Update from New Zealand – review of 2021

Wednesday 2 February 2022

Gary Hughes
Akarana Chambers, Auckland

This update addresses two significant themes influencing New Zealand’s fused profession of barristers and solicitors during 2021. There are of course a range of Covid response issues facing the regulated legal profession too, but commentary on those is left aside for now, in favour of two developments of a more enduring nature.

Impact of old prior convictions on being a ‘fit and proper’ person to become a lawyer?

In order to become a lawyer in New Zealand a person has various hoops they are required to jump through, even after meeting legal education requirements. A key test (in common with other jurisdictions) is a regulatory assessment as to whether the individual is a fit and proper person to be admitted to the legal profession.

This is recognised in section 55 of the Lawyers and Conveyancers Act 2006[1] (‘the Act’), which prescribes how to determine whether a person is fit and proper to be admitted as a barrister and solicitor of the High Court. The New Zealand Law Society (‘NZLS’) or the High Court have the powers to evaluate those different statutory factors when deciding to admit new lawyers.

A range of professions have good character requirements, as well as minimum competency standards for entry, but the content of those requirements may vary according to the profession. Two cases in the last 12-18 months explored these issues in the context of historic criminal convictions, including one at Supreme Court level.

Lawyer ‘fit and proper’ person requirements were discussed in New Zealand Law Society v Stanley [2020] NZSC 83[2] where Mr Stanley, at 67 years of age, had completed the necessary academic and professional qualifications later in life for admission as a lawyer. But the NZLS refused to give him a certificate of character enabling admission, due to concerns about a history of criminal traffic offending, which included four convictions for drink driving between 1978 and 2014.

Mr Stanley challenged this, ending up in the Supreme Court (New Zealand’s highest appellate body) after the Court of Appeal decided to grant an order admitting him despite the NZLS' objections. The Supreme Court also determined that Mr Stanley met the standard for admission, due to his otherwise good character, and surveyed international case law on this topic in the course of a detailed discussion of what it means to be a ‘fit and proper person’.

The majority judges [at 54] summarised the relevant principles on this standard as follows:

‘(a) The purpose of the fit and proper person standard is to ensure that those admitted to the profession are persons who can be entrusted to meet the duties and obligations imposed on those who practise as lawyers.

(b) Reflecting the statutory scheme, the assessment focusses on the need to protect the public and to maintain public confidence in the profession.

(c) The evaluation of whether an applicant meets the standard is a forward-looking exercise. The Court must assess at the time of the application the risk of future misconduct or of harm to the profession. The evaluation is accordingly a protective one. Punishment for past conduct has no place.

(d) The concept of a fit and proper person in s 55 involves consideration of whether the applicant is honest, trustworthy and a person of integrity.

(e) When assessing past convictions, the Court must consider whether that past conduct remains relevant. The inquiry is a fact-specific one and the Court must look at all of the evidence in the round and make a judgement as to the present ability of the applicant to meet his or her duties and obligations as a lawyer.

(f) The fit and proper person standard is necessarily a high one, although the Court should not lightly deprive someone who is otherwise qualified from the opportunity to practise law.

(g) Finally, the onus of showing that the standard is met is on the applicant. Applications are unlikely to turn on fine questions of onus.’

The Supreme Court concluded that drink driving offences, while not insignificant, were not related to character issues that have a direct connection with legal practice (as with, say, dishonesty type offending). Further, there was no ‘lack of candour’ given Mr Stanley’s full disclosure and cooperation with the NZLS inquiries process, and weight was also given to Mr Stanley’s age and date of the historic offending. The first drink driving conviction was around 42 years ago, and the second and third were over 18 and 12 years ago respectively.

The same issue came up in Grant v RITANZ [2020] NZHC 2876,[3] a case not about admission to the legal profession, but rather as an insolvency practitioner. The insolvency/liquidator market in New Zealand has only recently become subject to any form of licensing, and Restructuring Insolvency & Turnaround Association New Zealand (RITANZ) is a self-regulatory peer body charged with determining licensing applications.

In the case, RITANZ found that Mr Grant was not a ‘fit and proper person’ due to a criminal history including serving prison time for older fraud and credit card offences (34 past convictions in total). When Mr Grant sought judicial review of RITANZ’s decision, the High Court confirmed the importance of context in all character assessments and felt that he was a fully reformed character at a much later stage in his life.

Taking cues from the principles discussed in Stanley, the Court applied a flexible, forward-looking standard and quashed the RITANZ decision, directing that body to reconsider Mr Grant’s application afresh. It said [at 72]:

‘I note also the Supreme Court’s emphasis in Stanley on the fact that the focus of the evaluation exercise must be resolutely forward looking. A “weighing” or “balancing” exercise does not have that perspective and carries the inherent danger that applicants for admission are further punished for their past conduct. When a test is framed in terms of whether the previous convictions remain relevant, inevitably the primary focus turns from the past to the present.’

Many hopeful professionals have to place their vocation in the hands of a regulatory body which comprises other professionals. Both the Grant and Stanley cases emphasise that a sympathetic approach can be applied, where the alternative would be to deprive people the right to continue in their chosen jobs due to old offending that is unlikely to repeat in future.

Regulating for anti-harassment policies and better lawyer behaviour

New rules governing the behaviour of lawyers, with an emphasis on tackling bullying and harassment, came into force on 1 July 2021. The changes amended the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008,[4] which is the primary ethical code for New Zealand Lawyers.

This follows events in 2018 at the height of the #MeToo movement, when alarming issues emerged in the profession around bullying, discrimination and sexual harassment. The resulting Inquiry reports by Dame Silvia Cartwright for the NZLS, and by Dame Margaret Bazley into the conduct of some partners at the law firm Russell McVeagh, prompted a painful self-inspection by the profession.

That led to a regulatory pendulum swinging strongly back on lawyer social and staff misconduct issues, with new rules that came into effect in 2021 described as the most substantial regulatory changes to the behaviour of members of the profession ever attempted by the NZLS.

All lawyers or law firms must now have anti-bullying and harassment policies and a complaints process, including a ‘Designated Lawyer’ who must report annually to the NZLS on such issues including compliance with their reporting obligations and employment policies. Further, lawyers are required to report at any time if they have reasonable grounds to suspect that another lawyer may have engaged in misconduct (defined in the Rules), and a discretion where they are encouraged to report unsatisfactory conduct by other lawyers.

Law practices must notify NZLS within 14 days if any person in the firm was issued a written warning or dismissed for bullying, discrimination or harassment, or if any person leaves the firm before an investigation is completed. The concern here stems from some firms sweeping problems under the carpet in the past, or even asking complainants to reach confidential settlements.

This process has hugely raised awareness of welfare issues in the profession, especially affecting junior lawyers and women, although whether such a compliance framework can profoundly change elements of law firm culture remains to be seen.