WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage History
Purpose
Background
Main Provisions
Endnotes
Contact Officer and Copyright Details
Judiciary Amendment Bill
1998
Date Introduced: 3 December 1998
House: House of Representatives
Portfolio: Attorney-General
Commencement: Operative sections to commence on Proclamation
or otherwise within six months of Royal Assent.
To establish the
Australian Government Solicitor ('the AGS') as a statutory body, to
make various arrangements regarding the operation of AGS and to
implement provisions by which the Attorney-General can direct the
Commonwealth's legal work.
The Bill has been introduced to implement the
recommendations of the Report of the Review of the
Attorney-General's Legal Practice, March 1997 ('the Logan
Report'). Many of the measures in this Report's recommendations
have already been implemented administratively, however the
Attorney-General's Department awaits the passage of this Bill
before making some final adjustments.
The Logan Review was given its Terms of
Reference by the current Attorney-General in 1996 and reported in
early 1997. It was conducted by a committee of three: Basil Logan,
a prominent New Zealand businessman with experience in New Zealand
government reviews, David Wicks, QC, a member of the South
Australian Bar and counsel assisting the Royal Commission into
Commercial Activities of the Western Australian Government and
Stephen Skehill, then Secretary of the Attorney-General's
Department, now a partner with Mallesons Stephen Jacques a private
sector law firm with a growing government law practice.(1)
The Terms of Reference given by the
Attorney-General directed the Review to consider a wide range of
factors, including:
-
- the Liberal and National Parties' Law and Justice Policy
Statement of February 1996
-
- the Commonwealth Competitive Neutrality Policy Statement of
June 1996
-
- the 'Privatisation Principles -- A Privatisation Decision Tree
for Retention and Divestment of Commercial Businesses' of July
1996
-
- the role of the Attorney-General
-
- the Commonwealth's need for expert, extensive, diverse,
independent, confidential, consistent, co-ordinated and accountable
legal services, and
- the community service obligations and other public interest
functions and considerations relevant to the provision of legal
services to the Commonwealth such as:
-
- the requirements of government policy in administration
- the need for the Commonwealth and its agencies to be a model
litigant, and
- the need for consistency and fairness towards the citizen.
The Review developed four options which it felt
deserved consideration:
-
- The Status Quo with Competitive Neutrality
- The Status Quo with Competitive Neutrality and Greater
Contestability(2)
- A Public Sector Provider Separated from the Department with
Greater Contestability and Transparency, and
- No Public Service Provider.(3)
It decided option 3 was the best option because it had come to
the conclusion that:
-
- there is a strong and necessary public interest in maintaining
a central legal service provider
-
- this central legal service provider should, however, be
established so as to ensure competitive neutrality, to enable it to
compete effectively with the private sector, and to be transparent
and accountable
-
- the services this central provider provides should by [sic]
subject to increased contestability, and
-
- [it] maximises choice for Commonwealth purchasers of legal
services.(4)
From the Review's consideration's of the issues
it is apparent that, while there is no immediate intention to
privatise AGS, and while the Attorney-General said in his Second
Reading Speech that '[T]he Government has firmly concluded for the
reasons outlined by the committee that [the commercial parts of the
Legal Practice] should be retained within government ownership,'
the option of selling off elements or all of the AGS will remain a
possibility. The current change in structure would make this option
more easily achievable.
The debate regarding the pros and cons of
privatisation has been well rehearsed in regard to other matters
before the Parliament and does not need to be explored further
here.
The major changes in the Bill are the
establishment of the AGS as a government business enterprise which
will be able to 'charge fees at market rates'(5) and will be able
to employ staff and consultants outside the usual public service
regime. Principles of 'competitive neutrality' will also be
implemented. These are designed to ensure that the AGS does not
enjoy any net competitive advantage over its private sector
competitors by virtue of its public ownership. Thus it may pay
dividends to the Commonwealth and will be required to pay an amount
equivalent to the taxation it would have paid were it a private
sector company. These measures are said by the Attorney-General to
be necessary to ensure that the AGS remains competitive and
'cost-effective.'
It must be noted that, due to what the Attorney
refers to as 'constitutional limitations' the AGS client base will
be restricted to clients which have a Governmental nature, that is,
they are either elements of government (Commonwealth, State or
Territory) or they are statutory authorities or other
quasi-governmental institutions.(6) This limitation on the AGS
client base may have various effects on its competitive capacity
and long term viability.
These various measures raise a number of
questions, including whether making the AGS subject to the same
regimes as private sector law firms will actually bring down legal
costs for the Commonwealth, whether the AGS staff will benefit from
being outside the public service employment regime and whether the
limited client base will impact on the application of the
competitive neutrality principles.
With respect to the question of whether the AGS
staff will benefit from no longer being within the public service
employment regime it should be noted that, while staff at the
higher end of the salary spectrum, i.e. those in positions
equivalent to partners in private law firms, could expect to earn
significantly more if paid according to private sector
expectations, lawyers at the lower end of the pay scale currently
receive greater financial rewards under the public sector
regime.(7) Public sector lawyers may have specifically chosen the
public sector as an expression of their commitment to servicing the
public interest. The changes being proposed in this Bill could
change the nature of the commitments that have previously been
made.
The introduction of the Legal Services
Directions, which allows the Attorney-General to give the binding
directions about the conduct of Commonwealth matters no matter who
is acting for the Commonwealth, recognises what seems to be a
widely held view that there are certain risks inherent in
decentralising the provision of the Commonwealth's legal services,
including the possibility that legal services could be inconsistent
or lack co-ordination, they could fail to identify and
appropriately deal with 'whole of government and public interest
issues'(8) or they could ignore the need for the Commonwealth to
act as a model litigant. There are some areas where this risk will
be avoided, because some core areas of government legal work
'primarily Cabinet, constitutional and national security
matters'(9) will be specifically kept to be dealt with by the AGS.
However the Legal Services Directions will allow the
Attorney-General to try to avoid the above mentioned potential
difficulties in other areas.
Schedule
1 - Amendment of the Judiciary Act 1903
Items 1 & 2 change the
definitions of the AGS previously provided to refer to the new
legislative provisions. Item 3 inserts a
definition of legal practitioner, being those who are entitled to
practice under State or Territory legislation.
Item 4 inserts new sections
which deal with 'Attorney-General's lawyers' who are defined as
lawyers within the Attorney-General's Department (proposed
section 55G). Proposed sub-sections
55E(2) and (3) gives Attorney-General's
lawyers the rights and privileges of practising as a Barrister
and/or Solicitor under State or Territory laws but exempts them
from State or Territory legislation which regulates that legal
practice generally, although they are subject to specific
provisions regarding the rights, duties and obligations of lawyers
with respect to their clients and the courts, and the
Attorney-General's lawyers can be subjected to disciplinary
proceedings for misconduct. There is provision made for regulations
to be made to exempt Attorney-General's lawyers from such State or
Territory laws (proposed sub-section 6).
Proposed section 55Q also deals with this issue
(see p. 5 of this Digest).
Proposed section 55F ensures
that, if the Attorney-General approves, either specifically or
generally, an Attorney-General's lawyer may act for two or more
parties with conflicting interests.
Item 5 inserts two new parts
into the Judiciary Act 1903 ('the Principle Act') which
regulate the AGS (proposed Part VIIIB) and the
rules about Legal Services Directions (proposed Part
VIIIC).
Divisions 1 & 2 - Definitions and Establishment and
functions of the Australian Government Solicitor
Proposed Divisions 1 and 2 deal with definitions
and the establishment of the AGS. Proposed section
55K defines the functions of the AGS to be the provision
of legal, and related, services to the Commonwealth and to bodies
or people the Commonwealth has power to make laws for. It can also
provide legal and related services to the States and Territories,
including Norfolk Island or other external Territories.
Proposed sections 55L,
55M and 55P define the incidental
powers of the AGS and provide that the AGS is a body corporate
which may sue and be sued, and that it may charge fees for services
provided and disbursements made.
Proposed section 55N allows the
AGS to provide services to the Commonwealth, its Ministers,
individuals being sued or suing on behalf of the Commonwealth,
statutory authorities or employees of the Commonwealth, statutory
office holders, members of the Defence Force or companies which the
Commonwealth has a controlling interest in. A similar list applies
to State and Territory regimes. It is to be noted that, in the
normal course of events, proposed section 55N
would exclude private individuals or bodies from the list of
entities which the AGS may work for. While there are provisions
made for the list of entities which the AGS may work for to be
extended by the Attorney-General or the CEO of the AGS, any such
extension must fall within the 'functions of the AGS' as defined by
proposed section 55K, which restricts the
functions to situations which are governmental in nature.
Division 3 - Capacity of AGS and AGS lawyers to
act
Proposed section 55Q ensures
that AGS lawyers are entitled to practice in all States and
Territories with the relevant rights and privileges attaching to
their work, although they are exempted from the general regulatory
framework of the State or Territory regarding legal practitioners,
other than the rights, duties ad obligations that lawyers owe to
their clients and the courts. This proposed section also provides
exceptions to the standard rules regarding working for clients with
conflicting interests. There is also provision made for taking into
account a 'lawyer's position as an employee of the AGS' when
considering the nature of the rights, duties and obligations of an
AGS lawyer to a client. This is an interesting provision, the
ramifications of which do not seem to have been explored in the
explanatory memorandum, which simply states that not all duties and
obligations of a private practitioner to the court and their
clients will be relevant to the practice of law by lawyers of the
AGS. One of the explicit differences in the considerations is that,
provided the Attorney-General has generally or specifically allowed
it, lawyers with the AGS may act for two or more parties even when
they have conflicting interests in a matter.
Division 4 - Appointment and terms and conditions of CEO
and staff
Proposed section 55S,
55T and 55U establish a Chief
Executive Officer (CEO) of the AGS and specify the means and terms
of appointment. The appointee must be a lawyer with practising
rights, and the appointment, which must be on a full time basis for
up to 5 years, must be approved, not only by the Attorney-General
but also by the Minister for Finance and Administration ('the
Finance Minister'). The terms and conditions of the CEO's
appointment are to be set out in the instrument of appointment and
the Remuneration Tribunal can provide advice on these terms and
conditions to the Attorney-General and the Finance Minister.
Resignation by the CEO must be in writing
(proposed section 55V) and the appointment may
also be terminated at any time by the Attorney-General and the
Finance Minister in writing (proposed section
55W). No outside employment may be taken by the CEO
without written permission from the two Ministers (proposed
section 55Y). Proposed section 55X
establishes a requirement that the CEO advice the Attorney-General
and the Finance Minister in writing of any (including
non-pecuniary) interest that he or she acquire which could conflict
with their role as CEO.
There are standard provisions made for the
appointment of an acting CEO (proposed section
55Z). The provisions for the CEO to employ staff and
consultants (proposed section 55ZB) and to
delegate his or her powers to an employee (proposed section
55ZA) would remove the need for the CEO to comply with the
employment conditions established by the Public Service Act
1922.
Division 5 - Money
While proposed section 55ZC
exempts the AGS from State and Territory taxation regimes,
proposed section 55ZD introduces provisions for it
to make an equivalent payment to the Commonwealth. The sum to be
paid is set by the Attorney-General and the Finance Minister and is
to be determine to ensure 'the AGS does not enjoy net competitive
advantages over its competitors' because of its taxation exemption.
Similarly the Ministers may require the AGS to pay a dividend or
engage in other 'corporate governance arrangements'
(proposed section 55ZE). Once again the dividend
payments would be to ensure the AGS did not enjoy a net competitive
advantage over its competitors.
Part VIIIC - Attorney-General's Legal Services
Directions
This part introduces an important tool for the
management of Commonwealth legal services. The Commonwealth has
traditionally regarded itself as bound to act as a model litigant
-- to 'act with complete propriety, fairly, and in accordance with
the highest professional standards.'(10)
The Attorney-General is given the power to issue
Legal Services Directions regarding either general Commonwealth
legal work or the conduct of specific matters (proposed
section 55ZF). These Legal Services Directions have a
statutory force under proposed section 55ZG,
although compliance is only enforceable through the
Attorney-General, and non-compliance with a Legal Services
Direction may only be raised by, or on behalf of, the
Commonwealth.
The Legal Services Directions over-ride legal
professional privilege and other duties of confidence, although it
does not mean that privilege is waived when documents are disclosed
under such a direction (proposed section
55ZH).
The Attorney-General and those who act in
reliance on a Legal Services Directions are not liable to actions
for what they have done (or not done) in order to comply with the
Direction. The Explanatory Memorandum comments that this is to
prevent the Attorney-General being subjected to an action or
proceedings arising from the performance of his functions.
Schedule 2 -
Transitional Provisions
The provision in this Schedule are technical in
nature and simply provide for the current AGS to become the new
AGS, so that the latter is the 'successor in law' of the former and
the business transfers over (item 3). It also
provides that the Attorney-General has the power to transfer
Commonwealth assets (item 4) and liabilities
(item 5) and that the Secretary of the
Attorney-General's Department can transfer AGS records
(item 6).
Item 7 provides for the making
of regulations both for the purposes of transitional matters and
more broadly under the proposed Act.
Schedule 3 -
Consequential Amendments
This Schedule amends a number of Acts which had
previously referred to Officers whose role will have changed under
the new legislation. These amendments could be seen to represent
examples where the role of Attorney-General's officers is being
wound back. The legislation which is being affected in this way is
the:
Aboriginal Councils and Associations Act
1976
Aboriginal Land (Lake Condah and Framlingham
Forest) Act 1987
Lands Acquisition Act 1989
Lands Acquisition (Northern Territory
Pastoral Leases) Act 1981
National Parks and Wildlife Conservation Act
1975; and the
Northern Territory (Self-Government) Act
1978.
The Defence (Visiting Forces) Act 1963
is amended so as to allow the Attorney-General to delegate his
powers and functions to an Senior Executive Service Officer in the
Attorney-General's Department.
The Director of Public Prosecutions Act
1983 has various minor consequential amendments and the AGS is
exempted from the operations of the Freedom of Information Act
1982 and the Administrative Decisions (Judicial Review)
Act 1977.
-
- National Goals and Priority Setting by Government Science
and Technology Agencies, December 1994, Paper prepared for the
Coordination Committee on Science and Technology, p. 3.
- The principles of 'competitive neutrality' are designed to
ensure that the AGS does not enjoy any net competitive advantage
over its private sector competitors by virtue of its public
ownership.
- Review of the Attorney-General's Legal Practice, p.
5-6 & Chapter 9.
- Ibid., p. 6.
- Second Reading Speech, p. 3.
- See Nick Sedden and Stephen Bottomley, 'Commonwelath Companies
and the Constitution', Federal Law Review, v. 26(2) 1998,
pp. 271-307.
- Lawyers at the lower end of the pay scale within
Attorney-Generals currently earn between $31,793-$61,350 (Legal 1)
and $67,275-70,331 (Legal 2). In Victoria, for example, the median
gross salary for private sector solicitors in a large CBD practice
is between $35,000-$45,359 and between $25,500-$38,914 in a country
firm: Law Institute of Victoria, Law Institute Journal,
February 1997, p. 13.
- Second Reading Speech, p. 7.
- Second Reading Speech, p. 4.
- Legal Services for the Commonwealth, Ian Govey,
Director, Office of Legal Services Coordination, June 1998, p.
7.
Kirsty Magarey
3 February 1999
Bills Digest Service
Information and Research Services
This paper has been prepared for general distribution to
Senators and Members of the Australian Parliament. While great care
is taken to ensure that the paper is accurate and balanced, the
paper is written using information publicly available at the time
of production. The views expressed are those of the author and
should not be attributed to the Information and Research Services
(IRS). Advice on legislation or legal policy issues contained in
this paper is provided for use in parliamentary debate and for
related parliamentary purposes. This paper is not professional
legal opinion. Readers are reminded that the paper is not an
official parliamentary or Australian government document.
IRS staff are available to discuss the paper's contents with
Senators and Members
and their staff but not with members of the public.
ISSN 1328-8091
© Commonwealth of Australia 1999
Except to the extent of the uses permitted under the
Copyright Act 1968, no part of this publication may be
reproduced or transmitted in any form or by any means, including
information storage and retrieval systems, without the prior
written consent of the Parliamentary Library, other than by Members
of the Australian Parliament in the course of their official
duties.
Published by the Department of the Parliamentary Library,
1999.
Back to top