Prof Jacinta Ruru, pictured, along with Prof Ron Paterson and Jane Meares, was tasked with examining the entire statutory framework and processes for regulation and representation of legal services. Photo / Supplied
ANALYSIS
After two painfully long years since the Law Society announced a review of its functions, the highly anticipated independent report of the society was released last week.
Conducted by Professor Ron Paterson, Jane Meares, and Professor Jacinta Ruru, the panel was tasked with examining the entire statutory framework and processes for regulation and representation of legal services in Aotearoa.
The terms of reference asked the panel to assess whether the representation and regulatory function should be separated, how to address and prevent unacceptable conduct, the process and transparency of complaints, the Law Society’s operations and governance, the role of Te Tiriti o Waitangi and diversity, and which legal services were regulated and by whom.
I’ve been barking about this perceived conflict of interest since Russell McVeagh made headlines when allegations of sexual conduct were made against a former partner at the firm in 2018.
James Gardner-Hopkins was found guilty of six charges of misconduct for inappropriately touching interns at the firm’s work functions in 2015.
What’s often forgotten is the Law Society was first aware of the matter in October 2016. At the time, although the Law Society had the power to do so, I was told an ‘own motion’ investigation wasn’t undertaken on the basis no victim or victims wished to make a formal complaint.
It was of little surprise that an own motion investigation soon kicked off after the incidents made the news, in my view. But I digress.
Between June and September 2022, the panel conducted three webinars, five branch events, held 55 meetings with more than 250 stakeholders (I wasn’t included, she audaciously sobs) and four focus groups.
The panel also met with regulators and representative bodies in England and Wales, Ireland, Scotland, Canada, and Australia. Lucky panel-members!
We need to have a chat
After 12 months of engagement, research, and analysis, the panel found the current regulatory model does not work.
While the rationale for regulation was to protect consumers and the public, the dual-function of the Law Society has not adequately protected and supported consumers. The “interests of the profession conflicts squarely with its duty to regulate in the interests of the public”, the report read. I mean, yeah, no kidding.
It has meant there’s a lack of trust in the body and a perception of “lawyers looking after other lawyers”, the report read.
“The Law Society’s regulatory work tends to be reactive and is not transparent. It has a bias towards preserving the status quo, which is partly a feature of the Law Society being accountable to the profession.”
At the heart of the issue is the 14 year-old Lawyers and Conveyancers Act 2006. In the context of complaints, it actively prohibits the Law Society from making any comments in relation to complaints, for example. It also means there are circumstances where the Law Society can’t inform victims of the status of said complaints.
To put it bluntly, the rigid nature of the legislation means the “current complaints system is not working. It is slow, adversarial, produces inconsistent outcomes, is perceived as biased towards lawyers, and is not consumer-centred or restorative”.
The most minor of complaints can take nearly a year to be addressed, the report noted, and consumer and complaint resolution or informal procedures including negotiation, mediation, and tikanga-based approaches are lost in the process.
While the panel cited the adversarial nature of the complaints process was due to the ability to publicly identify lawyers who have fallen short of professional standards, this seldom eventuated (less than two per cent in the past five years).
I could go further here, and suggest having the ability to name and shame while failing to do so in practice has only exacerbated the lack of public trust in the Law Society’s regulatory function.
Who are these standard committee members?
Just last week I asked the Law Society for comment on whether standards committee members had any trauma-informed experience when dealing with complaints of a sexual nature.
Currently, every complaint must be considered by one of 22 standards committees, mostly volunteer lawyers operating independently from the Law Society.
A Law Society spokesperson said standards committee members had expertise in a whole range of areas. Following the Law Society’s independent Working Group, a national standards committee was specifically established to solely address sensitive conduct matters, they said.
“From time to time, depending on the circumstances of complaints before a standards committee, a committee may bring in experts in different fields or request support for dealing with different issues.
“There is no requirement for standards committee members to be trained in ‘trauma’, but that does not mean practitioners and laypeople do not have expertise in the field themselves.”
I was assured the procurement process was “quite rigorous”, with Law Society staff advertising and interviewing potential candidates to ensure the skill sets and expertise aligned with each specific committee. Appointments were made by the Law Society board, with committee members having to have had at least five years’ experience in the regulations.
More issues with ye olde Act
Back to the findings of last week’s report. After building a bridge and getting over the bizarre notion that a standards committee member could be both a specialist in the area of sexual misconduct but not have trauma-informed expertise, I’m delighted to see the panel has come out swinging to completely reform the Act.
The report found it restricts the ability for lawyers to team up with investors, or accountants, for example, or to complete pro bono work outside of their course of employment.
From a firm perspective, in the context of Russell McVeagh, I found it interesting that while Russell McVeagh suffered in a reputational sense, one could argue there was no accountability on a structural level.
Sure, in theory complaints could have been made against the partnership as individuals, but entity regulation of firms could “entrench an ethical infrastructure within firms”, the panel has proposed.
“A lack of ‘entity regulation’ in New Zealand means that in disciplining individual lawyers the Law Society may be addressing a symptom rather than the root cause of consumer harm.
“A law firm, through its hierarchical employment relationships, can exert a significant degree of control on the extent to which individual lawyers can fulfil their professional obligations,” the report read.
Otherwise, proposed new regulation would include specific reference to the importance of Te Tiriti, and with a primary focus on protecting and promoting the public interest, other objectives would include: Upholding the rule of law; improving access to justice; promoting and protecting consumers; promoting ethical conduct, professional and cultural competence; and encouraging an independent, strong, diverse, and effective legal profession.
Regulation tools would also include the power to suspend a practising certificate pending the outcome of a disciplinary process if they posed a risk of serious harm to the public or to public confidence in the profession.
The panel also suggested imposing conditions on a lawyer’s practising certificate (requiring supervision or limiting the scope of practice, for example) in the alternative.
Again, in the context of Russell McVeagh, as at July 1, 2021, the renewal of Gardner-Hopkins’ practising certificate was deferred pending the outcome of the penalty hearing, which was originally scheduled for a few weeks after he was found guilty of misconduct in June 2021.
In other words, section 40 of the Lawyers and Conveyancers Act provides that Gardner-Hopkins had to be treated as if he had a practising certificate.
The penalty hearing was in January 2022, more than six years following the events. Madness, in my view.
New independent regulator ahoy
What’s the answer? A new independent regulator not associated with the Crown, government, or Law Society, baby!
This is the case for Victoria (Australia), Canada, England and Wales, and Ireland. Citing a cost-benefit analysis, the panel refuted claims from lawyers fearing the move would cost a small fortune.
The body would have a board of eight members selected for their governance skills, with an equal split of lawyers and public members, and with a maximum tenure of 10 years. The Minister of Justice would make governance appointments following advice from a nominations panel, the report read.
It would mean the Law Society would become solely a membership body, and continue “to play an important and valuable role for the profession and for Aotearoa New Zealand, as a strong and independent voice speaking up for the rule of law”.
The panel suggested it downsize its governing council and board, instead opting for a board of eight-10 people, including members of the public.
The new body would also mean the disestablishment of the Legal Complaints review Officer. Instead, it would be replaced by a new review mechanism, facilitated by the regulator.
Interestingly, the regulatory body wouldn’t cover advocates or other unregulated legal services. And in line with the rise of the gig economy, it’s opting for a new ‘freelance lawyer’ model, meaning lawyers seeking to go out on their own shouldn’t need approval from the new regulatory body provided they’re essentially acting as a sole trader.
Ultimately, I’m tentatively delighted. But I think the panellists put it best in the report’s introduction:
“We believe that implementation of our recommendations will build on previous reforms to create new, fit-for-purpose legislation to regulate lawyers in Aotearoa New Zealand – recognising our bicultural foundations and the constitutional significance of Te Tiriti o Waitangi, and equipping a new independent regulator to meet the expectations of the community and the legal profession, as the market for legal services continues to evolve.
“We hand over this report, trusting that the ‘once in a generation’ opportunity of this review will be seized.”
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