Regulating Incorporated Legal Practices: ILP Investigations
The legal practitioner directors and any other legal practitioners who provide legal services on behalf of incorporated legal practices (ILPs) have the same professional obligations as all other legal practitioners.The Legal Profession Act 2007 (the Act) imposes additional obligations on legal practitioner directors of ILPs, however, and provides for a range of disciplinary, criminal and civil responses to contravention of those sections of the Act that apply specifically to ILPs not only by their legal practitioner directors but by their other directors, ‘executive officers’ and indeed by the corporation itself.
ILP investigations are investigations into alleged or suspected breaches by legal practitioners of their specific obligations as legal practitioner directors or ‘executive officers’ of an ILP, or of alleged or suspected breaches by other directors and executive officers of an ILP or of alleged or suspected breaches by the corporation itself.
Contraventions of the Act by legal practitioner directors capable of constituting unsatisfactory professional conduct or professional misconduct
The LSC might decide to investigate, either in response to a complaint or of its own motion, any of the following alleged or suspected conduct by a legal practitioner director of an ILP which, if proved, might amount to unsatisfactory professional conduct or professional misconduct:
- failure to keep and implement appropriate management systems to enable the provision of legal services by the practice in accordance with a practitioner’s professional obligations;
- failure to take all reasonably available action to ensure that other legal practitioners who provide legal services on behalf of an ILP honour their professional obligations and to take appropriate remedial action in the event of such breaches;
- any unsatisfactory professional conduct or professional misconduct by an employed legal practitioner of the practice (creating a form of vicarious liability);
- any conduct of a non-legal practitioner director of the practice that adversely affects the provision of legal services (also creating a form of vicarious liability);
- the unsuitability of a non-legal practitioner director to be a director of the corporation providing legal services. (if, for example, an ILP has as a director a former legal practitioner who has been removed from the roll, or ‘struck off’);
- contravention of the disclosure obligations when a person engages an ILP to provide services the person might reasonably assume to be legal services;
- contravention of the requirements relating to advertising; and
- failure to assist in an investigation or to ensure that an employee or officer complies with a requirement of an ILP investigator during an investigation.
Contraventions of the Act that make legal practitioner directors and / or ‘executive officers’ of an ILP or the ILP itself liable to criminal and/or disciplinary sanction
The LSC might decide to investigate, either in response to a complaint or of its own motion, any of the following alleged or suspected conduct by a legal practitioner director or executive officer of an ILP, or an ILP itself which, if proved, might amount to unsatisfactory professional conduct or professional misconduct on the part of a legal practitioner and/or a criminal offence;
- failure to lodge the required notice of intention to start engaging in legal practice as an ILP prior to prior to engaging in legal services;
- representing or advertising a legal practice as an ILP before lodging a notice of intention to start engaging in legal practice as an ILP;
- failure to lodge a notice of termination of the provision of legal services after an ILP stops engaging in legal practice;
- engaging in legal practice as an ILP without the ILP having a legal practitioner director for a period exceeding 7 days;
- failure by an ILP to meet its professional indemnity insurance obligations under the Act;
- permitting a disqualified person to be engaged or paid to provide legal services by the ILP or to be an officer or employee or to share receipts or other income arising from the provision of legal services by the ILP or to be a partner of the ILP in a business that includes the provision of legal services;
- providing legal services in contravention of a banning order; and
- cause or induce, or attempt to cause or induce a legal practitioner director or legal practitioner who provides legal services for an ILP to contravene the practitioner’s professional obligations.
Powers of investigation
The LSC and the QLS have the same powers of investigation in relation to ILP investigations as they have in relation to complaints and investigation matters generally, but also some additional powers. The additional powers include powers:
- to audit an ILP to ensure its compliance with the Act;
- to examine persons;
- to inspect the books of the ILP; and
- to hold hearings for the purposes of an investigation or audit.
Last updated 7/04/2008 2:41:04 PM