the principal Act comes into force. 
The Lawyers and Conveyancers Bill was introduced into Parliament in 2003 and it received its Royal assent in March 2006. The Government has had over 2 years to clarify this issue yet here we are still debating this matter on the afternoon of the very last sitting day before the Act comes into force in order to rush it through. 
One has to cast one’s mind back to other pieces of legislation that have been rushed through this House in an attempt to perform some particular whim of the Government—not necessarily this legislation but others like the Electoral Finance Act which will be the hallmark of the term of this Labour Government and we will be pleased to see it go. 
LYNNE PILLAY (Labour—Waitakere) 
: 
 I too like the member Chester Borrows commend the Lawyers and Conveyancers Amendment Bill (No 2) to the House on its third reading. I will not spend much time speaking on it because it is very important that the bill gets passed. It is a good example of parties working together. I also want to commend the constructive submissions and the very prompt work from the union movement the employers organisations the Nurses Organisation and the midwives. It is a very constructive amendment and I am very very happy to commend it to the House. Thank you. 
Hon GEORGINA TE HEUHEU (National) 
: 
 I rise to take a short call on the Lawyers and Conveyancers Amendment Bill (No 2). The commentary on the bill is obviously quite clear: “At present unions and employer organisations employ lawyers to provide legal services to their members.”—and they have done so for some time. The commentary continues: “The Act provides explicitly that lawyers employed by unions and employer organisations will be guilty of misconduct if they provide such services.” 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. But as my colleague Chester Borrows just related it is very important that this is not to be a licence for lawyers to give legal advice on all manner of things like drink-driving and so on and so forth. So the provision that allows that advice to be given is limited to matters that are related to the business of the employer or member organisation that any individual is in. 
The explanatory note of the Minister’s Supplementary Order Paper of Tuesday 29 July as I say clarifies “that a lawyer employed by an employer organisation or by a union may not provide legal services to a member of the organisation or the union if those services are not relevant to the person’s membership of the organisation or union.” That is very clear and it is very important. It is important that we recognise the areas where lawyers can provide advice but also that we are very explicit about the limits to the advice that is given. It continues: “A new subsection (1B) is inserted into section 9 of the principal Act to specify cases of legal services that are relevant to a person’s membership of an employer organisation or a union. These are legal services that” firstly “relate to the member’s rights obligations or liabilities in his or her capacity as a member or as an employer or employee”; secondly to “any matter concerning or arising out of an employment relationship as defined in the Employment Relations Act 2000. 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”; and thirdly 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. 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.” It goes on to list those enactments which include the Employment Relations Act; the Equal Pay Act; the Holidays Act; the Human Rights Act; the Police Act; the Injury Prevention Rehabilitation and Compensation Act; the Minimum Wage Act; the State Sector Act; and the Wages Protection Act. 
Fourthly the new subsection also specifies cases of legal services relating 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” and fifthly relating to “any question or matter concerning the member’s professional liability entitlement under a contract of insurance or compliance with professional standards.” 
I understand that this legislation comes into force tomorrow—1 August. It is rather ironic that at 4 o’clock 2 hours before the House rises we are now doing the third reading that will enable that to happen. I have not sat on the Justice and Electoral Committee so I am not entirely certain as to why it happens that at the last minute— 
Lindsay Tisch 
: Poor organisation. 
Hon GEORGINA TE HEUHEU 
: Well I was coming to that. I am not certain why at the last minute—just the day before the bill is to become law—we are now doing the third reading. My colleague Lindsay Tisch has obviously answered my question. That was the answer I was going to give anyway. I suppose it was a rhetorical question. 
Lindsay Tisch 
: Say it again. 
Hon GEORGINA TE HEUHEU 
: Well basically the reason is poor organisation by this Government—the Labour-led Government. It is typical of the way it has done things—or not done things—during the 9 years of its long tenure on the Treasury benches. It is no wonder that those 9 long years look to be coming to an end. Obviously it is because of things like this. This has been described as a technical bill but in essence it is a hugely important matter. As I say only a Government that does not know what it is doing would have us doing the third reading on the afternoon before the legislation is to become law. Thank you Madam Assistant Speaker. 
Bill read a third time.