Amendments to Legal Profession Act, 2004

The Justice Legislation (Further Amendment) Act 2006 No. 79 (Vic) was assented to on 10 October 2006 and the relevant part came into effect the following day: s. 2(1). Part 13 amends the Legal Profession Act 2004. The relevant purpose is stated in s. 1(k):

“(k) to amend the Legal Profession Act 2004—
(i) to reflect amendments to the national model provisions for the regulation of
the legal profession;
(ii) generally to improve the operation of the Act”.

Part 13 says:
“PART 13—AMENDMENT OF LEGAL PROFESSION ACT 2004
32. Definitions
In section 1.2.1 of the Legal Profession Act 2004—
(a) in the definition of “law firm”, in paragraph (b), after “lawyers;” insert “or”;
(b) in the definition of “law firm”, after paragraph (b) insert—

“(c) incorporated legal practices; or

(d) one or more incorporated legal practices and one or more Australian
legal practitioners; or
(e) one or more incorporated legal practices and one or more Australian-
registered foreign lawyers; or
(f) one or more incorporated legal practices, one or more Australian legal
practitioners and one or more Australian-registered foreign lawyers;”;

(c) in the definition of “practical legal training”, for paragraph (b) substitute—

“(b) supervised legal training, whether involving articles of clerkship or
otherwise; or”.

33. Local practising certificates
(1) After section 2.4.3(5) of the Legal Profession Act 2004 insert—

“(6) A local legal practitioner whose practising certificate is subject to a condition referred to in sub-section (3)(b)(i), (ii) or (iv) is not required to hold a practising certificate that is subject to the condition referred to in sub-
section (3)(b)(iii) to engage in legal practice as a volunteer at a community legal centre.

(7) A local legal practitioner whose practising certificate is subject to the condition referred to in sub-section (3)(b)(i) is not required—

(a) to hold a practising certificate that is subject to the condition referred to in sub-section (3)(b)(ii) to engage in legal practice as an employee of a law
practice; or

(b) to hold a practising certificate that is subject to the condition referred to in sub-section (3)(b)(iv) to engage in legal practice as a corporate legal
practitioner.”.

(2) For section 2.4.9(4A) of the Legal Profession Act 2004 substitute—

“(4A) A fee or surcharge is not payable for a local practising certificate that authorises the holder to engage in legal practice only as a volunteer at a community legal centre.”.

34. Supervised legal practice
(1) For section 2.4.18(1)(a) of the Legal Profession Act 2004 substitute—

“(a) if, to qualify for admission to the legal profession, the holder completed practical legal training—

(i) principally under the supervision of an Australian legal practitioner, whether involving articles of clerkship or otherwise; or

(ii) involving articles of clerkship principally under the supervision of a
person other than an Australian legal practitioner in accordance with the
admission rules—

a period or periods equivalent to 18 months’ supervised legal practice, worked out under relevant regulations, after the day the holder’s first practising certificate was granted; or”.

(2) For section 2.4.18(3) of the Legal Profession Act 2004 substitute—

“(3) The Board may exempt a person or class of persons from the requirement for supervised legal practice under sub-section (1) or may
reduce a period referred to in that sub-section or a person or class of persons, if satisfied that the person or persons do not need to be supervised or need to be supervised only for a shorter period, having regard to—

(a) the length and nature of any legal practice previously engaged in by the
person or persons; and

(b) the length and nature of any legal practice engaged in by the supervisors
(if any) who previously supervised the legal practice engaged in by the person
or persons.

(4) An exemption under sub-section (3) may be given unconditionally or subject to any conditions that the Board thinks appropriate.

(5) This section does not apply to—

(a) the holder of a local practising ertificate who is a barrister; or

(b) a person who held an Australian practising certificate at any time before
12 December 2005.

(6) Nothing in sub-section (5) prevents the Board or the Tribunal imposing a condition regarding supervised legal practice in relation to a person referred to in sub-section (5)(b).”.

35. Interstate legal practitioners
(1) In section 2.4.35(1) of the Legal Profession Act 2004—
(a) for paragraph (a) substitute—

“(a) if, to qualify for admission to the legal profession, the interstate legal
practitioner completed practical legal training—

(i) principally under the supervision of an Australian legal practitioner,
whether involving articles of clerkship or otherwise; or

(ii) involving articles of clerkship principally under the supervision
of a person other than an Australian legal practitioner in accordance with the admission rules—

the interstate legal practitioner has undertaken a period or periods
equivalent to 18 months’ supervised legal practice, worked out under
relevant regulations, after the day the practitioner’s first practising certificate
was granted; or”;

(b) in paragraph (b)—

(i) for “the practitioner” substitute “the interstate legal practitioner”;

(ii) after “jurisdiction—” insert “the interstate legal practitioner has undertaken”.
(2) For section 2.4.35(2) of the Legal Profession Act 2004 substitute—

“(2) Sub-section (1)—

(a) does not apply—

(i) to an interstate legal practitioner who engages in legal practice in
this jurisdiction solely as a barrister; or

(ii) if the interstate legal practitioner is exempt from the requirement
for supervised legal practice in the practitioner’s home jurisdiction;

(b) applies only to the extent of a shorter period if the required period of
supervised legal practice has been reduced for the practitioner in the
practitioner’s home jurisdiction.”.

36. Trust money and trust accounts
(1) In section 3.3.52(2) of the Legal Profession Act 2004, for “law firm” substitute “law practice”.

(2) After section 3.3.52(5) of the Legal Profession Act 2004 insert—

“(6) This section does not apply to a law practice in respect of an audit year in which the only trust money received by the law practice is transit money.”.

(3) In section 3.3.54(1) of the Legal Profession Act 2004—
(a) omit “that is required to maintain a trust account”;
(b) after “31 October” insert “if the law practice is required under section 3.3.52 to have those records examined”.
37. Costs disclosure
(1) Insert the following definition in section 3.4.2 of the Legal Profession Act 2004—

‘ “sophisticated client” means a client to whom, because of section 3.4.12(1)(c) or (d), disclosure under section 3.4.9 or 3.4.10(1) is not or was not required;’.

(2) For section 3.4.12(1)(c) of the Legal Profession Act 2004 substitute—

“(c) if the client is—

(i) a law practice or an Australian legal practitioner; or

(ii) a public company, a subsidiary of a public company, a large proprietary
company, a foreign company, a subsidiary of a foreign company or a registered Australian body (each within the meaning of the Corporations Act); or

(iii) a financial services licensee (within the meaning of that Act); or

(iv) a liquidator, administrator or receiver (as respectively referred to in that Act); or

(v) a partnership that carries on the business of providing professional
services if the partnership consists of more than 20 members or if the
partnership would be a large proprietary company (within the meaning of that Act) if it were a company; or

(vi) a proprietary company (within the meaning of that Act) formed for the
purpose of carrying out a joint venture, if any shareholder of the company is a
person to whom disclosure of costs is not required; or

(vii) an unincorporated group of participants in a joint venture, if any member of the group is a person to whom disclosure of costs is not required and if any other members of the group who are not such persons have indicated that they waive their right to disclosure; or

(viii) a Minister of the Crown in right of a jurisdiction or the Commonwealth
acting in his or her capacity as such, or a government department or public
authority of a jurisdiction or the Commonwealth;”.

(3) At the end of section 3.4.14 of the Legal Profession Act 2004 insert—

“(2) A law practice is not required to make a disclosure under sub-section (1) to a sophisticated client.”.

(4) For section 3.4.17(2), (3) and (4) of the Legal Profession Act 2004 substitute—

“(2) A law practice that does not disclose to a client anything required by this Division to be disclosed may not maintain proceedings against the client for the recovery of legal costs unless the costs have been reviewed
under Division 7.

(3) If a law practice does not disclose to a client anything required by this Division to be disclosed and the client has entered into a costs agreement with the law practice, the client may also apply under section 3.4.32 for the costs agreement to be set aside.

(4) If a law practice does not disclose to a client anything required by this Division to be disclosed, then, on a review of the relevant legal costs, the amount of the costs may be reduced by an amount considered by the
Taxing Master to be proportionate to the seriousness of the failure to disclose.

(5) If a law practice retains another law practice on behalf of a client and the first law practice fails to disclose something to the client solely because the retained law practice failed to disclose relevant information to the
first law practice as required by section 3.4.10(2), then sub-sections (1) to (4)—

(a) do not apply to the legal costs owing to the first law practice on account of
legal services provided by it, to the extent that the non-disclosure by the first law practice was caused by the failure of the retained law practice to disclose the relevant information; and

(b) do apply to the legal costs owing to the retained law practice.

(6) Failure by a law practice to comply with this Division is capable of constituting unsatisfactory professional conduct or professional misconduct on the part of any Australian legal practitioner or Australian-registered foreign lawyer involved in the failure.

(7) Sub-sections (1) and (2) do not apply if the legal costs are or have been the subject of a civil complaint under Chapter 4.”.

(5) After section 3.4.27(4) of the Legal Profession Act 2004 insert—

“(4A) Sub-section (3)(c)(iii), (d) and (e) does not apply to a conditional costs agreement made with a sophisticated client.”.

38. Billing and costs review
(1) For section 3.4.34(2) of the Legal Profession Act 2004 substitute—

“(2) A bill must be signed on behalf of a law practice—

(a) in any case, by an Australian legal practitioner or an employee of the law
practice; or

(b) in the case of a barrister, by an approved clerk or an employee of an
approved clerk authorised by the approved clerk.”.

(2) After section 3.4.34(5) of the Legal Profession Act 2004 insert—

“(5A) Despite anything in sub-sections (2) to (5), a bill may be given to a client electronically if the client is a sophisticated client and requested the bill to be given electronically.”.

(3) At the end of section 3.4.35 of the Legal Profession Act 2004 insert—

“(2) Sub-section (1) does not apply in relation to a sophisticated client.”.

(4) In section 3.4.41(2)(b) of the Legal Profession Act 2004, for “section 3.4.48” substitute “section 3.4.38”.
39. New section 3.4.48A inserted
After section 3.4.48 of the Legal Profession Act 2004 insert—

“3.4.48A. Contracting out of Division by sophisticated clients

A sophisticated client of a law practice may contract out of this Division.”.

40. Lodgement of disputed legal costs with Commissioner
In section 4.3.3(1) of the Legal Profession Act 2004, for “21 days” substitute “28 days”.
41. Distribution Account
In the Legal Profession Act 2004—
(a) in section 6.7.5(2)(b), for “6.7.10.” substitute “6.7.10;”;

(b) after section 6.7.5(2)(b) insert—

“(c) any amount paid by the Board under section 6.7.11A.”;

(c) section 6.7.10(2) is repealed.
42. New section 6.7.11A inserted
After section 6.7.11 of the Legal Profession Act 2004 insert—

“6.7.11A. Further legal aid funding

(1) This section applies if, in a financial year, there is any amount standing to the credit of the Distribution Account (including any amount carried over from a previous financial year) after all amounts have been
debited to that account for that year under section 6.7.5(2)(a) and (b).

(2) The Board may pay out of the Public Purpose Fund and into the Legal Aid Fund established under the Legal Aid Act 1978 an amount determined by the Board with the approval of the Attorney-General, not exceeding the amount standing to the credit of the Distribution Account referred to in
sub-section (1).

(3) Sub-section (2) applies despite anything to the contrary in section 6.7.9.”.

43. Transitional provisions
(1) For clause 2.2(4A) of Schedule 2 to the Legal Profession Act 2004 substitute—

“(4A) Sub-clause (4) does not apply to a local practising certificate that authorises the holder to engage in legal practice only as a volunteer at a community legal centre.”.

(2) In Schedule 2 to the Legal Profession Act 2004, clauses 2.2(5) and 2.2(6) are repealed.

44. New Part 11 inserted in Schedule 2
After Part 10 of Schedule 2 to the Legal Profession Act 2004 insert—

‘PART 11—JUSTICE LEGISLATION (FURTHER AMENDMENT) ACT 2006

11.1 Law firms

The definition of “law firm” in section 1.2.1 as amended by section 32 of the Justice Legislation (Further Amendment) Act 2006 is taken to have
applied at all times on and after the commencement day.

11.2 Conditions on local practising certificates

Sections 2.4.3(6) and 2.4.3(7) are taken to have applied at all times on and after the commencement day.

11.3 Supervised legal practice

(1) The definition of “practical legal training” in section 1.2.1 as amended by section 32(c) of the Justice Legislation (Further Amendment) Act 2006
is taken to have applied at all times on and after the commencement day.

(2) Section 2.4.18 as amended by section 34 of the Justice Legislation (Further Amendment) Act 2006 is taken to have applied at all times on and after the commencement day.

(3) A reference in section 2.4.18(5)(b) to an Australian practising certificate includes a reference to a practising certificate granted under the old Act or any preceding corresponding enactment, or under the law of another jurisdiction.'”

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