Worth Richard: Lawyers and Conveyancers Bill — Second Reading 
Worth Richard: Lawyers and Conveyancers Bill — Second Reading 
[Volume:624;Page:19020] 
Dr RICHARD WORTH (National—Epsom) 
: 
 On behalf of the National Party I say that with some reservations which will be covered more fully by myself and by other members of National we support the Lawyers and Conveyancers Bill. But we do so against the background that this bill provides for a long cherished hope that the present Minister who is a non-lawyer has had for non-lawyers to carry out conveyancing tasks. I wish to say something about that in the course of the short period of time I have to speak about this legislation. 
The purposes of the bill are simply stated: to maintain public confidence in the provision of legal and conveyancing services; clearly to protect the consumers of those services; to recognise the status of the legal profession; and to establish the new profession of conveyancing practitioner—Mr Goff’s dream. All that is miraculously encompassed in no less than 350 clauses and seven schedules. In fact there are more clauses than that because a number of clauses have additional lettered clauses. 
There are parts dealing with the restrictions on the provision of legal services and conveyancing services the admission and enrolment of barristers and solicitors a whole lot of material on the New Zealand Law Society and the new fangled New Zealand Society of Conveyancers and the conduct of practice by practitioners. There are also parts dealing with complaints and discipline the New Zealand Council of Legal Education and so on. 
I would like to talk about some specific aspects of the bill that I believe should warrant the concern both of the profession and of the public. I do that against the background of the New Zealand Law Society’s having a respected and honoured history. The New Zealand Law Society was established by statute in 1869 and in this bill we are amending legislation set out in the Law Practitioners Act of 1982. 
There has been a concern—and I can speak of this with some knowledge because I was a treasurer of the New Zealand Law Society for a number of years—that the work of the society has been made more difficult by the number of districts there are throughout New Zealand. Quite clearly the functions of the New Zealand Law Society and district law societies have overlapped to some extent. That has been particularly demonstrated in smaller district law societies where it has been troublesome for them to administer a complaints and discipline function when they have known their confreres almost too well. 
The issues I would like to talk about tonight concern the reservations I have in respect of this legislation. The first issue is that lawyers have traditionally maintained a fidelity fund. That is a hark back to the period when lawyers were actively involved in the business of moneylending. It was a period in New Zealand’s history which continued for quite a significant time when banks provided a most limited range of financial products and when lawyers substantially provided second mortgage finance on a flat basis for relatively short terms. There was always a risk because for lawyers to be involved in that business was not seen as necessarily compatible with the delivery of legal professional services so to manage the risk a fidelity fund was established. 
It is the Government’s plan—which is wrong in my view completely wrong—that the present bill should legislate for that fidelity fund to continue in place. I would say that no sufficient case has been shown for the continuation of the fidelity fund under Part 10. In case people think that some special exception is being made for lawyers I tell them that is not so because the fund has been abolished for most other occupations including chartered accountancy motor vehicle dealing and sharebroking. The fund had its place when lawyers were actively involved in mortgage lending but the current range of banking products has meant that lending by lawyers is rare and in the major urban areas it is exceedingly rare. So the fidelity fund is the first point. 
The second issue I would like to deal with is the Minister’s plan for this New Zealand Society of Conveyancers. I would like to draw to the attention of this crowded House and this crowded gallery the fact that the Justice and Electoral Committee heard evidence from the New Zealand Law Society that there might be five or six persons who would be qualified to join the society and that there is the faint possibility that Australian conveyancers might also seek to join. The indication in looking ahead—Mr Goff’s fulfilment of his dream—was that there might in total be seven or eight such people in the future. That clearly raises the justification for highly prescriptive statutory rules and signals the impossibility for this New Zealand Society of Conveyancers realistically to fund a fidelity fund. How could eight people fund a fidelity fund? 
Russell Fairbrother 
: It could work in New Zealand! 
Dr RICHARD WORTH 
: It is foolishness in the extreme. I do not know who that troublesome young member is who is interrupting at the moment but I would like to go on and deal with another issue that relates to reserved areas of work. Mr Goff has indicated some further changes are required to that part of the bill by way of a Supplementary Order Paper and we need to see what those changes are. But quite clearly it is critical that the law be clear and that it permit for example taxation lawyers to practise in accounting firms. 
The next area concerns complaints and discipline. I am not persuaded by that—in my view—cumbersome and overly bureaucratic structure proposed in the legislation albeit that the Law Society has blessed that model. I would rather see that the legal complaints review officer was reconstituted as a legal ombudsman resourced by the legal profession. 
Finally in the limited time I have I shall talk briefly about the last issue the question of rule-making powers. National is concerned that issues of policy like compulsory legal education like permission for senior counsels to practise within law firms and like compulsory indemnity regimes are being left to rule-making powers. There is also a proposal in the legislation that the Minister approve such rules. 
I shall take one example which is the whole issue of professional indemnity insurance. Now insurance is a significant cost for lawyers. The reality for most law firms is that the market is an English market either accessed locally or through Lloyd’s of London. Each year the terms and conditions of acceptable cover change as the underwriters form a view as to the acceptability of the risk. 
This is an area where the Minister and the Government should not be involved. What will happen is that the making of rules touching things like maximum indemnity levels terms and conditions of cover and minimum acceptable indemnity levels—I am talking about excesses when I make that comment—will change year in and year out. It is an issue for lawyers to grapple with as to what is acceptable and appropriate cover both in terms of affordability and in terms of looking after the people to whom they provide legal services. 
I am not aware and I do not think that National is aware of comparable powers being held by a Minister of State in respect of any other professional organisations. I do not believe that the Minister with all the skill he may have as a non-lawyer is in any better position than the New Zealand Law Society on rule-making issues or that he—or she as it may be in the future—will be able to strike a balance between the interests of the legal profession and the interests of the consumer. So those are the reservations that I offer 
Of course we see in this legislation a further step that the Government is taking towards its determined path of republicanism. I express regret that the bill proposes that the office of Queen’s Counsel should go. I express the hope that when there is a change of Government probably in the period of September 2005 a bold National Government will reinstate the role of Queen’s Counsel.