Goff Phil: Lawyers and Conveyancers Bill — Second Reading 
Goff Phil: Lawyers and Conveyancers Bill — Second Reading 
[Volume:624;Page:19018] 
Hon PHIL GOFF (Minister of Justice) 
: 
 I move  
That the Lawyers and Conveyancers Bill be now read a second time 
. I would like to thank the Justice and Electoral Committee for its consideration of the bill. I accept all but one of the committee’s amendments and I intend to move a Supplementary Order Paper in relation to that amendment at the Committee of the whole House. 
The vast majority of submitters agreed that there was a need to reform the regulatory regime for lawyers. This bill replaces the existing regulatory framework for lawyers with a co-regulatory regime that also covers the new profession of conveyancers created by the bill. The new regime will enable both professions to respond more effectively to the changing needs of consumers and suppliers in the legal services market. 
Many areas of work traditionally reserved to lawyers such as conveyancing and the making of wills will be opened up to other service providers. Consumers will have greater choice about where and from whom they purchase their legal services and suppliers will have greater choice about the range of legal services they provide. Freeing up the market in this way will not however compromise consumer protection. Those areas of legal work requiring the level of expertise and knowledge that can be gained only by completing a law degree and obtaining a practising certificate will remain the preserve of lawyers. 
Consumer protection will be further enhanced by a strengthened complaints and disciplinary scheme. The first of its three tiers is an accessible low-level complaints service funded and operated by the professions. The second tier is a complaints review body appointed by the Government and independent of both professions. The third tier is a disciplinary tribunal comprising professional and lay representatives. The new occupational framework for lawyers and conveyancers combines the benefit of industry self-regulation flexibility innovation and industry buy-in with sufficient regulatory oversight to maintain consumer confidence. 
I turn now to the changes to the bill recommended by the committee. The new purposes clause in Part 1 gives greater emphasis to the bill’s aims of consumer protection and the maintenance of public confidence in the legal and conveyancing professions. The changes in clause 6 dealing with interpretation of terms are largely technical. An important clarification however is made in the amended definition of “reserved areas of work”. This term could have been interpreted as meaning that non-legal specialists such as accountants and patent attorneys could no longer advise clients on matters within their area of expertise if those matters relate to litigation proceedings. The bill will not and was never intended to have this effect. Although lawyers retain the exclusive right to appear for clients before courts and tribunals and to provide advice on the direction and management of court and tribunal proceedings—that is subject to statutory exceptions—this will not prevent non-legal specialists from providing litigation-related advice. I am confident that the committee’s amendment will clarify the policy intent. 
The committee has also recommended amending the definition of “conveyancing” to address concerns that the term could capture work currently undertaken by non-legal specialists in areas such as taxation and intellectual property. It is not intended that any additional work should be reserved to lawyers and the amended definition makes this clear. The committee also recommended two changes to the definition of “misconduct” in relation to the provision of regulated services by employees. I am comfortable with the first of those changes which clarifies that volunteer lawyers in community law centres or citizens advice bureaus can provide regulated services to the public. I do not however support the committee’s second amendment to that provision. The amendment is intended to clarify that lawyers employed by non-legal specialists are not prevented from holding a practising certificate if they are providing legal services to their employer’s clients. 
I understand that the committee drafted that amendment to address concerns raised by the accountancy profession. There is no intention to stop in-house lawyers employed by non-legal specialists such as accountancy firms from holding a practising certificate. Nor do we intend to prevent those employed lawyers from providing a full range of legal services to their employer or from assisting their employer to provide certain services to the employer’s clients. However the committee’s amendment is inconsistent with the bill’s prohibition against multidisciplinary practices and could undermine consumer protection. Both the accountancy and legal professions are now in agreement that the committee’s amendment is unnecessary and should be dropped. I therefore intend to move a Supplementary Order Paper at the Committee of the whole House to replace that clause and to clarify the intent of the original clause. 
There are also changes to the “misleading descriptions” provisions in Part 2. The committee wanted to address the problem where a service provider who is not a lawyer uses a title such as “legal specialist” with the intention of causing clients to think that he or she is a lawyer. The amendments will provide additional safeguards against non-lawyers attempting to pass themselves off as lawyers and I know that that was something Lianne Dalziel was particularly interested in. 
I support the enhancements made by the committee to the complaints and disciplinary provisions in Part 7. It is recommended that standards committees be empowered to direct publication of their decisions that the legal complaints review officer be empowered to publish its decisions and that the chair of the disciplinary tribunal be required to publish the notice of an order prohibiting a person from employment by a law firm. These changes will improve the accountability and the transparency in the complaints and disciplinary scheme. Changes to widen remedies for complainants and enhance the cost-recovery and enforcement procedures will make the scheme more accessible and effective and improve procedural efficiency. 
In Part 8 which deals with the functions and powers of the New Zealand Council of Legal Education the committee has recommended changes to the formula and process for setting the levy on lawyers to address the concerns of the Law Society and the council. These will lower the levy ceiling require the Law Society to consult the council in setting the levy and provide for the matter to be referred to the Minister where agreement cannot be reached. These proposals appropriately balance the interests of both parties and will improve the workability of the provisions. 
There is a change to the Part 9 provisions relating to the division of interest on nominated trust accounts. The bill as introduced provided for community law centres to receive 55 percent and the banks to receive 45 percent. On the basis of the submissions made by the Bankers’ Association and community law centres the committee has recommended an increase in the proportion of interest received by community law centres to 60 percent with the banks’ share reducing to 40 percent. 
The committee supported the requirement in Part 10 for each profession to maintain a fidelity fund for consumer protection purposes. It has however recommended an additional rule-making power for the respective societies enabling them to make rules providing for the minimum size at which the fidelity fund must be maintained if it is to be held out as a protection for clients. 
I thank members of the Justice and Electoral Committee for their contribution which has resulted in improvements to the bill. The bill will enable the legal profession to continue to provide high levels of service to the New Zealand public and will enable the long overdue establishment of the occupation of licensed conveyancers. I commend this bill to the House.