Wilkinson Kate: Lawyers and Conveyancers Bill — In Committee 
Wilkinson Kate: Lawyers and Conveyancers Bill — In Committee 
[Volume:629;Page:1504] 
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.