Tisch Lindsay: Lawyers and Conveyancers Bill — Second Reading 
Tisch Lindsay: Lawyers and Conveyancers Bill — Second Reading 
[Volume:624;Page:19382] 
LINDSAY TISCH (National—Piako) 
: 
 It is interesting that the Lawyers and Conveyancers Bill which my colleague Dr Wayne Mapp mentioned had its genesis many many years ago is finally before the House today as we debate its second reading. It does go back a long long way. I note that the first reading occurred on 29 July 2003 which is nearly 2 years ago. We made some significant points during that first reading and subsequently at the select committee and those points are still valid today as they were back in 2003. 
Darren Hughes 
: What were they? 
LINDSAY TISCH 
: I shall mention some of those significant points to the member which National has highlighted on page 19 of the commentary if the member were to know our position and National did put a minority view into the commentary. 
First I want to look at the provisions of the fidelity fund. It is an arguable proposition when a number of professions and trades—that is an appropriate distinction to draw between the two of them—have done away with such funds. Yet we see here the need for lawyers to continue with a fidelity fund. 
In fact the first of the bullet points of the minority report makes a very strong point about the fidelity fund—that is: “No significant case has been shown for the continuation of the fidelity fund under Part 10 of the bill. The fund has been abolished for most other occupations including chartered accountants motor vehicle dealers and sharebrokers. The fidelity fund had a place when lawyers were actively involved in mortgage lending but the current range of banking products has meant that lending by lawyers is rare.” 
So the point we make here is that there is no need to retain the fidelity fund when similar requirements for other occupational groups be they professions or trades have ceased. That may have been important in those halcyon days when lawyers were involved in lending money and there are plenty of well-known cases that demonstrate when lawyers were involved in lending money mainly on contributory mortgages but there are other schemes. I was involved in earlier days with the Rural Bank and when we were lending money we often had to concede priority when lawyers wanted to rank their mortgage ahead of ours. They would lend on a first mortgage and we had to concede priority. However in those days when the Rural Bank had concessional lending it was a great opportunity for us to change the terms and conditions. In those days we were able to up the interest rate and to reduce the term because some other lender—lawyers or insurance companies—might have wanted to come in ahead of us and we were required to concede priority in that respect. It gave us some flexibility but I can understand that lawyers of that time thought a fidelity fund was certainly important. 
I now want to move to another area—that is the proposition in the context of engagement between a lawyer and the client. The basis of charging and the charges that will be related and applied during the course of the process need to be fairly well defined at the commencement of the engagement. The lawyer would inform the client of the client’s entitlement to such costs. It is important that that process be continued. It is very important and very necessary to provide an estimate of the time required to carry out whatever the engagement is and the probable time schedule for the main components within the engagement. So that is normal practice. Keeping the client informed as to the time frame and the costs involved very much forms a part of any occupational or professional grouping. 
The other area that I think is significant in the running of a professional legal services firm or for that matter any professional firm is the skill of the owners in managing the risk of the business. Risk management has become an integral part of doing business today. There are choices to be made in managing risk and that includes the transfer of risk. One of the core elements in transferring risk is the application of insurance. For a law firm and professional services firms judgments have to be made as to how much cover should be secured what the upper indemnity level should be and what should be deductible or the amount that the law firm in the first instance meets—what is popularly known as the excess. 
One of the issues here which we identified during the select committee process is that considerable costs will be involved. We want to make sure that those costs are clearly identified because there is nothing worse than cost overruns when it comes to the client. Those areas need to be clearly defined. We do not want to see any shortcomings and shortcuts because clients depend very much on the goodwill and professionalism of the legal fraternity. 
I want to refer to some of the other issues that have been canvassed by Dr Wayne Mapp and other speakers prior to the Easter break. They are important key concerns of National. Although we support this bill these concerns are mentioned in the minority report. I will summarise them very quickly because they form the basis of National’s position. They are not in any order. I have mentioned the fidelity fund and we do not believe there is any need to retain that. Another area is the decision to recognise the new group of non-lawyers to be called conveyancing practitioners. A Government member mentioned this group as being important. Conveyancing practitioners will have a separate regulatory body to be known as the New Zealand Society of Conveyancers. We say that that is unnecessary. We do not believe that there needs to be a separate role for these people. A key point made at the time was that in the absence of a sufficient number of conveyancing practitioners the proposals in the bill are unworkable. We still subscribe to that view and we need to highlight that once again. If the concept of conveyancing practitioners is to be retained then the bill should be divided. That will not happen but it was another point that we articulated at the time. 
The proposed complaints and disciplinary regime is overly cumbersome and a more simple structure would protect consumers of legal services. National would implement a structure whereby a first-care complaints system would be funded and operated by the legal profession. The system would include mediation services to encourage the chance of resolution of disputes involving client service. There could also be the establishment of a legal services ombudsman patterned on the Courts and Legal Services Act of 1990 in the UK. The High Court would assume the responsibility of dealing with activity that amounts to professional misconduct. In circumstances falling short of misconduct claimants should be limited to pursuing negligence or a breach of duties. The assumption of such powers by the High Court would be consistent with responsibilities as officers of the court to the court. 
As I said earlier we believe that the workability of the indemnity rules relating to compulsory professional indemnity insurance as under clause 86 and which we mentioned are very cumbersome and whether they will work at the end of the day we do not know. Finally I refer to the proposal to abolish the rank of Queen’s Counsel and substitute the title “Senior Counsel” when there is no call for such a change. To summarise our position we will support this legislation. I have highlighted the salient points that we believe are important and we have a full minority report on page 19 of the commentary.