Lawyers and Conveyancers Amendment Bill (No 2) — First Reading 
Lawyers and Conveyancers Amendment Bill (No 2) — First Reading 
[Volume:648;Page:16956] 
Lawyers and Conveyancers Amendment Bill (No 2) 
First Reading 
Hon ANNETTE KING (Minister of Justice) 
: 
 I move  
That the Lawyers and Conveyancers Amendment Bill (No 2) be now read a first time. 
 This bill amends the Lawyers and Conveyancers Act 2006 to allow unions and employers organisations to continue their longstanding practice of using in-house lawyers to provide legal services to their members. I intend to move that the bill be considered by the Justice and Electoral Committee and that the committee be directed to report finally to the House on or before 10 July 2008. I ask for the committee’s urgent attention to be focused on this bill so that it is enacted as swiftly as possible in order to ensure that the valuable contribution of unions and employers organisations can continue. 
Ensuring that all employees and employers participating in the labour market understand and can meet their obligations is vital to the market’s proper functioning and critical to the future of New Zealand’s productivity. To educate and support people in meeting their obligations unions and employers organisations provide a timely practical cost-effective and relevant service which integrates prevention advice and legal and other services. 
As enacted the Lawyers and Conveyancers Act 2006 will prevent unions and employers organisations from continuing their practice of providing legal services to their members. The proposed amendment will ensure that this longstanding practice can continue. The Lawyers and Conveyancers Act will make the provision of legal services to the public by in-house lawyers—that is lawyers employed by non-lawyers—an act of professional misconduct. That provision effectively prevents in-house lawyers from providing legal services to the public. 
Section 9 of the Act contains a list of exemptions to this general rule. This bill adds to those exemptions by including legal services that unions and employers organisations provide to their members. An employers organisation is defined as an organisation whose members are employers and that promotes the interest of its members as employers. A union is a union registered under Part 4 of the Employment Relations Act 2000. The remainder of the bill contains consequential exemptions that result from the amendment to section 9 such as the exemptions from the obligation to contribute to the Law Society’s fidelity funds. 
As I said I introduce this bill with a sense of urgency because the Lawyers and Conveyancers Act 2006 will come into force on 1 August 2008. Until this amendment is passed unions and employers organisations will have to either develop some temporary alternative arrangements for using their lawyers or stop providing legal services to their members through in-house lawyers. The alternative arrangements are viewed as cumbersome and unsatisfactory by both unions and employer organisations. Accordingly I do not want the situation to last very long. Four to 5 weeks may not seem long for us in terms of the passing of this amendment but for the family of someone who has been suddenly dismissed without cause this time period without access to sound or affordable legal advice will have severe detrimental effects. 
I intend to move that the Lawyers and Conveyancers Amendment Bill (No 2) be referred to the Justice and Electoral Committee and that the committee be directed to report finally to the House on or before 10 July 2008. I commend this bill to the House. 
SIMON POWER (National—Rangitikei) 
: 
 National will support the first reading of the Lawyers and Conveyancers Amendment Bill (No 2). The Minister has outlined the reasons that the bill needs to move with such haste. It is bearing down on the commencement date for many of the operative provisions of the Lawyers and Conveyancers Act which comes into force on 1 August. I am aware that there will need to be a thorough discussion during the select committee process with representations being made by the Law Society which will want to ensure that any changes to the Lawyers and Conveyancers Act that are proposed by this amendment bill are not in any way designed to undermine the original intent and purpose of that governing parent legislation. 
The Law Society and other stakeholder submitters will be given as I understand it the opportunity to make submissions to ensure that unions business associations and the like that provide and have always provided in-house legal advice to their members are not disadvantaged. We do not want in any way to see that happen. Nor do we want to inadvertently create a situation where legal advice other than in those specific situations is able to be given outside of the standard structures available for the practice of law. 
The Minister has asked the House for a very short time frame for the bill at the Justice and Electoral Committee. National will support that time frame. We will head to that committee with an open mind about submissions that need to be made to ensure that the provisions of the amendment bill are not overcooked which is something that I know my colleague Dr Richard Worth will want to make a few short remarks about in this debate. Having said that I note that the Minister approached the National Party on this issue on 10 June. In good faith she sent us a copy of the amendment bill and a covering letter asking whether we would support the legislation. We will do that and I personally look forward to sitting on the committee when I can to deal with this bill. Members of the National Party will do their best to ensure that all parties including practising lawyers in traditional legal frameworks are protected as well as those associations that have historically given legal advice to their members in the way that a business association or union has. 
CHARLES CHAUVEL (Labour) 
: 
 It is a pleasure to follow the previous two speakers and take a short call on the Lawyers and Conveyancers Amendment Bill (No 2). Ensuring that all participants in the labour market understand and can meet their obligations is vital to create a well-functioning labour market. I am very proud to have begun my career by working for a union. My first full-time job was working for a union the Northern Hotel Workers’ Union as its legal officer back in the late 1980s. That time marked the period when both unions and employers associations first began to feel the need to employ in-house legal counsel. 
There had been a practice for some time of lay advocates appearing in what was previously the Labour Court or the Arbitration Court to represent members of unions or employers associations when an employment case had to be taken to one of those institutions. A right of lay audience existed in those forums but with the increasing legalisation of the employment law regime in New Zealand particularly after the Employment Contracts Act 1991 it became virtually standard practice for every large union particularly as the unions consolidated and for many employers organisations to employ legally qualified staff to minimise the cost of providing advice and representation to their members. 
This was a position that was regarded under the legislation that predated the Lawyers and Conveyancers Act as quite acceptable and was condoned by the regulatory authorities including the district law societies and the New Zealand Law Society. But as the Minister said the Lawyers and Conveyancers Act 2006 scheduled to come into force very shortly on 1 August will prevent that status quo ante from continuing. It will stop unions and employers organisations from continuing the practice I have described. That would be a retrograde step as the Minister has said. It has the potential to deprive employees particularly low-income employees of a good expert and low-cost source of representation. It also has the potential to stop employers particularly small businesses from getting such representation from their employers associations. That would be highly undesirable in any view so it is good to hear that at least as far as this reading is concerned there is bipartisan and hopefully multi-partisan support for the measure and I hope that that will continue. 
It is interesting to note that until the amendment is passed unions and employers organisations are having to give consideration to developing temporary arrangements in order to meet the risk that we will not get this legislation through in time for the passage of the Act. I had one— 
Christopher Finlayson 
: Cheap advice from Minter Ellison. 
CHARLES CHAUVEL 
: Oh well there would no doubt have been excellent advice from my former firm—and hopefully from the shadow Attorney-General’s former firm as well although in the latter case probably more expensive. 
But some organisations are tying themselves in knots now. For example one employers association contacted me today to advise me that its plans to incorporate a law firm were advanced. It was having to get its in-house lawyers to set up a law firm in order to get around the problem of this legislation. That is a crazy cumbersome and silly way of dealing with the problem when indeed what we should do—as this amendment bill signals we should do—is to simply restore the previous situation. 
As I have said the legislation will ensure the maintenance of the longstanding convention of unions and employers organisations being able to provide legal services to their members. That is a very sensible thing to do. Along with my excellent Labour colleagues Lynne Pillay and Louisa Wall I look forward to hearing the submissions on the legislation at the select committee. As Mr Power has acknowledged there may be some definitional issues around the scope of the legal services that ought to be provided by counsel working for unions or employers associations. But it is not as simple as simply saying that it is employment advocacy in the employment institutions and nothing more. Employment law is a lot more complicated these days. There are intellectual property claims in the High Court and all sorts of other associated actions that really must be incorporated within the embrace of this legislation to ensure that the spirit—that is the restoration of the previous situation—is maintained. 
I look forward to hearing the evidence in the select committee from a small number of interested parties who will be able to assist us to make sure that the legislation we pass is the best possible legislation. I commend the amendment bill to the House. 
Dr RICHARD WORTH (National) 
: 
 The Lawyers and Conveyancers Amendment Bill (No 2) a short little bill of nine clauses that National supports sending to a select committee is actually quite complex. The complexity arises because of the very complex drafting in the principal Act the Lawyers and Conveyancers Act. The proposed amendments to it that are before the House tonight are capable of causing confusion and uncertainty. 
I have just looked back at the report by the Justice and Electoral Committee on the Lawyers and Conveyancers Bill—which is now law; this amendment proposes to change that Act—where National in a minority view stated this about the reserved areas of work which is the area we are talking about: “National would seek rewriting of the provisions to make their intent more clear and to permit for example taxation lawyers to practise in accounting firms.” 
If we look at this bill we see in summary it proposes that a lawyer employed by an employer group or a union can provide what are called legal services but not regulated services to his or her employer and its members. A distinction is being drawn between legal services and regulated services. Legal services basically means legal work as defined in section 6 of the Act; regulated services are much wider than that in scope. 
The situation that this bill sets out to address is not new and it was not created by the passage of the principal Act despite the comments of the previous speaker. Under the Law Practitioners Act which was the predecessor legislation it was not lawful for non-lawyers to provide legal services to the public or the non-lawyers’ members by employing lawyers to provide that service so one can legitimately be concerned about the provisions in this bill on the basis that first of all it allows non-lawyers to provide legal services through the intermediary of employed lawyers. That is a very significant issue of principle. There is also the point that tinkering at the edge of the principle is likely to create as many problems as it solves. I do not wish to pre-empt the position the select committee might take but tenable and acceptable options to that are available. 
The commentary on—or more precisely the explanatory note of—the bill is quite misleading. The third sentence in the first paragraph talks about “the delivery of an integrated prevention and advice service”—and I now underscore this—“connected with employment matters.” But in fact the way that this bill is drafted is far far wider than that. The bill as drafted would allow lawyers employed by unions and by employer organisations to provide all legal services not just employment law services. That is quite contrary to what is stated in the explanatory note. The note is misleading. I would also say that the proposed definition of “employer organisation” in clause 5 of the bill is unacceptably wide. 
I think I have said enough in connection with this bill to indicate that although National supports it being sent to a select committee it does so with a degree of reservation being conscious of the clear need to make major changes to ill-thought-out legislation. 
DAIL JONES (NZ First) 
: 
 I thank the Minister the Hon Annette King for making the Lawyers and Conveyancers Amendment Bill (No 2) available to New Zealand First—I think it was on 10 June as well—and New Zealand First has responded to the Minister about it. We have made it quite clear that we do not support this legislation. It is absolutely unprincipled legislation. 
When I first heard that the National Party was to support this bill it made me smile a little because it reminded me of the fact that here we have a situation where the trade union movement also known as the Labour Party and the employer groups also known as the National Party are getting together once again to try to do a deal for themselves—because that is what this bill does. It creates a special regime for some trade union groups and for the employers. That is what it does whereas those of us who were on the Justice and Electoral Committee during its consideration of the principal legislation know that this issue was considered by that select committee. 
I have here the submission of the New Zealand Council of Trade Unions. It was rejected by that select committee. This is not a new issue. It was considered over about 3 years and now this House is being asked to rush through legislation just to suit employers and unions. Well that really brings to mind the good old days of National and Labour in the 1970s and the 1980s when employers and unions would get together on the ninth floor of the Beehive over a few light drinks and run the country from up there having said they had had a great fight in the process. As I say this is unprincipled legislation. 
I agree entirely with what Dr Worth has so correctly said in so far as the scope of this bill is concerned. The scope of this bill would allow employers and trade unions to open law firms because they could do all reserved areas of work in the definition of “legal work”—that is legal practice of any kind. They could do traffic cases and domestic violence cases and appear before the High Court Court of Appeal and Supreme Court—the lot in so far as reserved areas of work are concerned. 
Under the definition of “legal work” which is referred to in the bill and defined in section 6 of the Lawyers and Conveyancers Act they could give advice in relation to “legal or equitable rights or obligations”. Can members imagine the trade union movement and employers giving advice to their members on legal and especially equitable rights or obligations? They could give advice on the preparation of or review any document that creates or provides evidence of legal or equitable rights or obligations—in other words trust deeds and suchlike—or that “creates varies transfers extinguishes mortgages or charges any legal or equitable title in any property; … mediation conciliation or arbitration services; … any work that is incidental to any of the work described in paragraphs (a) to (e)”. So they could open a law firm. 
Mr Chauvel made the correct point that if employers and unions want to do this sort of work then there is a very simple solution: they can just set up a law firm and the work can be done in that way. It is a simpler solution for employers and a simpler solution for the trade union movement. It is all that they have to do and I am sure that the Law Society would have no objection. I am absolutely sure that the Law Society would oppose this bill entirely because it goes against the principles of the Act on which we worked so hard not a little while ago. 
Of course we must not forget that where section 27(1) of the Lawyers and Conveyancers Act 2006 refers to all the restrictions and suchlike it states: “Sections 21 22 24 and 26 do not prevent— … (b) any person from appearing as an advocate or representing any other person before any court or tribunal if the appearance or representation is allowed or required—(i) by any Act or regulations; or (ii) by the court or tribunal; …”. That is usually for employment-law type of work with specific rights given to the trade union movement historically to do that work. So people can do that already. 
The practice that had been built up over the years since the 1982 Act—and I was the chairman of the parliamentary committee responsible for that legislation—was totally wrong. People were— 
Christopher Finlayson 
: What about the 1955 Act? 
DAIL JONES 
: I practised under the 1955 Act but no I was not here at the time! The practice that had built up was something I was staggered to discover when we were going through the Lawyers and Conveyancers Bill. Almost everyone was somehow getting registered as a solicitor to the High Court paying the levy to the Law Society and feeling that he or she was a lawyer. That was not the intention of the 1982 Act. 
One of the consequences of this bill will be that the members will not have 4 or 5 weeks’ consideration of this bill at the select committee because as Dr Worth knows the committee will have submissions from the New Zealand Educational Institute which made a similar submission. It will have submissions from every accountancy firm in the country because as we know that is what they wanted as well. Firms like Deloitte Touche Tohmatsu PricewaterhouseCoopers the Property Institute of New Zealand the New Zealand Bankers’ Association and everybody else will be in boots and all because if it is good enough for the employers and good enough for the trade unions then it is good enough for them too. Then well the Lawyers and Conveyancers Act may as well go in the rubbish tin. After all what is the point of it? All the hard work that was done by this Parliament on the Lawyers and Conveyancers Act would come to absolutely nothing. All we would be left with is a clear distasteful feeling that here we have yet again National and Labour getting together to do a deal for the benefit of employers and the trade union movement. 
Well New Zealand First will have nothing to do with it. This is totally unprincipled legislation and it should have been apparent on the close simplest view that that is what it was intending to do. Dr Worth has hit the nail on the head and I congratulate him on that. I note the National Party has said it will reserve its position until after the select committee process. New Zealand First says that quite regularly so I appreciate the view that the National Party is taking. 
Christopher Finlayson 
: Well why are you criticising us? 
DAIL JONES 
: I am criticising National because New Zealand First gets criticised for such a view from time to time. On this occasion the legislation we are amending is not even really law yet and Labour and National are considering allowing employers and the trade union movement to undermine it entirely. 
After all when that legislation was being progressed through the House this is what Phil Goff had to say in the third reading when he was taking credit for that bill: “This bill is a cornerstone of the reforms of legal services being undertaken by this Government. It removes unnecessary regulation from the legal services industry and replaces it with a more efficient regulatory framework that will give the public greater confidence in the legal profession. The bill’s purpose is to maintain public confidence in the provision of legal services”—which is being breached by this bill—“to protect consumers and to recognise the status of the professions that provide them. The Government has a vital interest in the regulation of the legal profession as the quality of lawyers’ services is critical to justice and the maintenance of the rule of law. The impetus for reform of the legal profession came from the New Zealand Law Society …”. 
This legislation totally contradicts everything that the former Minister of Justice said. This legislation will reduce totally public confidence in the provision of legal services. I need not say very much more as we come to the end of the day. I just hope that the Justice and Electoral Committee will make the same decision it made after some 3 years of deliberation on the principal legislation and reject the principles contained in the Lawyers and Conveyancers Bill (No 2). 
A party vote was called for on the question  
That the Lawyers and Conveyancers Amendment Bill (No 2) be now read a first time. 
Ayes 111 
New Zealand Labour 49; New Zealand National 48; Green Party 6; Maori Party 3; United Future 2; Progressive 1; Independents: Copeland Field. 
Noes 7 
New Zealand First 7. 
Bill read a first time. 
Hon ANNETTE KING (Minister of Justice) 
: 
 I move  
That the Lawyers and Conveyancers Amendment Bill (No 2) be considered by the Justice and Electoral Committee 
 and that it report back to the House on or before 10 July 2008. 
Motion agreed to.