Lawyers and Conveyancers Bill — In Committee 
Lawyers and Conveyancers Bill — In Committee 
[Volume:629;Page:1502] 
Lawyers and Conveyancers Bill 
In Committee 
Debate resumed from 30 March 2005. 
Part 1 Preliminary provisions ( 
continued 
)  
Dr RICHARD WORTH (National) 
: 
 This is resumed debate in Committee of the Lawyers and Conveyancers Bill. It is fair to say it is a bill that certainly in terms of its progress through the House has had a substantially delayed passage. As the Chairman commented but a short moment ago we last looked at the legislation on 30 March 2005 with the start of the Committee stage. It is a substantial bill to some extent because of the way it is drafted in some 11 parts. It effects major change to the legal profession—to the way legal business is done and to issues such as the provision of complaints and disciplinary measures for the legal profession at large. 
I will speak briefly in respect of Part 1 on an issue that is concerned with the fundamental obligations of a lawyer. I pose the question of what those fundamental obligations might be. I suggest that a good starting point is one that has been picked up by the Federation of Law Societies of Canada. The federation says that lawyers should practise law ethically and competently. In particular it says first that lawyers should be honest and courteous. Second they should keep clients informed respond promptly to phone calls and letters and work in a timely fashion. Third they should respect client confidences. Fourth they should safeguard clients’ funds and property and account for money entrusted to them. Fifth they should maintain adequate skills to represent clients effectively. Finally—and perhaps obviously—lawyers should not act in a conflict of interest such as improperly acting against a former client or improperly sharing a business interest with a client. Those obligations are able to be translated into action by dint of the passage of the bill not only as a result of provisions appearing on the face of the bill which when enacted will be binding on the legal profession but also because of the ability to make practice rules in a wide range of circumstances. 
In looking at issues of fundamental obligation three questions arise. I put them as follows. First of all what are the bounds of the rule of law? Second what is the duty of care concept that underpins fundamental obligations? Finally do ethical duties transcend legal obligations to the client? Time does not permit me to expound on the bounds of the rule of law but I will say something about the duty of care. 
The duty of care is a concept used in the law both to define the existence of a legal relationship and to establish a benchmark for a standard of professional care and skill. Of course failure to meet the benchmark creates legal liability. So the concept is inextricably linked to considerations of quality. There is a need for the client to understand the advice that he or she is receiving. There is also a need for that advice to be pragmatic in the sense that it is workable and properly related to the factual framework. 
 I think we all know there are some dangers of course in the provision of advice that is too dominated by pragmatism. It is very easy for lawyers to be drawn into meeting a client’s need for sign-off on a transaction and not sufficiently consider the black-letter law position or to be drawn into meeting the needs of the client by glossing the black-letter law position in a way that might have consequences for both the law firm and the client. 
It is also a reality—perhaps unlike surgery—that much legal work is not subject to absolute judgments as to quality. Just to give an illustration of that it is only for transactions where the commercial relationship between the parties breaks down that the document wording will be reviewed to determine the respective rights and interests of the parties. The vast majority of transactions are implemented without a close focus on those issues. If legal work is perceived as satisfactory the parties rest content on that albeit the reality may be otherwise. 
And so it is that this bill clearly provides for a regime where quality systems need to be implemented and maintained. 
CHRISTOPHER FINLAYSON (National) 
: 
 My colleague Dr Worth has briefly outlined the legislative history of this bill so I will take that as read. I too wish to address some comments to clause 4 which is a new clause—it not having appeared in the current Act the Law Practitioners Act 1982—and I particularly wish to say something about subclause (d). This clause sets out the fundamental obligations of lawyers and on its face looks to be a reasonably anodyne clause. First there is the obligation to uphold the rule of law and facilitate the administration of justice. No one would disagree with that. Secondly no one could take any issue either with the all-important “obligation to be independent” in providing regulated services to one’s clients. Thirdly there is the recognition that all barristers and solicitors have both “fiduciary duties and duties of care” when they carry out their tasks on behalf of clients and fourthly there is the obligation to protect the interests of clients—but it does not stop there—“subject to his or her overriding duties as an officer of the High Court …”. 
That is something unique to the legal profession and it has implications for that profession in a very real way that does not impact on other professionals. For example a surgeon who is operating on a person has a very clear and overriding duty to do the best he or she can for the patient. In the case of lawyers however there can be conflicting duties. There is an overriding duty to the court that supervenes the duty required to be shown to the lawyers’ clients. A good example of that arises when one is making submissions to a court. The duty to the court may necessitate all relevant authorities being placed before the judge even if those authorities are not necessarily favourable to the client. I make that statement because later in the course of this debate we will be considering clause 104 which discusses the immunities of barristers. I will be putting forward a Supplementary Order Paper to the Committee because in my opinion the twofold nature of the duty to both the client and the court has to be recognised by a change to clause 104. 
Generally the interpretation clause is reasonably straightforward. There are a couple of changes introduced by this bill that I consider to be most useful. Under the Law Practitioners Act reference was made simply to professional misconduct. Under this bill we have two concepts—first misconduct and second unsatisfactory conduct. I understand that it was the disciplinary provisions of the Law Practitioners Act that gave rise to this reform because many of the complaints made by disgruntled clients relate not necessarily to professional misconduct but to unsatisfactory conduct. Under the present Act the test of professional misconduct is high and the cases that have dealt with professional misconduct have shown there is a very high threshold. 
That concept of professional misconduct is repeated in clause 7 but we have this new concept of unsatisfactory conduct that addresses conduct that may fall short of the standard of competence but not quite reach the standard of professional misconduct. Those tests of misconduct and unsatisfactory conduct will flow through to other parts of the bill—which we will be considering later in the day and tomorrow—as to the way in which the Law Society’s Standards Committee will be able to deal with those problems. That is all I want to say on Part 1. I stress the importance of recognising the fundamental obligations of the practitioner and in particular the provision in subclause (d) of clause 4 that deals with the practitioner’s overriding duties to the court which will need to be reflected in a change I am about to introduce. I also welcome the introduction of the terms “professional misconduct” and “unsatisfactory conduct” which I think will go a long way to addressing the real needs of clients who complain to the Law Society about suboptimal conduct on the part of practitioners. 
SUE MORONEY (Labour) 
: 
 I move  
That the question be now put 
. 
KATE WILKINSON (National) 
: 
 I rise to speak in relation to Part 1 of the Lawyers and Conveyancers Bill and having been a conveyancing lawyer for 26 years I think I have some authority on the matter as well. It is important to reiterate the purposes of the whole bill the first of which is to maintain public confidence in the provision of legal and conveyancing services. That public confidence is vital in a profession where practitioners receive people’s money their lifelong savings to enable them to realise their Kiwi dream of purchasing a home. The second purpose is to protect those consumers those clients of legal services and to recognise the status of the legal profession. That is very important. As my learned colleague Mr Finlayson said the legal profession is a very old and respected profession. It is vital that its integrity and status is maintained and not watered down perhaps by the introduction of a new breed of licensed conveyancers. 
In general terms this bill replaces the Law Practitioners Act. It is a bill of huge volume and I know that its gestation period has taken some years. I was involved in the legal system when lawyers were looking at selling real estate as a knee-jerk reaction to this bill and I can tell members that that was many years ago. I am pleased to say that the bill having gestated for that time I think it is now generally agreed and accepted that it is the right way to go so it is pleasing that it is finally before Parliament. 
Conveyancing as we all know is defined as the act of transferring the ownership of property from one person to another and it includes deeds of assignment leases other assurances and deeds of any property. It does not include the drafting of wills in the old English legislation. Until now of course only solicitors could practise conveyancing; under this bill a new breed has been hatched—that of conveyancers. Part 1 provides for the various fundamental obligations of both professions if you like. The obligations are similar for lawyers and for conveyancers although lawyers still have the added obligation and responsibility—as well they should—to act as officers of the High Court to uphold the rule of law as previously mentioned and to facilitate the administration of justice. That goes a lot further than merely the conveyancing of property. 
As the corollary to those obligations the bill defines what would constitute misconduct by both lawyers and conveyancers. A difficulty however is that although misconduct in relation to a lawyer is among other things defined as that which would reasonably be regarded by lawyers of good standing as “disgraceful or dishonourable” in relation to a conveyancing practitioner which is a new breed misconduct is also defined as that which would be regarded by conveyancing practitioners of good standing as “disgraceful or dishonourable”. But of course we do not actually have any longstanding conveyancing practitioners as yet let alone any who are yet of good standing. Although I appreciate that that will happen we are setting the standard now and it is vital that that standard dovetails with the high standards set by the New Zealand Law Society in relation to lawyers. 
As members will be aware the Law Society has well-established and very well-regarded rules of professional conduct for barristers and solicitors—in fact those rules cover some 135 pages. Lawyers know the required standards that must be met. Conveyancing practitioners do not have that same advantage and they must evolve such rules if they are to have any credibility and to go back to the purpose of the bill if they are to inspire confidence in our conveyancing practitioners. I suggest that the rules for conveyancing practitioners should be pretty similar to those for lawyers. 
One further aspect of the bill that I would like to comment on relates to the ability of law firms to incorporate which is warmly welcomed by lawyers. That provision is very timely considering that Mr Power’s member’s bill having finally been drawn out of the ballot is to the same effect. Such incorporation allows the proprietors of law firms to structure their businesses in a similar fashion to other businesses. Until now lawyers have practised in partnership and as partners they were jointly and severally liable for the wrongdoings of their other partners—not a prudent or sensible way to structure a business. Certainly as a commercial lawyer I would advise clients to form incorporated companies rather than to have that joint and several liability. But incorporation does not necessarily mean a total limited liability for lawyers. It is important that we stress and emphasise that so that clients can still have the confidence and trust in the professionalism of their lawyers that is so necessary when lawyers are in the unique and privileged position of receiving clients’ hard-earned moneys and having to spend them in accordance with those clients’ wishes. 
Lawyers cannot in total hide behind what is commercially known as the “corporate veil”. Lawyers of course can still be held to have been negligent; they will not be able to hide behind the protection of incorporation from that. There are other Acts on the statute book that the directors of companies cannot hide behind either—the Resource Management Act is one such example. Directors can still be held liable for the negligence of their own misdeeds. So clients will still have notwithstanding the incorporation of law firms their normal rights against any negligent and dishonest action by a lawyer—and I know those actions are rare—or against the negligence or dishonest action of any conveyancing practitioner. Similarly in relation to the fidelity fund if a client loses money by reason of the theft of any money that has been entrusted to a lawyer then again the lawyer cannot hide behind the corporate veil. The lawyer or a director of the legal company is still personally liable to repay that money to the client. So there is no hiding behind the corporate veil. But by allowing incorporation this bill certainly brings law firms into the 21st century. It allows lawyers to structure their affairs and to incorporate—to form a more sensible and commercial business structure. 
Although I cannot agree with certain parts of the bill there are certainly other parts that I concur with. 
The question was put that the amendment set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to clause 3(1)(a) and (b) be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 48 
New Zealand National 48. 
Noes 71 
New Zealand Labour 50; New Zealand First 7; Green Party 6; Maori Party 4; United Future 3; Progressive 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to clause 3(1)(c) be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 48 
New Zealand National 48. 
Noes 71 
New Zealand Labour 50; New Zealand First 7; Green Party 6; Maori Party 4; United Future 3; Progressive 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to clause 3(2)(b) be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to 
. 
Ayes 48 
New Zealand National 48. 
Noes 71 
New Zealand Labour 50; New Zealand First 7; Green Party 6; Maori Party 4; United Future 3; Progressive 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to clause 3(2)(c) be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to 
. 
Ayes 48 
New Zealand National 48. 
Noes 71 
New Zealand Labour 50; New Zealand First 7; Green Party 6; Maori Party 4; United Future 3; Progressive 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to clause 3(2)(d) be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to 
. 
Ayes 48 
New Zealand National 48. 
Noes 71 
New Zealand Labour 50; New Zealand First 7; Green Party 6; Maori Party 4; United Future 3; Progressive 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to omit clause 5 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to 
. 
Ayes 48 
New Zealand National 48. 
Noes 71 
New Zealand Labour 50; New Zealand First 7; Green Party 6; Maori Party 4; United Future 3; Progressive 1. 
Amendment not agreed to. 
LINDSAY TISCH (Senior Whip—National) 
: 
 We note that the Committee is voting on amendments to a number of clauses. We seek leave to have the votes on the amendments of which there are a number to clauses 7 7A and 7B—which we will come to after clause 6—taken as one vote. Similarly we seek leave to have the votes on the amendments to clauses 10A and 10B taken as one vote. 
The CHAIRPERSON (Hon Clem Simich) 
: No mention of clause 6? 
LINDSAY TISCH 
: No—clause 6 stands alone so that vote would be put separately. Only— 
The CHAIRPERSON (Hon Clem Simich) 
: Clauses 7 to 7B and 10A to 10B? 
LINDSAY TISCH 
: That is correct. 
The CHAIRPERSON (Hon Clem Simich) 
: Leave is sought for that course to be followed. Is there any objection? 
Hon MARK BURTON (Minister of Justice) 
: 
 I seek clarification. A number of amendments relate to some of those clauses some of which are Government amendments and some of which are not. Therefore we may need differential voting on those amendments. I am a little unclear as to what the member proposes. 
LINDSAY TISCH (Senior Whip—National) 
: 
 The Minister may have amendments; I am referring only to the amendments put forward by Dr Worth. In the case of amendments from other members or from the Government we would look to accommodate whatever course of action they wish to take. 
The CHAIRPERSON (Hon Clem Simich) 
: Leave has been sought for that course to be followed. Is there any objection? There appears to be none. That is the way we will proceed. 
The question was put that the amendment set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to omit a number of definitions from clause 6 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to 
. 
Ayes 48 
New Zealand National 48. 
Noes 71 
New Zealand Labour 50; New Zealand First 7; Green Party 6; Maori Party 4; United Future 3; Progressive 1. 
Amendment not agreed to. 
The CHAIRPERSON (Hon Clem Simich) 
: There is also in relation to clause 6 an amendment in the name of Dr Richard Worth set out on Supplementary Order Paper 344 to omit paragraph (a)(ii) of the definition of course of study. Those who agree with that amendment please say “Aye” of the contrary opinion “No”. The Noes have it. 
LINDSAY TISCH (Senior Whip—National) 
: 
 I raise a point of order Mr Chairperson. Before the vote is put I just ask for your indulgence. We are voting on clause 6 and the related Supplementary Order Paper which my colleague Dr Worth and I are looking at is 344. We have just voted on clause 6 and now you are mentioning another amendment to clause 6—am I mistaken—on Supplementary Order Paper 344. 
The CHAIRPERSON (Hon Clem Simich) 
: No. The one we just voted on—I perhaps should have read it all out but it was a bit long— 
LINDSAY TISCH 
: Is it on Supplementary Order Paper 344? 
The CHAIRPERSON (Hon Clem Simich) 
: Yes. 
LINDSAY TISCH 
: In terms of the amendments to clause 6 mentioned there did we vote on only part of those amendments to clause 6? 
The CHAIRPERSON (Hon Clem Simich) 
: Absolutely. It was one of the amendments to clause 6. There are further amendments to clause 6. 
LINDSAY TISCH 
: My apologies Mr Chairman; I see where you are coming from. My comment earlier on in the point of order was that we treat all those amendments to clause 6 as one vote. 
The CHAIRPERSON (Hon Clem Simich) 
: I would not suggest that. 
LINDSAY TISCH 
: No—I am seeking leave. 
The CHAIRPERSON (Hon Clem Simich) 
: Certainly Mr Tisch. Leave has been sought for that course to be followed—that all the amendments to clause 6 be treated as one vote. Is there any objection to that course? 
Hon MARK BURTON (Minister of Justice) 
: 
 All of Mr Worth’s amendments? 
The CHAIRPERSON (Hon Clem Simich) 
: Yes. 
LINDSAY TISCH (Senior Whip—National) 
: 
 I raise a point of order Mr Chairperson. We have already voted on one of those amendments to clause 6. I am asking whether that stands alone and the balance of those amendments will be voted on as one question. Maybe the Clerk can help us with that interpretation. 
The CHAIRPERSON (Hon Clem Simich) 
: Yes it will. I realise I should have actually read out the first one which would have clarified the position. All these amendments relate to definitions. The first one related to definitions of matters relating to conveyancers and conveyancing. We have dealt with that one so the leave relates to the remainder of those amendments to clause 6. Is that clear? There is no objection to that. We will proceed along that course. 
Hon MARK BURTON (Minister of Justice) 
: 
 I raise a point of order Mr Chairperson. This is probably the right time to seek similar accommodation from the Committee for dealing with Government amendments to remaining clauses—that all amendments dealing with any particular clause be dealt with as a single question. 
The CHAIRPERSON (Hon Clem Simich) 
: Leave has been sought for that to be done. Is there any objection? There appears to be none. 
The further amendments are to clause 6 and are all in the name of Dr Richard Worth. They are set out on Supplementary Order Paper 344 and they relate to the omission of certain matters. 
The question was put that the remaining amendments set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to clause 6 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 48 
New Zealand National 48. 
Noes 71 
New Zealand Labour 50; New Zealand First 7; Green Party 6; Maori Party 4; United Future 3; Progressive 1. 
Amendments not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to clause 7 to omit clause 7A and to clause 7B be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 48 
New Zealand National 48. 
Noes 71 
New Zealand Labour 50; New Zealand First 7; Green Party 6; Maori Party 4; United Future 3; Progressive 1. 
Amendments not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to clause 8 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 48 
New Zealand National 48. 
Noes 71 
New Zealand Labour 50; New Zealand First 7; Green Party 6; Maori Party 4; United Future 3; Progressive 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to omit clause 9A be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 48 
New Zealand National 48. 
Noes 71 
New Zealand Labour 50; New Zealand First 7; Green Party 6; Maori Party 4; United Future 3; Progressive 1. 
Amendment not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to clauses 10A and 10B be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 48 
New Zealand National 48. 
Noes 71 
New Zealand Labour 50; New Zealand First 7; Green Party 6; Maori Party 4; United Future 3; Progressive 1. 
Amendments not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to omit clause 13 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 48 
New Zealand National 48. 
Noes 71 
New Zealand Labour 50; New Zealand First 7; Green Party 6; Maori Party 4; United Future 3; Progressive 1. 
Amendment not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 324 in the name of the Hon Phil Goff to the amendment set out on Supplementary Order Paper 289 in his name to clauses 6 and 13 and the amendment set out on Supplementary Paper 347 in his name to the amendment set out on Supplementary Order Paper 289 in his name to clause 13 be agreed to. 
Amendments to the amendments agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 289 in the name of the Hon Phil Goff to clauses 6 and 13 as amended the remaining amendments set out on Supplementary Order Papers 289 and 347 in his name to Part 1 and the amendments set out on Supplementary Order Paper 10 in the name of the Hon Mark Burton to Part 1 be agreed to. 
Amendments and amendments as amended agreed to. 
Part 1 as amended agreed to. 
Part 2 Restrictions on provision of legal services and conveyancing services 
Hon MARK BURTON (Minister of Justice) 
: 
 Part 2 of the bill contains the title protection provisions. It will be an offence to use the term “lawyer” or “law practitioner” if one is not entitled to do so. This part also defines the areas of work that are restricted to lawyers and licensed conveyancers. The Government Supplementary Order Paper amendments clarify that the bill will not prevent State sector non-lawyer employees from carrying out functions they currently perform legitimately. These amendments address concerns raised by the Inland Revenue Department in relation to the definitions of conveyancing and legal services. Government Supplementary Order Papers also clarify that patent attorneys can continue to undertake intellectual property conveyancing functions. These amendments are supported by the New Zealand Law Society and the New Zealand Institute of Patent Attorneys. 
Dr RICHARD WORTH (National) 
: 
 National supports the Lawyers and Conveyancers Bill and has done so from the outset with some reservations that are contained in the report that forms part of the commentary reported back by the Justice and Electoral Committee. I want to indicate against the background of some 14 amendments that have been made by Supplementary Order Paper that National’s contribution to those amendments is in only three areas. 
The first area as members of the Committee will have heard in comments relating to those amendments in connection with Part 1 is all about the New Zealand Society of Conveyancers. The amendments seek to strike from this bill reference to that particular organisation. National members have seen that as a very principled response. Let me explain why. This bill is called the Lawyers and Conveyancers Bill. For our money it would only have been called—and should only have been called—the “Lawyers Bill”. But instead the Government has decided that there is to be brought into existence a new class of statutory creature—the New Zealand Society of Conveyancers. As members will have noted from the number of amendments to Part 1 the legislation reeks of reference to this New Zealand Society of Conveyancers. 
Well what is the planned stature of this organisation the New Zealand Society of Conveyancers? Not much I would say. The committee heard evidence from the New Zealand Law Society that there might be five or six such persons who would be qualified to join the society and the faint possibility that Australian conveyancers might seek to join the society. So the likelihood is that there would be in total seven or eight such people. If that is right—and that is what the New Zealand Law Society tells us—then that clearly raises the justification for a highly prescriptive statutory regime and the impossibility of funding a realistic fidelity fund for such a limited occupational grouping. 
Reference is made in other parts of the bill to the fidelity fund and I am not going to deal with that now. But it is an amazing circumstance that this bill which in its reported-back state runs to 346 pages has so much stuff on the New Zealand Society of Conveyancers when it is intended that there might be only seven or eight such people belonging to it. Why is that? Well it has an ideological history and it reflects the bias and determination of a former Minister of Justice when he was Labour’s spokesperson on justice. The Hon Phil Goff who was not “the Hon” then became absolutely convinced that the legal profession’s monopoly on conveyancing should be broken. He spared no effort to try to translate that plan into action. In fact he sought to introduce into the Parliament a member’s bill to end that statutory monopoly. He said at the time that it was a move that would bring down the costs for homebuyers and sellers. 
I shall quote what he said in that context. He said: “The privileged position enjoyed by lawyers in having the sole right to do conveyancing is imposed by law. Today when most other services have been opened up to competition there is no justification for continuing this protection. Lawyers have fought strenuously to preserve their monopoly power and undoubtedly will bitterly resist this change. In the end however the self-interest of lawyers cannot be allowed to prevail over the wider interests of ordinary New Zealanders who are consumers.” 
It is surprising that the New Zealand Law Society has not been bold enough to stand against the inclusion of conveyancers in this bill. Certainly some of its members would not wish to see conveyancers forming part of this legislation. The reality of course is that events have moved on. At the time when Mr Goff articulated those concerns there were scales of charges for types of conveyancing transactions. Those scales of charges have now been swept away and the reality is that conveyancing operates on very much a cut rate and a cutthroat basis. So if there were a so-called premium to be taken from carrying out conveyancing work that premium has now long gone. 
In fact in some ways the legal profession in its pursuit of competitive interest has so priced conveyancing that for many law firms it is simply not cost-effective to do that work. There also was underlying the stance taken by the Minister a naivety that conveyancing was no more than the simple transfer of property from one owner to another. But it is much more than that and although lawyers in the conveyancing context are involved in the selling of land from seller to buyer there is much subtlety in the conveyancing task. That subtlety and the work that is done in sophisticated leases easements and other interests of land was wholly overlooked. 
 That is why National has persisted apparently against the wish of the New Zealand Law Society to maintain this monopoly for lawyers—albeit many lawyers will not seek and will never seek in the future to carry out conveyancing work. But there it is. The New Zealand Society of Conveyancers established by this bill is to have pride of place alongside lawyers and the seven or eight people will be tasked by this—in my view—unknowing and unwise Government to set up a structure of control including a fidelity fund. 
NICKY WAGNER (National) 
: 
 Part 2 deals with restrictions on the provision of legal services and conveyancing services. But what will that mean to the public of New Zealand? As a layperson I am not particularly interested in the law or in lawyers and much of what they talk about. To me as a layperson most of what lawyers do is not even vaguely relevant. But I Joe Public like the sound of a bill that states its purposes are to maintain public confidence in the provision of conveyancing and legal services to protect the consumers of those services to recognise the status of the legal profession and to establish a new profession of conveyancing practitioners. I feel better when I think that someone is protecting my rights and that that person is a professional. 
The chances are that the only time I will interact with lawyers is when I intend to buy a house and when I do that I want the matter to be dealt with efficiently effectively and cheaply. I want someone to make sure I do not make a terrible mistake. I want to pay for and get what I am expecting. I do not want to pay the wrong person. I do not want to have the surprise of discovering that a motorway is to be built right next door and I do not want my money to disappear during the transaction. I want to be very sure that in the future I will have a clear title to the property. Buying a house will probably be the biggest purchase of my life and up until now like most New Zealanders I have trusted a lawyer to do that for me. The system has worked pretty well. Sure there have been glitches but in comparison with land courts in other parts of the world we do well. 
Part 2 of the bill defines who can be a lawyer and how he or she can practice. It outlines the penalties for people who pretend to be something they are not. As a layperson that is important to me. I need to know that those whom I employ are qualified to advise me well and to protect me and my property. The bill also defines who can do my conveyancing services. As a layperson it is all the same to me as long as the job is done properly. The bill requires that both lawyers and conveyancers have a practising certificate and as long as the New Zealand Law Society and the New Zealand Society of Conveyancers do the job properly and ensure the required standards are met I am a happy consumer. From my point of view I want to receive professional advice at the right time at the right place and without excessive cost. 
The question was put that the amendment set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to the heading to Part 2 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 48 
New Zealand National 48. 
Noes 71 
New Zealand Labour 50; New Zealand First 7; Green Party 6; Maori Party 4; United Future 3; Progressive 1. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Nandor Tanczos to clause 25 be agreed to: 
to omit subclause (4) and substitute the following subclause: 
(4)Section 24 does not restrict the right of a lawyer who is not entitled to practise on his or her own account to act in any community law centre whose employing body comprises one or more lawyers qualified to practise on his or her own account under the direct supervision of a lawyer qualified to practise on his or her own account and employed by that community law centre or with the approval of the Legal Services Agency. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 71 
New Zealand Labour 50; New Zealand First 7; Green Party 6; Maori Party 4; United Future 3; Progressive 1. 
Noes 48 
New Zealand National 48. 
Amendment agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to clause 26(1) be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 48 
New Zealand National 48. 
Noes 71 
New Zealand Labour 50; New Zealand First 7; Green Party 6; Maori Party 4; United Future 3; Progressive 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to clause 27(1) be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 48 
New Zealand National 48. 
Noes 71 
New Zealand Labour 50; New Zealand First 7; Green Party 6; Maori Party 4; United Future 3; Progressive 1. 
Amendment not agreed to. 
LINDSAY TISCH (Senior Whip—National) 
: 
 I seek leave for all Dr Worth’s amendments to clause 28 to be taken as one question and not to have individual votes on them. 
The CHAIRPERSON (Hon Clem Simich) 
: Leave has been sought for that to happen. Is there any objection? There appears to be none. We will proceed as we have agreed. 
The question was put that the amendments set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to clause 28 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 48 
New Zealand National 48. 
Noes 71 
New Zealand Labour 50; New Zealand First 7; Green Party 6; Maori Party 4; United Future 3; Progressive 1. 
Amendments not agreed to. 
The CHAIRPERSON (Hon Clem Simich) 
: The amendments set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to clause 29 are out of order because they are inconsistent with the previous decision on clause 26. 
The question was put that the amendment set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to omit clauses 31 and 32 be agreed to. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to omit clause 33(2) and (3) be agreed to. 
Amendment not agreed to. 
The CHAIRPERSON (Hon Clem Simich) 
: The amendment set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to clause 33(4) is out of order because it is inconsistent with a previous decision. The amendments set out on Supplementary Order Paper 344 in his name to clause 34A are also out of order. The amendment to clause 34B set out on Supplementary Order Paper 344 in his name is out of order because it is inconsistent with the previous decision on clause 33. 
The question was put that the amendment set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to the chapeau of clause 35 be agreed to. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to clause 35(a) be agreed to. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to omit clause 36(1)(b) and (c) be agreed to. 
Amendment not agreed to. 
The question was put that the amendments set out on Supplementary Order Papers 289 and 324 in the name of the Hon Phil Goff and the amendments set out on Supplementary Order Paper 10 in the name of the Hon Mark Burton be agreed to. 
Amendments agreed to. 
Part 2 as amended agreed to. 
Part 3 Admission and enrolment of barristers and solicitors  
Hon MARK BURTON (Minister of Justice) 
: 
 Briefly Part 3 reflects Part 3 of the Law Practitioners Act and sets out the criteria for admission as a barrister and solicitor. Candidates for admission will continue to have to meet the criteria specified by the New Zealand Council of Legal Education. 
CHRISTOPHER FINLAYSON (National) 
: 
 As the Minister said Part 3 replicates what is already contained in the Law Practitioners Act 1982. It deals with the admission and enrolment of barristers and solicitors and there can be no objection to this part. Clause 40 deals with the right of every person who has satisfied the educational criteria and is of good character to be admitted as a barrister and solicitor. It is important to note that even if one chooses to practise as a barrister only one is admitted as a barrister and solicitor. Clause 41 deals with the three categories of person who qualify for admission. The following clauses deal with evidence of qualifications and suitability. 
Indeed the only clause that is new to this part is clause 46A which attempts to define who is a fit and proper person eligible for admission. The most important provision in that clause is paragraph (a) in subclause (1) which states that the Law Society can take into account whether the person is of good character. That term is not defined nor can it reasonably be defined because in many instances as the case law has indicated in the past determining whether a person is of good character depends obviously on the particular circumstances. 
With those brief comments in mind I do not think the time of the Committee need be detained any further. 
The question was put that the amendments set out on Supplementary Order Paper 10 in the name of the Hon Mark Burton to Part 3 be agreed to. 
Amendments agreed to. 
Part 3 as amended agreed to. 
Part 4 New Zealand Law Society 
Hon MARK BURTON (Minister of Justice) 
: 
 Part 4 makes provisions for the New Zealand Law Society. It significantly changes the society’s structure and sets out its regulatory responsibilities. Those regulatory responsibilities include overseeing the enforcement of the legislation the admission and enrolment of law practitioners and the implementation and enforcement of complaints and disciplinary procedures. The New Zealand Law Society will have to carry out a range of governance and constitutional tasks to bring this legislation into force. Until the New Zealand Society of Conveyancers is established when Part 5 comes into force the New Zealand Law Society will regulate conveyancers. 
Dr RICHARD WORTH (National) 
: 
 As the previous speaker has commented it is probably Part 4 of the Lawyers and Conveyancers Bill that represents the area of significant change and substantive lawmaking. Part 4 is headed “New Zealand Law Society” and two subheadings identify the content of the part: first the heading “Functions” and second the heading “Powers”. Under both those headings regulatory functions representative functions regulatory powers and representative powers are described. 
The part is far-reaching because the structure of the legal profession in New Zealand has the central role occupied by the New Zealand Law Society but nevertheless a pivotal role in substantive terms occupied by a number of district law societies. Based on the make-up in part of the old provincial districts some are strong—and I say that in terms of membership as distinct from commitment—and others are less strong. First if I take as an example the Auckland District Law Society quite clearly the impacts of this bill on that society will be significant—I am not saying that they will be bad but that they will be significant—because the society as presently constituted will dissolve. Second district law societies will lose their statutory power to regulate practising lawyers within their districts and finally district law societies will lose their compulsory membership rights. 
It is a tribute to the executive director of the New Zealand Law Society Mr Alan Ritchie that he has been able without any apparent effort to lead district law societies to an easy recognition of the substantial gains that will accrue to them from surrendering their rights and responsibilities. 
 That said it is thought that the district law societies in some form may continue to exist and I express the hope that district law societies such as the Auckland District Law Society will still have a vital role to play in maintaining cohesion and a sense of professional commitment to the profession. I would say it is vital for the well-being of the profession as a whole that the districts remain active and strong. 
My understanding is that the Auckland District Law Society has approximately 3800 lawyer members. It certainly has substantial assets. When I last looked at the statement of financial position of the Auckland District Law Society its assets exceeded $4 million including a building known as Chancery Chambers in the Auckland central business district; law libraries in the Auckland and Whangarei High Courts and 10 district courts throughout the district; and copyright in a number of Auckland District Law Society forms. There were substantial numbers of staff engaged in a professional standards department; a continuing legal education department; a library that managed not only the physical aspects of library work but also was involved in a major way in the production of databases; a commercial department and associated support and marketing facilities such as a weekly newsletter a website a range of special interest committees; and a variety of other support and collegial activities. So we are talking about—certainly as it touches the Auckland District Law Society—a substantial enterprise in business terms. 
It is also appropriate to record as we look at those aspects of structure an unsuccessful attempt by the New Zealand Institute of Legal Executives to gain some form of recognition in this legislation. There is a New Zealand Institute of Legal Executives; it has approximately 665 legal executives ranked in various categories and it is administered by an elected council. It is a well-organised body with a code of ethics procedures for disciplinary matters paid staff and a raft of tasks carried out within law firms throughout New Zealand that certainly enhance the efficiency and administration of the activities of those law firms. The New Zealand Institute of Legal Executives came to the Justice and Electoral Committee seeking recognition. 
CHRISTOPHER FINLAYSON (National) 
: 
 As both Dr Worth and the Minister in the chair Mark Burton have said the Lawyers and Conveyancers Bill represents a major change from the Law Practitioners Act 1982. Under Part I of the 1982 Act both the New Zealand Law Society and the district law societies had a statutory basis. Under this bill the New Zealand Law Society continues but it is “hail and farewell” to the provincial law societies as they existed or have existed from the time of the Law Practitioners Acts—both the 1982 one and its 1955 precursor and other ones. From my point of view the move to have the New Zealand Law Society and to move away from a statutory basis for the provincial law societies is a good thing because many of the problems with the 1982 Act centred on the fact that there were district law societies trying to do different types of jobs and provide different services for members of the public and those services were provided in a very variegated way because of the different sizes of the law societies. 
As Dr Worth has said the Auckland District Law Society—comprising over half of the number of practitioners in this country—has been able to provide an excellent service to the public which is most important and to practitioners because of its size. But it should be borne in mind that many district law societies in this country are very small ranging from the Westland District Law Society through to the Marlborough District Law Society and others. They are very small indeed and have not been able to do what is required to be done for the public in their area. In fact I think it is a fact that the three largest law firms in this country would be larger than all but a very few of the district law societies as they are currently constituted. 
The New Zealand Law Society continues and as Dr Worth has observed Part 4 outlines the distinction that is to be made between regulatory and representative functions and between regulatory and representative powers. I observe in clause 56 the key point that membership of the society is voluntary and does not impose any liabilities on members but by virtue of having a practising certificate barristers and solicitors will subject themselves to the regulatory functions. 
The regulatory functions are spelt out in clause 57 and they are the key functions that are needed to keep the Law Society going. The only one I intend to comment on is paragraph (e) which deals with the function of assisting and promoting “for the purpose of upholding the rule of law and facilitating the administration of justice in New Zealand the reform of the law.” and I simply acknowledge the huge contribution to law reform made by for example the legislation committee of the Law Society over the years. 
It is often thought quite unfairly that lawyers are in it only for the money but the fact of the matter is that large numbers of practitioners over the years have made a very valuable contribution to law reform and not just in the legislation committee. For example last year as a member of the High Court Rules Committee I was involved in a rules reform project. We needed to obtain the services of around 60 practitioners in New Zealand and we asked them to help with the reform of various parts of the High Court Rules. To a person every practitioner approached about assisting with that law reform project actually got involved and made a very valuable contribution. That extremely important contribution to reform of the law will continue under the aegis of the continuing New Zealand Law Society body. 
Clause 59 sets out the various regulatory powers and there is no real magic in that. It can be compared to the 1982 Act. Clause 60 deals with representative powers and again there is no real magic in any of those provisions. It provides for publications such as  
LawTalk 
 to continue to be sent to practitioners and for various periodicals and other things to be sent out and there is no real problem with that at all. 
Clause 64A needs brief mention. That deals with practising fees. It is important because the practising fee is to pay for the regulation; indeed subclause (3) states that the sole purpose of the fee is to fund the regulatory functions and powers of the society not the representative ones. 
Clause 65 is of course necessary because it deals with extraordinary purposes. There may be a need for a levy to deal with an extraordinary regulatory function or power of the society. Clause 66 provides for subscriptions that deal with voluntary membership. 
In summary I think that these changes are good. We have a movement towards a 21st century structure for the legal profession in New Zealand. The provincial law societies may continue in a representative capacity as incorporated societies but the statutory basis for them goes although that for the New Zealand Law Society continues and I welcome this change. 
KATE WILKINSON (National) 
: 
 I also rise in support of Part 4 of this bill. It is fairly much a basic common-sense provision of the bill relating to continuing with the New Zealand Law Society basically as we have known it in the past. That does not really change but as my learned colleague Mr Finlayson has said what does change is the effect of abandonment if you like of the district law societies of which there were 15 throughout the country. Previously barristers and solicitors belonged to both the local law society and the national one. Now they will belong to the New Zealand Law Society and if the local law society decides to continue they may still belong to it. Under this part of the bill the national body the New Zealand Law Society will be the central body to regulate practising lawyers and also to represent them. It centralises the society and that makes some sense. 
Interestingly enough the biggest bone of contention in relation to this part is not the governing of the lawyers and the legal profession from Wellington nor is it the lack of if one likes any particular local knowledge of any one district but it seems to be the libraries. The question of district law society libraries is the main issue of contention: who will own them on the abandonment of the local law societies and who will maintain them. Without the libraries and ready access to them lawyers simply cannot do their jobs properly. It is vital that lawyers have the best possible access to the best possible legal information. 
The law society in my area Canterbury has a very well-developed library built up over 100 years and I am sure that it is not alone in having done that. It has a huge value. In fact a figure of over $3 million has been attributed as the value of the Canterbury District Law Society library. Under this part of the bill the local law societies have 6 months to decide what to do with those libraries. Although the New Zealand Law Society may contribute to the funding of those law libraries that is not mandatory but is discretionary so they may be contributed to. It is vital that in the restructuring and in the bringing-in of this legislation the library resource is not lost never to be regained. 
However in addition to the issue of libraries the New Zealand Law Society is vital in regulating and making the rules that bind its members and in representing members’ best interests. It sets the standard of behaviour sets the rules and makes sure that the rules are obeyed. For that regulation and representation members pay their dues. They pay their levies and that is fair. However the counterpart in this bill to the New Zealand Law Society is the New Zealand Society of Conveyancers and we must ensure that it sets the appropriate standards of behaviour. It is of no use to anyone if the respective rules of both professions are poles apart. Lawyers and conveyancers are being thrown together under this bill into the same barrel whether or not they like it. If a conveyancer turns out to be a bad apple that will taint not only all the other conveyancers but also all the other lawyers. Therefore it is absolutely imperative that the good name of lawyers is not tainted by a bad conveyancer. 
The rules and standards are crucial—they are critical. They must reflect the importance of maintaining the already good reputation of lawyers. My concern is that we must not build up the conveyancing profession by bringing down the law profession. The Law Society and the Society of Conveyancers will be critical in ensuring that standards are maintained. Again if we go back to the purpose of the legislation we find it is so that the consumer—the client—can have absolute confidence in his or her conveyancing professional. 
Bearing that in mind whilst we are talking about conveyancing professionals I point out that it is very easy to denigrate conveyancing and say it a form-filling exercise and to say it is easy to tick the boxes. Conveyancing is a bit more complicated than that because with the law becoming increasingly complex conveyancers whether they be lawyers or conveyancing practitioners end up being experts on the Resource Management Act and on Building Act requirements. They even become experts on whether a gasfitters certificate is required in respect of gas appliances. Also they are often asked for advice on business structures and on how to structure a purchase. 
NICKY WAGNER (National) 
: 
 As we have heard Part 4 deals with the New Zealand Law Society. I am not a lawyer but to me as a layperson it is very important that I have confidence in the workings of the New Zealand Law Society. I do not care about the details but I do need to know that there is a regulatory body that will provide benchmarking for good legal practice in order to control the quality of lawyers and that I can therefore rely on the professionalism of any lawyer whom I employ. As Joe Public I support the work of the Law Society in developing professional standards and practice notes that are consistent across the whole country. I will feel more secure in my choice of a lawyer because of the Law Society’s issuing of practising certificates and a database of those who have practising certificates. My lawyer may or may not choose to belong to the Law Society; that does not concern me—although I can see the benefits of that for lawyers—but I will feel more comfortable knowing that my lawyer is subject to the regulations of the Law Society. 
NANDOR TANCZOS (Green) 
: 
 I rise to speak not to the bill as a whole because I think the Green Party’s position has been stated quite clearly in previous readings but to an amendment in my name to clause 57 introducing new clause 57A. The amendment addresses an issue that is primarily dealt with in clause 106 in Part 6 but I rise to speak to it now because these two amendments are in conjunction and I thought I should speak at the earliest opportunity. 
It relates to the issue of Queen’s Counsel and Senior Counsel. It is an issue that has been contentious in previous readings of the bill and there has been a lot of discussion about it although now that Dail Jones has gone the conversation might calm down a little bit. The Green Party supported the move away from the language of “Queen’s Counsel” towards “Senior Counsel” because we saw that terminology as being of more relevance in Aotearoa today in the 21st century. However during the discussions at the select committee I began to question the value of the grade at all. We heard a number of arguments for and against the idea of having either Queen’s Counsel or Senior Counsel. Some people were of the view that being appointed as a Queen’s Counsel simply meant one could put one’s fees up. The point was made that there occasionally were honorary appointments as Queen’s Counsel as well. But I think it is also true that by and large it is genuine recognition of seniority and expertise so it does have value in that sense. 
The other point we heard is that it is not necessarily a fair measure in that although only very good lawyers become Queen’s Counsel or if this bill passes in its current form Senior— 
Dr Richard Worth 
: I raise a point of order Mr Chairperson. This particular member is speaking about Part 6 and in particular the provisions relating to Senior Counsel and Queen’s Counsel in that part but we are currently working our way diligently through Part 4. 
The CHAIRPERSON (Hon Clem Simich) 
: Dr Worth is quite right. The member did signal when he opened that he was going to go a bit wide but we are going through the bill in parts and we should be confining ourselves to each part. 
NANDOR TANCZOS 
: Speaking to the point of order Mr Chairperson I point out that if Mr Worth had read my proposed amendment he would understand that it is an amendment to this part but it relates to the issue of Queen’s Counsel— 
Dr Richard Worth 
: It’s the wrong part. 
NANDOR TANCZOS 
: —as the member would understand if he either read the amendment or did me the courtesy of listening to my speech. 
The CHAIRPERSON (Hon Clem Simich) 
: I call Nandor Tanczos to continue. As you were. 
NANDOR TANCZOS 
: Although only good lawyers become Queen’s Counsel the point has been made that some people who would be very deserving of that status do not get recognition for various political reasons. The strongest argument I heard for having the status at all is that it is a protection for the independent Bar and that while it is available only to barristers sole it gives a status that is sought after and valued and lawyers will leave firms in order to make themselves available for that status. The argument is that to extend it to lawyers practising in firms would weaken the independent Bar. So maybe this bill actually gives us the worst of both worlds in a sense. 
It seems to me that there is value in recognising seniority and expertise but that that is not the role of the State. So I have proposed new clause 57A which makes it clear that it should be one of the regulatory functions of the New Zealand Law Society and an amendment to delete clause 106 which has it as a function of the Governor-General. The point is that it should be up to the profession to determine status in its own profession and to recognise seniority and expertise and it should not be the role of the State to confer State patronage on lawyers. I mean no disrespect whatsoever to those lawyers who have already received that grade but it seems to me inappropriate that it should be a function of State patronage to award that status when it is a matter for the profession. It is the profession that is in the best position to evaluate candidates to make such recommendations and through its own regulatory function—the New Zealand Law Society—to decide on those matters. 
I have brought this matter up in the debate on this part because it relates to proposed new clause 57A. I hope the Committee will support the amendment. 
The question was put that the following amendment in the name of Nandor Tanczos to Part 4 be agreed to: 
to add the following new clause: 
57APower to prescribe guidelines in relation to Senior Counsel and Queen’s Counsel 
(1)As from the commencement of this section the New Zealand Law Society is responsible for prescribing— 
(a)The process by which candidates may be recommended for appointment as Senior Counsel: 
(b)The fees to be paid by candidates for appointment as Senior Counsel: 
(c)The privileges and duties of Senior Counsel and Queen’s Counsel: 
(d)The conditions on or subject to which Senior Counsel and Queen’s Counsel may practice their profession: 
(e)The precedence that Senior Counsel are to have in the courts of New Zealand: 
(f)Such other matters as may be necessary in relation to Senior Counsel and Queen’s Counsel: 
(g)Such other matters as may be necessary in relation to Senior Counsel and Queen’s Counsel. 
(2)The New Zealand Law Society may also issue guidelines in relation to both the qualifications and experience that should be possessed by candidates for appointment as Senior Counsel and the process by which such candidates may be recommended for appointment. 
(3)A person who holds the rank of Senior Counsel or Queen’s Counsel ceases to hold that rank if— 
(a)he or she is suspended from practice as a barrister; or 
(b)his or her name is struck off the roll. 
(4)If the Sovereign for the time being is a King every reference in this section or in any guidelines made under subsection (1) to “Queen’s Counsel” is unless the context otherwise requires to be read as a reference to “King’s Counsel”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 10 
Green Party 6; Maori Party 4. 
Noes 109 
New Zealand Labour 50; New Zealand National 48; New Zealand First 7; United Future 3; Progressive 1. 
Amendment not agreed to. 
Part 4 agreed to. 
Part 5 New Zealand Society of Conveyancers 
Hon MARK BURTON (Minister of Justice) 
: 
 Part 5 of the bill provides for the New Zealand Society of Conveyancers and sets out its regulatory responsibilities. In that respect it mirrors Part 4 which we have just debated and which deals with the New Zealand Law Society. The regulatory responsibilities include overseeing enforcement of the legislation admission and enrolment of conveyancing practitioners and implementation and enforcement of complaints and disciplinary processes. 
Dr RICHARD WORTH (National) 
: 
 National has an amendment in respect of Part 5 “New Zealand Society of Conveyancers”. It is a simple amendment. It proposes that the whole of Part 5 be deleted. I have had an opportunity to speak very briefly on National’s position towards the New Zealand Society of Conveyancers. I will briefly summarise those arguments against the background that National supports with reservations the Lawyers and Conveyancers Bill. 
It is a pity in the context of the Committee stage of the debate that Labour members have been strangely silent. Sure it has been the case that the Minister at the start of each part has offered a child’s guide to the content of the part but there are on that side of the House presently constituting the Government a number of lawyers including one who sat on the Justice and Electoral Committee and who is strangely silent. That is a pity because Russell Fairbrother I am sure could make a worthwhile contribution to the debate if minded. I express the hope on behalf of members on this side of the House that he will feel free to say at least something supportive or otherwise on a bill that occupied a very substantial period of select committee consideration and deliberation. As one looks through the bill which now runs to 346 pages it is right to say that on most pages of the bill as it was reported back one can see changes to what was originally sent to the select committee. 
Part 5 is in very similar form to Part 4 which is concerned with the New Zealand Law Society. Part 5 is concerned with the New Zealand Society of Conveyancers. So why is National opposed to Part 5? 
Hon Mark Burton 
: A very good question. 
Dr RICHARD WORTH 
: It is a very good question as the Minister in the chair the Hon Mark Burton says. I have a very simple answer by way of response. The select committee heard evidence from the New Zealand Law Society that there might be five or six people who would be qualified to join the society and the faint possibility that Australian conveyancers might seek to join the society although there would be only a few. So the probability was that there might be seven or eight such people in total. That clearly raises questions as to the justification for a highly prescriptive statutory regime and the impossibility of funding a realistic fidelity fund for such a limited occupational grouping. I suggest that one would have to get up very very early in the morning to find legislation other than a private bill that was enacted for the benefit of seven or eight people. Certainly it would be unusual in the context of legislation to provide such a highly prescriptive regime for those people. In Part 5 in addition to provisions establishing the New Zealand Society of Conveyancers there are provisions relating to functions and powers. As I have said they mirror substantially the provisions of Part 4 relating to the New Zealand Law Society. 
One of the most interesting clauses from a lawyer’s perspective is clause 79. Clause 79 applies the Acts and Regulations Publication Act 1989 and the Regulations (Disallowance) Act 1989 to the constitution of the New Zealand Society of Conveyancers. I do not think there is another statutory example apart from that Act of the constitution of an entity being made subject to those provisions. I will comment briefly on what I see as being the implications of that particular change. What this is about in part is a linking provision to the definition in the Standing Orders of the House of Representatives of “regulation” as “a regulation within the meaning of the Regulations (Disallowance) Act 1989”. If one then moves to later provisions in the Standing Orders—I am referring particularly to the provisions related to delegated legislation—it seems interestingly and I think curiously that the Regulations Review Committee has been given a specific jurisdiction to deal with issues relating to the constitution of the New Zealand Society of Conveyancers. That means that those provisions of that constitution will have the status of regulation and it will open them up to the scrutiny of a powerful parliamentary committee. So people aggrieved by the operation of the constitution of the New Zealand Society of Conveyancers will be able—provided that they can bring themselves within the framework of the Standing Orders—to advance a complaint to the Regulations Review Committee which can then act as others have said as a poor man’s appellate court to do justice to that presumably aggrieved conveyancer. That is quite an unusual provision. 
As I said at the outset National is opposed to this part. I welcome a response from Minister Mark Burton the new Minister of Justice to say why Part 5 is truly needed. 
RUSSELL FAIRBROTHER (Labour) 
: 
 It is fascinating that all the member could suggest was that Part 5 should be deleted. That follows his practice at the Bar of belonging to firms that were leading the way in specialisation and in the presentation of the product in such a way that lawyers in the provinces cannot keep up with the pretty packages and named sweets they find littering the table as they search for prospective clients in the big firms. 
We have a bill that already has five or six people indicating they want to be conveyancers. Of course this bill will not be law for lawyers; it will be law to ensure that lawyers and conveyancers provide a service to the public. So it is fallacious for my learned friend to argue that the bill provides for only five or six people. In fact this legislation will bring conveyancing back to the public and to each of the 4 million people in this country who will be able to engage conveyancers at a price they can afford for that specialised service. So as the major firms have led the way in specialisation this bill follows by bringing the specialisation of conveyancing back to the people of New Zealand. Clearly my friend is misguided in his mischievous proposal to delete Part 5. He is surely not trying to protect the ivory towers and glass towers of Queen Street; he surely wants to provide ample conveyancing to the mums and dads of this country who are finding it increasingly expensive to ride in the high-powered lifts in those towers—once they make it to Queen Street. 
I argue for and this Government supports bringing the practice of law and the conveyancing associated with mums and dads buying houses back to the people who can afford it by providing a specialised service that is relevant to the needs of ordinary New Zealanders. I therefore support this bill wholeheartedly. 
Dr JONATHAN COLEMAN (National—Northcote) 
: 
 We have just heard the Labour line from the former member for Napier and frankly I do not think the public is really interested in some sort of inter-fraternity legal tit-for-tat and cheap shots that that member is dealing out there to members with respected legal minds who know quite a substantial amount and who have spent their careers focusing on the legal profession. National actually has brought some excellent legal minds to bear on this whole issue. 
It is a pleasure to be talking at the Committee stage of the Lawyers and Conveyancers Bill 2003. The legislative history of this bill has been well outlined by my colleagues who have preceded me. They have spoken to the various parts and indeed National is supporting much of the bill especially those parts that deal with the regulation of the legal profession. But when we turn to Part 5 which I am about to address we have some serious concerns. That part will establish the New Zealand Society of Conveyancers but I think that any sensible person would agree that there is really very little need for the establishment of such a society. Conveyancing work as lawyers on the benches over there will tell us is already well covered by the legal profession. 
The public are well serviced in that arena and conveyancing is hardly a matter of public complaint or issue at the present time. I have not exactly been inundated with constituents coming in to complain about the issue of conveyancing. In fact I would have to say that Part 5 is really not on the public radar and quite frankly should be extinguished before it ever has the chance of seeing the light of day. 
The reasons for professional regulation are well known to many members of this Committee. When a body is going to be professionally regulated there is a clear objective and the regulator is trying to establish a set of professional standards by which that body will be regulated and the members of that profession will be answerable to their peers. In fact many would say that we could do with such a body in this Parliament. 
The reality is that professional societies do not become established just for any old reason but it seems quite clear that with Part 5 we will be establishing a new professional body the New Zealand Society of Conveyancers for the benefit of seven or eight individuals. Apparently we might even have one or two join from Australia. So we will have a totally new system of regulation that will involve perhaps 10 practitioners and frankly that seems to be almost a waste of parliamentary time. I mean I can see the need for establishing a professional body for the medical profession. We have the Medical Council of New Zealand— 
Brian Connell 
: Why is that? 
Dr JONATHAN COLEMAN 
: Well the medical profession needs regulation. There was a programme on last night called  
Rogue Gynaecologists 
. I doubt whether we will be watching a programme called “ 
Rogue Conveyancers 
”. We have those bodies for when there is an actual need. Conveyancing is already firmly covered by the legal profession. A professional body has to set the ethical guidelines within which its members will operate. The Law Society already establishes those guidelines as they relate to conveyancing and the legal profession. 
In the medical profession in New Zealand there are about 2500 general practitioners. When we are talking about trying to self-regulate— 
Russell Fairbrother 
: What clause deals with that in the bill? 
Dr JONATHAN COLEMAN 
: Well Mr Fairbrother should have a read of the bill. If he had been in the Chamber he would know where we were up to. 
Russell Fairbrother 
: Where’s the medical profession in the bill? 
Dr JONATHAN COLEMAN 
: If the member just had a listen he might find out the relevance. The point is that a certain body of people is needed—a critical mass of numbers—to self-regulate a profession. If there are only seven or eight people who on earth will hear the disciplinary procedures for conveyancers? 
KATE WILKINSON (National) 
: 
 I am rising obviously to speak to this part but I am amazed at the suggestion that it will bring conveyancing back to the public—and that is a suggestion from a former criminal lawyer. I suggest that we need to ensure that this part does not take the public back to the lawyers for negligence claims. There was also a suggestion that conveyancing was becoming increasingly expensive but I suggest that if the anecdotal evidence was read and looked at that would be seen to be incorrect. The fees now are proportionately less and the responsibility is more than they were previously. 
The perception that conveyancing is expensive is typical of the commonplace perception that conveyancing is a rubber-stamping exercise. As I said before when speaking on Part 4 conveyancing is not just a case of ticking the boxes and hoping for the best; it is becoming more and more complicated. Conveyancing is not just concerned with residential housing but also with commercial properties which can have their own complications. One needs to be aware of fire regulations and fully conversant with the Employment Relations Act and all the various amendments that are passed through this Parliament—including the latest suggestion that vulnerable workers will become protected. Members can imagine the situation that if they were doing the conveyancing for a hotel related to the hospitality industry they would have to be totally acquainted with those new employment rules. Then there are intellectual property issues trademark issues zoning requirements and the scrutiny of leases. There is an ample field for negligence and if we have under-qualified conveyancers doing that work without the necessary standards of experience and qualification then it will be quite true that the public will be going back to lawyers for negligence claims. 
 This part of the bill deals with the establishment of a New Zealand Society of Conveyancers. It is a new society that is to be especially set up for the group of so-called licensed conveyancers which probably only a handful of people are eligible to belong to at the moment. One has to wonder whether this new layer of bureaucracy and the extent of it is really justified. Should we be forward-thinking and allow for the possibility of a long line of legal executives and landbrokers queuing up for membership? I do not know whether we should be. 
Not only do new rules and regulations have to be made for the small elite group of licensed conveyancers but also somehow those licensed conveyancers have to set up a realistic fidelity fund. That could be a huge problem for the small group of elite conveyancers. For a start the fidelity fund will have to be sufficient to ensure the confidence of clients is maintained. It will be starting from scratch. The lawyers have had a fidelity fund for many many years. That fund has been used on occasions and its history is well known. Lawyers are not starting from scratch as are the licensed conveyancers. In order to put the matter on a level playing field the fidelity fund of licensed conveyancers has to be sufficiently comparable to the lawyers’ fidelity fund. That will be a huge barrier for the small group of licensed conveyancers. 
Because of the two separate fidelity funds—and I am not suggesting for one moment that the conveyancers should take advantage of the lawyers’ fidelity fund—lawyers run the risk of being tainted by an inferior fidelity protection provided by licensed conveyancers. So it is vital that the two funds are comparable. The integrity of the whole legal profession is at stake as indeed is the integrity of the soon-to-be-formed conveyancing profession. One bad apple is all it will take to damage that integrity. 
I am concerned that there are simply not enough members of the conveyancing profession for them to properly carry out the regulation and representation functions. For example the code of ethics for barristers and solicitors runs to some 135 pages and that is for a membership of thousands not just tens. The rules of both professions must to a certain extent run parallel to each other in order to justify the creation of the conveyancing profession. They must dovetail to ensure and maintain the integrity of and the confidence in both professions. 
Hon DAVID PARKER (Attorney-General) 
: 
 I rise in support of Part 5 of the Lawyers and Conveyancers Bill. We have heard some pretty superficial criticisms of Part 5 including comments that we do not need to have conveyancers and that conveyancers cannot be relied upon. 
Let us reflect on the fact that New Zealand’s system of land registration is the Torrens registration system which is the system devised by Mr Torrens and first implemented in South Australia. South Australia has operated for more than 100 years with land brokers or conveyancers who are not members of the legal profession and it does not seem to have too many problems in doing so. 
If people other than lawyers are being allowed to convey interests in land then there is a need for a regulatory regime because we do need to protect members of the public when they undertake what for most of them is the most important financial transaction in their lives. We do not want them to lose their life-savings. Accordingly there is a need for regulation of conveyancers and as the previous speaker Kate Wilkinson pointed out—and I agree with her—there is a need to make sure that they have similar obligations in respect of fidelity funds. 
I will make one more point. We as lawyers ought not to be too precious that lawyers do not err. I am one of the lawyers—and I sure Mr Worth is another—who remember a $10000 bill that lawyers faced as a top-up to the fidelity fund following the collapse of Renshaw Edwards and the defalcations that occurred within that firm. Lawyers had to put their hands in their pockets to the tune of $10000 each to make good the losses that people who had been using that firm had suffered. The lawyers did so for which they ought to be congratulated. It is necessary to have some level of regulation so that we can have a similarly effective fidelity fund for conveyancers. I support this part of the bill. 
BRIAN CONNELL (National—Rakaia) 
: 
 I was not intending to take a call when I came to the Chamber but I was so intrigued by the arguments that have been put forward that I felt I should take up the challenge of trying to put a layperson’s interpretation on these proceedings. 
Dr Richard Worth 
: Tell us what you think. 
BRIAN CONNELL 
: Before I do so I have to say that when the previous speaker David Parker said that he felt some of the arguments were superficial I thought I was going to be educated. But he took the word “superficial” to new heights—I thought his argument was superficially superficial if I could put it that way. I am still waiting to understand exactly what points he was trying to make; they have not yet registered with me but I am sure that speakers with legal training could put his speech in some kind of perspective. 
From a layperson’s perspective I cannot understand why the Minister in the chair the Hon Mark Burton has been convinced to support Part 5. I ask the Minister what in the submissions convinced him that we need to create in legislation a special place for four five eight or nine people. That seems to me to be highly irregular. The Minister said that he took advice from colleagues. Well Minister you are in the chair now and I would expect that you would be— 
The CHAIRPERSON (H V Ross Robertson) 
: Order! 
BRIAN CONNELL 
: I apologise for bringing the Chairperson into the debate. I would expect the Minister to take a call to elucidate why he feels it is so important to support this legislation. 
The previous speaker gave the Committee the view that if conveyancing was not done through this conveyancing body then our conveyancing practices would be put at risk. I have to say that I have been totally satisfied with the conveyancing experiences I have had through the legal people whom I have retained. From time to time I have a small concern about some of the fees that come my way but that is an issue I take up with the people concerned. I certainly do not think it is necessary to put in place new legislation when there is no problem to remedy. Who in the Chamber would want anyone who is not competent to handle his or her conveyancing matters? I am not at all convinced that the bill would provide that certainty. I say again that the Minister in the chair should get up and take a call to convey that he is comfortable that that certainty can be provided. 
When my colleague Kate Wilkinson was on her feet she made a very very good point that conveyancing these days is not just to do with residential conveyancing. Some of it is very complex. I would like to take comfort that the conveyancing structures have been put in place and that the professionals who are handling conveyancing—particularly in my own affairs if I can use that example—are giving me the very best advice possible. 
Hon Member 
: Tell us about your affairs. 
BRIAN CONNELL 
: I am not sure that I want to tell the Committee about my commercial affairs or anything else in that regard but I am concerned that if I require my conveyancing affairs to be dealt with then I want them to be attended to in the very best way. 
What is the recourse if things go awry? The first thing people will do is see their solicitor. I do not believe that it is possible to have a body of eight or nine people who self-regulate. It simply cannot be done. It is just a matter of scale and the scale will not be there to enable that to happen. The New Zealand Law Society gave the very best submission on the matter when it said that it simply is not necessary to do this. Why does the Government feel that it can ignore that advice and bring to the Chamber as part of a bigger piece of legislation Part 5 which represents six or seven people? I say to the Minister that he has some explaining to do and when he gets the opportunity to do so I will be very appreciative because I believe that this is becoming quite a significant issue. National will support other parts of the bill but Part 5 is a concern. 
Hon MARK BURTON (Minister of Justice) 
: 
 Ever so briefly I must refer the member—he may not have been in the Chamber at the time—to what I said at the beginning of the debate on Part 5. The pertinent thing is that the content of this part mirrors the statutory regulations and responsibilities of this group of people that apply to lawyers under Part 4. I think the provisions and protections are precisely the same provisions and protections that are referred to in Part 4. 
As to the other matters I certainly do not want to waste the time of the House because we are making such good progress. I simply refer the member to the comments made by two of my colleagues on this side of the House. I fully endorse in particular Mr Fairbrother’s view that this provision is actually for 4 million New Zealanders not for 6 7 8 or however many it turns out to be over time. 
JOHN HAYES (National—Wairarapa) 
: 
 I am not a lawyer but like many New Zealanders I have used the services of lawyers. And like the odd Kiwi I have been ripped off. In one case my lawyer was sent to jail. Ho-hum—ever tried to recover money from a fidelity fund? So I come to this issue with a certain cynicism reinforced by the comments of the two Labour speakers in the last quarter of an hour Mr “Fairweather” and his colleague over there. 
The CHAIRPERSON (H V Ross Robertson) 
: The member’s name is Fairbrother. 
JOHN HAYES 
: I am so sorry—Mr Fairbrother. 
Brian Connell 
: You should know that—he’s the former member for Napier. 
JOHN HAYES 
: Yes the former member for Napier—and I commend the people of Napier for their very good judgment. I say to Mr Chairperson and the Minister in the chair that you have been down this road before with the Retirement Villages Act. You think you have— 
The CHAIRPERSON (H V Ross Robertson) 
: The member cannot bring the Chairperson into the debate. By using the word “you” the member is bringing the Chairperson into it. 
JOHN HAYES 
: Sorry—I was referring to the Minister. The Government has brought in the Retirement Villages Act which professes to set up a whole network of care for our elderly people. The legislation before us—particularly Part 5 which we oppose—is just like the retirement village legislation. It sets up the illusion of protecting people. It sets up the illusion of competition. In fact it establishes protective and restrictive trade practices. I ask members to look at the State-owned Public Trust and the very high fees it charges supposedly for looking after the aged in our community. 
On the other hand I support the involvement of conveyancers in conveyancing work because I believe in free competition. Membership of an entity is good for looking after conveyancing activity. But this legislation strikes me as being hugely unnecessary and hugely complicated and more conducive to the establishment of an anti-competitive cabal. The Law Society has pointed out that at the very most we can expect eight of its members to join this organisation. It will be totally impossible for this organisation to set up a realistic fidelity fund. 
Overall I think the legislation is unnecessarily prescriptive. It is cumbersome and accordingly poor law. Part 5 plays into the hands of those who promote anti-competitive behaviour under the guise of protecting our community. It looks to be promoting free competition but that is absolute rubbish. This is B-grade legislation setting up a B-grade entity in comparison with the Law Society. This part of the bill should be eliminated. 
NATHAN GUY (National) 
: 
 I rise to follow on from Dr Worth’s comments about Part 5. National supports most of this bill but it does not support Part 5 as it stands this evening. 
I would like also to follow on from some of the comments Mr Parker made earlier. He referred to those of us including me who feel we are protected from having our own solicitors do our own conveyance and would have concerns about the half-dozen or so who may be allowed to do conveyance under Part 5. I feel that this legislation adds just another layer of bureaucracy and more regulation. 
It is interesting that conveyancers will have to meet the criteria set out for a fit and proper person. I refer the members here this evening to clause 73A which concerns those criteria—whether the conveyancer is of good character has previously been bankrupt has had any previous convictions and so on. This is all very well but who will monitor it? The more frameworks this legislation sets up in more areas about people being fit and proper the more someone has to measure whether these people actually are fit and proper. 
Another area of concern in Part 5 is training monitoring and ongoing assessment. I believe that we have to keep the crossbar on the goalpost extremely high and my concern is that in allowing this to go through we would be seen to be lowering it. If I particularly wanted some conveyancing done I would prefer to see my solicitor to ensure it was done in a proper practical fashion. 
Clauses 79 and 80 of Part 5 talk about practising fees and levies the regulatory functions around them and their compulsory nature. Clause 81 talks about the ongoing subscriptions that conveyancers will have to pay to the New Zealand Society of Conveyancers. 
National members have concerns about Part 5. A lot of other speakers on the National Party side who have a wealth of experience in this area are happy to support the bill but have real concerns about Part 5. 
Dr JONATHAN COLEMAN (National—Northcote) 
: 
 As other National members have already laid out the fundamental point about Part 5 is that it is just an expansion of bureaucracy. It is a case of more Government regulation in an area of legal administration that is already perfectly well regulated. People actually want less unnecessary regulation in our society and on the statute book. But here we have effectively a de facto professional body that the Government is seeking to establish under the guise of a new profession. 
I argue that there are very set strict definitions of what constitutes a profession and a professional body. Certainly professional status should not be conferred lightly. Something like this I feel opens a gateway in a wide range of areas of New Zealand public life—such as those related to the health-care professions and the health-care industry perhaps—that frankly serves no good public purpose. 
Also I think that the establishment of a New Zealand Society of Conveyancers debases the work that the legal profession does. The legal profession is one of the world’s oldest. There is no question that the profession and the principles upon which it is founded have a long history. The legal profession has not sprung up overnight; it goes back hundreds of years. Our legal system which is based on the British legal system serves New Zealanders well. Property conveyancing is actually a relatively straightforward and simple matter and it is handled well by local solicitors. The job a local solicitor does is based on trust. It is based on a relationship that one builds up with that professional. 
What we do in Part 5 if we let it go through is just say that anyone can carry out conveyancing—anyone is free to handle the most important financial transaction of a New Zealander’s life. Where will that lead us? We have heard today that there will probably be eight or nine people in the New Zealand Society of Conveyancers and I just ask members here to consider how on earth that body will self-regulate—because self-regulation is one of the key functions of a professional body. 
Dr Richard Worth 
: They will all be on the committee. 
Dr JONATHAN COLEMAN 
: Exactly. All the conveyancers will be on a committee with their mates. So one of them will appear on a disciplinary matter and it will be a case of that person having a mate on the committee who is asked to discipline him or her and maybe even recommend legal procedures. I can tell members that no profession with that few people involved can seriously be expected to regulate itself. So to be honest establishing a New Zealand Society of Conveyancers is just another unnecessary level of bureaucracy. 
Another area that professional bodies handle is continuing education. I ask the Committee to consider how on earth those members of the Society of Conveyancers will keep up with developments in law. Quite simply they will probably have to call in the legal profession to come and help them with their continuing education. Quite frankly this new profession will need rigorous professional standards attached to it and I think we will find that its members are so busy muscling in on lawyers’ traditional work that they will not want to sit on a committee and listen to disciplinary cases. They will not be interested in establishing a new profession and in drawing the boundaries within which that profession operates. 
I read in the bill about gathering subscriptions from this profession. I would be surprised if the new Society of Conveyancers had an annual subscription higher than $500—they will not have much money. 
BRIAN CONNELL (National—Rakaia) 
: 
 I would like to examine in a bit more detail the issue of the New Zealand Society of Conveyancers. Whilst I am on my feet I would like to thank the Minister in the chair Mark Burton for taking a call and satisfying my earlier concerns. But I have a couple of other concerns I would like to raise. 
In particular I am looking at clause 68(2)(a) which states: “The New Zealand Society of Conveyancers is a body corporate with perpetual succession and a common seal and except as provided in this Act has and may exercise—”—and here is the part that concerns me—“(a) all the rights powers and privileges and may incur all the liabilities and obligations of a natural person of full age and capacity;”. But when I turn the page I see clause 69 “Membership” which states: “but membership is voluntary and does not of itself—(a) impose on the members any liability in respect of any contract debt or other obligation made or incurred by the New Zealand Society of Conveyancers;”. It strikes me I say to the Minister in the chair that there seems to be a contradiction. Maybe the drafting of this passage is not right because in one section we are saying that there will be obligations and liabilities and in another section we are saying that there will not. 
The other issue I want to draw the Committee’s attention to is clause 70 “Regulatory functions”. Again I raised this matter in my last call and other speakers have also raised it but it is still something that does not satisfy me. How will this body self-regulate when essentially it will not have enough members to do so? It is a fundamental issue for which I have not heard a satisfactory answer thus far. The issue has been raised but how does a body do it? It just seems to be an impossibility. The spectre of someone coming before the disciplinary committee of this body—they will almost be judge and jury. They will be sitting there at the table and someone who raises an issue will probably then have to race down to the other end of the table to fill the chair and answer the question. Now I am taking it to a bit of an extreme but when we have six or seven or eight or nine people only on this body I see that as a significant issue. 
Another colleague raised the issue of what is a fit and proper person. 
Nathan Guy 
: It was me Brian. 
BRIAN CONNELL 
: Mr Guy raised it. He is an outstanding member for Otaki and he nearly brought about the upset of the century when he nearly took a very safe Labour seat from a reasonably incompetent and inexperienced member of the Government. But next time I am sure he will complete the act. 
Lindsay Tisch 
: He will. 
BRIAN CONNELL 
: I am sure he will. 
The issue I want to raise concerns clause 73A “Fit and proper person”. Paragraph (a) of subclause (1) states: “whether the person is of good character:”. It is OK to write that into legislation but who will test that? Who will determine that? Mr Guy raised that as a concern. The Minister has said nothing about it. Mr Fairbrother who took a call did not answer that question. The former member for Otago did not answer that question when he took a call. 
Paragraph (b) of subclause (1) states: “whether the person has at any time been declared bankrupt …”. Who will check that? Unsuspecting members of the public when they are engaged in what for most of them will be the only conveyancing activity in their life will put their trust in those people yet the public will have no prior determination as to whether those people can be trusted. The legislation as it is drafted does not call for those checks and balances. We have already been told when I raised this issue in relation to clause 68 that the body corporate of conveyancers will not impose any liabilities or obligations. The Minister in the chair will have to get to his feet and deal with that issue yet again. Paragraph (b) goes on to state: “or been a director of a company that has been put into receivership or liquidation: ”. They are easy things to say but they go to the core of credibility. How will we know that these checks and balances have been done? It remains a major issue of concern. 
Hon MARK GOSCHE (Labour—Maungakiekie) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 71 
New Zealand Labour 50; New Zealand First 7; Green Party 6; Maori Party 4; United Future 3; Progressive 1. 
Noes 48 
New Zealand National 48. 
Motion agreed to. 
Part 6 Conduct of practice by practitioners 
Hon MARK BURTON (Minister of Justice) 
: 
 Part 6 provides for the development of practice rules by the respective societies the New Zealand Law Society and the New Zealand Society of Conveyancers which we have just dealt with during Parts 4 and 5. Those rules cover matters such as conduct trust accounts and indemnity insurance—and trust as well I would imagine. The rules must be the subject of consultation with the relevant professions and they also require approval by the Minister. 
This part also contains provisions based on the existing Law Practitioners Act and Solicitors’ Trust Account Regulations relating to the trust accounts that must be kept by practitioners who receive money for or on behalf of others. It also provides that regulations may be made relating to the rank of Senior Counsel which will rename the office of Queen’s Counsel. I note that my colleague Mr Worth has put forward Supplementary Order Paper 272 which seeks to replace the words “Senior Counsel” with “Queen’s Counsel”. It will come as no surprise to him of course that the Government will oppose that Supplementary Order Paper— 
Dr Richard Worth 
: Will oppose it? 
Hon MARK BURTON 
: Indeed it will. There is also a Government Supplementary Order Paper—Supplementary Order Paper 289 in the name of the Hon Phil Goff—that extends eligibility to employee lawyers to be appointed as Senior Counsel. 
Dr RICHARD WORTH (National) 
: 
 Part 6 of the Lawyers and Conveyancers Bill has within it major change and is of major significance. It is headed “Conduct of practice by practitioners” and it has four subparts although they are not strictly subparts. The first relates to practice rules and regulations the second to investigations the third to trust accounts and the fourth to barristers Senior Counsel and Queen’s Counsel. 
For reasons best known to itself this Government as it steadily seeks to erode constitutional positions in New Zealand including the place of the monarchy has decided that it would be a good idea to rename “Queen’s Counsel” as “Senior Counsel”. There is no move from either the profession or the public for that to occur. But the Government has decided in its wisdom that it is timely to continue that erosion of constitutional principle and to produce that outcome. I would like in a later call to deal with the specific amendments on Supplementary Order Paper 272 in my name on that issue. 
Instead in this call I will deal with the issue of practice rules—one set of practice rules in particular which is provided for in clause 86 “Indemnity rules”. There are quite detailed provisions relating to the indemnity rules. The thrust of the clause is that lawyers may be required to hold professional indemnity insurance. There is nothing new in that. I suspect that maybe 80 to 90 percent of law firms in fact carry professional indemnity insurance. But to have a one-size-fits-all practice rule dealing with indemnity insurance portrays an incredible naivety about the insurance market. Members who are lawyers and who have been in practice will know exactly what I speak about. 
There are probably three core elements of a professional indemnity policy. The first core element is the level of cover—the so-called indemnity level. New Zealand law firms have cover between two parameters: $1 million and $100 million. The indemnity level is the first element. How will that be set by practice rules? Is it to be related to the turnover of the business to the number of lawyers in the firm to the number of employees in the firm or to the number of principals in the firm? So the first element—the indemnity level—is not a matter that lends itself to a practice rule. 
Then there is another element: how much the excess should be. Now the jargon word for the excess in broking and in underwriting circles is the “deductible”. How much should the deductible be? Should it be $20000 as it is with regard to some firms or should it be $2 million as it is with regard to some of the bigger firms? How will that issue be addressed? 
The third element relates to the terms of cover. It is commonplace as members of the House will know that professional indemnity insurance is written in a number of markets. Some of the markets are in New Zealand some are in London—Lloyd’s is an illustration of that—and some are in Bermuda. One needs only to look at professional indemnity policies to see that they are widely variable in the terms of cover in the scope of cover and in the wording of cover. It is not a matter that lends itself to the making of practice rules. The terms on which the risk is set are a matter for the particular underwriter. But the issue is actually more subtle and sophisticated than that because in the course of say 90 days underwriters may change their position. New underwriters may come to the market old underwriters may exit and new syndicates of underwriters may be formed. It may be a policy of a syndicate that it will write cover only in a particular way. 
But the situation is worse than all that. Not only is the task of setting the terms of compulsory professional indemnity insurance to be entrusted to the Law Society but the Minister of Justice the Hon Mark Burton with the wisdom of Solomon is to sign off on the issues of the deductible the indemnity level and the policy wording. We have an illustration there of incredible naivety on the part of Government members if they think the Minister of Justice the Hon Mark Burton can grapple with those issues. 
I see sitting in the chair David Parker the newly appointed Attorney-General. He has been a partner in a law firm. The probabilities are that he has had to grapple with those issues. I invite him to take a call to say exactly how the indemnity rules in just the three areas that I have identified can possibly work. That is just one illustration of the naivety the Government shows in this part of the bill but it is a good illustration. 
CHRISTOPHER FINLAYSON (National) 
: 
 There are three parts of Part 6 that I wish to address. The first is to note with pleasure the re-enactment in clause 84(1)(b) of rules that “may require lawyers or any class of lawyers to undertake ongoing legal education relating to the law or the practice of law:”. In my opinion we are fast approaching the time when continuing legal education needs to be mandatory. I acknowledge immediately the great job done by the New Zealand Law Society’s Continuing Legal Education department over many years in providing seminars for practitioners. I acknowledge the huge contribution made to the law by Mrs Annette Black in her over 20 years as head of that department of the Law Society and the work of people like Dick Edwards. But I think that mandatory continuing legal education is appropriate. In the old days people would go into law firms and would receive legal education as part of their training within the firm as law clerks or staff solicitors but increasingly large numbers of lawyers when they come out of law school for example commence practice as barristers sole and have no experience. They are left to their own wits to their own skills and in my opinion these people are a menace. So something needs to be done about it and I express my hope that the Bar Association and the Law Society will address those matters in the very near future. 
The second clause that I wish to address is clause 104 which provides that barristers of the High Court have all the powers privileges duties and responsibilities that barristers have at law. In my opinion that is a garbage clause. It simply means nothing; it is circular. The note below it asks us to compare it with section 61 of the 1982 Act which provides that barristers of the court shall have all the powers privileges duties and responsibilities that barristers have in England. That provision has been the subject of a lot of litigation over the years. I have been involved in cases concerning whether the High Court has the jurisdiction to prevent barristers from acting in a conflict of interest and reference was made to that section. I have also been involved in cases concerning whether the court has an inherent jurisdiction to make barristers personally liable for costs. Again section 61 was referred to. 
It is important that we get clause 104 right. As it is expressed in the bill it simply does not mean anything. That is why I have proposed an amendment to omit the words “have at law” and substitute the words “have in the Commonwealth of Australia”. There are a number of reasons why I have done that. It is appropriate that we cease to look north to England particularly given that the Privy Council has now gone. It is appropriate that we look west to the Commonwealth of Australia because more and more New Zealand practitioners are admitted both in New Zealand and in Australia. I think this is a practical way of giving some meaning to clause 104 because there is no meaning in it at the present time. It is appropriate if one is practising as a barrister on both sides of the Tasman—as I said many people are—that the same rules in relation to barristers apply in New Zealand as in Australia. 
The third point I wish to address deals with Queen’s Counsel and Senior Counsel. The term Queen’s Counsel is very well known throughout the world. In fact it is sometimes a term of various insurance policies that certain advice must be obtained from a Queen’s Counsel because that term instantly recognises that a certain standard of legal advice will be provided. I do not think it is a particularly good idea to move away from that term and move towards Senior Counsel. 
But of greater moment are the various parts of clause 105 to which I take objection. The first is subclause (2)(a) which deems that it is lawful for a lawyer who practises either alone or in partnership with any other lawyer to be appointed to the rank of Senior Counsel or Queen’s Counsel. Subclause (2)(b) states that it will be lawful for a person who holds the rank of Queen’s Counsel or Senior Counsel to practise in partnership with another lawyer. The essence of the rank of Queen’s Counsel to be appointed as a member of the inner bar is independence. 
RUSSELL FAIRBROTHER (Labour) 
: 
 I would like to take issue with several of the matters addressed by the last speaker and also by Dr Richard Worth. 
First of all I refer to clause 104 which relates to barristers. Given that the member has practised at the Bar I find incredible his argument that he does not know what the term “barristers have at law” may mean. The clause equates it to the High Court which of course has an inherent jurisdiction. That means one cannot prescribe it by statute but it has the jurisdiction to do what is right. Barristers have a unique role in being officers of the High Court and their responsibilities must coincide with the inherent jurisdiction of the court. The relationship of a barrister to the High Court is inherent in the way our common law and in fact our statute law have developed. It is inherent in the way in which our courts operate. It is inherent in the responsibilities that fall upon the shoulders of barristers and those responsibilities can in fact be onerous. One needs only to peruse the findings of the New Zealand Law Society or the Law Practitioners Disciplinary Tribunal to understand how the tribunal has dealt with that inherent relationship between obligations to the court and barristers. If my friend who has just spoken does not understand that term then he alienates himself from the movement of responsibilities of barristers in Britain and in Australia and the emerging jurisprudence and development of the role of barrister. 
On the one hand my friend minimises the role of barrister; on the other hand he laments the loss of the status of Queen’s Counsel. The reform of Queen’s Counsel to a Senior Counsel description is long overdue. Queen’s Counsel originated in Britain. They were obliged to accept the instruction of the monarch who of course no longer instructs counsel in New Zealand. As we move to competent and experienced litigators who prefer to spend most of their lives practising in the larger firms it is totally artificial to try to identify leaders at the Bar and separate them from leaders at the Bar who remain in our law firms. Long gone is the distinction between barristers and solicitors. The more accurate distinction is litigators. Thus moving to Senior Counsel which applies to litigators no matter in what form they practice is the way to go. In fact I foresee in the not too distant future—when the Law Society grapples with the realities—an amendment to this legislation that will remove the fused Bar. Then the contradiction that my friend from the National Party just sought to argue will no longer even appear on paper. 
Finally the clauses in this part of the bill that really stand proud are those relating to indemnity. Dr Richard Worth attempted to tackle this argument but of course the practice rules on indemnity really provide a form of group insurance. It also provides a further form of discipline to practitioners. The cost of insurance may be met across the Bar and across lawyers because of the low standards of some of the members. So there is a further incentive on all lawyers to act in a collegial way to ensure that all perform to the highest and safest standards. 
Dr Richard Worth 
: That’s naive. 
RUSSELL FAIRBROTHER 
: Dr Worth may feel that is naive but the reality is that it is a collegial Bar still. It is still a Bar where as Mr Finalyson lamented the senior practitioners are duty-bound to assist junior practitioners in order to help them to gain the experience that is so often not passed down because of the pressures of time recording. 
This is a bill that recognises the evolving legal profession in New Zealand. It recognises that barristers have a unique relationship with the High Court and it recognises that the collegiality of the Bar is one of the important characteristics of that relationship. I support this part of the bill. 
R DOUG WOOLERTON (NZ First) 
: 
 New Zealand First intends to support this bill. We take issue with only one part of it. We have an amendment in the name of Peter Brown on an issue that was followed through by Mr Dail Jones in the previous Parliament who spoke with some heat on the matter if his  
Hansard 
 is a true and correct record—and I am sure it is. We believe that the changing of Queen’s Counsel to Senior Counsel is along the lines of Mr Finlayson’s and Mr Worth’s contributions more of a politically correct statement than anything else. We believe that the term Queen’s Counsel has long been recognised and should be retained. We feel so strongly about it that we are proposing an amendment to that effect. 
I have been asked—and I cannot see for myself whether he is in the gallery now—to recognise the President of the New Zealand Law Society Mr Chris Darlow who is here or has been here taking a vital interest in this bill. 
Apart from clauses 105 and 106 in this part concerning Senior Counsel and Queen’s Counsel New Zealand First will support the bill. However we will be supporting the amendment in the name of Mr Peter Brown to those clauses. 
CHRISTOPHER FINLAYSON (National) 
: 
 I am most grateful to my friend Mr Fairbrother for his explanation of clause 104. Unfortunately however I remain unconvinced that there is any meaning to the clause as it is currently drafted. If it refers simply to the powers privileges duties and responsibilities that barristers have at common law then why have it? Why not simply dispense with it? It is an otiose clause as drafted; it makes no sense. The way that I have suggested it be redrafted reflects the fact that New Zealand and Australia are really part of one legal market now. We should be looking west as I see it not north. 
I will come back to clause 105. In an earlier call I addressed the fundamental need for Queen’s Counsel to be independent of any firm so as to be able to give impartial independent—sometimes brutally so—legal advice to keep law firms and their clients on the straight and narrow. I have a real concern that if Senior Counsel or Queen’s Counsel are able to be partners in law firms that rigorous independence will go. I believe that that is the fundamental flaw with this new procedure that is proposed to be adopted. 
The other aspect of the clause that really gives me concern is that large law firms in particular as Mr Parker would know from his days at Anderson Lloyd Caudwell are very competitive organisations. I can see situations whereby partnerships will find themselves in a lot of strife. The first point is that the Chapman Tripps the Bell Gullys the Minter Ellisons and the Russell McVeaghs will want their quota of Senior Counsel. 
Dr Richard Worth 
: Simpson Grierson. 
CHRISTOPHER FINLAYSON 
: And Simpson Grierson—I apologise to Dr Worth for omitting his firm. They will all want their quota. I can see a situation developing whereby a junior partner who is perhaps known to the Attorney-General and who is perhaps active in the Labour Party gets the nod ahead of a more senior person who is a member of the National Party or who is independent. I can tell members now that that will be a recipe for strife. In my respectful submission I maintain that the independence of Senior Counsel is what gives them value. It is not some kind of bauble or prize to be awarded to the most senior person or the most favoured person in a law firm; it is a mark of someone’s independence and strength as a practitioner. That independent element is to be very closely safeguarded. 
The second point about the appointment of Queen’s Counsel or Senior Counsel relates to the amendment in the name of Mr Peter Brown. I will have a good look at it over the dinner adjournment. I must say that I am quite attracted to the concept of the name being retained as I have said. I am also attracted to the idea as raised by Mr Tanczos in relation to an earlier part that Queen’s Counsel should be appointed after consideration between judges the Law Society and the Bar Association. I do not see any reason why the State should be seen to confer some kind of monopoly privilege on people; I think it is time the State stepped back from it. 
I know that Mr Parker will find that applications for this year’s Queen’s Counsel round close today and he will have to deal with that over the next few months in reliance on the advice of the Solicitor-General and having consulted with the Chief Justice and taken soundings from throughout the Law Society and so on. I am sure this Attorney-General will do his job in an honourable and decent manner but whether one could say that about others is a matter for debate. The fact of the matter is that I cannot see any reason why Queen’s Counsel need to be appointed by the Attorney-General. I think it is a better approach for the State to step back from the appointments process and leave it to the judges the Law Society and the Bar Association. I am sure they will come up with a perfectly acceptable list of Queen’s Counsel. 
In conclusion I emphasise the need for independence from the law firm. We need truly independent minds to be able to give the kind of advice that often needs to be given to law firms and their clients. I really do worry in these competitive times that if we allow Queen’s Counsel to be partners in law firms it will be a cause of internal jealousy and nastiness within firms and that that very important element of independence will not be there for partners in law firms. 
Hon DAVID PARKER (Attorney-General) 
: 
 I will just respond briefly on the Senior Counsel replacement for Queen’s Counsel point. I disagree with the points made by the last speaker Chris Finlayson. I know that they are held not just by him but also by a number of members of the Bar but I hold the contrary view that was espoused by Mr Fairbrother—that Senior Counsel are as likely to be found in a law firm as they are at the separate Bar. I do not agree that they have lower standards of independence. They owe the same duties to the court as lawyers practising at the Bar. They owe the same duties of care to their clients—indeed the duties of care of solicitors in some instances are broader than those of barristers. 
In terms of some concern that we will see an undermining of the standard of representation of clients we need only look at what was the status quo some 20 or 30 years ago before the separate Bar proliferated. Many of the senior practitioners in the times of personal injury litigation actually sat within firms of solicitors and not at the separate Bar. They were unable to have the title of Queen’s Counsel but they did the work of senior practitioners. Some of the most senior practitioners in this land such as Mr Jack Hodder who is editor of  
The Capital Letter 
 and a very very senior practitioner sit within a law firm—in Mr Hodder’s case Chapman Tripp. I have no doubt that he and people like him would be suitable candidates for the position of Senior Counsel. I think it is unfair that we keep that privilege from them. 
In terms of concerns about whether this bill doles out monopoly privileges I think there are concerns that if we have too few Queen’s Counsel we elevate their value in a way that is inappropriate and actually confer upon Queen’s Counsel close to monopoly or oligopoly privileges. One way we can ameliorate that concern is by having recourse to some of the very able and senior counsel who sit in law firms. 
Dr RICHARD WORTH (National) 
: 
 I raise a point of order Mr Chairperson. The Attorney-General has resumed his seat too quickly. I invite him to make comment on the issues relating to professional indemnity. 
The CHAIRPERSON (H V Ross Robertson) 
: The member has been here for a considerable amount of time. He knows that that is not a point of order and that he is actually trifling. 
JOHN HAYES (National—Wairarapa) 
: 
 I rise in support of the Lawyers and Conveyancers Bill but I do have some reservations about Part 6 for the reason that it makes professionals—professional lawyers and the profession—look incompetent. The Minister seems to retain the right to determine practice rules and it seems to me that that will encourage the Law Society to engage in political toadying instead of a force for an independent profession to protect individuals against the State. I think that is really important. I am also fearful that disciplinary procedures will make people vulnerable to legal ambush. 
Clause 85(1)(a) requires conveyancers to provide educational criteria and it gives no further guidance. That seems to me to be an example of over-regulation of our industry and seems to set up the potential to establish a cabal or anti-competitive behaviour. 
But clause 85(1)(b) sets up a requirement to recognise foreign qualifications. I commend the Minister for that provision because so many New Zealanders—660—are leaving this country every week to go to Australia. No New Zealanders will be left to engage in this work—we will have to rely on foreigners and their qualifications to come here to help us with our conveyancing. 
 I would like now to go to clause 96. I notice that the Law Society—and I speak as a non-lawyer; just a Joe Blow citizen—is allowed to appoint someone to look at irregularities for example high fees and accounts. Surely this is a faulted concept. Why should the poacher also be the gamekeeper? When I go on to read clause 101 it seems to me that a duty is put on practitioners of the law to ensure that funds earn interest. This is yet another example of what I was trying to say in an earlier call: we are writing legislation to give the pretence that people are being protected. There is no mention here of anything about market rates. Provided someone paid 0.25 percent or 0.5 percent interest I would presume that person is in keeping with the law even if he or she is ripping off people. I would like these elements to be considered in this legislation. 
KATE WILKINSON (National) 
: 
 In rising to speak to Part 6 of the Lawyers and Conveyancers Bill relating to the conduct of practice by practitioners I refer to my short address on Part 5. Whilst both lawyers and conveyancers are to have their own respective practice rules or codes of conduct it is vital that they dovetail together to ensure consistency of standards. The standards of professional conduct and client care must be upheld and maintained if this dual profession is to have any integrity if it is to be held in any respect and if it is to enjoy the total confidence of the clients. In this regard the maintenance of a properly managed trust account is critical. Lawyers receive clients’ funds—their hard-earned savings—in trust in order to purchase that iconic Kiwi home. That money is sacrosanct. It must be protected; there must be no defalcations. That is the responsibility and the trust currently enjoyed by lawyers and that will be the responsibility to be had and the trust to be earned by conveyancers. 
This part of the bill also provides for the rules relating to trust accounts and the management of such trust accounts and I would just like to indulge members and step them through a typical conveyancing transaction in relation to the financial aspects. At the commencement of a transaction a deposit is often paid to the solicitor’s trust account to be held on trust until any conditions contained in an agreement for sale and purchase are fulfilled. Prior to settlement if mortgage moneys are required once the documentation has been duly signed the solicitor then signs a certificate to the bank certifying that all those documents have been properly signed and that on receipt of the mortgage funds the solicitor in effect guarantees that the bank will get its mortgage security. The client’s personal contribution is also paid to the solicitor’s trust account. All those funds are then paid over to complete the purchase transaction. So money is flowing in and out of the trust account for any number of different clients at the same time and for any number of different purposes. It is absolutely vital when dealing with other people’s money that the proper accounting practices are in place and are complied with at all times. That money does not belong and never belongs to the solicitor or—when this legislation is passed—to the licensed conveyancer. It belongs to the client to be held exclusively for that client and to be paid as that client directs. 
There must be the ability for an independent auditor or person to examine from time to time the accounts of conveyancing practitioners. Such examinations and investigations give integrity to the whole system and they are preserved in clause 96 of this bill. There must be regulations relating to the use and audit of trust accounts. There are provisions for many of those regulations to be provided prohibiting for example the collection of a client’s money by a lawyer regulating the lending of a client’s money by a practitioner and prohibiting the borrowing of a client’s money by a practitioner. Those guidelines are firm and they must be obeyed. Members will also see that trust account management is vital and having the training for that is vital. There is provision for such training for those intending to set up their own trust accounts. It is interesting that there is also provision for those intending to be directors. I wonder whether there is an omission in this bill as it does not address the situation of existing partners who have already undergone such training and who want to avail themselves of incorporation. Will they have to be retrained? Those existing partners already have to undergo retraining under the trust account partners scheme. If they have to have new training as well as the retraining it might be a wee bit of overkill for those who are already experienced in the running of a trust account. 
Those existing partners have been managing their trust account for years. The situation is not like that of the conveyancers who are suddenly coming to this afresh and who have had no training whatsoever and no experience in running trust accounts. Do existing trust account partners really have to undergo the new training just because they now want to incorporate? 
Dr JONATHAN COLEMAN (National—Northcote) 
: 
 It is a pleasure to be addressing Part 6. I do so not as a member of the legal profession and I will not be engaging in any of the legal sophistry that some of the Government members have engaged in in justifying some of their approaches to this bill. But I do think that there is indeed a need for a conduct of practice by legal practitioners to be set down in legislation because there is no question that the public expects and deserves such protection. Speaking as a layperson the part of Part 6 that really concerns me is clause 105 which refers to the removal of references to Queen’s Counsel and King’s Counsel. We could engage in various legal arguments as to why this should be so but as a layperson the thing that immediately strikes me—as Mr Woolerton has pointed out—is that this seems to be just an exercise in political correctness. 
R Doug Woolerton 
: Republicanism. 
Dr JONATHAN COLEMAN 
: It is republicanism by stealth and I think it is really part of a wider agenda. If one removes enough of the trappings of the monarchy little by little one erodes the public support for it and there is no question that members of the Government would very much like to see the monarchy done away with and republicanism instituted at the earliest possible opportunity. I put it to members that there are people in the Government who find that the use of the title King’s Counsel or currently Queen’s Counsel in New Zealand is a real offence to them. I can tell those Government members that most New Zealanders do not want to have republicanism by stealth. They want to have a proper debate on these issues. It annoys people in this country—the public—when we do not have proper consultation and when they wake up tomorrow and read in the  
Dominion Post  
or the  
New Zealand Herald  
that in Parliament at 9 o’clock at night a handful of people just suddenly decided to do away with the title Queen’s Counsel or King’s Counsel. 
Hon Pete Hodgson 
: Why King’s Counsel? 
Dr JONATHAN COLEMAN 
: Well when we have a king again we will once again have the title King’s Counsel. 
I think that there is also the issue of talking down the profession and trying to remove some of its aspirational nature. The one thing Labour members hate is for people to have something to aspire to and there is nothing that those members hate more than to see lawyers have something like the title Queen’s Counsel—or King’s Counsel—to aspire to. They would rather that we were all dumbed down. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
Dr JONATHAN COLEMAN 
: I wish to resume talking on Part 6 of the Lawyers and Conveyancers Bill. As members know Part 6 deals with the conduct of practice by practitioners. Prior to the dinner break I spoke about clauses 105 and 106 which deal specifically with the removal of the title Queen’s Counsel and when appropriate at a later time eventually the title King’s Counsel and their replacement with the title Senior Counsel. I was making the point that this is in fact republicanism by stealth and that really there is no public appetite for this change. We do not hear anyone talking about the need to remove the title Queen’s Counsel or we did not used to hear about the need to remove the title King’s Counsel. As my colleague Mr Worth noted there is no appetite within the legal profession for this change. In fact in surveys of the legal profession up to 90 percent of company lawyers—those who would be engaging the services of a Queen’s Counsel—say that they do not wish to see a change. One of the reasons for that is that the title Queen’s Counsel signals a very important piece of information to the market for legal services. The title signals that when we have a Queen’s Counsel before us we have someone who is at the very apex of his or her profession. So if we do not have a legal degree ourselves or if we do not know the local legal personnel we can be assured that we are retaining the services of someone who is at the very top of his or her profession. That is called transparency in the market for legal services. If we changed that title to Senior Counsel it would effectively be a dumbing down at the highest rank of the legal profession. 
There are about 8000 barristers in New Zealand but only about 80 of them are Queen’s Counsel. I cannot see why we would want to tamper with that. We have an excellent legal system based on British law and it has served this country well since its inception. The roots of that legal system go back centuries and it is a legal system that is the envy of many countries in the world. I put it to the Committee that there would be few other places in the world that would want to start tampering around the margins of their legal system in the way that we are seeking to do here. 
When I get back to this point of republicanism by stealth I think it is important that in this Committee we listen to what people want. The people of New Zealand woke up to find that they no longer had the right of appeal to the Privy Council. That was decided here. It did not go out for public consultation— 
Hon Lianne Dalziel 
: No select committee hearing! 
Dr JONATHAN COLEMAN 
: It went through a select committee but it was not something that met with a great deal of approval in the public domain and I do not think there will be any appetite for this change either. 
But there is another part of Part 6 that really concerns me. If I refer back to Part 5 when we talked about the National Party being opposed to the establishment of a New Zealand Society of Conveyancers and I went through in detail why were opposing that I see that clause 85 is headed: “Certain practice rules in relation to conveyancing practitioners” and I think that serves to illustrate the points I was making in talking on Part 5. Clause 85(1) states: “The rules made under section 83 by the New Zealand Society of Conveyancers—(a) must provide educational criteria to be met by candidates for practising certificates as conveyancing practitioners:”. I think the point is very much that if one is going to establish a profession one has to provide a facility for continuing education. As I think has been pointed out if we are going to have seven or we said maybe nine but certainly not even 10 new practitioners of conveyancing how on earth will they provide the facilities and the structure for continuing legal education and continuing conveyancing education? It really makes a farce of the notion of a new profession and a new society. 
Clause 85(1)(b) states—and if there is a laugh in this bill maybe it is this or maybe it is not—that the rules of the New Zealand Society of Conveyancers “must provide for or include mechanisms providing for the recognition of foreign qualifications registration and experience:”. I think that shows what a load of nonsense having a New Zealand Society of Conveyancers would be. How on earth would we recognise foreign qualifications when frankly there are none to recognise? Furthermore who will administer this system and say who is fit to be a conveyancer coming from overseas with these foreign qualifications? The answer is that if we have only nine people at most practising this they will all be out trying to make money trying to take income away from qualified solicitors by practising conveyancing themselves. So there will be no mechanism for that. 
Finally clause 85(1)(c) states that these rules in relation to the New Zealand Society of Conveyancers “may require conveyancing practitioners or any class of conveyancing practitioners to undertake ongoing education relating to the law or the practice of conveyancing.” It is really hard to say which comes first the chicken or the egg. If there is no Society of Conveyancers and we think that is right and if we then talk about establishing the practice and the profession of conveyancing one cannot follow without the other. We would be quite happy that the practice of conveyancing as envisaged under this new structure does not come to pass. But it also goes on about ongoing education relating to the law to do with conveyancing. As I think has been illustrated this will not be able to be carried out by those nine or so conveyancers because they will not be in a position to legally educate their peers. There will be a situation where there are nine people around the table each taking turns. 
Dr RICHARD WORTH (National) 
: 
 I would like to pick up an issue that has been fleetingly referred to and which is enshrined in an amendment I am proposing that I hope New Zealand First will support. It is numbered 272 and it relates to clauses 105 and 106. As has been said National supports this bill although we have some reservations about some of the parts. Sadly we think that the New Zealand Law Society should have pushed the Government harder than it did and that the Law Society has been too quick to yield. 
Mr Finlayson has spoken about clause 104 and how as drafted it is meaningless. Clause 104 states: “Subject to this Act barristers of the High Court have all the powers privileges duties and responsibilities that barristers have at law.” It is meaningless but the good point that Mr Finlayson made is that if we look at the 1982 legislation—which we are asked by way of footnote to compare with clause 104—we will see that it was meaningful but by deletion it has become meaningless. If we look at the roles that barristers have across a range of common law jurisdictions—Canada Australia and the UK to name three—we can see that each one of those countries has slightly different rules. He has explained that. 
My amendment to clauses 105 and 106 is quite simple. First it proposes the deletion of clause 105. I guess the crunch point about clause 105 is that it contemplates that there will be Queen’s Counsel within firms. We went through that in a period at the close of the 19th and the beginning of the 20th centuries. I had a great-grandfather who was a Queen’s Counsel in a law firm. 
 That experiment—if I can call it that—ran for about 8 years and was then scrapped. I think there was good reason for making that change and now the Government is seeking to creep back to what was a discredited plan. 
That is not the main point though; the main point is probably in clause 106 and that is the issue of Senior Counsel and Queen’s Counsel. This bill proposes that those who to date have been Queen’s Counsel—and when we had a king King’s Counsel—would now become Senior Counsel. We had a debate within the Justice and ElectoralCommittee to which the bill was referred—and what clever people there were on the committee I say gazing for a moment at the Minister currently occupying the chair the Hon Lianne Dalziel—as to how appropriate that change is. The point is that the term Senior Counsel is used loosely to describe senior lawyers who are not in fact Queen’s Counsel. It is commonplace in the courts to talk about someone being senior counsel but that person is not armed with the letters of patent that have come from the Queen. So we will have senior counsel who are not Senior Counsel because they are not Queen’s Counsel and we will have senior counsel who are Senior Counsel by dint of their seniority. 
One of the earlier speakers—I think it was Mr Coleman who has made a hugely promising start in his venture into the legal arena despite his very substantive medical qualifications—made the point that what we are really looking at here is the creeping advance towards a republic. And he was right because one can look at a whole lot of illustrations of how this Government since 1999 has embarked on that particular path. I will mention the abolition of the Privy Council and the fact that the honours system has utterly changed. If one asks a person on the street or in this Parliament for example what the difference is between ONZ and ONZM— 
Dr Jonathan Coleman 
: What is the difference? 
Dr RICHARD WORTH 
: Well that is a very good question. Here is a member right alongside me who is not completely sure of the difference. But when we degraded the honours system we produced an outcome whereby we crept towards republicanism. The Oaths Modernisation Bill is another illustration of what we are doing. That is why I say that we should stay with the title Queen’s Counsel. 
NATHAN GUY (National) 
: 
 I rise to talk to Part 6 of the Lawyers and Conveyancers Bill. It is a major change and is of major significance. There are some areas that I would really like to highlight particularly around the rules. The rules around eligibility for a practising certificate; payment of the practising fees levies and subs; and a register of practitioners all seem to me to be of extreme significance and paramount importance. Also having read through Part 6 I feel it is appropriate to mention the professional conduct that is required whether from a sole practitioner someone in partnership or otherwise. 
There are certain practice rules. We heard earlier this afternoon about some of the people from Australia who could be interested in coming here and getting into conveyancing in this country. We need to be mindful of the foreign qualifications and education of those people. 
Another significant point around Part 6 relates to indemnity insurance which needs to be approved by the New Zealand Law Society and the New Zealand Society of Conveyancers. That is extremely important. 
Another important point to pick up on is the consultation that is required under clause 87. The rules can be made with the approval of the Minister and that seems extremely logical to me. Of course the rules have to be consistent with the international rules that apply to New Zealand. The Minister may amend those rules in consultation with the New Zealand Law Society and the New Zealand Society of Conveyancers which seems very appropriate. 
We also need to look at the investigation of affairs and practices as they need to be examined as well. Of particular concern—and this has been highlighted by the previous two speakers Dr Worth and Dr Coleman—is the whole change of Queen’s Counsel to Senior Counsel. I have QC KC SC— 
Dr Richard Worth 
: It’s a shambles! 
NATHAN GUY 
: You are right Dr Worth. You talked about just how loose— 
The CHAIRPERSON (H V Ross Robertson) 
: The member cannot bring the Chairperson into the debate. 
NATHAN GUY 
: Dr Worth talked about how Senior Counsel is a very loose term. 
Moana Mackey 
: Dr Worth? 
NATHAN GUY 
: Is the member a doctor? 
Dr Richard Worth 
: I am! 
NATHAN GUY 
: He is—brilliant! I thought he was. I think it is extremely important that we do not lose sight of our ties to Britain. We need to be very mindful of just how important—Mr Finlayson talked about this earlier on—the brand and the mana around the term Queen’s Counsel is. We need to have a serious look at that provision in particular. Otherwise National is supportive of Part 6. 
CHESTER BORROWS (National—Whanganui) 
: 
 It is my privilege to rise in support of the Lawyers and Conveyancers Bill. I find it quite ironic that I would speak in favour of the legislation which will broaden the scope of legal practice and the practice of law in New Zealand. 
When I went from being a policeman to a lawyer I was told by my former colleagues that I had gone over to the dark side and my new colleagues convinced me that I had come into the light. I guess it is obvious that I am more of an ex-cop than an ex-lawyer but I am pleased to note and to speak in support of Part 6 because it imposes a bit of regulation monitoring and accountability on the profession and allows others to be involved in conveyancing and some other legal matters. 
As a detective in the 1980s and 1990s the most attractive prospect was of turning the key on an errant lawyer. One can look around at some of the lawyers in the Chamber and see where I was coming from. Of course I do not refer to the paragons of virtue on this side of the Chamber; all the others to whom I am referring are not so easily visible here this evening. 
It was the crash in 1987 that proved too much of a temptation for a lot of lawyers—far too many lawyers—in this country and a lot of people suffered as a result of it. Under clause 96(1) the New Zealand Law Society may from time to time investigate the accounts of lawyers firms of lawyers or incorporated law firms and it can look into and investigate any other aspects of practice as well. 
I recall investigating the activities of a lawyer whom I eventually managed to arrest for the theft of over half a million dollars. The person who brought him down was a little old lady with an exercise book that she kept all her accounts in. When she and dad were farming and did not have much to come and go on all the accounts were kept in a little exercise book. Every little penny and then every little cent was accounted for and when they sold the farm and had over a million bucks to their name she still kept her little exercise book. She had written in there everything that was supposed to be invested and a copy of every letter she had sent to her lawyer was pasted in the back. The book became a mine of evidence and it was eventually what brought the guy down. 
When there were no share certificates and no replies to her letters she went to the New Zealand Law Society and that forced the investigation. An unusual point was though that the investigating accountant from the Law Society had no idea of the extent of the criminal liability. He did not have it together in his head that because money had been stolen and applied to some other purpose that did not directly affect him—in other words to pay staff wages or office rent or applied to the mortgage of a mate—it was theft. We have a bit of a problem here because if the lookers do not understand entirely what is going on then how do they know what they are looking at? They do not know what they do not know. 
 That problem is compounded by the attrition over time of fraud squads within the police. Around the country those squads have been taken away whereas when those investigations took off and people worked hand in hand with detectives fraud squad officers and forensic accountants as part of the police they were able to add to the mix. But it is increasingly common for there not to be any fraud squads around the country or in various cities. It is not long ago when I was in practice that I rang the Wellington police station and asked to be put through to its fraud squad. I was given the local duty squad because there was no fraud squad. I think we have something to fear from that as it applies to this part: it is all very well to have legislation but if we are looking at people who are dealing with the assets of vulnerable people and if the legislation is not backed up with some institutional or forensic knowledge then those vulnerable people can be placed even further at risk. Those investigating need to have the support of the police and other agencies to be able to follow through and to be able to keep safe the assets of those vulnerable people that I mentioned earlier. 
Something that three other speakers have mentioned earlier is the removal of the title of Queen’s Counsel. That seems to me to be a move that sets us up for the execution of the will of this Government to move towards republicanism. I think there is another flaw in the plan as well which is that lay people are aware of there being senior counsel. 
CHRISTOPHER FINLAYSON (National) 
: 
 This is I think my third intervention on this part and thus I will be brief. I really want to respond to something the Attorney-General said before the dinner adjournment. He gave the impression which I think is incorrect that large numbers of people are eligible within law firms for the rank of Senior Counsel. I think he fails to understand that the nature of the profession has changed since he and I were law clerks in the early 1980s. When I first joined a law firm in the early 1980s there were very few people who practised as barristers sole—who practised at the independent Bar. In the space of the last 25 years the situation has changed dramatically. There are now far more barristers sole than there have been at any other time in the country’s history and it is the exception rather than the rule for people to practise within law firms. When I first joined the partnership of Bell Gully in Wellington there were 10 litigation partners in the Wellington office. When I left to go to the Bar following all the others who had gone to the Bar there were four litigation partners. 
The nature of the profession has changed dramatically and that is why the chances of anyone being of adequate standard to be appointed as Senior Counsel or Queen’s Counsel within firms will be few and far between. That is not to say that there are not good people within law firms who should go to the Bar and become eligible to apply to take silk but the reality of the matter is that the profession has changed and what clients value more than anything is the independence that comes from the opinion of a Queen’s Counsel. Sometimes clients desperately need independent legal advice but they will not necessarily obtain it from a partnership that is dependent on that client for large fees; sometimes the partnership itself will want the independence that comes from obtaining an opinion from a Queen’s Counsel. 
So in two respects I am afraid that the Attorney-General got it wrong. The nature of the profession has changed dramatically. The independent Bar—or the separate Bar as some people like to call it—is very much stronger than it was when he and I were law clerks he in Dunedin and I in Wellington. The second point that needs to be made is to emphasise and emphasise again the important role the Queen’s Counsel plays in giving utterly objective independent advice. That independence which is the cornerstone of those who are called to the inner Bar will be compromised if those people are partners within law firms. I say that from experience in both a medium-sized partnership and a large partnership and putting aside questions of competition for the rank. 
As for the suggestion that employed solicitors and barristers within law firms would be eligible for the rank I say quite frankly that that is madness. I cannot think of anyone who would qualify for the rank who is an employed person. It is simply an unacceptable suggestion that further diminishes the independence of the rank. That is all I want to say about clause 105; I hope that the Government reflects on it very closely because these are important matters. 
KATE WILKINSON (National) 
: 
 Following on from what my learned colleague Mr Finlayson has said and bearing in mind that I come from the other end of the spectrum—being a mere conveyancer and certainly not being someone who is ever likely to take silk— 
Simon Power 
: Oh steady on. 
Dr Richard Worth 
: Oh you’re too quick to deny your skill. 
KATE WILKINSON 
: I may wear silk I tell members but the chances of me taking silk are I think very remote. I will concentrate on one clause of Part 6 that as a past conveyancing lawyer I find is of the utmost importance. It is clause 102 which relates to the control of trust accounts. 
Again my learned colleague Mr Finlayson has commented on the changing nature of the profession and I certainly agree wholeheartedly with that. I also suggest that in some cases it is changing because the onerous obligations of running a trust account should not be underestimated. Having said that on the other side of the coin I appreciate and accept that it is absolutely vital that when we are dealing with other people’s money the correct rules and procedures are in place for that. That is perhaps reflected in clause 102 which has 25 separate purposes for which the Governor-General may make regulations. Those purposes are all in relation to the use auditing and regulation of trust accounts. I am not decrying that at all; I think it is great that it should be emphasised like that. 
I have a couple of queries perhaps for the Minister. One of the requirements under those regulations is that a firm keep a register of properties. I am not sure exactly what that means because if conveyancing firms had to keep a register of all the properties they ever dealt with that might create its own bureaucracy by itself. Subclause (f) states in full: “requiring the keeping of registers of properties authorities and appointments held by practitioners and related persons or entities and incorporated firms:”. If I go back to my former career if you like I can perhaps compare that only to what we used to call the register of trust securities. That was a very important register that we all learnt about in our first year of law never having heard about it before which basically meant that if a firm had control say with a power of attorney without an independent attorney or the like then that firm had to fill in the register of trust securities. So I wonder whether the keeping of a register of properties is meant in some way to relate to that register of trust securities. Perhaps when I have finished my call the Minister may like to clarify that for me. 
I will move on to consider the regulations themselves. They regulate “the use and audit of trust accounts of practitioners …” which is very vital and prohibit or regulate “the collection of money of a client by a lawyer …”. Again we are dealing with other people’s money; we are not dealing with lawyers’ money. It is important that those regulations are strict. There are provisions for “regulating the lending of money of a client by a practitioner …” and “the borrowing of money of a client by a practitioner …”. We do not have to look very far in the newspapers to see a recent incident of a practitioner who may perhaps have borrowed money from his client using an enduring power of attorney. Certainly in my 26 years as a conveyancing lawyer that was not a practice to be encouraged—whatsoever. 
 The payment investment and recording of money and other valuable property entrusted to practitioners is vital in the regulations as well. It is important that the checks and balances are put in place. The money belongs to other people; it does not belong to the practitioner. Therefore the regulations should be very strict and very robust. 
In my earlier call in relation to Part 6 I mentioned the training in relation to trust account management and I certainly do not intend to repeat myself. Suffice it to say to the Minister that I would like to know whether the old trust account partner training is to be incorporated into the trust account management training rather than doubling up the training. I would appreciate some clarification on that point. There are regulations to prescribe the duties of persons appointed to conduct examinations of accounts and prescribing the duties of practitioners. In relation to conducting the examination of accounts one may find anecdotally that many of the defalcations have been discovered and revealed not by persons examining the accounts but by the partners of the defalcating person. Although I endorse the robust examination of accounts I think it should be done by somebody who is suitably qualified to be able to understand the vagaries of any legal system and of the conveyancing systems. 
I would perhaps offer caution at this stage especially in relation to the Land 
online 
 dealings. As I understand it Land 
online 
 electronic dealings will soon become compulsory for all law firms and conveyancing firms. Although I accept that that is a very efficient way to conduct conveyancing I also wonder whether there will be enough checks and balances to ensure that skulduggery does not happen. To give an example—not to give away any trade secrets of course—it is very easy for a solicitor to sign a document and have it witnessed when the signature is not that of the client. So it is actually very very easy for such misdeeds to occur and the protections in place have to be somewhat robust. 
The regulations further provide for “a scheme for the protection of money entrusted to practitioners …”. I am not quite sure exactly what is meant by that—whether there is to be a separate layer of bureaucracy in relation to that or whether it is just a catch-all phrase relating to trust accounts in general. There are further provisions for “the establishment of an inspectorate by the New Zealand Law Society or the New Zealand Society of Conveyancers or by both …”. I mentioned before that I am concerned that we do not build up conveyancers by bringing down law practitioners in the sense that the standards must dovetail in order to ensure that the integrity of both professions is suitably maintained. Again I urge that some cognisance be taken of that. 
There are quite a few provisions for regulations. One of them clause 102(o) authorises any auditor or the Law Society “to communicate directly for the purpose of establishing whether the regulations have been complied with—(i) with clients of lawyers and with related persons or entities; and (ii) with clients of incorporated law firms; and (iii) with clients of conveyancing practitioners and with related persons or entities; and (iv) with clients of incorporated conveyancing firms; and (v) with other persons:”. Again I seek clarification from the Minister that that regulation is intended to be subject at all times to professional privilege and that that certainly is not intended to be breached pursuant to clause 102(o) of the bill. 
There are other regulations that will obviously prescribe the fees and costs. We all know that the fees and costs of running a trust account are not insignificant. Having said that I think the current system in which people do not get audited regularly—it is more of a spot audit—is certainly adequate and suitable and it seems that that is prescribed again in this bill. 
In conclusion subject to clarification on those two points I certainly endorse the strict and robust provisions for regulations relating to trust accounts. Obviously that will be dependent on the regulations themselves but judging from the intent in the bill it is certainly clear that the maintenance of a trust account is an issue that is taken very seriously—and it should be taken very seriously. I endorse the robustness of clause 102. 
The CHAIRPERSON (H V Ross Robertson) 
: We now move to the voting on Part 6. 
LINDSAY TISCH (Senior Whip—National) 
: 
 I seek leave that the amendments to the following clauses on Supplementary Order Paper 344 in the name of Dr Richard Worth be aggregated and taken together: clauses 83 and 83A 86 87 94 96 102 and 106. 
The CHAIRPERSON (H V Ross Robertson) 
: Leave is sought. Is there any objection to that course of action? There is none. 
The question was put that the amendments set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to clauses 83 and 83A be agreed to. 
Amendments not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to omit clause 85 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 48 
New Zealand National 48. 
Noes 70 
New Zealand Labour 50; New Zealand First 7; Green Party 6; Maori Party 4; United Future 2; Progressive 1. 
Amendment not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to clause 86 be agreed to. 
Amendments not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to clause 87 be agreed to. 
Amendments not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to omit clause 89(2) be agreed to. 
Amendment not agreed to. 
The CHAIRPERSON (H V Ross Robertson) 
: The amendments set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to clauses 90 and 92 are out of order because they are inconsistent with the previous decision on clause 87. 
The question was put that the amendments set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to clause 94 be agreed to. 
Amendments not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to clause 96 be agreed to. 
Amendments not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to clause 102 be agreed to. 
Amendments not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to clause 103(4)(d) be agreed to. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Christopher Finlayson to clause 104 be agreed to: 
to omit the words “have at law” and substitute the words “have in the Commonwealth of Australia”.  
A party vote was called for on the question  
That the amendment be agreed to 
. 
Ayes 48 
New Zealand National 48. 
Noes 70 
New Zealand Labour 50; New Zealand First 7; Green Party 6; Maori Party 4; United Future 2; Progressive 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 272 in the name of Dr Richard Worth to omit clause 105 be agreed to. 
Amendment not agreed to. 
The CHAIRPERSON (H V Ross Robertson) 
: The amendment in the name of Peter Brown to clause 105 is out of order because it is inconsistent with a previous decision. 
The question was put that the amendments set out on Supplementary Order Paper 272 in the name of Dr Richard Worth to clause 106 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to 
. 
Ayes 48 
New Zealand National 48. 
Noes 70 
New Zealand Labour 50; New Zealand First 7; Green Party 6; Maori Party 4; United Future 2; Progressive 1. 
Amendments not agreed to. 
The question was put that the following amendment in the name of Nandor Tanczos to clause 106 be agreed to: 
to omit this clause. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Peter Brown to clause 106 be agreed to: 
to omit clause 106 and substitute the following clause: 
106Regulations as to Queen’s Counsel 
The Governor-General may from time to time by Order in Council make regulations prescribing— 
(a)the method of appointment of Queen’s Counsel: 
(b)the fees to be paid by them: 
(c)their privileges and duties: 
(d)the conditions on or subject to which they may be appointed or may practise their profession: 
(e)such other matters as may be necessary in relation to Queen’s Counsel. 
Amendment not agreed to. 
The question was put that the amendments set out on Supplementary Order Papers 289 324 and 347 in the name of the Hon Phil Goff and the amendments set out on Supplementary Order Paper 10 in the name of the Hon Mark Burton to Part 6 be agreed to. 
Amendments agreed to. 
Part 6 as amended agreed to. 
Part 7 Complaints and discipline 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 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. 
CHRISTOPHER FINLAYSON (National) 
: 
 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— 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 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. 
Dr RICHARD WORTH (National) 
: 
 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. 
Dr WAYNE MAPP (National—North Shore) 
: 
 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. 
RUSSELL FAIRBROTHER (Labour) 
: 
 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. 
CHRISTOPHER FINLAYSON (National) 
: 
 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. 
LINDSAY TISCH (Senior Whip—National) 
: 
 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. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 48 
New Zealand National 48. 
Noes 70 
New Zealand Labour 50; New Zealand First 7; Green Party 6; Maori Party 4; United Future 2; Progressive 1. 
Amendments not agreed to. 
The question was put that the amendments set out on Supplementary Order Papers 289 and 324 in the name of the Hon Phil Goff to Part 7 and the amendments set out on Supplementary Order Paper 10 in the name of the Hon Mark Burton to Part 7 be agreed to. 
Amendments agreed to. 
Part 7 as amended agreed to. 
Part 8 New Zealand Council of Legal Education 
The CHAIRPERSON (Ann Hartley) 
: The debate includes debate on schedule 5. 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 Part 8 continues the Council of Legal Education which is renamed the New Zealand Council of Legal Education. I recall that submitters on this part were very grateful to members of the council for making the effort to make direct submissions to the Justice and Electoral Committee. The functions and powers of the council have been aligned more closely with current practice. The council’s functions and powers include regulation of the education of candidates for admissions and the recognition of foreign legal qualifications. The work the council does is absolutely imperative to the quality of the legal profession in this country and I am very pleased to be supporting this part. 
I should note that Government Supplementary Order Paper 289 will change the arrangements for funding the council. I recall that the select committee debated this at some length. It seemed to be a vexed question. However it is a vexed question that has now been resolved by agreement between the council and the New Zealand Law Society. That agreement is reflected in the Supplementary Order Paper which states that the levies paid to the council to fund its annual budget shall not exceed an aggregate of 5 percent of the practising fees paid by lawyers. Should the 5 percent be insufficient any dispute between the council and the New Zealand Law Society is to be referred to the Minister who may set an amount above 5 percent. 
I pay tribute to both parties for coming to a sensible arrangement and I commend the part to the Committee. 
CHRISTOPHER FINLAYSON (National) 
: 
 As Dr Worth has said he is currently serving on the Council of Legal Education. I served on it during the 1990s and I do not think it would be inappropriate simply to mention that the Speaker herself served on the Council of Legal Education when she was Dean of the University of Waikato School of Law. So there is some experience of that council around this place. I agree with the Minister that the council performs a very important role particularly in prescribing courses for candidates for admission as barristers and solicitors. Of course it is the Law Society thereafter that is responsible for continuing legal education and for what I hope as I said earlier will be mandatory continuing legal education. 
The functions are set out in clause 251 and I have no problem with that. The Minister has referred to the agreement on levies so I will not waste time on that. But I will say something about the Institute of Professional Legal Studies because I am very interested and pleased to see that a power has been included in clause 256 that will enable the council to sell on such terms as it thinks fit the business conducted by the Institute of Professional Legal Studies. My hope is that that sale comes sooner rather than later because at the present time I think the council is in the invidious position of being not only a regulator of professional legal studies but also an operator of one of the two options for professional legal studies. In my opinion that is unfair to the College of Law that runs the competitor system. Generally speaking especially in the 1980s there was in some respects an obsession about dividing organisations between regulators and those who actually operate the service— 
Hon Lianne Dalziel 
: Funders and providers. 
CHRISTOPHER FINLAYSON 
:—funders and providers—that sometimes reached absurd proportions. That occurred for example with the Arts Council and the Arts Board but I will not go there; I would rather focus on lawyers and conveyancers. However I think it is appropriate for the Council of Legal Education to operate as regulator and it can sell the Institute of Professional Legal Studies to some other body in such a way that when it is dealing with the College of Law it is able—and is seen to be able—to act fairly and justly as between various providers. 
So I too pay tribute to the Council of Legal Education. I especially pay tribute to Justice Tipping now of the Supreme Court who has been chair of that body for many years and to those lawyers who have given up their time to serve on it as well. They are the only comments I wish to make about this part because generally speaking the council is working very well. 
Dr RICHARD WORTH (National) 
: 
 Perhaps there is not a lot in Part 8 that need detain us as we move to the closing stages of debate on this Lawyers and Conveyancers Bill but it is right to know that apparently for good reason the Council of Legal Education has been renamed the New Zealand Council of Legal Education. The previous speaker paid tribute to Justice Tipping and that is wholly appropriate but I also identify for recognition the secretary of the council Rosemary Gordon who gives much of her time and certainly all of her skill to running that enterprise on a proper and professional basis. It is certainly a challenging organisation to be part of. There are people in this Chamber including people like Christine Grice who make a magnificent contribution to the work of the council. 
The council’s primary task is concerned with supervising the provision of training for those who having secured their degrees in law embark on pre-admission training prior to being admitted as barristers and solicitors of the High Court. That is of course not its only function but that is its primary function. I would also instance as an example of the further work it does the liaison that is undertaken with the deans of the faculties of law schools throughout this country in both the setting of prescriptions and the assessment and moderation of papers in the core subjects that are seen to constitute the prerequisites for a law degree. 
One of the issues that has challenged the New Zealand Council of Legal Education in recent times is the flow of persons from overseas who wish to practise law in this country. Those people come from a range of jurisdictions where the practice of law may be markedly different from the way law is practised in this country. They come not only from the common law jurisdictions with which we are all very familiar but from other places as well where the rule of law is perhaps pursued in a somewhat different way. I mention this only because there is an issue that sweeps across a wider spectrum of activity than simply the law—that of authenticating the qualifications that those coming from other countries claim. I do not doubt—and certainly the Council of Legal Education has struck this—there are circumstances whereby people proffer their credentials for scrutiny and those credentials following scrutiny do not stack up. We need to develop more sophisticated mechanisms to make sure that those who seek to practise in this country against the background of qualifications secured in a foreign clime do in fact have the qualifications they assert they do. 
Mr Finlayson has spoken of a current issue—and it is probably rightly described as a conflict—between the College of Law and the Institute of Professional Legal Studies. The College of Law has a background of delivering training in jurisdictions other than New Zealand and Australia—in other countries besides—and it has recently entered the market particularly at the behest of the major law firms to provide a greater degree of distance learning. That I suppose has provoked a response from the Institute of Professional Legal Studies to offer a similar type of training programme. How achievable it is as Mr Finlayson has suggested to sell the institute is not perhaps an issue for today but he is right to identify the potential for conflict that exists in the case of a council that has both a regulating and a providing function. Quite clearly it is a time of tension between those entities. The Council of Legal Education’s concern has to be that services are properly delivered. 
The question was put that the amendment set out on Supplementary Order Paper 10 in the name of the Hon Mark Burton to an amendment set out on Supplementary Order Paper 289 in the name of the Hon Phil Goff to clause 252 be agreed to. 
Amendment to the amendment agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 289 in the name of the Hon Phil Goff to clause 252 as amended the amendments set out on Supplementary Order Paper 324 in his name and the amendments set out on Supplementary Order Paper 10 in the name of the Hon Mark Burton to Part 8 be agreed to. 
Amendment as amended and amendments agreed to. 
Part 8 as amended agreed to. 
Part 9 Lawyers and Conveyancers Special Fund 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 This part renames the New Zealand Law Society’s special fund as the Lawyers and Conveyancers Special Fund. The special fund consists of a proportion of the interest paid by banks on trust accounts. The bill allows banks to retain the remainder of the interest in lieu of fees and charges. Special fund proceeds must be paid to the Legal Services Agency to fund community law centres. This is a change from the current Act which requires funds to be distributed to community law centres and the New Zealand Law Foundation. In practice the community law centres’ funding requirements meant that the Law Foundation seldom received any funding from the special fund. The new provisions reflect current practice. 
The bill as introduced provided for community law centres to receive 55 percent and banks to receive 45 percent of the interest on trust accounts. The Justice and Electoral Committee’s amendments increase community law centres’ share of the interest to 60 percent with the banks’ share reducing to 40 percent in response to submissions made by the Bankers’ Association and community law centres. I know that the select committee again debated this at considerable length. The committee called various parties before it and sought further advice in order to try to find the right solution to what is a balancing act. I commend this part to the Committee. 
CHRISTOPHER FINLAYSON (National) 
: 
 The Minister in the chair Lianne Dalziel has very adequately summarised what Part 9 is all about and from the National Party’s point of view there is no dispute. The heart of Part 9 is clause 273 which as the Minister has said provides that all money standing to the credit of the fund at the appropriate time or times must be paid to the Legal Services Agency for the purpose of funding community law centres. So that really repeats what is already provided for in the Act with the exception of the Law Foundation matter that the Minister referred to. Nothing is really new; it reflects existing practice. 
The CHAIRPERSON (Ann Hartley) 
: The question now is— 
LINDSAY TISCH (Senior Whip—National) 
: 
 I raise a point of order Madam Chairperson. I seek leave to formally aggregate the questions in Dr Worth’s Supplementary Order Paper 344 to amend clause 264. 
The CHAIRPERSON (Ann Hartley) 
: Is there any objection to that course of action? There is not. 
NANDOR TANCZOS (Green) 
: 
 Madam Chairperson I offer my apologies. I am aware that if the voting has begun then that is the end of the debate so I seek to pre-empt the commencement of the voting by seeking leave for a call. 
The CHAIRPERSON (Ann Hartley) 
: The member is seeking leave because he did not realise that the vote had been put. Is there any objection to the member speaking now on Part 9? There is not. 
NANDOR TANCZOS (Green) 
: 
 I simply want to draw the attention of the Committee to a proposed amendment in my name to clause 276(5) which relates to the proportion of the interest on the special fund that the banks will retain as payment for their services in administering nominated trust account funds. Members will be aware that for some time the banks have taken a pretty substantial cut of the interest; it has been up to this time 50 percent of the interest. I think that many members when they understand that that is what the bank takes find that pretty astounding. 
The bill as it was introduced originally sought to amend that provision so that the banks would retain 45 percent and the community law centres would receive 55 percent of the interest. In the Justice and Electoral Committee we discussed that further because as the report states we were still not convinced that that was a reasonable amount for the banks to take. Members may be aware that there was some discussion in the committee as to the appropriate proportion for the banks to retain and we had submissions from the Coalition of Community Law Centres of Aotearoa and from the banks themselves. The banks put forward a figure that they claimed was the cost of the service that they provided. That figure was disputed by the coalition and when the select committee invited the banks to substantiate their claim they simply refused to do so. They refused to provide any information to the select committee and acted in what I would call a contemptuous manner actually. 
The question of the true cost of the service has never actually been resolved to anyone’s satisfaction so I am moving to amend the proportion the banks would now retain from 40 percent to 30 percent. The concern about the proportion is that if we get it wrong the banks may cease to provide the service. However it seems to me that the banks would still be retaining a pretty substantial margin in return for the service they provide and 30 percent of the interest on those funds has to be a pretty good whack by anyone’s account. I would encourage members to support the amendment to change that proportion to 30 percent and I hope I have the support of the Committee on that. 
The question was put that the amendment set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to the heading of Part 9 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 48 
New Zealand National 48. 
Noes 69 
New Zealand Labour 50; New Zealand First 7; Green Party 5; Maori Party 4; United Future 2; Progressive 1. 
Amendment not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to clause 264 be agreed to. 
Amendments not agreed to. 
The CHAIRPERSON (Ann Hartley) 
: The next amendment on Supplementary Order Paper 344 in the name of Dr Richard Worth to clause 266 is out of order and his amendment to clause 267 is also out of order. 
The question was put that the amendment set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to omit clause 268(1)(b) be agreed to. 
Amendment not agreed to. 
The CHAIRPERSON (Ann Hartley) 
: The amendment set out on Supplementary Order Paper 344 in the name of Richard Worth to clause 277 is out of order. 
The question was put that the following amendment in the name of Peter Brown to clause 276 be agreed to: 
to omit from subclause (5) the expression “40%” and substitute the expression “45.1%”. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Nandor Tanczos to clause 276 be agreed to: 
to omit from subclause (5) the expression “40%” and substitute the expression “30%”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 16 
New Zealand First 7; Green Party 5; Maori Party 4. 
Noes 101 
New Zealand Labour 50; New Zealand National 48; United Future 2; Progressive 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to clause 278 be agreed to. 
Amendment not agreed to. 
Part 9 agreed to. 
Part 10 Fidelity Funds 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 As I have done with the other parts I will simply introduce the clauses. Part 10 requires both the New Zealand Law Society and the New Zealand Society of Conveyancers to each maintain a fidelity fund to compensate clients for particular forms of pecuniary loss. This is a core and important part of the consumer protection functions of the bill and I commend the part to the Committee. 
Dr RICHARD WORTH (National) 
: 
 Part 10 of the Lawyers and Conveyancers Bill is also an issue that National has some difficulties with. Part 10 in itself constitutes a code and it continues forward provisions that were broadly similar in the Law Practitioners Act of 1982. National’s perspective on this issue is set out in the commentary as the bill was reported back from the Justice and Electoral Committee. It is one of our primary reservations and it is seen by this party as a principled reservation. 
I note that it seems to be the case that the Law Society is keen to continue with the fidelity fund. But I question that and we say that no sufficient case has been shown for the continuation of the fidelity fund under the bill. Interestingly the fund has been abolished for most other occupations including I would assert occupations where there is a greater risk of loss. I refer to occupations such as chartered accountants motor vehicle dealers and sharebrokers. So National says that 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 now rare. 
A few years ago when I first commenced in practice it was very much part of the business of the legal profession to be involved in moneylending. That was a direct result of the shortage of money in the market and the niche opportunity that lawyers had traditionally seen to take money from clients for investment and lend it out generally on mortgages that were flat mortgages not involving principal repayments for relatively short terms. It is right to say as Dr Mapp has said that it was generally second-mortgage money—maybe third-mortgage or fourth-mortgage money. But that was at a time when the banking profession in New Zealand had not developed to any extent the sophistication that it now has. Although some law firms still lend money that activity is in the descendent. For example the middle-sized and the larger-sized firms have pretty much moved out of that market. 
The reason for having a fidelity fund one supposes is to provide a safety net in a setting where risk of loss is real not where risk of loss is illusory. So there has to be real risk. There has to be a real mischief to be resolved. I would say that in the case of the law profession that risk is no longer there and the range of professional indemnity insurance covers including fidelity extensions that can be purchased for a reasonable price—certainly the fidelity extensions—makes it completely unnecessary for the fidelity fund to continue in its current form. 
As a matter of philosophy in a highly competitive environment it is an interesting perspective that one should be asked to subsidise one’s fraudulent competitors in business. Yet that is basically what the fidelity fund is about. 
Hon Lianne Dalziel 
: It’s a profession. 
Dr RICHARD WORTH 
: The Minister makes the comment that the legal business is a profession. She is right to say that if she is comparing the concept of a profession and a trade but let us not be blinded to the fact that law is a business just as much as medicine is a business. 
Dr WAYNE MAPP (National—North Shore) 
: 
 I would just like to continue developing the point that Dr Worth has been making in relation to fidelity funds. The key point here is that fidelity funds are not for negligence primarily as that can be insured for. They are not for accidental loss that can be insured for. Indeed I imagine it would be a requirement—or it should be a requirement—that lawyers hold the appropriate insurance cover for that sort of thing. Fidelity funds are actually for theft. So why did they come into being in the first place? 
It is worth looking at the history of this at least briefly. After all if one deposits money with a bank it could be stolen. So why do we not require banks to hold fidelity funds? The reason is that it is highly unlikely that any one theft from a bank or even a multiple series of thefts or theft by servants within the bank will endanger the financial stability of that bank so that it cannot recover the loss from its general assets. In the case of lawyers of course it is quite different. A firm might have two partners and when a partner is purchasing a house or assets the level of theft is so great that the honest partner if I can put it that way could not in truth cover it. Therefore a fidelity fund is a way of spreading the prospect of theft not able to be covered from within a firm across the totality of all other members of the profession. Put like that it has a logic and I can understand why the fidelity fund exists from that origin. 
However the particular issue that I raise is that the Government has then said that the conveyancers must also have a fidelity fund presumably on the basis of a level playing field—if it is reasonable for lawyers it must be reasonable for conveyancers. The problem is that fidelity funds—by the description of the design that I mentioned—require a sufficiently large number of people. That is so that the contributions from any one of them to cover the defalcation of a particular person are sufficiently low that they are actually manageable. So when there is a profession of some thousands of lawyers and one or two of them steal the others can cover it. We know in practice that it actually proved to be quite difficult a number of years ago in the case of Renshaw Edwards. Every principal at that time had to pay $10000 for one major defalcation by one not-so-large firm. Even across thousands of people it was a real difficulty for many practitioners. 
Conveyancers will form a much much smaller pool. Some say it might be as low as six people. Realistically once created the profession will increase in size but it is highly unlikely that the spread will be broad enough to cover the defalcation by one conveyancer without effectively bankrupting the rest of them. Looking at it in that light the role of a fidelity fund at least for conveyancers is moot. So if it will be hard for fidelity funds to work in practice for conveyancers what is the point of retaining it for lawyers across the board—for the very reasons that Dr Worth gave. The Minister in the chair the Hon Lianne Dalziel said: “But we’re professionals.” I guess she would say that bankers and accountants are also professionals. Maybe the argument is then that accountants do not have large deposits of vulnerable clients’ funds and perhaps that is broadly speaking true. However in the case of purchasing a house for many people that is their major asset therefore they need that particular level of protection. 
The fidelity fund exists in part because of the offer by the Law Society as part of the overall package that it should be continued. There are a lot of people in the legal profession who are unhappy with that decision but it became something of the deal that was entered into between the profession at large represented by the Law Society and the relevant Ministers of the time as the price for modernisation of the profession. National feels that the time has come when the fidelity fund is no longer appropriate. But given that I recognise that the Government has probably got the numbers on that issue it is not a sufficient reason to vote the bill down as a whole. However we do wish to raise those points of principle as to why fidelity funds look increasingly inappropriate for the future. It will be particularly difficult for a fidelity fund to work in practical terms in relation to conveyancers. It is a sort of nod to ideology and the ideological idea of the level playing field but without any real recognition of the practical reality of it so we do raise those issues for consideration. 
I note—and I do this quite deliberately—another issue raised by United Future members who are not speaking tonight. I raise the issue because it was raised about the profession broadly—and maybe some of my colleagues will speak on it as well. It was the issue of the use of the money in existing Law Society funds for Law Society purposes. A lot of lawyers were deeply upset about that—I know that because they made representations to me personally about it. I know that in the profession it became a highly contested issue. Again it became part of the deal. That part however was rather reluctantly agreed to. It is certainly there and I think it is only proper to record it as an issue that was raised—in particular by a member for United Future who is no longer in the House; by an ACT member who also is no longer in the House; and by a New Zealand First member who also is no longer in the House. I just make the point that it is a highly contentious issue and it is a matter that needs to be put on the record. 
BRIAN CONNELL (National—Rakaia) 
: 
 I am somewhat surprised by the argument that has been mounted by my colleagues regarding the issue of fidelity funds. But I am also somewhat persuaded by them having listened to the arguments that have been put forward. The profession relies very much on the quality of the advice it provides to clients and in the market place the position in which our legal profession is generally held is one where that quality of advice is what people depend on before they make very serious commercial decisions. So my original position as a layperson was that some protection in law would have been appropriate. However having listened to some of the arguments put forward I can see that it is probably an issue that over time and through an education process we can start to move away from. In the meantime though the legal profession might just have to accept it. Picking up on Dr Worth’s point I say that this might be at a cost to sales in the short term. 
My real concern—and I am addressing these concerns to the Minister in the chair the Hon Lianne Dalziel—is that we are at risk of making this law an ass before the ink is dry. In particular I am thinking about the requirement on the conveyancing body to have a fidelity fund. In principle I totally agree with that but I wonder whether it can happen in practice. I wonder whether we are actually setting up this new body for failure before it even starts. To my mind that is not sensible lawmaking. The New Zealand Law Society when it made its submission to the Justice and Electoral Committee was at pains to point out that it thought that only seven or eight people would be incorporated. When we start to do the maths using the argument that Dr Mapp used and when we start to leverage that across that number of people we can see that it is going to be nigh on impossible for them to put funds aside to meet their obligations under the law that we are busy debating. 
The point that I am making—and I do not want to take up too much of the Committee’s time making it—is that this is the opportunity and the time to agree that there will be a flaw in the legislation. Let us work collectively to address that issue and leave here tonight with a sense that we did the right thing. It is OK to have positions but at the end of the day we as lawmakers are charged with making good law and I propose that we are putting ourselves in a position where we simply will not be able to do that. I have made the point which has been made by others and is quite right that when this is leveraged across four five six or seven eight or nine people—let us be generous and call it 20—those people will just not have the ability to pay. That will create all sorts of different pressures and might lead to some shortcuts and improprieties simply because people will have to find ways of funding this to meet their legislative requirements. That strikes me as a silly way to proceed. So I leave the Committee with that view. It is very much from a layperson’s perspective but I see it as a possible stumbling block that I believe needs the attention of the Committee. 
KATE WILKINSON (National) 
: 
 As a personal contributor to the Renshaw Edwards levy I think this does have— 
Dr Wayne Mapp 
: $10000. 
KATE WILKINSON 
:—Yes $10000—some particular relevance to me. I certainly recall that at the time the thought of paying $10000 in times I must confess that were somewhat commercially lean was a bit of a burden. There were certainly philosophical arguments—probably stronger in those days than they are now—for the abolition of the fidelity fund. Under Part 10 there is provision for the establishment maintenance and management of the two fidelity funds both the Lawyers Fidelity Fund and the Conveyancing Practitioners Fidelity Fund. That in itself has its own permutations as Mr Connell pointed out. The rules however provide for a minimum size at which the fund is to be maintained if it is to be held out as a protection for the clients of lawyers or conveyancing practitioners. So in effect it is capped. It fixes the maximum amount that may be paid out to any individual claimant and it also fixes the maximum amount that may be paid out to all claimants. So it is not an unlimited guarantee; it is somewhat limited. There is also provision to pay differing amounts depending on the classes of lawyers. 
Now there has been considerable discussion about fidelity funds. We are aware that accountants do not have a fidelity fund but that lawyers do and yes the philosophical argument asks why innocent lawyers should effectively give an unlimited guarantee for all other lawyers. Why should lawyers guarantee someone over whom they have no control? Why should they guarantee someone when they have not even given a written guarantee? 
I think the Renshaw Edwards case really did highlight the situation. The levy at that stage was $28 million which was quite a considerable sum to be funded by business people at the rate of $10000 each. One has to bear in mind however that the Renshaw Edwards days were the heady days of solicitors’ nominee company mortgages. I have to say that trends have changed since then and the desire of lawyers to run their own nominee company mortgages has certainly dwindled in the last few years. I can think for example in Christchurch of only one firm that runs a substantial nominee company system. 
That system had its own checks and balances of course and was run by nominee company rules. Probably its most important feature was that if one’s client wanted to invest money that client had to sign either a specific authority or a general authority. That specific authority asked whether the client wanted to invest with so-and-so on a particular piece of land. In those cases the risk of running foul of the nominee company rules was slightly less than if there had been a general authority which was usually: “I authorise you to invest x thousands of dollars at y percent over whatever security.” I believe that that is how the Renshaw Edwards money was invested but it is less common now. The levy at the moment I think is something like $500 per practitioner or per partner so it is not actually a huge amount in the scheme of things. 
I would like to take up Mr Connell’s comment about the ability of such a small handful of conveyancers who would be able to contribute to a realistically funded fidelity fund. The whole idea of this Lawyers and Conveyancers Bill is to put lawyers and conveyancers on a level playing field and if any requirements are waived for conveyancers to pay into a fidelity fund because they cannot afford it and there are not enough of them then lawyers who are subject to the same strict regime cannot be reasonably expected to pay for that fidelity fund. I think that that could lead to some potential difficulties from a practical and realistic point of view. 
CHRISTOPHER FINLAYSON (National) 
: 
 Those of us who were in private practice in the early 1990s well remember the Renshaw Edwards disaster that affected the profession. I know that my firm had to contribute over $600000 to the fidelity fund. I know that Dr Worth’s firm had to do something similar and the big firms which were in no way associated with any kind of activity that would attract fidelity fund requirements contributed many millions of dollars to the fund. But that is behind us and we must move on. 
Other speakers have spoken about the desirability of a fidelity fund so I will not go there but I think that Mr Connell raised a very important point about clause 286B. I would invite the comments of the Hon Lianne Dalziel the Minister in the chair on it because for the life of me I fail to understand how it is to be expected that a handful of conveyancers—and it will start off as a handful even taking into account the grandparenting provisions in clause 346A relating to landbrokers—will provide cover for a theft of say $2 million soon after the fidelity fund is up and running and this new profession of conveyancing gets under way. I do not think it is an answer to say that insurance is the way through because I doubt whether the premium would be able to be paid by members of that new conveyancing profession. The premia would be horrendous. So I would be very grateful for the Minister’s response to that. 
I must say I have been very grateful to both the Attorney-General and the Minister for their occasional answers to questions but these are important matters. The lawyers and conveyancers legislation comes before Parliament for the first time in 24 years. The last time these important matters governing the profession were debated was 1982 and for me anyway as a new member maybe the reality of life is that Government MPs are sitting like zombies while we Opposition members speak. I would have hoped for a better debate at the Committee stage on some of these important issues of principle but maybe I hope in vain. I would certainly be grateful if the Minister could answer Mr Connell’s query and my query. 
LINDSAY TISCH (Senior Whip—National) 
: 
 I raise a point of order Madam Chairperson. I see that the Minister is conferring with officials and I wonder whether that means she may respond to both my colleagues’ requests for a clarification of their points. 
The CHAIRPERSON (Ann Hartley) 
: No she does not want to. 
LINDSAY TISCH (Senior Whip—National) 
: 
 I seek leave that all the amendments in Dr Worth’s Supplementary Order Paper 344 relating to Part 10 be taken as one question. 
The CHAIRPERSON (Ann Hartley) 
: Leave is sought for that course of action. Is there any objection? There is not. First though I draw members’ attention to the amendments to clauses 300 and 301. They are inconsistent with previous decisions so they are ruled out of order. 
The question was put that the amendments set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to Part 10 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 48 
New Zealand National 48. 
Noes 69 
New Zealand Labour 50; New Zealand First 7; Green Party 5; Maori Party 4; United Future 2; Progressive 1. 
Amendments not agreed to. 
The question was put that the amendments set out on Supplementary Order Papers 324 and 347 in the name of the Hon Phil Goff and on Supplementary Order Paper 10 in the name of the Hon Mark Burton be agreed to. 
Amendments agreed to. 
Part 10 as amended agreed to. 
Part 11 Miscellaneous provisions 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 I shall continue the practice I have started. Part 11 contains a range of miscellaneous provisions but clauses 305 to 308 probably raise the most significant aspect of the part. Those clauses allow lawyers in limited circumstances to enter into conditional fee arrangements known as contingency fees. The provisions will enable the lawyer and client to agree that either the entire fee or an agreed proportion of the fee will be payable only upon the success of the client’s matter. I believe that those provisions formalise arrangements that are made on an informal basis in breach of Law Society rules around the country at the moment. However there are limits on that practice in the area of Family Court criminal work and immigration cases which are appropriately in my view excluded from conditional fee arrangements. 
A final point I want to make is that the conditional fee agreement not being a legal contract refers to the payment of a fee plus a premium. It is the definition of “premium” that is extremely important in the part because the provision does not allow for the premium to be calculated as a proportion of the amount recovered and I think that that is a very important protection. I commend Part 11 to the House. 
Dr RICHARD WORTH (National) 
: 
 The Minister is right to identify the provisions relating to conditional fee agreements as the area of particular interest in Part 11 of the Lawyers and Conveyancers Bill. It is a small part in terms of its number of clauses but clearly it is the most significant part. Other parts of Part 11 primarily concern themselves with transitional provisions. 
I would like to speak briefly on the topic of conditional fee agreements and to note two things. First of all there are definitions of the relevant provisions. The definition of “conditional fee agreement” is “an agreement under which a lawyer agrees with a client that some or all of the lawyer’s fees and expenses for the provision to that client of advocacy or litigation services in respect of a matter are payable only if the outcome of that matter is successful”. Then there is a definition of a “premium” which in part states: “Premium in relation to a conditional fee agreement means remuneration that a lawyer may become entitled to under the agreement in addition to a normal fee being remuneration by way of premium that— … (d) is not calculated as a proportion of the amount recovered.” 
So in the context of what passes for conditional fee agreements in various parts of the world this is very much a Clayton’s conditional fee agreement because conditional fee agreements are often calculated in a similar way to the Lloyd’s arrangements of “no cure no pay”. Maybe those conditional fee agreements were seen by the officials as innovative and scary. The law has been that conditional fee arrangements are currently not offered because of old causes of action under the common law called maintenance and champerty. 
I understand that the officials were of the view that the provisions as drafted were not too detailed given that the introduction of these arrangements marks a significant change to the current law and the importance of the restriction prohibiting the charging of a proportion of the amount recovered. There should be I would argue support for conditional fee agreements and the main reason for permitting those types of arrangements is that they improve access to justice for people who would otherwise find it difficult to get a lawyer. 
 It is the old problem reflected in the line that the courts are open to everyone like the Ritz Hotel. In the context of what we are now talking about that means the wealthy obviously have no difficulty in meeting the costs of a lawyer. For those who are at the bottom of the socio-economic heap legal aid is generally available. It is those in the middle who have significant problems. That is where I would argue conditional fee arrangements have real merit. 
The bill allows for conditional fee arrangements: a normal fee or a normal fee plus a premium that is dependent on the matter succeeding. The premium may compensate the lawyer for the risk of not being paid at all and for the disadvantage—which may be considerable—of not receiving payments on account that cannot be calculated as a proportion of the amount recovered. There are some exclusions. In general terms exclusions relate to criminal immigration family and judicial review proceedings. National supports the introduction of conditional fees on the basis that these arrangements afford flexibility and choice to both clients and lawyers and will enable people to take litigation that they might otherwise be unable to afford. 
Those who are interested to read the writings of John Grisham may know that he has recently published a book called  
The King of Torts 
. It provides an insight into what goes on in the United States where contingency fee arrangements are taken to a high level of sophistication. I am not suggesting we need go to that level of what some might call and I have called sophistication. But I do believe that it is appropriate to have regard to the amount of the recovery in fixing the amount of the contingency fee. I do not really understand the contrary argument given the principle behind contingency fees. 
I also suspect that as the Minister has indicated contingency fees on the basis I have described do exist in the market. It seems quite reasonable to me that where the lawyer is not much interested in taking the case an injustice may be done unless there is some premium related to the amount recovered. So as long as the lawyer makes a reasonable assessment of the outcome the New Zealand climate—in which jury awards and punitive damages are extremely rare—makes it pretty unlikely that huge windfalls to lawyers will result. Of course lawyers are still subject in addition to the fee revision process. 
Really contingency fees are simply an advance economic allocation agreed between lawyer and client after due regard for risk. For my money the conditional fee agreements as described in the legislation do not go far enough. 
CHRISTOPHER FINLAYSON (National) 
: 
 I endorse what both the Minister and Dr Worth have said about conditional fee agreements so I will not waste the time of the Committee by dealing with that matter but I do want to make a few comments about law society libraries. In particular I want to address clauses 340 to 340D because they contain some detailed provisions about transitional arrangements relating to the dissolution of district law societies and to what are for them important assets mainly their libraries. On dissolution those assets can be dealt with in various ways including as set out in clause 304A(2)(b) whereby they may be transferred to an incorporated society and the incorporated society in a former law society district may be able to provide a law library. Then clause 340C(1) provides that the New Zealand Law Society may from time to time in the period of 5 years beginning with the close of 6 months referred to in clause 340(1) contribute to the funding. 
 My hope is that this next 5-year period will be used as an opportunity to rationalise district law society libraries around the country and indeed it is not before time. At the risk of being anecdotal I can say that in the early 1990s I served on the New Zealand Law Society’s library committee and we spent a great deal of time on the issue including getting consultants—as one has to when one breathes these days—to look at the whole issue of libraries. A very good report was provided which essentially stated that there should be three major libraries in the country—Auckland Wellington and Christchurch—and that services should be provided to the outlying districts. Several district law societies kicked up a fuss about that saying that their libraries meant a lot to them—well perhaps not the Timaru district library because I remember inspecting that and finding that most of its books were in a box down the back of the High Court registry. Certainly the Hawke’s Bay people seemed to think their district law library was pretty flash. If Mr Fairbrother were here—and of course I cannot comment that he is not here—I am sure he would be interjecting on that. 
So there is a need for rationalisation of law libraries. I welcome these provisions and express the hope that at the end of the 5-year period we will not need to face a situation where an amendment to this legislation will be required so that the New Zealand Law Society continues to fund libraries. It is high time there was reform of libraries and that is the only comment I wish to make on Part 11. 
LINDSAY TISCH (Senior Whip—National) 
: 
 I seek leave that all the amendments set out on Dr Worth’s Supplementary Order Paper 344 relating to Part 11 be taken as one question. 
The CHAIRPERSON (Ann Hartley) 
: Leave is sought for that. Is that agreed to? Thank you. 
The question was put that the amendments set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to Part 11 be agreed to. 
Amendments not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 324 in the name of the Hon Phil Goff and on Supplementary Order Paper 10 in the name of the Hon Mark Burton to Part 11 be agreed to. 
Amendments agreed to. 
Part 11 as amended agreed to. 
Schedules 
LINDSAY TISCH (Senior Whip—National) 
: 
 I seek leave that all the amendments set out on Dr Worth’s Supplementary Order Paper 344 relating to the schedules be taken as one question. 
The CHAIRPERSON (Ann Hartley) 
: Leave is sought for that. Is there any objection? There is not. The amendments to schedules 1 2 and 4 are out of order as they are inconsistent with a previous decision. 
The question was put that the amendments set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to schedule 6 be agreed to. 
Amendments not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 10 in the name of the Hon Mark Burton to the amendment set out on Supplementary Order Paper 324 in the name of the Hon Phil Goff to schedule 6 be agreed to. 
Amendment to the amendment agreed to. 
The question was put that the amendment as amended set out on Supplementary Order Paper 324 in the name of the Hon Phil Goff to schedule 6 the amendments set out on Supplementary Order Paper 324 in his name to schedules 5 and 7 and the amendments set out on Supplementary Order Paper 10 in the name of the Hon Mark Burton to schedules 2 and 6 be agreed to. 
Amendment as amended and amendments agreed to. 
Schedules 1 to 7 as amended agreed to. 
Clauses 1 and 2 
The question was put that the amendment set out on Supplementary Order Paper 344 in the name of Dr Richard Worth to clause 1 be agreed to. 
Amendment not agreed to. 
Clause 1 agreed to. 
Clause 2 agreed to. 
Bill reported with amendment. 
Report adopted.