Rules of Practice 1994
In pursuance and exercise of the powers conferred on it by the Legal Profession Act 1993 , the Council of The Law Society of Tasmania makes the following Rules of Practice under and for the purposes of that Act.
PART 1 - Preliminary
These rules may be cited as the Rules of Practice 1994 .
These rules take effect on 31 December 1994.
In these rules –act includes omission;Act means the Legal Profession Act 1993 ;accounting period means the period of 12 months immediately before the inspection by a trust account inspector under Part 3 ;accounting record means any book of account or other accounting record required to be kept under Part 3 ;approved means approved by the Council;approved institution means –(a) a bank; or(b) a permanent building society; or(c) a trustee company within the meaning of the Trustee Companies Act 1953 ;cash book means a trust account cash book maintained under rule 26 ;client includes a person by whom, or on whose behalf, money for investment is advanced to, or held by, a firm;controlled fund means a fund that is subject to supervision under Part 5 as if it were part of the trust bank account of a firm;controlled fund operator means a fund operator that –(a) operates a controlled fund; and(b) is registered under rule 67 ;[Rule 3 Amended by No. 42 of 2001, Sched. 2, Applied:15 Jul 2001] corporation means a corporation within the meaning of the Corporations Act;cost agreement means an agreement under section 129 of the Act;disbursements means any fees, costs or charges other than those incurred by a practitioner for advice given, or work done, by another practitioner who is a partner of, or employed by, the same practice as the practitioner;examination means an examination made under rule 50 ;Executive Director means the Executive Director of the Society;firm, in Parts 3 , 4 , 5 and 6 , includes a legal practitioner corporation;fund means money for investment and the securities arising from that money for investment, held or controlled by a firm or fund operator with authority to advance in the acquisition of mortgage securities or other securities;fund operator means a corporation, partnership, individual or firm which controls a fund;government valuation means a valuation made by any State or Commonwealth government or local government of the capital value of a property;insured, in relation to a mortgage, means insured under a policy of insurance providing for the indemnification of the mortgagee by the insurer against default by the mortgagor in respect of the payment of principal and interest until all money secured by the mortgage has been paid;insurer means an approved trustee insurer within the meaning of the Trustee (Insured Housing Loans) Act 1970 ;investor includes –(a) a client of a firm; and(b) a person by whom money for investment is placed with, or on whose behalf money is held by, a firm or fund operator for investment;lease includes an agreement for lease;litigation loan agreement means an agreement between a client, a lending institution and a practitioner to provide the client with money to pay the legal costs of the practitioner in relation to the conduct of litigation for or on behalf of the client;money includes –(a) in Division 9 of Part 3 , a cheque, bank draft, bill of exchange or any other negotiable instrument; and(b) in Part 5 , any instrument or asset that is capable of being converted into money;money for investment means money received or held by a firm or fund operator on behalf of an investor as –(a) money borrowed by the firm or fund operator; or(b) money received or held for application in the acquisition of any securities that are to be held –(i) beneficially by or for the firm or fund operator; or(ii) by any person for an investor;mortgage means a registered mortgage over an estate in fee simple in land;mortgage security means a security by way of mortgage;partnership includes a limited partnership;[Rule 3 Amended by S.R. 1995, No. 176, Applied:27 Dec 1995] party includes any person who is jointly a party to any proceedings or transaction;practise means to practise as a barrister or legal practitioner;[Rule 3 Amended by S.R. 1995, No. 176, Applied:27 Dec 1995][Rule 3 Amended by S.R. 1995, No. 176, Applied:27 Dec 1995] practitioner –(a) means a person who is practising as a barrister or legal practitioner; and(b) for the purposes of rule 12 , includes a firm or a partner, an employer or an employee of a practitioner;president means the president of the Society;[Rule 3 Amended by S.R. 1995, No. 176, Applied:27 Dec 1995] proceedings, for the purposes of rule 12 , means any action or claim at law or in equity;registered valuer means a registered valuer within the meaning of the Valuers Registration Act 1974 ;related firm, in relation to a controlled fund, means the firm that applies to the Society to register a fund operator as a controlled fund operator of that fund;report means a report made by a trust account inspector under rule 52 ;security valuation, in relation to an application or proposed application of money for investment, means a valuation for security purposes made in accordance with rule 66 ;short-term money market dealer means a person carrying on business in this State who is –(a) approved by the Reserve Bank of Australia as a dealer in the short-term money market; and(b) is declared under section 5(1)(h) of the Trustee Act 1898 to be a dealer in the short-term money market;statutory charge means a charge on land arising by force of a statute;[Rule 3 Amended by S.R. 1995, No. 176, Applied:27 Dec 1995] statutory tribunal means any tribunal or other quasi-judicial body established under an Act;[Rule 3 Amended by S.R. 1995, No. 176, Applied:27 Dec 1995] transaction means any dealing between parties which may affect, create or be related to any legal or equitable right or entitlement or interest in property of any kind;trust account inspector means a person appointed under rule 47 .
PART 2 - Professional practice and conduct
Division 1 - Place and conduct of business
(1) [Rule 4 Subrule (1) substituted by S.R. 2003, No. 33, Applied:14 May 2003] A practitioner must not carry on his or her practice at any place unless the practitioner or another practitioner –(a) is in charge of that place; and(b) spends substantial time at that place during its normal business hours.(1A) [Rule 4 Subrule (1A) inserted by S.R. 2003, No. 33, Applied:14 May 2003] A practitioner must not carry on a branch of his or her practice at any place unless –(a) the practitioner or another practitioner is in charge of that place; and(b) there is displayed in a prominent area in that place for inspection by members of the public a notice that –(i) specifies the contact details of another office of the practice at which a practitioner may be contacted; and(ii) if a practitioner is not in attendance, specifies when a practitioner will next be in attendance.(1B) [Rule 4 Subrule (1B) inserted by S.R. 2003, No. 33, Applied:14 May 2003] A notice under subrule (1A)(b) is to be in a form approved by the Council.(2) [Rule 4 Subrule (2) amended by S.R. 2003, No. 33, Applied:14 May 2003] A practitioner may apply to the Council for approval not to comply with subrule (1) or (1A) .(3) The Council may –(a) grant the approval with or without conditions; or(b) refuse to grant the approval.(4) An application for approval is to be –(a) in writing; and(b) lodged with the Executive Director.(5) The Council may withdraw an approval at any time.
5. Sharing of premises and carrying on another business
(1) A practitioner may only carry on another business apart from a practice and share premises with another business if –(a) the conduct of that business is kept separate from the practice as far as practicable; and(b) the carrying on of that business is not likely to lead to a contravention of the Act or these rules.(2) A practitioner is taken to be carrying on another business if that business, although conducted by another entity, is carried on substantially under that practitioner's direction or control.
6. Firm names and professional description
(1) A practitioner may carry on a practice under a firm name that includes –(a) that practitioner's name; or(b) the names of any partner or former partner of the firm.(2) A practitioner must not carry on a practice under a firm name, other than a firm name specified under subrule (1) , without the approval of the Society.(3) An application for approval is to –(a) be in writing; and(b) specify the proposed firm name; and(c) be lodged with the Executive Director.(4) The Society may –(a) grant the approval; or(b) refuse to grant the approval.(5) The Society must not grant an approval if a firm name is misleading or deceptive or is likely to mislead or deceive.
Division 2 - Advertising and attracting business
(1) A practitioner may advertise in connection with his or her practice if the advertisement –(a) does not contain a statement that the practitioner knows to be false; and(b) is not misleading or deceptive or likely to mislead or deceive; and(c) does not make or imply a comparison with another practitioner; and(d) is not vulgar, sensational or of a nature that, in the opinion of the Society, is likely to bring the practitioner, the legal profession or the legal system into disrepute.(2) In respect of any investigation of a complaint or any disciplinary proceedings under Part 8 of the Act, a practitioner claiming expertise or specialty in a particular field of the law, if required by the Society, must prove that the claim is –(a) not false; and(b) not misleading or deceptive or likely to mislead or deceive.(3) Subrule (2) does not apply to the practice of mediation or arbitration.
8. Attracting business in offensive manner
A practitioner, directly or indirectly, must not –(a) apply for, or seek instructions for, professional business from a person whom the practitioner knows is a client of another practitioner in a current matter; or(b) do any act or thing, or permit or cause any act or thing to be done, that may reasonably be regarded as –(i) attracting business in an offensive manner; or(ii) using harassment or coercion; or(iii) calculated to attract business unfairly.
Division 3 - Mediation and arbitration
9. Restrictions relating to mediation and arbitration
(1) A practitioner must not hold himself or herself out, or allow himself or herself to be held out, directly or indirectly, as being prepared to perform work as a mediator or an arbitrator or as both a mediator and an arbitrator without the approval of the Society.(2) A practitioner may apply to the Society for approval to practise as a mediator or an arbitrator or a mediator and an arbitrator.(3) The Society may –(a) grant the approval with or without conditions; or(b) refuse to grant the approval.(4) An application for approval is to be –(a) in writing; and(b) lodged with the Executive Director.(5) A condition of an approval may require the practitioner to comply with any rules of practice or guidelines –(a) approved by the Society in respect of the practice of mediation; or(b) approved by the Australian Institute of Arbitrators in respect of the practice of arbitration.(6) The Society may withdraw an approval at any time.
Division 4 - Relationship and dealings between practitioner and client
(1) A practitioner must do his or her best to complete a client's business –(a) in a competent manner; and(b) within a reasonable time.(2) A practitioner must inform a client of all significant developments in that client's matter unless the client has instructed otherwise.
11. Disclosure of information and interest
(1) A practitioner must not disclose any information obtained in the course of handling a client's matter without the consent of the client other than to the administrator of a scheme relating to legal assistance in accordance with rule 16 .(2) A practitioner must disclose to a client –(a) any interest that the practitioner has in any transaction in which he or she is acting for that client; and(b) any matter which may reasonably be regarded as a conflict of interest on the part of the practitioner.(3) Unless the client otherwise instructs, a practitioner must cease to act for a client if –(a) that practitioner has an interest in the transaction in which the practitioner is acting for that client; and(b) that interest is adverse to the interests of the client.
12. Acting for more than one party
[Rule 12 Substituted by S.R. 1995, No. 176, Applied:27 Dec 1995](1) A practitioner may act for more than one party to any proceedings or transaction.(2) A practitioner must not accept instructions from more than one party to any proceedings or transaction unless the practitioner is satisfied on reasonable grounds that –(a) each of the parties is aware that the practitioner intends to act for another party or parties; and(b) each of the parties is aware that as a result of acting for more than one party –(i) the practitioner may be prevented from disclosing to any one of those parties the full knowledge that the practitioner has of matters relevant to the proceedings or transaction; and(ii) the practitioner may be prevented from giving advice to any one of those parties if that advice is contrary to the interest of any other party; and(iii) the practitioner must cease to act for all parties if the practitioner determines that he or she is not able to continue to act for all parties without acting in a manner contrary to the interests of one or more of those parties; and(c) each of the parties, with full knowledge of the matters referred to in paragraph (b) , has consented to the practitioner acting for more than one party.(3) A practitioner who is acting for more than one party to any proceedings or transaction must immediately cease to act for all parties if that practitioner determines that he or she is not able to continue to act for all parties without acting in a manner contrary to the interests of one or more of those parties.
12A. Practitioner member of statutory tribunal
[Rule 12A Inserted by S.R. 1995, No. 176, Applied:27 Dec 1995](1) A practitioner must not undertake work on behalf of a client in relation to, or appear in, any proceedings before a statutory tribunal of which the practitioner is a member.(2) A practitioner must not appear in any proceedings before a statutory tribunal on behalf of a client if a partner, employer or employee of the practitioner is sitting as a member of that statutory tribunal for the purposes of those proceedings.(3) A practitioner must not undertake work on behalf of a client in relation to, or appear in, any proceedings before a statutory tribunal of which a partner, employer or employee of the practitioner is a member unless –(a) the practitioner advises his or her client and any other party to the proceedings that a partner, employer or employee of the practitioner is a member of that statutory tribunal; and(b) that advice is given as soon as practicable.(4) A reference to a partner of a practitioner is a reference to –(a) a partner of the firm of which the practitioner is a partner; or(b) a director of the legal practitioner corporation of which the practitioner is a director.(5) A reference to an employee of a practitioner includes a reference to –(a) a practitioner employed by a legal practitioner corporation of which the first practitioner is a director; and(b) any other practitioner employed in the firm or legal practitioner corporation of which the first practitioner is an employee.(6) A reference to an employer of a practitioner includes a reference to a director of a legal practitioner corporation of which the first practitioner is an employee.
(1) This rule does not apply to a practitioner receiving remuneration under Division 2 of Part 7 .(2) As soon as practicable after first taking instructions, a practitioner, unless it is unreasonable or inappropriate in the circumstances, must provide a client with written advice as to –(a) the reasonably estimated range of costs and disbursements that may be incurred by the client; and(b) the method of calculation of those costs; and(c) the condition upon which the practitioner accepts the client's retainer; and(d) the frequency with which accounts are to be rendered to the client; and(e) any Court scale applying to those costs.(3) A practitioner may dispense with the advice if that practitioner already has an agreement with the client in which all work done by that practitioner is subject to an agreed charging rate.(4) A practitioner must provide to a client if requested –(a) a review of the estimated costs and disbursements of a matter; and(b) the method of calculation used.
Before settlement of a litigious matter negotiated by a practitioner, the practitioner must advise the client of the likely minimum amount that the client will receive if –(a) the matter is settled in accordance with the proposed settlement; and(b) the payments due from the settlement are no more than those of which the practitioner is reasonably aware at the time of settlement.
Division 5 - Dealings with legal aid clients
A practitioner must inform a client of any entitlement to apply for legal aid.
(1) Subject to any guidelines issued by any scheme relating to legal assistance, a practitioner must inform the administrator of that scheme if the practitioner –(a) forms the view that a client in receipt of legal aid no longer has a reasonable prospect of success; or(b) is instructed about any significant change in the financial position or other circumstances of a client in receipt of legal aid.(2) A practitioner must inform a client of any matter communicated under subrule (1) .
PART 3 - Accounting rules
Division 1 - Receipts
(1) A firm must maintain a separate receipt book for each trust bank account established and maintained by it.(2) A trust bank account receipt book is to be clearly identified as a trust bank account receipt book.
(1) A firm must ensure that a receipt is written for any trust money received by it for or on behalf of a client.(2) A receipt of trust money is to contain the following:(a) the date of issue of the receipt and the date of receipt of the money, if different;(b) the amount of money received;(c) the form in which the money was received;(d) the name of the person from whom the money was received;(e) the name of the person on whose behalf the money was received;(f) clear identification of the ledger account to be credited;(g) the description of the matter;(h) the purpose for which the money was received;(i) the signature of the person who issued the receipt or the name of the firm.
19. Numbering and identification of receipts
A firm must ensure that receipts –(a) are consecutively numbered; and(b) identified as trust bank account receipts.
A firm must issue a duplicate receipt if the details contained on the receipt are not entered into the cash book when the receipt is issued.
Division 2 - Payments
(1) A firm must not make a cash payment of trust money without the written authority of the client.(2) A firm must keep any written authority received by it.
A cheque for the payment of trust money is to –(a) be crossed "Not Negotiable"; and(b) be issued payable to order or bearer; and(c) record the name of the firm; and(d) record the words "Trust Account" on the cheque; and(e) be signed by a principal of the firm or an approved person.
A firm must –(a) keep a cheque butt as a record of each payment of trust money; or(b) keep cheque requisitions or some other record of each payment of trust money; or(c) enter details of the payment of trust money into the cash book when the cheque is issued.
A firm must ensure that the following details are recorded on each cheque butt, cheque requisition or other record of payment of trust money in respect of each payment from a trust bank account:(a) the number of the cheque;(b) the date of the cheque;(c) the amount of the cheque;(d) the name of the payee;(e) details clearly identifying the trust ledger account to be debited;(f) the description of the matter;(g) details of the purpose for which the payment was made.
25. Details of cheque requisitions
If a firm keeps cheque requisitions or some other record of each payment of trust money instead of cheque butts, the firm must –(a) record the relevant cheque number on that requisition or record; and(b) store the requisitions or records in numerical order.
Division 3 - Cash books and bank deposit books
A firm must maintain a separate trust account cash book in respect of each trust bank account established and maintained by it.
(1) A firm must ensure that the following details are recorded in the cash book in respect of each receipt:(a) the date of issue of the receipt and the date of receipt of money received, if different;(b) the amount of money received;(c) the form in which the money was received;(d) the name of the person from whom the money was received;(e) the name of the person on whose behalf the money was received;(f) clear identification of the trust ledger account to be credited;(g) the description of the matter;(h) the purpose for which the money was received;(i) the date and amount of each deposit to the trust bank account.(2) Details of receipts are to be recorded in the receipts part of the cash book –(a) in the order in which they are issued; and(b) within 7 days of the issue of the receipt.
(1) A firm must ensure that the following details are recorded in the cash book in respect of each payment:(a) the date the payment was made;(b) the amount of the payment;(c) the name of the payee;(d) clear identification of the trust ledger account to be debited;(e) the description of the matter;(f) the purpose for which the payment was made.(2) Details of payments are to be recorded in the payments part of the cash book –(a) in the order in which the cheques are issued; and(b) within 7 days of the issue of the cheque.(3) A firm, on becoming aware of a direct credit to its trust bank account, must write a receipt for that payment containing the following particulars:(a) the date of the receipt;(b) the amount of the payment;(c) the name of the client in respect of whom the payment is made;(d) the words "direct credit" or similar;(e) any other particulars that may assist in identifying the transaction.
A firm must maintain a trust bank deposit book in duplicate for each trust bank account established and maintained by it.
Division 4 - Trust ledger account
(1) A firm must maintain a separate trust ledger account for each client's matter for which it receives trust money.(2) A firm must record receipts, payments and journal transfers in the trust ledger account –(a) in the order in which they are issued; and(b) within 7 days of issue.
31. Details of trust ledger account
A firm must ensure that the following details are recorded for each trust ledger account:(a) the name of the person on whose behalf the money is held;(b) that person's address;(c) clear identification of the matter.
A firm must ensure that the following details are recorded in the trust ledger account in respect of each receipt:(a) the date the receipt was issued and the date the money was received, if different;(b) the amount of money received;(c) the name of the person from whom the money was received;(d) the purpose for which the money was received.
A firm must ensure that the following details are recorded in the trust ledger account in respect of each payment:(a) the date the payment was made;(b) the amount of the payment;(c) the name of the payee;(d) details of the purpose for which the payment was made.
Division 5 - Journals
(1) A firm must maintain a journal which contains the following details in respect of each transfer:(a) the date of the transfer;(b) the trust ledger account from which the money is transferred;(c) the trust ledger account to which the money is transferred;(d) the amount transferred;(e) the purpose of the transfer.(2) Transfer journal entries are to be maintained –(a) in proper sequence; and(b) in a secure manner.
Division 6 - Bank statements
35. Trust bank account bank statements
A firm must keep every bank statement for each trust bank account established and maintained by it.
Division 7 - Reconciliations
36. Reconciliation of trust records
A firm, within 10 days of the end of each month, must –(a) balance the cash book; and(b) reconcile the bank statement balance to the cash book balance; and(c) reconcile the list of trust ledger account balances to the cash book balances; and(d) record details of those balances and reconciliations as a permanent record.
Division 8 - Withdrawals from and payments to trust bank account
(1) A firm must not withdraw money from a trust bank account for or on behalf of a client unless –(a) money amounting to at least the amount withdrawn is held in that account at the time of that withdrawal –(i) in the trust bank account to the credit of that client; or(ii) in the possession of the firm for payment into the trust bank account to the credit of that client; or(iii) in the trust bank account identifiable by details recorded in the trust ledger account as being money to which that client is entitled; or(b) that withdrawal arises from the debiting of a cheque which has been properly used to obtain a bank cheque on behalf of that client while that bank cheque remains in the possession of the firm pending its proper disposition.(2) A firm must not retain a bank cheque drawn under subrule (1) for a period exceeding 2 banking days.
A firm receiving money that is to be paid into that firm's trust bank account in accordance with section 101 of the Act must –(a) record details of that money in the trust ledger account; and(b) pay that money into the trust bank account before the end of the next banking day.
39. Payment of costs and expenses
A firm may –(a) withdraw from the trust bank account any money held in the trust bank account for or on behalf of a client, if the withdrawal does not cause a debit balance in that client's account in the firm's trust ledger account; and(b) apply that money to its own use, either –(i) in payment of any costs owing to the firm by a client; or(ii) in reimbursement of any out of pocket expenses incurred by the firm on behalf of a client.
40. Limit on withdrawal of money
(1) A firm must not withdraw any money in excess of $100 from a client's account in the trust ledger account except –(a) with an authorization in writing from the client; or(b) in accordance with an account, bill of costs, letter, statement or memorandum posted to the client within a reasonable time to the client's last known address.(2) A copy of every account, bill of costs, letter, statement or memorandum referred to in subrule (1) must be kept by the firm for at least 2 years.(3) Subrule (1) does not apply to money received by a firm for costs.
Division 9 - Money in transit
A firm that receives money from another person with instructions to pay or endorse and deliver it to a third person must comply with those instructions –(a) before the end of the next banking day or as soon as practicable after the next banking day; or(b) no later than the day authorized by the person from whom the money was received, if that day is later than the next banking day.
(1) [Rule 42 Subrule (1) substituted by S.R. 1995, No. 176, Applied:27 Dec 1995] A firm must maintain a ledger in respect of money to which rule 41 applies.(2) A firm must ensure that the following details are recorded in a ledger within 7 days of the receipt of the money:(a) the name of the person from whom the money was received;(ab) [Rule 42 Subrule (2) amended by S.R. 1995, No. 176, Applied:27 Dec 1995] the name of the person on whose behalf the money was received;(b) the amount of money received;(c) the form in which the money was received;(d) the date of receipt of the money;(e) the name of the person to whom the money is to be paid or endorsed and delivered;(f) the day on which the money is to be paid or endorsed and delivered, if it is later than the next banking day;(g) the word "paid", when that money is paid or endorsed and delivered.(3) [Rule 42 Subrule (3) inserted by S.R. 1995, No. 176, Applied:27 Dec 1995] A firm must provide a statement of account in respect of each ledger to the person on whose behalf the money was received –(a) within 28 days of receipt of the money; or(b) if it is unreasonable or inappropriate to do so within that period, as soon as practicable.
Division 10 - Computer accounting systems
43. Computer accounting systems
(1) A firm may maintain its trust bank account records on a computer system.(2) A firm that maintains a computer accounting system must maintain a record in chronological order of all changes to the following details:(a) name of the client;(b) address of the client;(c) number of the client;(d) number of the matter;(e) description of the matter;(f) trust bank account number.
44. Journals maintained on a computer system
A firm must ensure that in respect of any journal maintained on a computer system –(a) entries balance before new entries are made to the trust ledger account; and(b) any journal reference numbers are allocated in sequence.
45. Trust ledger account maintained on a computer system
A firm must ensure that in respect of any trust ledger account maintained on a computer system –(a) a programme is not able to accept the entry of a transaction resulting in a debit balance to an account unless a contemporaneous record of that transaction and of all subsequent transactions by which the debit balance is increased, reduced or remedied is made in a manner which produces in a permanent and legible form a separate chronological report of all the transactions that may be made; and(b) a programme is not able to delete an account unless –(i) the balance of the account is zero; and(ii) if deleted, the account is retained in visible form.
46. Manner of keeping records on a computer system
A firm must ensure that –(a) an entry in a record produced in a visible form is in chronological order and a copy is kept on the file relating to that record; and(b) a report and each entry or page in a report is numbered sequentially in a manner which allows the completeness of the records to be verified; and(c) particulars of a recorded transaction are not able to be amended except by a separate transaction effecting the amendment; and(d) a back-up copy of all records is made at least once each month; and(e) the most recent back-up copy is kept at separate premises or in a fireproof location on the firm's premises.
Division 11 - Trust account inspectors
47. Appointment of trust account inspectors
(1) The Council, by instrument, may appoint one or more trust account inspectors.(2) An instrument is to be signed by 2 members of the Council.(3) A person may not be appointed as a trust account inspector unless he or she –(a) is a member of the Institute of Chartered Accountants; or(b) is a member of the Australian Society of Certified Practising Accountants; or(c) holds an approved qualification.
48. Assistant trust account inspector
A trust account inspector, with the approval of the Council, may appoint an assistant.
A legal practitioner is to supply to the trust account inspector particulars of each bank account maintained or operated by that legal practitioner in respect of his or her practice during the accounting period.
(1) A trust account inspector is to carry out an examination, at least once in every 12 month period, of each legal practitioner who holds a practising certificate.(2) An examination is to consist of the following:(a) an examination of the book-keeping system in each place of business of the legal practitioner to determine whether or not the system complies with the requirements of this Part;(b) a check of a sample of postings to each trust ledger from records of receipts and payments of clients' money;(c) a check of the arithmetical accuracy of those records;(d) a comparison of a sample of lodgements into, and payments from, the trust account, as shown in bank statements, with the records of receipts and payments of clients' money;(e) a check of the system of recording costs and making withdrawals in respect of costs from the trust account;(f) a sample of transactions recorded in each trust ledger during the accounting period in order to ascertain –(i) whether the entries relating to those transactions are in accordance with the rights of each client as those rights appear to the trust account inspector from the documents held by the legal practitioner; and(ii) whether the accounting has been carried out in accordance with this Part;(g) a check of the extraction of balances of the trust ledger accounts at any one date during the accounting period including –(i) a check of the additions of the extraction of balances; and(ii) a check of the reconciliation of the total of the balance with the balance shown in the bank statement; and(iii) a check that any amount shown in the reconciliation as being money in hand was promptly deposited; and(iv) direct confirmation with the bank concerned of the accuracy of the bank balance used in the reconciliation;(h) a check that, as at the date chosen for the check of the extraction of balances and the check of the reconciliation, the total of any debit balances in the trust ledger account was covered in accordance with rule 37 ;(i) a check of some money taken to the credit of the office account of the legal practitioner to ascertain that the credit was not money which should have been credited to a client's trust account;(j) an inquiry into the amount on deposit with the Trust.(3) A trust account inspector may carry out an approved inspection of a legal practitioner's affairs if the inspection relates to the operation of that legal practitioner's trust bank account.(4) The Council may fix and impose a scale of fees for an examination.(5) A trust account inspector may carry out an examination in the presence of a legal practitioner appointed by the Council under subrule (6) .(6) The Council may appoint a legal practitioner to be present at an examination.
(1) A trust account inspector may require a legal practitioner to produce for examination the following documents held by the legal practitioner on behalf of a client:(a) stocks or shares;(b) mortgages or other securities;(c) titles;(d) any other documents.(2) A legal practitioner is to comply with a requirement made under subrule (1) .(3) A legal practitioner complies with a requirement made under subrule (1) in respect of a title or mortgage if he or she produces for inspection a receipt or other documentary evidence that the title or mortgage has been produced for the purpose of the Land Titles Act 1980 .
(1) A trust account inspector is to report to the Council if, in the course of examining a legal practitioner's accounting records and other relevant documents, the trust account inspector –(a) finds those records to be in disorder at any time during the accounting period; or(b) considers that there should be a closer examination of the records; or(c) has reasonable grounds to suspect that –(i) there is irregularity in the accounts; or(ii) the legal practitioner has failed to keep the accounts in accordance with this Part.(2) A trust account inspector may make any further examination necessary to complete a report if of the opinion that a legal practitioner has not complied with this Part.(3) A further examination is not limited to the accounting records for the accounting period.
(1) A trust account inspector, at the time of making an examination, may require the legal practitioner whose accounting records are under examination to deliver certain letters to the inspector.(2) The letters are to –(a) be in an approved form; and(b) be written on the business paper or letterhead of the legal practitioner; and(c) be signed by the legal practitioner; and(d) be addressed to those clients specified by the inspector.(3) Subject to subrule (4) , the number of letters required to be provided by the legal practitioner is not to exceed 10% of the number of clients of the legal practitioner who are involved in money for investment or securities.(4) The number of letters may exceed 10% of the clients of the legal practitioner, if –(a) the legal practitioner consents; or(b) the Council approves.(5) A legal practitioner must comply with a requirement made under subrule (1) .
(1) A legal practitioner has the right on the ground of privilege to refuse to produce any document to a trust account inspector engaged in an examination.(2) If a legal practitioner refuses to produce any document on the ground of privilege, the legal practitioner is to report to the Council in writing the circumstances of the privilege.
(1) The Council, at any time, may require a legal practitioner to produce to a person appointed by the Council for that purpose any of the following documents kept by the legal practitioner to record costs and expenses:(a) accounting records;(b) documents relating to the entries in those records;(c) copy receipts;(d) cheque butts;(e) bank statements.(2) The Council is to notify the legal practitioner of –(a) the time and place at which the documents are to be produced; and(b) the person to whom the legal practitioner is to produce the documents.
56. Obstructing a trust account inspector
(1) A practitioner must not obstruct or delay a trust account inspector, an assistant trust account inspector or a legal practitioner appointed by the Council under rule 50(6) in the exercise of any functions.(2) A practitioner who contravenes subrule (1) is guilty of professional misconduct.
(1) Subject to subrule (2) , a trust account inspector, an assistant trust account inspector or a legal practitioner appointed by the Council under rule 50(6) must not make an unauthorized disclosure of –(a) any matter that comes to their notice in the course of an examination; or(b) anything contained in a report.(2) A trust account inspector may disclose any matter –(a) to an assistant; or(b) to a legal practitioner appointed by the Council under rule 50(6) ; or(c) in a report.(3) A member of the Council, employee of the Society or legal practitioner must not make an unauthorized disclosure of anything in a report.(4) In this rule,unauthorized disclosure means a disclosure to a person other than –(a) the Attorney-General; or(b) a member of the Council; or(c) a person authorized by the Council; or(d) an employee of the Society; or(e) a legal practitioner appointed by the Council under rule 50(6) ; or(f) the Supreme Court.
Division 12 - Miscellaneous
58. Maintenance of accounting records
A firm must keep each book of account or accounting record required to be maintained under this Part –(a) in good order and condition; and(b) for a period of not less than 10 years after the date of the last entry in that book or record.
(1) A firm may apply to the Council for an exemption from the provisions of this Part.(2) The Council may –(a) grant the exemption with or without conditions; or(b) refuse to grant the exemption.(3) An application is to be –(a) in writing; and(b) lodged with the Executive Director.(4) The Council may revoke an exemption at any time.
PART 4 - Solicitors' Guarantee fund
60. Designated trust deposit account
(1) A designated trust deposit account is to be –(a) with a bank's head office in Hobart; and(b) entitled "The Solicitors' Trust – Solicitors' Deposit Account".(2) A firm, on making a payment out of its trust bank account into a designated trust deposit account under section 102(1) of the Act, must provide the Trust with a certificate in accordance with Form 1 of Schedule 2 .(3) If a firm is not required to pay any further amount into a designated trust deposit account under section 102(1) of the Act, it must provide the Trust with a certificate in accordance with Form 2 of Schedule 2 .(4) A firm requiring repayment of an amount by the Trust under section 102(4) of the Act must provide the Trust with a certificate and application in accordance with Form 3 of Schedule 2 .
(1) A firm drawing a bill of exchange on the Trust under section 103(1) of the Act must –(a) complete and present the bill of exchange to the bank with which the firm maintains its trust bank account; and(b) pay the money received by it under the bill of exchange into the firm's trust bank account; and(c) provide the Trust with a certificate in accordance with Form 4 of Schedule 2 .(2) A bill of exchange is to be –(a) in accordance with Form 5 of Schedule 2 ; and(b) signed by each member of the firm presenting it.(3) A bill of exchange is not required to be signed by each member of the firm presenting it if, before drawing the bill of exchange, the firm provides an authority specifying the method of signing it to –(a) the Trust; and(b) the bank to which it is to be presented.(4) An authority is to be signed by each member of the firm.(5) A person signing an authority is bound by the bill of exchange to which the authority relates.
PART 5 - Money for mortgage investment
Division 1 - Mortgages and securities
(1) A first mortgage is a mortgage that has priority over any other encumbrance or over any charge, other than a statutory charge, in respect of the land to which it relates and under which the amount advanced does not at the time of any advance under the mortgage exceed –(a) two-thirds of the security valuation if the mortgage is not insured; or(b) 90% of the security valuation if the mortgage is insured in respect of so much of the amount advanced as exceeds two-thirds of the security valuation; or(c) 50% of the government valuation in force at the date of the mortgage if there is no security valuation.(2) If the amount secured under a first mortgage does not exceed the limits specified in subrule (1) , a mortgage includes a further mortgage or further charge between the same parties in relation to the same estate if no other creditor of the mortgagor has priority over the claims under the further mortgage or charge by reason of any other encumbrance or any charge that is not a statutory charge.
(1) A second mortgage is a mortgage –(a) that, if deferred, is deferred only to a first mortgage; and(b) under which the amount secured, together with all money secured under any first mortgage, does not exceed –(i) 80% of the security valuation if the mortgage is not insured; or(ii) 95% of the security valuation if the mortgage is insured in respect of so much of the amount advanced as exceeds 80% of the security valuation; or(iii) 70% of the government valuation in force at the date of the mortgage if there is no security valuation.(2) If the amount secured under a second mortgage does not exceed the limits specified in subrule (1)(b) , a second mortgage includes –(a) a mortgage that has priority over any other encumbrance and over any charge, other than a statutory charge, under which the amount secured exceeds the proper valuation limits for a first mortgage; and(b) a further mortgage or further charge between the same parties in relation to the same estate if no other creditor of the mortgagor who is deferred in priority to that second mortgage has priority over the claims under the further mortgage or charge by reason of any other encumbrance or any charge that is not a statutory charge.
A contributory mortgage is a first or second mortgage, the principal sum of which is –(a) recorded in the accounts and records of a fund operator as being held wholly, in one or more specific parts, for one or more identified investors; and(b) invested in accordance with the authority of that or those investors.
(1) Securities are assets arising from the application of money for investment.(2) Securities do not include –(a) assets arising by their deposit or investment with an approved institution; or(b) assets to be held by, or in the name of, an investor; or(c) assets to be held by one or more members of a firm, or a body corporate which is not a fund operator, as bare trustee for an investor in accordance with an authority in writing signed by the investor and on behalf of the firm or body corporate identifying the assets and specifying the terms and conditions on which the assets are to be held.
A security valuation is to be made in writing by a registered valuer not earlier than 3 months before the date of the first mortgage or second mortgage on the security of which money is advanced to the borrower.
Division 2 - Controlled fund operators
(1) A fund operator must not operate as a controlled fund operator unless it is registered with the Society.(2) A fund operator may apply to the Society to register a fund operator as a controlled fund operator.(3) An application is to be –(a) in writing; and(b) lodged with the Executive Director.(4) The Society is to register a fund operator as a controlled fund operator if it is satisfied that the fund operator will comply with the provisions of this Part.
68. Control of fund operators by practitioners
(1) A legal practitioner must not allow a fund operator to –(a) carry on business in that legal practitioner's office; or(b) be represented by a member of that legal practitioner's firm in any dealing with an investor.(2) [Rule 68 Subrule (2) amended by No. 42 of 2001, Sched. 2, Applied:15 Jul 2001] Subrule (1) does not apply to a fund operator that is exempt from or complies with the provisions of the Corporations Act in relation to its activities.
69. Controlled fund operators that are corporations
If a controlled fund operator is a corporation –(a) each practitioner who is a member of the related firm is to be a director of the corporation; and(b) only a practitioner who is a member of the related firm may be a director of the corporation; and(c) the corporation's articles of association are to provide that only a practitioner who is a member of the related firm may be a shareholder of the corporation; and(d) the controlled fund operator must have its accounts and records audited at least once a year by a trust account inspector.
70. Controlled fund operators that are not corporations
If a controlled fund operator is not a corporation –(a) each practitioner who is a member of the related firm is to be a member of the controlled fund operator; and(b) only a member of the related firm is to be a member of the controlled fund operator.
71. Investments by controlled fund operators
(1) A controlled fund operator must not –(a) invest money for investment other than –(i) with an approved institution; or(ii) in a first mortgage or second mortgage; or(iii) in a loan to a short-term money market dealer in accordance with the conditions specified in section 5(1)(h) of the Trustee Act 1898 ; or(b) pledge or charge money for investment or securities held by the controlled fund operator.(2) Subrule (1)(a) does not apply to –(a) money invested by a controlled fund operator and secured by mortgage securities before 31 December 1994; or(b) money invested in substitution for any money referred to in paragraph (a) .(3) A controlled fund operator may take or acquire additional collateral security in respect of a loan that is secured by a first mortgage or second mortgage.(4) A controlled fund operator must not accept money for investment unless, at or before the time the money is accepted, the investor is given a notice in writing signed –(a) by or on behalf of the firm; or(b) if the firm is not the controlled fund operator, by or on behalf of the controlled fund operator.(5) A notice is to specify –(a) the amount or identity of the money; and(b) the nature of the securities in which the money may be invested; and(c) how the rate of interest payable to the investor is to be determined and any condition under which the interest is payable; and(d) the expenses to be paid by the investor; and(e) the conditions under which the investor is entitled –(i) to redeem the money; or(ii) in the case of a contributory mortgage, to a transfer of the security in which the money is invested; or(iii) in the case of any other security, to a transfer of a security equivalent in value to the money.
72. Deregistration of controlled fund operators
(1) The Society, by notice in writing, may suspend or revoke the registration of a fund operator as a controlled fund operator if it is reasonably satisfied that the fund operator or the related firm has contravened the provisions of this Part.(2) A suspension or revocation does not take effect until 14 days after the day on which the notice is given to the fund operator.(3) At any time while the registration of a fund operator as a controlled fund operator is suspended, the Society may –(a) cancel the suspension; or(b) reduce or extend the period for which the registration is suspended.(4) While the registration of a fund operator as a controlled fund operator is suspended, that registration remains in effect for the purposes of rules 69 , 70 , 73 and 74 .
Division 3 - Liability of related firms
73. Liability of members of related firms
(1) If a fund operator is a controlled fund operator, each member of the related firm is responsible for any act of the controlled fund operator done while the member is a member of the related firm as if it were an act of a member of the related firm.(2) A person who is a member of a firm is liable for any act of a fund operator done while that person is a member of the firm in so far as that act arises from –(a) a business transaction of the fund operator carried on from within the office of the firm; or(b) a business transaction in which the fund operator was represented by a member or agent of the firm.(3) The members of a related firm who are, or have been, members or directors of a controlled fund operator at the time any loss of money is incurred are jointly and severally liable as guarantors to any investor for –(a) the repayment of money for investment placed by or on behalf of that investor with that controlled fund operator; and(b) for the payment of the interest due on that money for investment.(4) Subrule (3) does not apply to money that is –(a) advanced on a contributory mortgage; or(b) invested with an approved institution; or(c) invested in a loan to a short term money market dealer.(5) The liability of a member of a related firm under subrule (3) –(a) is not extinguished by the death of that member; and(b) ceases at the expiration of 3 years after the date on which that member ceases to be a member of the firm or a director of the fund operator.
Division 4 - Books of account
(1) The books of account and other accounting records of a controlled fund operator are taken to be part of the books of account and other accounting records of the related firm.(2) The books of account and records of the related firm and of the controlled fund operator are subject to the provisions of Part 3 .
PART 6 - Indemnity cover
(1) The Society may negotiate or enter into an agreement or arrangement with an insurer or any other person for the operation of a scheme providing for an approved indemnity cover for professional indemnity insurance of a firm.(2) The Society may determine how the cost of providing an approved indemnity cover is to be paid by a firm.(3) An approved indemnity cover is to be for the period specified in any negotiation, agreement or arrangement.
76. Indemnity cover during negotiations
If the Society has negotiated or entered into an agreement or arrangement relating to a scheme under rule 75 , a firm is to take out and maintain any approved indemnity cover provided in that scheme for the period specified in the negotiation, agreement or arrangement –(a) not later than one month after the date on which the negotiation is finalized or the agreement or arrangement is entered into, if a firm is carrying on business on that date; or(b) not later than one month after the date on which the firm commences to carry on business, if a firm commences carrying on business after the date on which the negotiation is finalized or the agreement or arrangement is entered into.
77. Payment of indemnity cover
(1) A firm must pay any premium or other amount payable in respect of an approved indemnity cover within 30 days of receiving a demand from the Society for payment of that premium or amount.(2) A demand for payment –(a) is to be in writing; and(b) may be made up to and including 90 days in advance of any period in respect of which an indemnity cover is maintained.(3) A certificate is evidence of the amount payable if it –(a) states the amount payable by a firm; and(b) is signed by the Executive Director.
A legal practitioner or former legal practitioner is to provide the Society with the information required by a notice under section 125 of the Act within the time specified by the Society.
PART 7 - Remuneration
Division 1 - General provisions relating to remuneration
(1) A practitioner must not share profit costs from that practitioner's legal practice with a person who is not a practitioner without the approval of the Council.(2) A practitioner may apply to the Council for approval to share profit costs with a person who is not a practitioner.(3) The Council may –(a) grant the approval with or without conditions; or(b) refuse to grant the approval.(4) An application for approval is to be –(a) in writing; and(b) lodged with the Executive Director.(5) The Council may withdraw an approval at any time.
(1) A practitioner must not charge both profit costs and commission in relation to the same work carried out for or on behalf of a client if that practitioner is also –(a) a trustee and an executor; or(b) a trustee; or(c) an executor.(2) A practitioner must not accept or charge any commission for the execution of a trust unless –(a) the instrument creating the trust provides otherwise; or(b) every beneficiary under the trust who may be affected by the charging of commission has given –(i) written consent, if the beneficiary is of full legal capacity; or(ii) the written consent of a parent or guardian, if the beneficiary is not of full legal capacity; or(c) an order of the Supreme Court has been made authorizing the charging of commission.(3) A practitioner must not cause or permit a person to execute a will or settlement unless that person, before executing the will or settlement, has signed a statement showing the rate or identifying the scale of commission to be charged in addition to legal professional charges if –(a) the practitioner or a principal or an employee of that practitioner's firm is appointed under the will or settlement as –(i) an executor; or(ii) a trustee; or(iii) an executor and a trustee; and(b) the practitioner, principal or employee is entitled to a trustee's commission.
81. Restrictions on litigation loans
A practitioner must not assist a client to enter into a litigation loan agreement unless the purpose of the agreement is to pay any disbursement incurred by the practitioner on behalf of the client.
Division 2 - Remuneration relating to non-contentious business
For the purposes of this Division, remuneration does not include –(a) the cost of stamps or paper; or(b) counsel's fee; or(c) auctioneer's or valuer's charges; or(d) charges for maps or plans; or(e) travelling or accommodation expenses; or(f) search fees; or(g) fees for registration or production of documents; or(h) the cost of extracts from a register or record; or(i) any other disbursement reasonably and properly paid by a practitioner; or(j) fees for extra work as a result of changes occurring in the course of a transaction.
This Division applies to –(a) any transaction in respect of land; and(b) business connected with a sale, purchase, lease, mortgage, settlement or other conveyancing matter; and(c) any other business which is not –(i) an action; or(ii) transacted in a court or in the chambers of a judge; or(iii) other contentious business.
84. Election to enter cost agreement
(1) Before undertaking any business to which this Division applies or a transaction to which this Division applies, a practitioner may elect to receive remuneration under a cost agreement.(2) An election is to be –(a) in writing; and(b) signed by the practitioner; and(c) communicated to the client.(3) If a practitioner does not elect to receive remuneration under a cost agreement, remuneration is payable to the practitioner in accordance with this Division.(4) If a practitioner elects to receive remuneration under a cost agreement, this Division applies to any matter that is not covered by the cost agreement.
(1) A practitioner may charge a reasonable fee for work done, whether or not a matter is completed.(2) In determining the fee, a practitioner may take into account any of the following matters:(a) the nature of the matter; and(b) the consideration; and(c) the time taken; and(d) the responsibility involved on the part of the practitioner; and(e) the complexity or the difficulty of the matter and questions raised; and(f) the skill, work and specialized knowledge of the practitioner; and(g) the number and importance of the documents prepared or perused; and(h) the place where, and the circumstances in which, the business or part of the business is transacted; and(i) the importance of the matter to the client; and(j) the effect of the matter on any other business of the practitioner; and(k) the amount of research and consideration of questions of law and fact required; and(l) any other matter which the taxing officer considers proper to take into account.
86. Recommended scale of charges
A practitioner who renders an account purported to be in accordance with a recommended scale of charges published by the Society must provide the client to whom the account is rendered with a copy of that scale of charges if the client requests it.
(1) A practitioner may charge a reasonable negotiation fee for a transaction in respect of a mortgage or bill of sale.(2) A negotiation fee must not exceed one per cent of the consideration involved in the transaction.(3) In determining a negotiation fee, a practitioner may take into account –(a) the work carried out by the practitioner; and(b) the responsibility involved.
PART 8 - Barristers[Rule 88 Rescinded by S.R. 2016, No. 77, Applied:01 Oct 2016] . . . . . . . .
88A. Professional indemnity insurance
[Rule 88A Inserted by S.R. 2000, No. 182, Applied:04 Oct 2000] A barrister must maintain professional indemnity insurance providing cover of at least 1 million dollars for each claim.[Rule 89 Subrule (2) substituted by S.R. 2000, No. 182, Applied:04 Oct 2000] [Rule 89 Rescinded by S.R. 2016, No. 77, Applied:01 Oct 2016] . . . . . . . . [Rule 89A Inserted by S.R. 2000, No. 182, Applied:04 Oct 2000] [Rule 89A Rescinded by S.R. 2016, No. 77, Applied:01 Oct 2016] . . . . . . . . [Rule 90 Amended by S.R. 2000, No. 182, Applied:04 Oct 2000] [Rule 90 Rescinded by S.R. 2016, No. 77, Applied:01 Oct 2016] . . . . . . . . [Rule 91 Rescinded by S.R. 2016, No. 77, Applied:01 Oct 2016] . . . . . . . . [Rule 92 Rescinded by S.R. 2016, No. 77, Applied:01 Oct 2016] . . . . . . . . [Rule 93 Rescinded by S.R. 2016, No. 77, Applied:01 Oct 2016] . . . . . . . . [Rule 94 Rescinded by S.R. 2016, No. 77, Applied:01 Oct 2016] . . . . . . . . [Rule 95 Rescinded by S.R. 2016, No. 77, Applied:01 Oct 2016] . . . . . . . . [Rule 96 Rescinded by S.R. 2016, No. 77, Applied:01 Oct 2016] . . . . . . . . [Rule 97 Rescinded by S.R. 2016, No. 77, Applied:01 Oct 2016] . . . . . . . .
PART 9 - Miscellaneous
The Executive Director is to keep the following lists:(a) a list of practitioners;(b) a list of legal practitioners taken to hold a practising certificate under section 51(8) of the Act;(c) a list of legal practitioner corporations;(d) a list of persons admitted and electing to practise solely as barristers;(e) a list of practitioners who are –(i) resident in another State; and(ii) listed on the Supreme Court Roll in that State; and(iii) entitled to appear in this jurisdiction;(f) a list of foreign lawyers and foreign law firms approved by the Council;(g) a list of persons admitted under the Act and not practising.
The rules set out in Schedule 1 are rescinded.
SCHEDULE 1 - Rules rescinded
1. Barristers' Rules of Practice 1972 (Statutory Rules 1972, No. 158) | 2. Barristers' Rules of Practice Amendment 1990 (Statutory Rules 1990, No. 157) | 3. Legal Practitioners (Indemnity Cover)Rules 1987 (Statutory Rules 1987, No. 131) | 4. Rules of Practice 1977 (Statutory Rules 1977, No.209) | 5. Rules of Practice 1978 (Statutory Rules 1978, No. 313) | 6. Rules of Practice 1979 (Statutory Rules 1979, No. 86) | 7. Rules of Practice 1980 (Statutory Rules 1980, No. 278) | 8. Rules of Practice 1983 (Statutory Rules 1983, No. 246) | 9. Rules of Practice 1986 (Statutory Rules 1986, No. 51) | 10. Rules of Practice (No. 2) 1986 (Statutory Rules 1986, No. 52) | 11. Rules of Practice Amendment (Classified Listings) 1992 (Statutory Rules 1992, No. 62) | 12. Rules of Practice (Mediators and Arbitrators) 1992 (Statutory Rules 1992, No. 63) | 13. Rules of Practice (Publications) 1992 (Statutory Rules 1992, No. 64) | 14. Rules of Practice Amendment (Litigation Loans) 1993 (Statutory Rules 1993, No. 1) | 15. Rules of Practice Amendment (Advertising) 1993 (Statutory Rules 1993, No. 40) | 16. Rules of Practice Amendment (Accounts) 1993 (Statutory Rules 1993, No. 120) | 17. Rules of Practice Amendment (Commission) 1993 (Statutory Rules 1993, No. 121) |
SCHEDULE 2 - Forms
Form 1
Form 2
Form 3
Form 4
Form 5
These foregoing Rules of Practice were made by the Council of the Law Society of Tasmania at a meeting of the Council on 3 December 1994.
C. P. Webster
President
P. A. Griffits
Member
Displayed and numbered in accordance with the Rules Publication Act 1953.
Notified in the Gazette on 28 December 1994
These rules are administered in the Department of Justice.