CHAPTER 2
Recruitment to the Judiciary
2.1 The judicial pension scheme is an important element in attracting
appointees to judicial office. This is because there is a significant
gap between the salary paid to judges compared to that of the highest
paid members of the private sector legal profession. Underlying the issue
of the attractiveness of judicial remuneration compared to remuneration
in other positions is the issue of what sort of people should be appointed
as judges. That is to say: to what extent should the Commonwealth be attempting
to make judicial office attractive to senior private sector lawyers?
Who do we want as judges?
2.2 There is a widespread view that the primary source for members of
the judiciary should be senior barristers, for reasons of experience.
Mr Justice Davies stressed the importance of experience for judges of
the Federal Court of Australia, saying that 'judges are at their best
in their late 50s, 60s and even the exceptional one in their early 70s.
[1]
2.3 Chief Justice Nicholson of the Family Court of Australia told the
Committee that he was of the view that the mid-40s range was an appropriate
time to appoint judges. He went on to say that, in the Family Court, judges
should 'not only have legal skills but also have human skills and human
experience'. He was of the view that 'the main source of judicial appointees
ought to come from the practising profession at this stage'. [2]
2.4 Professor George Winterton of the University of New South Wales told
the Committee that, although one would hope that the judiciary would become
more diverse (and thus would include persons who had lower remuneration
expectations than leading barristers), 'the leaders of the bar will inevitably
be the primary source of list for the higher judiciary. I think that is
what the community would want'. [3]
2.5 The consequence for judicial pension arrangements of having senior
barristers as the primary recruitment source for the judiciary was stated
simply by Professor Winterton:
Therefore, the reality is that the level of remuneration, including
the pension and the superannuation which are part of the package, will
have to be high enough to attract them [leading barristers]. [4]
The judicial pension scheme as a recruitment tool
2.6 The Committee received evidence which highlighted the role of the
judicial pension scheme as a recruitment tool, particularly for attracting
senior private sector lawyers.
2.7 The Judicial Remuneration Co-ordinating Committee, a committee representing
the majority of the South Australian judiciary in relation to remuneration
and related issues, submitted to the Committee that 'leaders of the bar
and successful senior legal practitioners earn remuneration grossly in
excess of prevailing judicial salaries' and that they 'have access to
a variety of mechanisms for tax minimisation' which are not available
to judges. [5] The Supreme Court of Victoria
submitted that for practising lawyers appointed to the judiciary:
[t]heir income as a judge is almost always less than they would
have been able to earn in private practice'. [6]
2.8 Justice Davies told the Committee that judges of the Federal Court
are chosen for being leading lawyers with proven ability in the court's
work, and that such lawyers tended to have high incomes: He said the 'government
simply cannot afford to pay judges what they can earn at the bar'. [7]
He emphasised that:
We do not seek to attract the average of the 400 senior barristers.
The Federal Court of Australia is looking for the very top people'.
[8]
2.9 The President of the New South Wales Bar Association, Mr David Bennett,
submitted that 'judicial salaries have declined very significantly in
real terms since the 1970s', having been eroded during the high inflationary
periods of the 1970s and 1980s. [9] Mr
Bennett wrote that, in his experience of leading barristers:
the major disincentive affecting such people when they consider
judicial appointment is the very substantial reduction in income'. [10]
2.10 The Attorney-General's Department referred to a 1992-1993 Australian
Bureau of Statistics survey which indicated that there were 400 barristers
who were principals of practices with an operating profit over $300,000
per annum, at an average operating profit for each barrister of $435,000.
[11] This compares with a judicial remuneration
package for Federal Court judges of $270,237 (calculated by the Remuneration
Tribunal in 1993). [12] The Attorney-General's
Department noted that while the data is 'now several years old, there
is no reason to suggest that there has been a marked change in relativity'.
[13]
2.11 The Committee accepts that judicial remuneration is appreciably
less than that received by leading private sector lawyers. However, the
Committee does not express a view as to whether such a difference in remuneration
is any more of an issue for judicial recruitment now than it has been
in the past.
2.12 There was a divergence of views put to the Committee as to whether
it is becoming harder to attract suitable appointees to the judiciary.
Mr Richard Moss, Deputy Secretary of the Attorney-General's Department,
said that he did not have any personal evidence that it is becoming harder.
[14] However, Chief Justice Nicholson
said:
It varies a little from state to state, but we have been having
more difficulty recently in finding suitable appointees, certainly from
the bar, than was the case in the past. I do not say that it is necessarily
a bad thing, because we have got some very good appointees from elsewhere,
but I still agree that the main source of judicial appointees ought
to come from the practising profession at this stage. And the less attractive
the remuneration is, both in terms of salary and retirement benefits,
then the more difficult it becomes to attract those people. [15]
2.13 The issue for the Commonwealth in recruiting judges was neatly set
out by the Attorney-General's Department as follows:
While the Commonwealth Government cannot hope to match the highest
levels of private sector remuneration, it must ensure that the degree
of salary sacrifice involved in accepting judicial office is not such
as to unacceptably discourage appointment by persons of the necessary
calibre. It must also ensure that it is able to compete with the State
and Territory Governments in relation to judicial remuneration, otherwise
candidates for federal appointment may prefer to accept appointment
to State or Territory courts. [16]
2.14 Given the gap which exists between judicial remuneration and the
remuneration of leading private sector lawyers, the judicial pension has
taken on particular significance in attracting suitable appointees to
the judiciary. Mr Moss told the Committee that:
Traditionally, in that context [of a very great gap between earnings
as a judge or as a private sector lawyer], the pension entitlement has
been a significant amelioration of that problem'. [17]
2.15 Justice Davies said that the judicial pension scheme was an important
recruiting tool:
All courts other than the High Court of Australia have difficulty,
from time to time, in attracting members of the quality they wish. The
pension has been a recruiting tool. The Chief Justice has informed me
how he considers this to be absolutely vital. He knows the difference
it makes when he is trying to attract someone to the bench when he can
say, 'You have got this security. It is there. That is what you have
got on retirement whatever happens.' [18]
2.16 The Hon. Justice J. B. Thomas of the Supreme Court of Queensland
submitted that:
[t]he pension scheme has for many generations been an important
incentive in inducing talented persons who would otherwise earn considerably
more than judicial salary, to accept judicial appointment. [19]
2.17 A personal view of the factors which influence a person to accept
judicial office was given by The Hon. Justice Graham Mullane of the Family
Court. He said that he took account of the judicial pension scheme's benefits
for dependants:
It was quite an attraction to know that your spouse and children
would be well taken care of if you died during your service. [20]
2.18 Justice Mullane also told the Committee that the 'pension is attractive
to potential appointees, particularly someone who is over 50'. [21]
2.19 The Committee notes that the certainty offered by the judicial pension
scheme is an attractive feature for potential judicial appointees, particularly
for those leading private sector lawyers who would receive appreciably
higher remuneration than that of judges.
The effects on judicial recruitment of general changes to superannuation
2.20 The Committee received evidence that two generally applicable changes
to superannuation law - the introduction of the superannuation surcharge,
[22] and the application of Reasonable
Benefits Limits (RBLs) [23] - would
have particular effects on the attractiveness of judicial office.
2.21 Although the superannuation surcharge does not apply to already
serving federal judges, it will apply to new appointees. The Parliamentary
Secretary (Cabinet) to the Prime Minister, the Hon Chris Miles MP, explained
in the second reading speech on the Superannuation Contributions Surcharge
(Application to the Commonwealth - Reduction of Benefits) Bill 1997 that:
The remuneration of a current judge is protected under the Constitution
from reduction during his or her continuation in office. This Bill ensures
that new appointees are subject to the surcharge. [24]
2.22 A group of prominent Family Court judges, including Chief Justice
Nicholson, have expressed strong concern that general changes to the superannuation
regime, particularly the superannuation surcharge, are substantially eroding
the remuneration of judges compared to the private legal profession, and
that this is likely to lead to a decline in the quality of appointments
to the judiciary. [25] The Family Court
judges also submitted that the effect of the surcharge would be that new
federal judges would have a loss of pension entitlement of at least 10%.
[26]
2.23 In relation to the effect of the superannuation surcharge, Justice
Mullane said:
I would think that because the overall remuneration has been
reduced by the proposed surcharge that would lessen the attraction of
the appointment'. [27]
2.24 The Committee was informed that there was uncertainty as to whether
the superannuation surcharge would apply to State judges. This is because
some, if not all, State judges' pensions are provided by 'constitutionally
protected schemes' on which surcharge cannot be levied by the Commonwealth.
[28] Surcharge will not be levied on
such schemes until, and unless, the States enact complementary legislation.
As the Attorney-General's Department noted, the application of surcharge
to State judges is unclear at this stage. [29]
The view was expressed that discrimination between federal and State/Territory
judges would be unconscionable. [30]
2.25 Regarding the effect of surcharge, Mr Moss of the Attorney-General's
Department, while acknowledging that the pension would become less attractive,
said:
2.26 In relation to the application of RBLs, the Committee was told:
Government has a responsibility to ensure that those who have
been hit by "friendly fire", in this case the judiciary, do
not suffer as a result. [32]
2.27 The "friendly fire" effect is that, in order to calculate
whether the RBL is exceeded (thus giving rise to a higher rate of taxation
on the amount of superannuation above the RBL), the judicial pension is
added to any pre-existing superannuation acquired before entering the
judiciary. However, unlike other taxpayers, judges have not received any
taxation advantage in relation to the judicial pension. [33]
2.28 RBLs are designed to limit the amount of concessionally taxed superannuation
available to individuals. If the judges' pension scheme is to be regarded
as superannuation then the fact that no taxation concession has been enjoyed
by judges would seem to make the application of RBLs unreasonable.
Future changes to the judiciary?
2.29 As previously noted, the Australian Law Reform Commission (ALRC)
has raised for discussion a range of possible changes to the federal civil
litigation system, so as to diminish its adversarial emphasis, with a
view to reducing delay, cost and unfairness. One of the issues raised
by the ALRC is that the reluctance of judges to take a more active role
in managing litigation may be a barrier to reform. [34]
The ALRC calls into question whether the current emphasis on appointing
judges from among senior barristers is appropriate.
2.30 The ALRC suggested that the current adversarial emphasis in the
federal civil litigation system may be caused, in part, by 'appointing
judges from the ranks of practising lawyers with significant litigation
experience'. [35] The ALRC noted:
While judges are usually drawn from the ranks of lawyers and
are well versed in the litigation process the lack of emphasis on adjudication
skills may mean that judges are less prepared to adjudicate disputes.
[36]
2.31 Given these concerns, the ALRC has invited comment on whether Australia
should change the current processes of appointing judges, and on whether
Australia should develop a career judiciary. [37]
2.32 Justice Mullane said that inequities in the current judicial pension
scheme are relevant to career decisions in relation to judicial office.
He said that the current pension qualifying requirements served as a disincentive
to people outside the traditional area for judicial recruitment:
It is true that the Australian judiciary largely comprises white
men of middle or upper class background with private school educations
who were at the time of appointment likely to be aged 50 years or over
and working as senior barristers.
... if a government wants to encourage some appointments of younger
people and of people of more diverse backgrounds one thing that would
provide greater attraction to those people would be the knowledge that
if retirement occurred before entitlement to a pension ... there would
be some entitlement to another appropriate benefit. [38]
2.33 However, as noted above at paragraphs 2.2-2.4, the widespread view
is that judges should be drawn primarily from the bar. Chief Justice Nicholson
said that he personally was of the view that the mid-40s age range was
an appropriate time to appoint judges, and that:
I differ with any comments that the Law Reform Commission may
have made in their discussion paper [Review of the Adversarial System
of Litigation] about the desirability of appointing judges at an
earlier age. [39]
2.34 Justice Davies told the Committee that he did not expect any change
to the Federal Court's recruitment base. [40]
2.35 Another issue was raised by the Hon. Justice Kirby AC CMG of the
High Court of Australia in a public address commenting on the issues raised
by the Australian Law Reform Commission (see paragraphs 2.29-2.30 above).
He said:
[A]ppointing judges, as we generally do, from the private sector
legal profession in middle-age, means that the appointees bring with
them attitudes of independence. They do not see themselves as public
servants for they have never been so'. [41]
2.36 The Committee is of the view that, although there are arguments
for the diversification of recruitment to the judiciary, senior barristers
will remain the primary source of recruitment to the judiciary, at least
for the foreseeable future. Accordingly, for the foreseeable future, judicial
remuneration, including the pension scheme, will have to be such as not
to unacceptably discourage senior barristers from accepting appointment
to the judiciary. However, if the basis of recruitment to the judiciary
were to be significantly changed, then the Government may need to re-examine
the remuneration of judges, including the pension scheme.
[Return to Table of Contents]
Footnotes
[1] Evidence, Justice Davies, p. 39.
Before an amendment to the Constitution in 1977, federal judges were appointed
for life. The current retirement age for High Court judges is set in the
Constitution as 70. For other federal courts the retirement age is set
by specific legislation (but cannot be higher than 70). The current retirement
age of Federal Court and Family Court judges is 70. Federal judges who
were appointed before the 1977 constitutional amendment retained their
lifetime appointment.
[2] Evidence, Chief Justice Nicholson,
pp. 45, 46, 48.
[3] Evidence, Professor George Winterton,
p. 50.
[4] Evidence, Professor George Winterton,
p. 51.
[5] Submission No. 2, Judicial Remuneration
Co-ordinating Committee, p. 4.
[6] Submission No. 35, Supreme Court
of Victoria, p. 5.
[7] Evidence, Justice Davies, p. 15.
[8] Evidence, Justice Davies, p. 15.
[9] Submission No. 49, NSW Bar Association,
pp. 1-2.
[10] Submission No. 49, NSW Bar Association,
p. 2.
[11] Submission No. 41, Attorney-General's
Department, p. 6.
[12] Submission No. 41, Attorney-General's
Department, p. 6.
[13] Submission No. 41, Attorney-General's
Department, p. 6.
[14] Evidence, p. 66.
[15] Evidence, Chief Justice Nicholson,
p. 48.
[16] Submission No. 41, Attorney-General's
Department, p. 5.
[17] Evidence, Mr Richard Moss, p. 66.
[18] Evidence, Justice Davies, p. 16.
[19] Submission No. 17, Justice Thomas,
p. 1.
[20] Evidence, Justice Mullane, p. 11.
[21] Evidence, Justice Mullane, p. 10.
[22] On the superannuation surcharge generally,
see this Committee's earlier report: Australia, Parliament of the Commonwealth
of Australia, Senate Select Committee on Superannuation, Report 23, Superannuation
Surcharge Legislation (1997).
[23] The RBL is the maximum limit on the amount
that a member can receive with preferential taxation treatment from superannuation,
approved deposit funds or deferred annuity funds.
[24] House of Representatives, Hansard,
6 March 1997, p. 2166..
[25] Submission No. 47, Nicholson CJ,
Frederico, Buckley and O'Ryan JJ, p. 3.
[26] Submission No. 47, Nicholson CJ,
Frederico, Buckley and O'Ryan JJ, p. 2.
[27] Evidence, Justice Mullane, p. 6.
[28] See Australia, Parliament of the Commonwealth
of Australia, Senate Select Committee on Superannuation, Report 23, Superannuation
Surcharge Legislation (1997), pp. 21-22.
[29] Evidence, Mr George Witynski, p.
62.
[30] Submission No. 47, Nicholson CJ,
Frederico, Buckley and O'Ryan JJ, p. 2.
[31] Evidence, Mr Richard Moss, pp.
66-67.
[32] Submission No. 47, Nicholson CJ,
Frederico, Buckley and O'Ryan JJ, p. 3.
[33] Submission No. 47, Nicholson CJ,
Frederico, Buckley and O'Ryan JJ, p. 2-3.
[34] Australia, Australian Law Reform Commission
(ALRC), Issues Paper 20, Review of the Adversarial System of Litigation:
rethinking the federal civil litigation system ('Review of the
Adversarial System of Litigation') (1997), p. 97.
[35] Australia, ALRC, Review of the Adversarial
System of Litigation, p. 97.
[36] Australia, ALRC, Review of the Adversarial
System of Litigation, p. 135.
[37] A career judiciary, such as exists in
European civil law countries such as France, is one where many judges
would begin their judicial career immediately following legal studies.
Judges commence at lower level offices and are promoted to higher positions
over their life as a judge, thus developing special skills in adjudication.
Australia, ALRC, Review of the Adversarial System of Litigation, p. 135.
[38] Evidence, Justice Mullane, pp.
4, 5.
[39] Evidence, Chief Justice Nicholson,
p. 45.
[40] Evidence, Justice Davies, p. 39.
[41] The Hon Justice Kirby AC CMG, Changing
the Legal Vocation?, 13 May 1997, p. 12.
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