(e) External Intervention

Legal Profession Act 2004, Chapter 5

External intervention is the appointment of a supervisor, manager or receiver to a law practice and the exercise of powers and functions of those persons in relation to a practice.

s.611 LPA External intervention ensures that an appropriate range of options is available for intervention in the business and professional affairs of law practices and Australian-registered foreign lawyers for the purpose of protecting the interests of:
(a) the general public, and
(b) clients, and
(c) lawyers, including the owners and employees of law practices, so far as their interests are not inconsistent with those of the general public and clients.

Supervisor: Appointment of a supervisor is the least intrusive form of intervention. The intervention gives the supervisor the powers and duties of the practice in relation to trust money including powers to receive trust money entrusted to the practice and to open and close trust accounts. This form of intervention can enable issues to be addressed without the need to take professional and operational responsibility for the practice.

Manager: A manager for a law practice may carry on the practice and may do all things that the practice or a legal practitioner associate of the practice might lawfully have done, including but not limited to the following s626:
(a) transacting any urgent business of the practice,
(b) transacting, with the approval of any or all of the existing clients of the practice, any business on their behalf, including:
(i) commencing, continuing, defending or settling any proceedings, and
(ii) receiving, retaining and disposing of property,
(c) accepting instructions from new clients and transacting any business on their behalf, including:
(i) commencing, continuing, defending or settling any proceedings, and
(ii) receiving, retaining and disposing of regulated property,
(d) charging and recovering legal costs, including legal costs for work in progress at the time of the appointment of the manager,
(e) entering into, executing or performing any agreement,
(f) dealing with trust money in accordance with this Act and the regulations,
(g) winding up the affairs of the practice.

Can not trace or recover property.  Manager walks into the shoes of the practitioner and is allowed to run trust accounts and deal with files.

Receiver: The role of a receiver for a law practice is: to be the receiver of regulated property of the practice, and to wind up and terminate the affairs of the practice s633. For the purpose of winding up the affairs of the law practice and in the interests of the practice’s clients, the Supreme Court may, by order, authorise: the receiver to carry on the legal practice engaged in by the law practice, if the receiver is an Australian legal practitioner who holds an unrestricted practising certificate the person authorised to carry on the legal practice engaged in by a law practice has all the powers of a manager under this Part and is taken to have been appointed as manager for the law practice.

A receiver is an officer of the court and can only be appointed by an order of the court.  It is expensive and can employ a solicitor to act as a receiver.  A receiver can trace and recover property

External intervention may take place in relation to a law practice in any of the following circumstances (s.615 LPA):

(a) where a legal practitioner associate involved in the practice:
(i) has died, or
(ii) ceases to be an Australian legal practitioner, or
(iii) has become an insolvent under administration, or
(iv) is in prison,
(b) in the case of a firm-where the partnership has been wound up or dissolved,
(c) in the case of an incorporated legal practice-where the corporation concerned:
(i) ceases to be an incorporated legal practice, or
(ii) is being or has been wound up, or
(iii) has been deregistered or dissolved,
(d) in any case-where the Law Society Council forms a belief on reasonable grounds that the practice or an associate of the law practice:
(i) is not dealing adequately with trust money or trust property or is not properly attending to the affairs of the practice, or
(ii) has committed a serious irregularity, or a serious irregularity has occurred, in relation to trust money or trust property or the affairs of the practice, or
(iii) has failed properly to account in a timely , manner to any person for trust money or trust property received by the practice for or on behalf of that person, or
(iv) has failed properly to make a payment of trust money or a transfer of trust property when required to do so by a person entitled to that money or property or entitled to give a direction for payment or transfer, or
(v) is in breach of the regulations or legal profession rules with the result that the record-keeping for the practice's trust account is inadequate, or
(vi) has been or is likely to be convicted of an offence relating to trust moneyor trust property, or
(vii) is the subject of a complaint relating to trust money or trust property received by the practice, or
(viii) has failed to comply with any requirement of an investigator or external examiner appointed under this Act, or
(ix) has ceased to be engaged in legal practice without making provision for properly dealing with trust money or trust property received by the practice or for properly winding up the affairs of the practice, or
(e) where any other proper cause exists in relation to the practice.

When the Council becomes aware of circumstances referred to in s.615 LPA and decides, having regard to the interests of clients and other matters it considers appropriate,

The Law Society Council may determine (s.616(2) LPA):

(a) to appoint a supervisor of trust money received by the law practice, if the Council is of the opinion:
(i) that external intervention is required because of issues relating to the practice's trust accounts, and
(ii) that it is not appropriate that the provision of legal services by the practice be wound up and terminated because of those issues, or
(b) to appoint a manager for the law practice, if the Council is of the opinion:
(i) that the practice is or may be a viable business concern, and
(ii) that, for this to occur, there, is, a need for an independent person to be appointed to take over professional and operational responsibility for the practice, or
(c) to apply for the appointment of a receiver for the law practice, if the Council is of the opinion:
(i) that the appointment is necessary to protect the interests of clients in relation to trust money or trust property, or
(ii) that it may be appropriate that the provision of legal services by the practice be wound up and terminated."

The Bar association may:

This Chapter applies in respect of the law practice of a barrister subject to the following modifications:
(a) a reference to the Law Society Council is to be read as a reference to the Bar Council,
(b) Parts 5.3 (Supervisors) and 5.5 (Receivers) do not apply in respect of a law practice of a barrister,
(c) the powers of the manager for a law practice of a barrister include power to reallocate or return briefs.

(f) Issues of codes: best practice for client care, conveyancing

• Riley

(g) Solicitors and other lawyers

In all of their dealings with other practitioners, practitioners should act with honesty, fairness and courtesy, and adhere faithfully to their undertakings, in order to transact lawfully and competently the business which they undertake for their clients in a manner that is consistent with the public interest.