LEGAL SERVICES BOARD ANNUAL REPORT 2012 · 6 LegaL ServiceS BOarD AnnuAl RepoRt 2012 Our greatest achievement was the release of LSB Online, an online system, to all Victorian legal

LEGAL SERVICES BOARDANNUAL REPORT 2012

ii LegaL ServiceS BOarD ANNUAL REPORT 2012

LEGAL SERVICES BOARD ANNUAL REPORT

Level 10, 330 Collins Street MELBOURNE VICTORIA 3000

GPO BOX 4937 MELBOURNE VICTORIA 3001

Ausdoc: DX170 ABN: 82 518 945 610

Telephone: (03) 9679 8000 Fax: (03) 9679 8100 Email: [email protected] Website: www.lsb.vic.gov.au

LegaL ServiceS BOarD AnnuAl RepoRt 2012 1

AbouttheLegalServicesBoard 3 Statutoryobjectives&values 4 Chairperson’sreport 5 CEO’sreport 6

chapter 01 the BOarD 7

Boardmembers 7 Meetingattendance 9 Boardcommittees 9 Committeemembershipandfunctions 10 Significantachievementsandevents 12

chapter 02 the LegaL prOfeSSiOn in victOria 13

Glossary 14 Practitionerstatistics 15 Legalentitystatistics 22

chapter 03 repOrt Of OperatiOnS 27

Regulatingthelegalprofession 27 Protectingconsumersoflegalservices 30 Ensuringthepropermanagementoftrustaccounts 33 EnsuringthattheVictoriansystemisattheforefrontofregulation 35 PromotingthedeliveryofbetterlegalservicesandlawsinVictoria 37 Strengtheningourorganisationalcapabilities 41 Strengtheningourfinancialpractices 42

chapter 04 cOmpLiance StatementS 51

chapter 05 financiaL repOrt 65

DiScLOSure inDex 118

contents

2 LegaL ServiceS BOarD AnnuAl RepoRt 2012

ACLA theAustralianCorporateLawyersAssociation

the Act theLegalProfessionAct2004

the Bar theVictorianBar

the Board theLegalServicesBoard

COAG CouncilofAustralianGovernments

CPD continuingprofessionaldevelopment

the Fidelity Fund LegalPractitioners’FidelityFund

the Grants Program theLegalServicesBoardGrantsProgram

ILP incorporatedlegalpractice

LIV theLawInstituteofVictoria

LSC theofficeoftheLegalServicesCommissioner

PPF thePublicPurposeFund

the Register theRegisterofLegalPractitionersandLawPractices

RODA theRegisterofDisciplinaryAction

SDA statutorydepositaccount

SLP supervisedlegalpractice

VCAT VictorianCivilandAdministrativeTribunal

ABBReVIAtIons


the Board is a body corporate with perpetual succession. It is a public entity, but it does not represent the crown. the responsible minister is the Attorney-General, the Hon. Robert clark mp.

TheBoardwasestablishedon12December2005undertheLegalProfessionAct2004(theAct).TheBoardisresponsibleforabroadrangeoffunctions,including:

• issuing,renewing,suspending,imposingconditionsuponandcancellingpractisingcertificates

• settingprofessionalindemnityinsurancerequirements

• maintainingtheRegisterofLegalPractitionersandLawPractices(theRegister),andtheRegisterofDisciplinaryAction(theRODA)

• administeringfundssetoutundertheAct

• monitoring,inspectingandinvestigatinglegalpractitioners’trustaccounts

• investigatinganddeterminingclaimsagainsttheLegalPractitioners’FidelityFund(theFidelityFund)

• appointinglawpracticesupervisorsandmanagersandapplyingtotheSupremeCourtfortheappointmentofreceivers,and/orconductingexternalinterventionsoflawpractices

• auditingandsupervisingincorporatedlegalpractices(ILPs)

• makingandapprovinglegalprofessionrules

• prosecutingbreachesoftheAct

• managinganddeterminingarangeofexemptionsfromrequirementsundertheAct

• conductingapplicationsforremovaloflegalpractitioners’namesfromtheSupremeCourtroll,and

• makinggrantstoenhancethelegalsystem,legalservicesandlegaleducation.

ThroughitsroleasthepeakregulatorofthelegalprofessioninVictoria,theBoardaimstopromotehighprofessionalstandardsamonglegalpractitionersbyworkingwiththeLegalServicesCommissioner(LSC),theLawInstituteofVictoria(LIV)andtheVictorianBar(Bar)toachievethesestandards.

ABout tHe leGAl seRVIces BoARD

the legal services Board (the Board) is an independent statutory authority responsible for the regulation of the legal profession in Victoria.


stAtutoRY oBJectIVes

VAlues

The Board’s statutory objectives as stated in section 6.2.3 of the Act are to:

■■ ensuretheeffectiveregulationofthelegalprofessionandthemaintenanceofprofessionalstandards

■■ addresstheconcernsofclientsoflawpracticesandlegalpractitionersthroughtheregulatorysystemandprovidefortheprotectionofconsumersoflegalservices

■■ ensuretheadequatemanagementoftrustaccounts,and

■■ ensurethattheVictoriansystemisattheforefrontofregulationoflegalpractitioners.

Impartiality:Makingdecisionsobjectively

Integrity:Earningandsustainingpublictrust

Accountability:Takingresponsibilityforresults

Responsive service:Demonstratingaspiritofservice

Human Rights:Providingafairgoforeveryone

Respect:Providingfairandobjectivetreatment

Leadership: Leadingbyexample


ThismaybeoneofthefinalannualreportsoftheBoardwiththeimplementationofthenationallawlikelytocommenceinthenextreportingyear.TheVictorianLegalServicesBoardiscommittedtoworkingwithgovernmenttoimplementthenationalschemeinVictoria.Weare,however,equallycommittedtocontinuingourroleaslegalregulatoroftheVictorianlegalprofessionasrequired.

During2011-12,theBoardcontinuedtoembarkonnewregulatoryinitiativesandprojects,oneofwhichinvolvedthereleaseofouronlineregistrationsystem,LSBOnline,toalllegalpractitionersinVictoria.LSBOnlineenableslegalpractitionerstorenewtheirpractisingcertificatesonlineandwill,inthenearfuture,alsoallowmanyotherformstobecompletedonline.Approximately87%ofpractitionerswhorenewedtheirpractisingcertificatesforthe2012-13practisingyeardidsothroughLSBOnline,whichisatremendousresultinitsfirstyearofoperation.IwouldliketoacknowledgeandthankBoardstafffortheirdedicationtothissignificantproject.

Theapprovalofnewpractisingcertificatefeeswasalsoontheagendaforthe2011-12reportingyear.On30June2012,thepreviousregulationssettingoutthosefeesexpired.TheBoardwasrequiredtoprepareandprovidetothegovernmentaRegulatoryImpactStatementassessingtheimpactofrecommendedpractisingcertificatefeesonthelegalprofession.TherecommendedfeesweresubsequentlyapprovedbytheGovernor-in-Councilandthenewregulationssettingoutthenewfeescameintoeffecton14March2012.

AnotherinitiativeundertakenbyBoardstaffwasthedevelopmentandsubsequentapprovalbytheBoardoftheMentalHealthPolicy.AlongwiththenewlyrevisedFitandProperPersonPolicy,legalpractitionersnowhaveclearguidelinesregardingthetypeofsuitabilitymattersthatmayimpactupontheirfitnesstopractise,aswellasclarificationregardingtheirobligationsofdisclosureofmentalhealthissuestotheregulator.Now,itisclearonlyincapacitatingmentalillnessneedstobedisclosed,therebyencouragingdisclosuretodoctorsandfamily.

TheBoard’sGrantsProgramcontinuedduringtheyear.Eightprojectsreceivedfundingtotalling$411,547.Thoseprojectsrelatedtocommunitylegaleducation,educationandguidanceforthelegalprofession,andaccesstojusticefordisadvantagedandmarginalisedVictorians.TheBoardalsograntedatotalof$3.7millioninthe2011MajorGrantsroundto15projects,withthemajorityfocussingonissuesrelatingtoviolenceagainstwomen.

Theprojectsrangedfromprovidinglegalassistancetowomenatriskof,orexperiencing,violence;theestablishmentoffamilyviolencesupportservicesatsmallercourts;andresearchingtheincidenceofviolenceagainstwomenwhichcouldleadtolegalreform.TheBoardbelievesithassupportedarangeofgreatinitiativestakenbycommunitygroupsandorganisationstoimprovejusticefortheVictoriancommunity.

ThisyeartheVictorianAuditorGeneral’sOffice(VAGO)reviewedtheperformanceofthePublicPurposeFund(PPF)aspartofareviewthatlookedattheoverallmanagementoftrustfundsintheJusticeportfolio.Thefindingswereoverwhelminglypositiveand,overall,complimentaryoftheBoard’sadministrativeprocessesandpracticesinrelationtothePPF.TheBoardwaspleasedwiththefindingsofthisreviewandhasadoptedthesuggestionsmadeforimprovementbyVAGO.

WithregretIacknowledgethatthisyearwasMelissaHorne’slastyearontheBoard.IwouldliketothankMelissaonbehalfoftheBoardforhersignificantcontributionsoverthelastfouryears.

IwouldalsoliketoextendmyappreciationandthankstoBoardandLegalServicesCommissionerstafffortheirhardworkandcommitmentthroughouttheyear.

Colin Neave am Chairperson

cHAIRpeRson’s RepoRtI am pleased to present the 2011-12 annual report of the legal services Board, which also marks my seventh annual report as chairperson of the Board.


OurgreatestachievementwasthereleaseofLSBOnline,anonlinesystem,toallVictorianlegalpractitionersforthe2012-13practisingcertificaterenewalscycle.Theveryhightake-uprateamongstthelegalprofessionwasnotableasafirstyearinitiative,butthatwaslargelyduetoaverysuccessfulpromotionexerciseandaworkableonlinetool.Theavailabilityofonlineapplicationsandformsforpractitionersreducespaperwaste,increasesefficiencyandprovidesforamorestreamlinedprocess,thusreducingtheregulatoryburdenforlawyers.

AsCEOoftheBoard,IamalsotheLegalServicesCommissioner(LSC).TheActprescribesthatIamtheemployerofstaffworkingforboththeBoardandLSCfunctions.Inanticipationoftheproposednationallaw,Iinitiatedarestructureofbothorganisationstoassistinourtransitiontotheproposednationalscheme.ThisprocessresultedintheestablishmentofanInvestigationsandRegulationTeam,whoareresponsibleforcarryingouttheregulatorypowersoftheBoard.AlthoughthisteamisprimarilyresponsibleforexercisingBoardfunctions,theyhavebeenplacedintheRegulationandComplaintsareaoftheLSCtoensureacoordinatedapproachtomattersthatrequiretheinvolvementofboththeLSCandtheBoard.Iampleasedtoreportthatthisinitiativeisalreadydeliveringpositiveresults,withourorganisationsrespondingswiftlyandwithsingularpurposetopotentialbreachesandusingthemostappropriateregulatorypowersavailable.

Aspartoftherestructureprocess,Ialsoestablishedasinglepolicyteam,knownastheRegulatoryReformandPolicyTeam,whichisresponsibleforprovidingoperationalandregulatorypolicysupporttoboththeBoardandtheLSC.TheRegulatoryReformandPolicyTeamwereinstrumentalindevelopinganewMentalHealthPolicythisyear,whichsetsouttheBoard’sapproachtolawyerswithmentalimpairments.Thepurposeofthispolicyistoencouragesuchlawyerstovoluntarilyseekappropriatetreatmentandtoonlyrequiredisclosuretotheregulatorwheretheimpairmentaffectsthelawyer’scapacitytoengageinlegalpractice.TheBoardconsultedwithawiderangeofinterestgroupsinthedevelopmentofthispolicy,includingtheLawInstituteofVictoria(LIV),theVictorianBar(Bar),AustralianCorporateLawyersAssociationandmentalhealthadvisorybodies.

TheRegulatoryReformandPolicyTeamalsoworkedcloselywiththeVictorianDepartmentofJusticetoamendtheLegalProfessionAct2004toinclude,amongstotherthings,theopportunityforcorporatelegalpractitionerstoprovideprobonoservicesbeyondcommunitylegalcentres.TheBoardsubsequentlyapprovedtheNationalProBonoResourceCentrepolicyscheme,whichprovidesprofessionalindemnityinsuranceforthoselegalpractitionersprovidingprobonoworkontheirapprovedprojects.

Asat30June2012,therehasbeenasignificantincreaseinfemalelegalpractitionersregisteredinVictoria,ascomparedwithlastyear.7,836femalelegalpractitionerswereregisteredinthisreportingyear,anincreaseofalmost500since30June2011.Itisalsosignificanttonotethat59%ofregisteredlegalpractitionersbetweentheagesof20to40arefemale.ThetotalnumberofregisteredlegalpractitionersinVictoriahasalsoincreasedto17,453,ascomparedwith16,727in2010-11.Thegrowthandchangingmakeupoftheprofessionwillaffectthewayitisregulated.

AsCEOoftheBoardIcontinuetoencouragemystafftoregularlyliaisewithstaffattheLIVandBar,thelegalprofessionalassociationsanddelegatesoftheBoard,andtoshareknowledgeandexpertisewhereappropriate.OurworkingrelationshipswiththeLIVandBarstaffarecriticaltotheongoingsuccessoflegalregulationinVictoria,andinthissenseIthankthemfortheirongoingcommitmentandsupportfortheworkoftheBoardandtheLSC.

IremaincommittedtoimprovingandfurtherdevelopingtheabilityofmyofficetoensurethatlegalregulationinVictoriacontinuestoenhancethevalueandqualityoflegalservicesforconsumers.Iamespeciallyconsciousofthespecialrolethelegalregulatorplayswiththelegalprofessioninensuringalllawyersmeettheprofession’sownveryhighstandardsofethics,trainingandgoodservice.

Michael McGarvie CEO

ceo’s RepoRtAs ceo of the Board I would first like to extend my personal gratitude to both Board members and staff working on Board functions for all of their hard work in making the 2011-12 year a success.


the Board consists of a chairperson, three elected legal practitioner members and three non-legal practitioner members who are members of the community with broad experience or understanding of legal services. the Governor-in-council, on the recommendation of the Attorney-General, appoints the chairperson and the three non-legal practitioner members.

mr colin neave amcHAIRpeRson

ColinhasbeenChairpersonoftheBoardsinceDecember2005.ColinpractisedasasolicitorinMelbournefor20yearsbetween1967and1987.Duringthelastfiveyearsofthattime,heheldthepositionofCompanySecretaryofAMIToyotaLtd,thenalistedcompany.Between1987and1996,heheldseniorpositionswithvariousgovernments,includingSecretaryoftheAttorney-General’sDepartmentinVictoria,andCommissionerforConsumerAffairsinSouthAustralia.ColinwastheBankingandFinancialServicesOmbudsmanfromFebruary1996untilJuly2008whenhebecameChiefOmbudsmanoftheFinancialOmbudsmanServiceuntilretiringfromthatroleinSeptember2011.HehasbeentheChairmanoftheCommonwealthConsumerAffairsAdvisoryCouncil(anditspredecessors)sinceJuly1997.ColinwasalsoappointedPresidentoftheCommonwealthAdministrativeReviewCouncilinMay2010.

ms fiona Bennettnon-leGAl pRActItIoneR memBeR

FionaisadirectorofanumberofentitiesincludingHillsHoldingsLimitedandBoomLogisticsLimited,andisdeputyChairofAlfredHealth.SheisaCharteredAccountantwithextensiveexperienceincommercialandfinancialmanagement,governance,riskmanagementandaudit.ShehasheldseniorexecutivepositionsatBHPBillitonLimitedandColesGroupLimited,andhasbeenChiefFinancialOfficerofseveralorganisationsinthehealthsector.FionaisaFellowoftheInstituteofCharteredAccountants,theAustralianInstituteofCompanyDirectorsandtheAustralianInstituteofManagement.

ms carolyn Bondnon-leGAl pRActItIoneR memBeR

CarolynistheCo-CEOoftheConsumerActionLawCentre,aspecialistcommunitylegalcentrethatprovideslegalassistancetoconsumersandcampaignsonconsumerissues.Carolynhasworkedonarangeofconsumerpolicyissuesincludingcreditregulation,debtcollectionandconsumerdisputeresolutionandhasrepresentedtheconsumerinterestonanumberofbodies.SheiscurrentlyamemberoftheCommonwealthConsumerAffairsAdvisoryCommittee,andtheNationalLegalAssistanceAdvisoryBody.CarolynwasamemberoftheNationalLegalProfessionReformConsultativeGroup.

cHApteR 01 tHe BoARD


mr David faramleGAl pRActItIoneR (non-ADVocAte) memBeR

DavidisaSheppartonbasedlawyerwithover35years’legalexperience.HeisapartneratFaramRitchieDavieswherehepracticesextensivelyinfamilylawandseriousindictablecrime.Hepreviouslypractisedinpersonalinjurylaw.Heisalsoanindependentchildren’slawyerandaccreditedmediator.DavidwasamemberoftheLIVCouncilfor10years,heldthepositionofLIVPresidentin2002andwasawardedHonoraryLifeMembershipoftheLIVin2008.

mr richard fleming leGAl pRActItIoneR (non-ADVocAte) memBeR

Richardisacommercialandtechnologylawyerwithapproximately20years’experience.Formerlyapartnerofanationallawfirm,Richardsubsequentlyestablishedhisownboutiquefirm,Benelex.RichardisChairmanoftheLIVEthicsCommitteeandaformerLIVCouncilmember.HeisalsoanactivememberoftheAustralianCorporateLawyersAssociation.

ms melissa hornenon-leGAl pRActItIoneR memBeR

MelissacurrentlyistheCorporateAffairsandGovernmentRelationsDirectorforoneofAustralia’stop300publiclylistedfirms,specialisingininformationandcommunicationstechnology.ShejoinedtheBoardasanAttorney-General’sappointeeinJuly2008.Shehasabackgroundinmediarelationsandcommunicationsmanagementacrossabroadrangeofsectorsincludingtransport,energyandinformationtechnology.

mr peter Jopling Qc leGAl pRActItIoneR (ADVocAte) memBeR

PeterisaQueen’sCounselspecialisingincommerciallawandtradepracticeslaw.Hewasadmittedtopracticein1978andsignedtheVictorianrollin1980.PeterservedasanAssociatetoHighCourtJusticesSirKeithAickinandSirNinianStephen.HewasappointedQCin1996.Peterhasheldpositionsasdirector,memberandchairforarangeoforganisationsandcommittees.HeiscurrentlyamemberoftheVictorianCivilandAdministrativeTribunalLegalPracticePanel,memberoftheBoardofExaminers,directoroftheMelbourneBusinessSchool,deputychairoftheAustralianCentreforContemporaryArt,aGovernoroftheFloreyNeuroscienceInstitutes,memberoftheVictorianCollegeoftheArtsFoundationandamemberoftheadvisoryboardoftheCentreforEthicalLeadership.

mr michael mcgarviecHIef executIVe offIceR

MichaelwasappointedLegalServicesCommissioner,andasaresult,CEOoftheBoardinDecember2009.Priortothis,MichaelwastheCEOoftheSupremeCourtofVictoriaforaperiodofthreeyears.HepractisedasasolicitoratHoldingRedlichfor23years,wherehespecialisedinpersonalinjuries,civillitigationanddisputeresolution.


meeting attenDanceTheBoardmettentimesinthereportingyear.

Figure 1 Board memBer meeting attendance in 2011-12

BoARd MeMBeR NuMBeR of BoARd MeeTINGs ATTeNded

MrColinNeaveam 10

MsFionaBennett 9

MsCarolynBond 9

MrDavidFaram 8

MrRichardFleming 10

MsMelissaHorne 7

MrPeterJoplingqc 4

finaL year fOr meLiSSa hOrneOn28July2012MelissaHorneendedherfour-yeartermasanon-legalpractitionermemberoftheBoard.TheappointmentofanewBoardmemberismadebytheGovernor-in-CouncilontherecommendationoftheAttorney-General.Attheendofthereportingperiod,theBoardwasawaitingadviceontheappointmentofanewBoardmembertotheimpendingvacancy.

BOarD cOmmitteeS

Figure 2 Board committees

Audit Committee

FionA Bennett ChAir

LegAL PrACtiCe

Committee

dAvid FArAm ChAir

FinAnCe And investment Committee

FionA Bennett ChAir

FideLity Fund CLAims Advisory

Committee

CAroLyn Bond ChAir

grAnts Committee

CoLin neAve am ChAir

LegAL serviCes BoArd

CoLin neAve am ChAirPerson


finance & Investment CommitteeChair

Ms Fiona Bennett

Members

Ms Carolyn Bond Mr Richard Fleming Mr Peter Jopling qc Mr Colin Neave am

The main responsibilities of the Finance and Investment Committee are to monitor the financial performance of the Board and the funds under its administration. The Committee provides recommendations to the Board on:

• yearly funding for the Board, the LSC and the Victorian Civil and Administrative Tribunal (VCAT) Legal Practice List

• funding for the LIV and the Bar for performance of delegated functions

• funding for legal education

• any amount to be transferred to the Fidelity Fund

• investment strategy, allocation of assets and the appointment/termination of Investment Managers

• investments for the Statutory Deposit Account and Fidelity Fund, and

• the amount to be credited to the Distribution Account.

Audit CommitteeChair

Ms Fiona Bennett

Members

Ms Melissa Horne Mr Richard Fleming

The main responsibilities of the Audit Committee are to:

• review the maintenance of the accounting systems and ensure there are effective internal controls

• review and approve the Board’s accounting policies and application of relevant accounting standards and requirements of Government Departments, including those set out in the Financial Management Compliance Framework

• review the findings of the auditors (internal and external) and ensure that management’s actions to redress control weaknesses are appropriate

• review the annual financial statements with the CEO and External Auditors and recommend approval by the Board

• review major changes in accounting policies and determine the impact of those changes on the presentation of the Board’s results

• review the performance of the internal and external auditors

• recommend to the Board the appointment and remuneration of the auditors (internal and external)

• prepare a report to the Board on the Audit Committee performance that summarises the activities of the Committee to fully discharge its duties during the year

• monitor IT strategy, systems implementation and the IT control environment of the Board

• monitor the actuarial reviews of the Fidelity Fund

• review and monitor the risk management practices of the Board on a quarterly basis, and

• review processes for monitoring compliance with law and regulations, the organisation’s code of conduct and the financial code of practice.

cOmmittee memBerShip anD functiOnS


Grants CommitteeChair

Mr Colin Neave, AM

Members

Ms Carolyn Bond Ms Melissa Horne Mr David Faram

Legal Practice CommitteeChair

Mr David Faram

Members

Ms Meagan Keogh (Victoria Legal Aid representative)

Ms Jenni Smith (Federation of Community Legal Centres representative)

Mr Kevin J A Lyons (Victorian Bar representative)

Mr Paul Vine (Australian Corporate Lawyers Association representative)

Mr Michael Hermitage (Consumer Action Law Centre representative)

Mr Steven Stevens (LIV representative)

fidelity fund Claims Advisory CommitteeChair

Ms Carolyn Bond

Members

Mr Richard Fleming Mr Kevin Lyons (external) Mr Roger Batrouney (external)

The main responsibilities of the Grants Committee are to:

• recommend to the Board the object, nature and quantum of yearly grants to be made under the Act for law reform, legal and judicial education, legal research and other purposes relating to the legal profession, and

• advise the Board in its determination of the criteria for issuing grants.

The functions of the Legal Practice Committee are to:

• consider proposals for significant changes to the legal profession rules and other regulatory matters in relation to the manner of legal practice

• report and make recommendations to the Board on issues relating to legal profession rules and the legal profession

• review and advise on the implementation of legal profession rules in Victoria

• liaise with other jurisdictions and national bodies on developments in the regulation of the legal profession, and

• provide advice to the Grants Committee and the Finance and Investment Committee as required about potential funding for projects or activities relating to legal profession rules and the manner of legal practice.

The main function of the Fidelity Fund Claims Advisory Committee is to assist the Board in determining whether claims on the Fidelity Fund should be allowed or disallowed.


sIGnIfIcAnt eVents AnD AcHIeVements

RecoRDeD approximately 87% of practitioners, out of 97% who renewed their practising certificates for 2012-13, who had done so through LsB online. More information on page 27.

RecommenDeD to the government new practising certificate fees for the Victorian legal profession and prepared a Regulatory Impact statement to assess the impact of the proposed fees on the legal profession. More information on page 28.

estABlIsHeD a new Investigations and Regulation Team to deal with breaches of the Act under the regulatory powers of the Board. More information on page 41.

RecoRDeD 419 trust account investigations, conducted by the Board’s delegate, the LIV. More information on page 33.

pRoVIDeD approximately $411,547 to eight projects through the Project Grants stream of the Grants Program. A further $3.7 million in funding was distributed to 15 projects in the 2011 Major Grants round. More information on page 38.

AppRoVeD a Mental Health Policy to provide guidance to practitioners in relation to suitability matters relevant to the question of whether a practitioner is fit and proper to practise. More information on page 28.

fAReWelleD Board member Melissa Horne, whose four-year term ended on 28 July 2012. Melissa was a non-legal member who brought to the Board a wealth of knowledge and experience in the field of communications and government relations. More information on page 8.


What iS the regiSter?TheBoardisresponsibleformaintainingtheRegister,whichfunctionsasaconsumerprotectionmechanismasitisthecentraldatabaseofinformationaboutlegalpractitionersinVictoria.Forexample,consumerscansearchtheRegistertoconfirmwhetherapractitionerholdsapractisingcertificate.Consumersoflegalservices,legalpractitionersandthepublicingeneralcaninspecttheRegisteratnocharge.

hOW can the regiSter Be acceSSeD?TheRegistermaybeinspectedwithoutanappointmentattheBoard’sofficesduringbusinesshours.Apersonmay,inmostcircumstances,obtainanextractfromtheRegister,freeofcharge.AnextractoftheRegistercanalsobeviewedviatheBoard’swebsiteatwww.lsb.vic.gov.au.

What infOrmatiOn DOeS the regiSter cOntain?TheRegistercontainsdetailsofalllocallegalpractitioners,locally-registeredforeignlawyers,solepractitioners,lawfirms,multi-disciplinarypartnerships,incorporatedlegalpracticesandcommunitylegalcentres.Theregisterisupdatedaspractitionerandlawpracticedetailschange.

TheRegisterincludesthefollowinginformationaboutlocallegalpractitioners:

• name

• dateofbirth

• dateofadmissiontothelegalprofession

• addressforservice

• conditionsimposedonthepractitioner’spractisingcertificate(includingthetypeofpracticeauthorised)

• whetherthepractitionerengagesinlegalpracticesolelyasabarrister

• thenameofalawpracticewherethepractitionerisemployed(iftheyareanemployeeofalawpractice),and

• anybusinessnamesthepractitionertradesunder(iftheyareasolepractitioner).

TheRegisterincludesthefollowinginformationaboutlawpractices:

• name

• addressforservice

• businessnames

• thetypeofentity,and

• namesofpartners/directors.

cHApteR 02 tHe leGAl pRofessIon In VIctoRIAthis chapter provides an overview of the number and type of legal practitioners and legal entities registered in Victoria. the data featured in this chapter was derived from the Register of legal practitioners and law practices (the Register) as at 30 June 2012.

http://www.lsb.vic.gov.au


GlossARY

Below are the definitions of words and terms featured in this chapter.

Australian-registered foreign lawyer isapersonauthorisedtopractiseforeignlawwithinthejurisdictionofthisAct,namelyVictoria.

Community Legal Centre (CLC)isanorganisationthatprovidesfreelegalservicestomembersofthecommunitywhogenerallydonothavefinancialmeanstoobtainprivatelyfundedlegalservices.

Corporate legal practitionermeansapractitionerwhoprovideslegalservicestoanemployeroragencythatisnotalegalentityorlawpractice.

Foreign law practicemeansapartnershiporcorporateentitythatisentitledtoengageinlegalpracticeinaforeigncountry.

Government employerisagovernmentbodyoragencythatemploysAustralianlegalpractitioners.

Incorporated Legal Practice (ILP)isanincorporatedcompanyregisteredwithASICthatengagesinlegalpractice,regardlessofwhetheritalsoprovidesservicesotherthanlegalservices.

Law firmisapartnershipconsistingofAustralianlegalpractitionersand/oroneormoreILPsand/oroneormoreAustralianregisteredforeignlawyers.

Law practice meanseitheranAustraliansolepractitioner,alawfirm,amulti-disciplinarypartnership(MDP),anILPoraCLC.

Legal practitioner directorisadirectorofanILPwhoisanAustralianlegalpractitionerengaginginlegalpracticeastheprincipalofalawpractice.

Legal practitioner partnerisapartnerofaMDPwhoisanAustralianlegalpractitionerengaginginlegalpracticeastheprincipalofalawpractice.

Legal practitioner employee isanAustralianlegalpractitionerholdinganemployeepractisingcertificateemployedbyalawpracticefortheprovisionoflegalservices.

Multi-Disciplinary Partnership (MDP) isapartnershipbetweenoneormoreAustralianlegalpractitionersandpersonswhoarenotAustralianlegalpractitioners,wherethebusinessofthepartnershipincludestheprovisionoflegalservices.

Non-legal employerisanentitythatisnotaregisteredlegalentityandemployslegalpractitionersfortheprovisionofin-houselegalservices.

PrincipalmeansanAustralianlegalpractitionerwhoiseitherasolepractitioner,legalpractitionerpartner(eitherofalawfirmorMDP),legalpractitionerdirectorofanILPorsupervisinglegalpractitionerofaCLC.

Principal with trust authorisation canbeeitherasolepractitioner,apartnerinalawfirmorMDP,alegalpractitionerdirectorinanILP,orasupervisinglegalpractitionerinaCLCwhoisauthorisedtoreceivetrustmoneyand/oroperateatrustaccount.

Sole practitionerisanAustralianlegalpractitionerwhoengagesinlegalpracticeforhisorherownprofit,withoutbeinginpartnershiporthroughanILP.

Supervising legal practitionerisanAustralianlegalpractitionerwhoistheprincipalforthelegalservicesprovidedbyaCLC.

Volunteer at CLCisanAustralianlegalpractitionerwhoprovideslegalservicesinavolunteeringcapacityataCLC.


pRActItIoneR stAtIstIcs

17,45316,72716,028

17,453 practitiOnerS regiStereD in victOria aS at 30 June 2012ThenumberofpractitionersregisteredinVictoriaincreasedby4%overlastyear.

■2009-10■2010-11■2011-12

Figure 3 numBer oF practitioners registered in Victoria

1,3411,263

1,1861,341 neW practitiOnerS aDmitteD tO the LegaL prOfeSSiOn BetWeen 1 JuLy 2011 anD 30 June 2012ThenumberofnewpractitionersadmittedinVictoriaincreasedby6%overlastyear.

■2009-10■2010-11■2011-12

Figure 4 neW practitioners admitted to tHe LegaL proFession

1,0031,0701,056

1,003 practitiOnerS DiD nOt reneW their practiSing certificateS fOr the year enD 30 June 2012

■2009-10■2010-11■2011-12

Figure 5 non-reneWaL oF practising certiFicates


practitiOnerS By age anD genDerConsistentwithfiguresfromprecedingyears,oflegalpractitionersregisteredinVictoriaasat30June2012,55%weremaleand45%werefemale.Significantly,59%ofregisteredlegalpractitionersbetweentheagesof20to40werefemale,despitebeingconsiderablyunder-representedinthesubsequentagegroups.

Figure 6 practitioners By age and gender

AGe IN yeARs

GeNdeR 20-30 31-40 41-50 51-60 61-70 70+ ToTAL

MALe

2010-11 1,369 2,221 1,973 2,229 1,319 278 9,389

2011-12 1,417 2,293 1,968 2,229 1,375 335 9,617

feMALe

2010-11 2,282 2,728 1,353 752 196 27 7,338

2011-12 2,397 2,860 1,495 843 208 33 7,836

ToTAL

2010-11 3,651 4,949 3,326 2,981 1,515 305 16,727

2011-12 3,814 5,153 3,463 3,072 1,583 368 17,453

practitiOner type anD genDerAsshowninFigure7,themajorityoflegalpractitionersregisteredinVictoriapractiseassolicitors.89%practiseassolicitorsand11%practiseasbarristers.

Figure 7 practitioner type and gender

TyPe

soLICIToRs BARRIsTeRs ToTAL

GeNdeR 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12

Male 7,968 8,185 1,421 1,432 9,389 9,617

Female 6,863 7,350 475 486 7,338 7,836

ToTAL 14,831 15,535 1,896 1,918 16,727 17,453


LOcatiOn Of practitiOnerS AsshowninFigure8,59%oflegalpractitionersregisteredinVictoriaarebasedinthecity,followedby30%inthesuburbs.

Figure 8 Location oF practitioners

TyPe

soLICIToRs BARRIsTeRs ToTAL

LoCATIoN 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12

City 8,140 8,406 1,843 1,861 9,983 10,267

Suburb 4,964 5,295 39 41 5,003 5,336

Country 1,191 1,262 9 12 1,200 1,274

Overseas 348 369 2 1 350 370

Interstate 188 203 3 3 191 206

ToTAL 14,831 15,535 1,896 1,918 16,727 17,453

practitiOnerS By aDmiSSiOn LOcatiOn anD genDerFigure9showsthenumberofpractitionersregisteredinVictoriaasat30June2012bytheiradmissionlocationandgender.Practitionersthatobtainedadmissiontopracticeinterstatecomprisedapproximately6%ofthetotalnumberofpractitionersregisteredinVictoria.

Figure 9 practitioners (incLuding Victorian registered Foreign LaWyers) By admission Location and gender

VICToRIAN INTeRsTATe foReIGN ToTAL

GeNdeR 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12

Male 8,979 9,152 410 465 17 17 9,406 9,634

Female 6,820 7,232 518 604 6 1 7,344 7,837

ToTAL 15,799 16,384 928 1,069 23 18 16,750 17,471*

*Includes18foreignlicensesprovidedtoVictorianregisteredforeignlawyers.


practitiOnerS By pOSitiOn typeAt30June2012,therewere18,764legalpractitionerpositionsregisteredinVictoria.ThisishigherthanthetotalnumberofpractitionersregisteredinVictoriaduetopractitionersmaintainingpositionswithmorethanoneentity.Forexample,apractitionermayoccupyapositionasanemployeeofalawfirmwhilemaintainingavolunteerpositionwithacommunitylegalcentreatthesametime.

At30June2012,Figure10indicatesapproximately35%ofpractitionersmaintainedapositionasalegalpractitioneremployeeinanentity,whileafurther26%occupiedapositionasasolepractitioner.

Figure 10 practitioners By position type

ToTAL 17,454

ToTAL 18,764

2010-11

■■■Legalpractitioneremployee6,219(35%)

■■■Solepractitioner4,693(27%)

■■■Corporatelegalpractitioner2,947(17%)

■■■Legalpractitionerpartner1,701(10%)

■■■Legalpractitionerdirector1,121(6%)

■■■VolunteeratCommunityLegalCentre678(4%)

■■■Supervisinglegalpractitioner95(1%)

2011-12

■■■Legalpractitioneremployee6,629(35%)


■■■Corporatelegalpractitioner3,307(18%)

■■■Legalpractitionerpartner1,818(10%)

■■■Legalpractitionerdirector1,243(6%)

■■■VolunteeratCommunityLegalCentre757(4%)

■■■Supervisinglegalpractitioner102(1%)


practitiOnerS By practiSing certificate type anD ageFigure11showsthenumberofpractitionersregisteredinVictoriabypractisingcertificatetypeandage.Approximately38%ofpractitionersregisteredinVictoriaat30June2012heldanemployeepractisingcertificate.Ofthese,45%wereagedbetween20and30,whileafurther33%wereagedbetween31and40.Approximately20%ofpractitionersmaintainedaprincipalwithtrustpractisingcertificate,ofwhomapproximately37%wereagedbetween51and60.

Figure 11 practitioners By practising certiFicate type and age

AGe IN yeARs

20-30 31-40 41-50 51-60 61-70 70+ ToTAL

eMPLoyee

2010-11 2,932 2,103 648 414 252 70 6,419

2011-12 3,035 2,204 690 417 252 81 6,679

PRINCIPAL wITH TRusT AuTHoRIsATIoN

2010-11 23 504 953 1,266 626 91 3,463

2011-12 22 496 928 1,276 647 108 3,477

PRINCIPAL

2010-11 206 948 989 983 583 140 3,849

2011-12 225 1,022 1,055 984 618 171 4,075

CoRPoRATe

2010-11 425 1,329 697 293 44 3 2,791

2011-12 451 1,357 744 366 54 5 2,977

VoLuNTeeR

2010-11 65 65 39 25 10 1 205

2011-12 81 74 46 29 12 3 245

ToTAL

2010-11 3,651 4,949 3,326 2,981 1,515 305 16,727

2011-12 3,814 5,153 3,463 3,072 1,583 368 17,453


maLe practitiOnerS By practiSing certificate type anD ageFigure12showsthenumberofmalepractitionersinVictoriabypractisingcertificatetypeandage.At30June2012,approximately29%ofmalepractitionersheldaprincipalwithtrustpractisingcertificate,whileafurther28%heldanemployeepractisingcertificate.29%maintainedaprincipalcertificatewithnotrustauthorisation.

Figure 12 maLe practitioners By practising certiFicate type and age

AGe IN yeARs

20-30 31-40 41-50 51-60 61-70 70+ ToTAL

eMPLoyee

2010-11 1,091 809 273 237 200 62 2,672

2011-12 1,127 840 269 226 200 72 2,734


2010-11 10 338 714 1,087 558 80 2,787

2011-12 9 326 680 1,074 578 95 2,762

PRINCIPAL

2010-11 102 530 649 735 516 133 2,665

2011-12 112 566 665 717 549 162 2,771

CoRPoRATe

2010-11 143 526 322 160 40 3 1,194

2011-12 148 537 338 199 43 4 1,269

VoLuNTeeR

2010-11 23 18 15 10 5 0 71

2011-12 21 24 16 13 5 2 81

ToTAL

2010-11 1,369 2,221 1,973 2,229 1,319 278 9,389

2011-12 1,417 2,293 1,968 2,229 1,375 335 9,617


femaLe practitiOnerS By practiSing certificate type anD ageFigure13showsthenumberoffemalepractitionersinVictoriabypractisingcertificatetypeandage.Asindicatedbelow,approximately50%offemalepractitionersheldanemployeepractisingcertificateasat30June2012.Ofthese,48%wereagedbetween20and30andafurther35%wereagedbetween31and40.22%maintainedacorporatepractisingcertificate,while17%maintainedaprincipalwithnotrustpractisingcertificate.Approximately9%maintainedaprincipalwithtrustpractisingcertificate.

Figure 13 FemaLe practitioners By practising certiFicate type and age

AGe IN yeARs

20-30 31-40 41-50 51-60 61-70 70+ ToTAL

eMPLoyee

2010-11 1,841 1,294 375 177 52 8 3,747

2011-12 1,908 1,364 421 191 52 9 3,945


2010-11 13 166 239 179 68 11 676

2011-12 13 170 248 202 69 13 715

PRINCIPAL

2010-11 104 418 340 248 67 7 1,184

2011-12 113 456 390 267 69 9 1,304

CoRPoRATe

2010-11 282 803 375 133 4 0 1,597

2011-12 303 820 406 167 11 1 1,708

VoLuNTeeR

2010-11 42 47 24 15 5 1 134

2011-12 60 50 30 16 7 1 164

ToTAL

2010-11 2,282 2,728 1,353 752 196 27 7,338

2011-12 2,397 2,860 1,495 843 208 33 7,836


leGAl entItY stAtIstIcs

7,404 LegaL entitieS in victOriaThenumberoflegalentitiesinVictoriaincreasedby7%overlastyear.

■2010-11■2011-12

5,0954,858

5,095 SOLe practitiOnerS in victOriaThenumberofsolepractitionersinVictoriaincreasedby5%overlastyear.

■2010-11■2011-12

Figure 16 LaW Firms in Victoria

Figure 15 soLe practitioners in Victoria

7,4046,927

251252

251 LaW firmS in victOriaThenumberoflawfirmsinVictoriadecreasedslightlyoverthelastyear.

■2010-11■2011-12

Figure 14 numBer oF LegaL entities in Victoria


numBer Of LegaL entitieS in victOria Figure17showsthenumberofentitiesregisteredinVictoriaasat30June2012.ThemajorityoflegalentitiesinVictoriaaresolepractitioners.Solepractitionersrepresent69%ofthetotalnumberofregisteredentitieswhilenon-legalemployersrepresent14%ofthetotalnumberofregisteredentities.Lawfirmsaccountforjust3%ofthetotalnumberofentitiesregisteredinVictoria.

Figure 17 numBer oF LegaL entities in Victoria

2010-11


■■■Non-legalemployer910(13%)

■■■ILP768(11%)

■■■Lawfirm252(3%)

■■■Governmentemployer73(1%)

■■■CLC52(1%)

■■■MDP9(1%)

■■■Foreignlawpractice5(1%)

2011-12


■■■Non-legalemployer1,059(14%)

■■■ILP847(11%)

■■■Lawfirm251(3%)

■■■Governmentemployer75(1%)

■■■CLC55(1%)

■■■MDP10(1%)

■■■Foreignlawpractice12(1%)

ToTAL 6,927

ToTAL 7,404


LOcatiOn Of LegaL entitieSFigure18showsthenumberoflegalentitiesregisteredinVictoriabyentitytypeandlocationasat30June2012.48%ofsolepractitionersarecitybasedwhileafurther38%aresuburbanbased.Approximately53%ofregisteredlawfirmsarebasedinthecity.

Figure 18 Location oF LegaL entities

TyPe CITy suBuRB CouNTRy INTeRsTATe oVeRseAs ToTAL

soLe PRACTITIoNeR

2010-11 2,387 1,813 348 57 253 4,858

2011-12 2,462 1,928 366 60 279 5,095

NoN-LeGAL eMPLoyeR

2010-11 425 351 30 25 79 910

2011-12 474 406 38 30 111 1,059

ILP

2010-11 305 318 109 36 0 768

2011-12 318 369 119 41 0 847

LAw fIRM

2010-11 135 69 37 11 0 252

2011-12 132 71 37 11 0 251

GoVeRNMeNT eMPLoyeR

2010-11 51 16 4 2 0 73

2011-12 54 18 3 0 0 75

CLC

2010-11 15 28 7 2 0 52

2011-12 15 31 6 2 1 55

MdP

2010-11 3 3 1 2 0 9

2011-12 4 3 1 2 0 10

foReIGN LAw PRACTICe

2010-11 2 2 0 0 1 5

2011-12 3 8 0 0 1 12

ToTAL

2010-11 3,323 2,600 536 135 333 6,927

2011-12 3,462 2,834 570 147 392 7,404


entitieS By type anD numBer Of principaLSFigure19showsthenumberoflegalentitiesbyentitytypeandthenumberofprincipals.Asindicatedbelow,themajorityofentitiesonlyemployoneprincipal,theonlyexceptionbeinglawfirms.

Figure 19 entities By type and numBer oF principaLs

TyPe 0 – 1# 2-3 4-5 6-10 11-20 21-40 40+ ToTAL

soLe PRACTITIoNeR

2010-11 4,858 0 0 0 0 0 0 4,858

2011-12 5,092 3 0 0 0 0 0 5,095

ILP

2010-11 587 137 33 4 7 0 0 768

2011-12 647 150 40 4 6 0 0 847

LAw fIRM

2010-11 7 178 20 14 11 9 13 252

2011-12 16 172 10 18 12 9 14 251

CLC

2010-11 37 14 0 0 0 1 0 52

2011-12 38 16 0 0 0 1 0 55

MdP

2010-11 4 2 1 0 1 1 0 9

2011-12 4 2 1 0 1 2 0 10

NoN-LeGAL eMPLoyeR

2010-11 910* 0 0 0 0 0 0 910

2011-12 1,059* 0 0 0 0 0 0 1,059

GoVeRNMeNT eMPLoyeR

2010-11 73* 0 0 0 0 0 0 73

2011-12 75* 0 0 0 0 0 0 75


2010-11 4 0 0 1 0 0 0 5

2011-12 11 0 0 1 0 0 0 12

ToTAL

2010-11 6,480 331 54 19 19 11 13 6,927

2011-12 6,942 343 51 23 19 12 14 7,404

*Allgovernmentandnon-legalemployershavenoprincipalsassigned,asallpractitionersworkingfortheseemployersareregisteredascorporateemployees.

#Entitieswithnoprincipalsassignedareduetoprocessingtimesforregisteringchanges.Inmostinstancestheseentitiesareintheprocessofceasingpractice,buthavenotyetformallynotifiedtheBoard.However,insomeinstancestheabsenceofaprincipalisduetoapractitioner’sfailuretonotifytheBoardofhisorhercommencementinthisrole.


entitieS By entity type anD numBer Of empLOyeeSFigure20showsthenumberoflegalentitiesregisteredinVictoriabyentitytypeandthenumberofemployees.Asindicatedbelow,themajorityofentitiesemployonlyoneemployee,theexceptionbeinglawfirms.

Figure 20 entities By entity type and numBer oF empLoyees

TyPe 0-1# 2-3 4-5 6-10 11-20 21-40 40+ ToTAL

soLe PRACTITIoNeR

2010-11 4,508 281 47 21 1 0 0 4,858

2011-12 4,713 309 49 22 2 0 0 5,095

NoN-LeGAL eMPLoyeR

2010-11 579 180 67 57 14 7 6 910

2011-12 700 193 73 63 16 7 7 1,059

ILP

2010-11 357 217 79 73 31 5 6 768

2011-12 400 230 88 82 34 7 6 847

LAw fIRM

2010-11 3 88 50 50 23 13 25 252

2011-12 9 83 44 47 27 13 28 251

GoVeRNMeNT eMPLoyeR

2010-11 27 11 10 13 8 1 3 73

2011-12 21 20 8 8 14 2 2 75

CLC

2010-11 0 6 9 11 13 8 5 52

2011-12 3 7 9 6 18 6 6 55

MdP

2010-11 4 1 1 1 0 0 2 9

2011-12 4 1 1 1 1 0 2 10


2010-11 3 1 0 1 0 0 0 5

2011-12 10 1 0 1 0 0 0 12

ToTAL

2010-11 5,481 785 263 227 90 34 47 6,927

2011-12 5,860 844 272 230 112 35 51 7,404

#Entitieswithnoemployeesassignedareduetoprocessingtimesforregisteringchanges.Inmostinstancestheseentitiesareintheprocessofceasingpractice,buthavenotyetformallynotifiedtheBoard.However,insomeinstancestheabsenceofaprincipalisduetoapractitioner’sfailuretonotifytheBoardofhisorhercommencementinthisrole.


ReGulAtInG tHe leGAl pRofessIonthe Board is responsible for ensuring the effective regulation of the legal profession in Victoria. the Board maintains a regulatory regime to ensure Victorian legal practitioners maintain the legal profession’s own current high standards of legal service and conduct.

OnLine reneWaL Of practiSing certificateS Inthepreviousreportingperiod,theBoardreportedonthedevelopmentofanewsystem,knownasLSBOnline,whichenableslegalpractitionerstorenewtheirpractisingcertificatesonline.ThissystemwastrialledinApril2011amongst4,000legalpractitionersduringthe2011-12practisingcertificaterenewalscycle.Followingthesuccessofthispilotprogram,theBoardreleasedLSBOnlinetoallofVictoria’s17,000legalpractitionersfromApril2012forthe2012-13renewalscycle.Asat30June2012approximately97%ofpractitionershadrenewedtheirpractisingcertificatesfor2012-13,ofwhichapproximately87%haddonesothroughLSBOnline.Only13%completedthehardcopyrenewalform.

Theonlineprocesssignificantlyreducedtheneedforpaper-basedforms,whichresultedintimesavingbenefitsforpractitionersandtheBoardanditsdelegates.AnotherbenefitofLSBOnlineisthatitalertslegalpractitionerstoanyerrorsbeforetheformissubmitted,suchasincompletefields.Thisthereforereducestheneedforformstobereturnedandre-submitted.Thequalityandaccuracyofdatahasalsobeenimprovedduetoreducedmanualdataentry.

TheBoardcarriedoutanextensivecommunicationcampaigntopromoteLSBOnlinetothelegalprofession.ThiscampaigninvolvedarangeofactivitiesincludinginformationsessionsheldinMelbourne,Dandenong,FrankstonandGeelong;anarticlepublishedintheLawInstituteJournaloutliningthenewonlineprocess;regularnoticespublishedintheLIVandBarweeklye-bulletinsandcorrespondencethatwassenttoindividualpractitionersandlawfirms.TheBoardalsoestablishedasupportteamwhichcomprisedoffourstaffwhoassistedpractitionerswithgeneralqueriesrelatingtoLSBOnline.

AkeyfeatureofLSBOnlineisamodulethatenableslegalentitiestomanagetherenewaloftheirpractitioners’practisingcertificatesonline.Themoduleenableslegalentitiestoseewhichoftheirpractitionershavelodgedarenewalformandthemethodoflodgement,forexample,whethertherenewalformwaslodgedonlineorbypaper.Theonlinemodulealsoallowslegalentitiestomakeabulkpaymentfortheirpractitioners’practisingcertificatefees.

TheBoardiscurrentlyreviewingthefeedbackreceivedduringtherenewalsperiodtoidentifysystemandprocessenhancementsforthe2013-14renewalscycle.

change Of infOrmatiOn fOrm nOW avaiLaBLe OnLineFurthertothepeakrenewalperiod,theBoardimplementedanotheronlineform,whichenableslegalpractitionerstoupdatetheirdetailsontheregisteroflegalpractitionersmaintainedbytheBoard.TheActstipulatesthatlegalpractitionersmustnotifytheBoardwithin14daysifanyoftheirdetailsontheregisterchange.Forexample,legalpractitionersmustcompletethisformiftheychangeemployer.ThesechangescannowbemadethroughLSBOnline.

LegalpractitionerscanaccessLSBOnlineviatheBoard’swebsiteatwww.lsb.vic.gov.au.Legalpractitionersmustobtainausernameandpasswordinordertologintothesystem.

cHApteR 03 RepoRt of opeRAtIons

this chapter outlines the Board’s performance in carrying out its key functions in the 2011-12 reporting year.



neW practiSing certificate feeS fOr the victOrian LegaL prOfeSSiOnTheBoardisresponsibleforrecommending,tothestategovernment,practisingcertificatefeesfortheVictorianlegalprofession.ThepractisingcertificatefeesaresetinregulationswhichareapprovedbytheGovernor-in-Council.TheLegalProfession(PractisingCertificateFees)InterimRegulations2011expiredon30June2012.Consequently,theBoardwasrequiredtorecommendnewpractisingcertificatefeestothegovernmentandprepareaRegulatoryImpactStatement(RIS)toassessthelevelofimpactofthenewfeesonthelegalprofession.

TheBoardconsultedwiththeLIV,Bar,AustralianCorporateLawyersAssociationandtheFederationofCommunityLegalCentreswhendraftingtheRIS.TheBoardinvitedcommentsandfeedbackinrelationtotheRISandproposedpractisingcertificatefeesfrommembersoftheprofessionandthewidercommunityinJanuary2012.

Followingthisperiodofpublicconsultation,theBoardrecommendedtothegovernmentthatthenewfeesshouldbe:

• 36.50feeunitsforapractisingcertificateauthorisingthereceiptoftrustmoney,and

• 24.71feeunitsforapractisingcertificatenotauthorisingthereceiptoftrustmoney.

TheBoard’srecommendationwasapprovedbytheGovernor-in-Councilon13March2012.Accordingly,theLegalProfession(PractisingCertificateFees)Regulations2012cameintoeffecton14March2012andwillbeinforceuntil30June2017.Fortheperiod2011-12,thepractisingcertificatefeeswereasfollows:

• $446forapractisingcertificateauthorisingthereceiptoftrustmoney,and

• $302forapractisingcertificatenotauthorisingthereceiptoftrustmoney.

Thefeeswillbepro-ratedonaquarterlybasis.InformationaboutthenewpractisingcertificatefeesisavailableontheBoard’swebsiteatwww.lsb.vic.gov.au

pOLicieSWhiletheActprovidestheregulatoryframeworkfortheprofession,thepracticalapplicationofregulatoryrequirementsreliesonthedevelopmentofBoardpolicies.Throughconsultationwithitsdelegatesandinterestedparties,theBoarddevelopspolicieswhichprovideguidancetopractitionersontheirobligationsundertheAct.ThepoliciesreduceregulatoryburdenbyclarifyingregulatoryobligationsandprovidinginformationabouthowtheBoardwillperformitsregulatoryfunctions.

Review of existing policiesInthereportingyear,theRegulatoryReformandPolicyTeamreviewedtheExemptionsPolicy(ProfessionalIndemnityInsurance),theForeignLawyerRegistrationPolicy,thePrivacyPolicyandtheWhistleblowersPolicy.TherevisedPrivacyPolicyandWhistleblowersPolicyandProceduresnowapplytoboththeLSBandtheLSC.

New fit and Proper Person Policy and Mental Health PolicyTheBoardapprovedtwonewpolicies,theFitandProperPersonPolicyandtheMentalHealthPolicy,afterrevisingtheexistingFitandProperPersonPolicyStatementandHealthAssessmentPolicy.Thesenewpoliciesassistpractitionersbyestablishingclearguidelinesinrelationtosuitabilitymattersrelevanttowhetherapersonisa‘fitandproperperson’topractise,andclarifyingthatmentalillnessisonlyrelevantwhereitaffectsapractitioner’scapacitytoengageinlegalpractice.Toraiseprofessionalawarenessofthepolicies,Boardstaffundertookarangeofactivities,includingdeliveringpresentationstoarangeofpractitionersonkeyissuesinthepolicies.Inaddition,BoardCEO,MichaelMcGarvie,submittedanarticletotheLawInstituteJournalandparticipatedinseveralinterviewswithlegalaffairsjournaliststodiscusssomeofthekeyprinciplesofthenewpolicies.

supervised Legal Practice Policy and Continuing Professional development PolicyTheBoardalsoreviewedanumberofexistingpoliciesrelatingtosupervisedlegalpracticeandcontinuingprofessionaldevelopment.Thesepolicieswereconsolidatedintoanew

SupervisedLegalPracticePolicyandanewContinuingProfessionalDevelopmentPolicy,providinggreaterclarityforpractitionersinaccessingrelevantinformationandcomplyingwithregulatoryrequirements.

Thesepolicies,andarangeofotherregulatorypolicies,areavailableontheBoard’swebsiteatwww.lsb.vic.gov.au

amenDmentS tO the victOrian Bar appLicatiOn anD reaDing reguLatiOnSTheRegulatoryReformandPolicyTeamalsoworkedwiththeVictorianBartomakeamendmentstotheApplicationandReadingRegulations.Theserulessetoutminimumtrainingandsupervisionrequirementsforlegalpractitionerswhowishtopractisesolelyasbarristersbyprescribingareadingperiodandareader’scourse.

incOrpOrateD LegaL practiceSAnIncorporatedLegalPractice(ILP)isacorporationthatispermittedundertheActtoengageinlegalpractice.ILPsmayalsoprovideservicesotherthanlegalservices,exceptthosethatareexpresslyprohibitedbytheActortheregulations.TheActrequiresadirectorofanILPtoimplementandmaintainappropriatemanagementsystems.ThepositionofILPsisuniqueundertheActandarangeofprovisionsintheActdealwiththepotentialforconflictstoariseonthepartoflegalpractitionerdirectorsofILPs.Normallyacompanydirectoroweshisorherprimarydutytotheshareholdersofthecompany,however,theprimarydutiesofalegalpractitionerareowedfirsttothecourtandsecondlytotheclient.

Appropriate Management systems for ILPs PolicyInMay2012,theBoardapprovedtheAppropriateManagementSystemsforILPsPolicy.TheBoarddecidedtoadopttheapproachoftheLegalServicesCommissionersinNewSouthWalesandQueensland.Accordingly,asetoftenobjectives(coveringtheareasthatILPsmustaddressinordertodemonstratethatthereareappropriatemanagementsystemsinplace)areusedbyILPstoself-assesstheirmanagementsystems.Thetenobjectivesare:




1. Avoidnegligencebyutilisingcompetentworkpractices

2. Provideeffective,timelyandcourteouscommunication

3. Ensuretimelydelivery,reviewandfollowupoflegalservicestoavoidinstancesofdelay

4. Operateacceptableprocessesforliensandfiletransfers)

5. Provideforasharedunderstandingandappropriatedocumentationfromcommencementthroughtoterminationofengagementcoveringcostsdisclosure,billingpracticesandterminationofengagement

6. Ensuretimelyidentificationandresolutionofconflictsofinterest

7. Minimisethelikelihoodoflossordestructionofcorrespondenceanddocumentsthroughappropriatedocumentretention,filing,archivingandprovidingforcompliancewithrequirementsregardingregistersoffiles,safecustody,andfinancialinterests

8. Provideforundertakingstobegiven,compliancemonitoringandtimelycompliancewithnotices,orders,rulings,directionsorotherrequirementsofcourtsandregulatoryauthoritiessuchastheBoardandLSC

9. Provideforcompliancewithstatutoryobligationscoveringlicenceandpractisingcertificateconditions,employmentofpersonsandensuringtheproperqualityassuranceofworkoutputsandtheperformanceoflegal,paralegalandnon-legalstaffinvolvedinthedeliveryoflegalservices,and

10.AvoidingfailuretoaccountandbreachesoftheActinrelationtoTrustmoneyandtrustaccounts.

AnILPinformationkitiscurrentlybeingdevelopedfordistributiontoindividualswhomaybeconsideringregisteringanILPwiththeBoard.Thisinformationkitwillbecompletedinthe2012-13financialyear.

ILP Audits

TheBoardhasthepowertoauditanILPtoensurethatitiscomplyingwiththerelevantlegislativerequirements,regulationsandpracticerules.TheBoardmayappointanappropriatelyqualifiedpersontoundertakeanaudittoensurethecomplianceofanILP,alongwithitsofficersandemployees.Duringthe2011-12period,theBoardconductedfourauditsofILPs,whichwerecommencedinresponsetocomplaintsreceivedbytheLSCaboutthelegalservicesrenderedbythoseILPs.Theauditsinvolvedreviewingfiles,assessingtheILP’smanagementsystemsandprocessesandinterviewingILPdirectors,employeepractitionersandsupportstaff.TheBoardsubsequentlyprovidedtheILPswithauditreportsprovidinganassessmentoftheircompliancewiththerequirementsoftheActandprescribedremedialactionforissueswhichrequiredimprovement.Inonecase,seriousnon-complianceissueswereidentified,whichresultedintheBoardappointinganexternalintervenertomanageandwinduptheaffairsofthepractice.

SuperviSeD LegaL practice reQuirementSTheActimposesaconditionontheinitialVictorianpractisingcertificategrantedtolegalpractitionersthattheholdermustengageonlyinsupervisedlegalpracticeforaspecifiedperiodof:

• 18months,ifthelegalpractitionercompletedpracticallegaltrainingprincipallyunderthesupervisionofanAustralianlegalpractitioner(e.g.traineeship,articlesofclerkship)toqualifyforadmission,or

• twoyears,ifthelegalpractitionercompletedotherpracticallegaltrainingtoqualifyforadmission,forexampleLeoCussenorCollegeofLaw.

Thepurposeofsupervisedlegalpracticeistoensurethatlegalservicesprovidedbythenewlyadmittedlegalpractitionerareappropriatefromaconsumerprotectionpointofview.Italsoprovidesforfurthereducationandtrainingforthepractitionerbyanexperiencedseniorpractitioner.

Thesupervisedlegalpracticerequirementdoesnotapplyto:

• barristers

• legalpractitionerswhoheldanAustralianpractisingcertificateatanytimebefore12December2005,or

• foreignlawyerspractisingforeignlawinVictoria.

Thesupervisedlegalpracticeconditionmayberemovedinoneoftwoways:

• byapplyingtoremovetheconditionaftertherequisiteperiodofsupervisedlegalpracticehasbeencompleted,or

• byapplyingforanexemptionfromtherequirementonthebasisofpriorlegalpractice;forexample,experiencegainedinterstate,overseasorasanemployeeoftheCrown.

TheBoardmayexemptapersonfromthesupervisedlegalpracticerequirement,eitherinfullorinpart,havingregardtothelengthandnatureofanylegalpracticepreviouslyengagedin,andtheexperienceofthesupervisor.In2011-12,theBoardreceived65applicationsforsupervisedlegalpracticeexemptionscomparedwith54in2010-11.TheBoardapproved48applications.Figure21showstheoutcomesoftheapplications.

Figure 21 appLications For exemptions From superVised LegaL practice requirements

2010-11 2011-12

Applicationsreceived 54 65

Exemptionsgranted 31 48

Applicationsdeclined 1 0

Decisionspendingat30June 18 11

Applicationswithdrawn 4 6


pRotectInG consumeRs of leGAl seRVIcesthe Board is committed to addressing the concerns of clients of law practices and legal practitioners through maintaining an effective regulatory system which ensures adequate protection for consumers of legal services. the Board aims to achieve this through establishing and maintaining standards of conduct for the provision of legal services, and further by effectively responding to breaches of the Act, regulations and professional standards.

enfOrcement Of reQuirementSTheBoardexaminesbreachesoftheAct,theregulationsandtherelevantlegalprofessionrules.WheretheBoardinvestigatesbreaches,actionistakeninanappropriateandtimelymanner.BoardstaffandBoarddelegatespursueallnon-compliancemattersthrougharangeofinterventions,commencingwitheducationandcounsellingforminorbreaches.Thisescalatestoreferralsfordisciplinaryinvestigation,externalinterventionsinrelationtolawpractices,suspensionorcancellationofpractisingcertificates,strike-offapplicationsandcriminalprosecution.Themajorityofregulatoryactionsfornon-compliancearedelegatedtotheLIVandtheBar.WhentheBoardreceivesinformationaboutsuspectedtrustaccountdefaultsorunqualifiedpracticeconcerns,themattersaresometimesreferredforinvestigationbytheBoard’sdelegate.

unQuaLifieD LegaL practiceApersonmustnotengageinlegalpracticeinVictoriaunlesstheyholdalocalorinterstatepractisingcertificate,unlessoneofthestatutoryexceptionsapplies.PractisinginVictoriawithoutalocalorinterstatepractisingcertificateisanoffencecarryingamaximumpenaltyoftwoyears’imprisonment.Thisisknownasunqualifiedlegalpractice.TheBoardisresponsibleforinvestigatingcomplaints,andifrequired,institutingproceedingsagainst,unqualifiedpersonswhoperformlegalworkorwhofalselyholdthemselvesoutaslegalpractitioners.Duringthereportingperiod,theBoardreceived55newcomplaintsregardingpossibleunqualifiedlegalpractice.22ofthosecomplaintswereaboutAustralianlawyerswithoutpractisingcertificatesand33ofthosecomplaintswereaboutpeoplewhowerenotlawyersatall.

externaL interventiOnSTheBoardalsohasthepowertoappointasupervisorormanagertoalawpracticeortoapplytotheSupremeCourtforanorderappointingareceivertoalawpractice.IngrantingtheBoardthepowertoappointexternalintervenerstoalawpracticetheActaims,amongstotherthings,toprotecttheinterestsofthegeneralpublicandtheinterestsandpropertyofclients.TheBoardcanappointexternalintervenersinavarietyofcircumstancesincludingcaseswheretheBoardbelievesthatthepracticeisnotdealingadequatelywithtrustmoney,hascommittedaseriousirregularityandwherethepracticeisincontraventionoftheAct,regulationsorrules.Figure22showsthenumberofexternalinterventionsundertakenin2011-12.

Figure 22 externaL interVentions

PART of ACT TyPe of exTeRNAL INTeRVeNTIoN

oPeNING BALANCe CoMMeNCed CLosed CLosING BALANCe

2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12

Part5.5 Receiverships 15 8 1 11 8 1 8 18

Part5.4 Managements 0 0 0 8 0 1 0 7

Part5.3 Supervisions 0 0 0 1 2 0 0 1


expression of interest for law practice managers and supervisorsDuringtheyear,theBoardsoughtexpressionsofinterestfromlawyerstojoinapanelofsupervisorsand/ormanagerswhomaybeappointedtolawpracticeswhereexternalinterventionstoalawpracticearerequired.TheBoarddeterminedtoestablishthispaneltoensurethatexternalintervenersareappointedinatimelymanner.Thepaneliscomprisedof13lawyers.Sofarithasproventobeeffectivetohaveavailable,experiencedpractitionersreadytobeengaged.

SuSpenSiOn anD canceLLatiOn Of practiSing certificateSWherethereisstrongevidencethatarelativelyseriousbreachoftheAct,regulationsorruleshasoccurredandthebreachposesanactualorlikelyriskofconsumerdetriment,thenthepractisingcertificateofapractitionermaybesuspendedorcancelled.TheLIV,astheBoard’sdelegate,suspendedfourpractisingcertificatesinthereportingyear.

remOving practitiOnerS frOm the LOcaL rOLLTheBoardhasthepowerundertheActtoapplytotheSupremeCourtofVictoriaforalocalpractitioner’snametoberemovedfromtherolloflegalpractitionersmaintainedbytheCourt.Thisisknownasastrike-offapplication.TheBoardwillmakeastrike-offapplicationwhentheBoardconcludesthatthepractitionerisnotafitandproperpersontoholdapractisingcertificateandtheconcernsaboutthelawyercannotbeadequatelyaddressedbytemporaryrestrictionsandthecircumstancesinvolvedishonestyorapriorhistoryofsimilaroffences.During2011-12,theBoardmadethreeapplicationstohavethenamesoflegalpractitionersremovedfromtherolloflegalpractitioners,allofwhichweresuccessful.WorkingmorecloselywiththeOfficeofPublicProsecutionsandVictoriaPolicehasallowedtheBoardonsomeofthoseoccasionstoattendcourtwherealegalpractitionerisbeingsentencedinacriminalmatter,andaskthecourttoexerciseitsinherentjurisdictiontostrike-offthelawyer.Thishasallowedthesematterstobedealtwithexpeditiously.

cOntinuing prOfeSSiOnaL DeveLOpment verificatiOnSOneofthewaysinwhichtheBoardensuresthathighstandardsofconductaremaintainedisbyconductingcontinuingprofessionaldevelopment(CPD)verifications(audits)toensurepractitionershavecompliedwiththeirCPDobligations.LocallegalpractitionersarerequiredtoundertakeaminimumoftenhoursofCPDactivitiesduringeachyearofpractice.ThepurposeofCPDactivitiesistoensurethatpractitioners’knowledgeandskillsarekeptcurrent.TheCPDactivitiesundertakenbypractitionersmustcomplywiththeCPDRulesprescribedbytheBoardandthoseoftheprofessionalassociations.

TheseRulesareavailableontheBoard’swebsite.PractitionersarerequiredtokeeparecordofallCPDactivitiesundertakenforaperiodofthreeyears.TheBoard,throughtheLIVandtheBarasitsdelegates,mayconductauditstodeterminewhetherpractitionershavemettheirobligationsundertheapplicableCPDrulesforthecurrentCPDyearoranyofthethreepreviousCPDyears.Ifselectedforverification,practitionersmustprovide:

• theirCPDattendancerecord

• astatutorydeclaration,and

• supportingevidence(e.g.receipts,copiesofpresentationnotes,copiesofenrolmentrecordsorcertificatesofcompletion).

Whenrenewingtheirpractisingcertificates,practitionersmustconfirmthattheyhavecompletedtheirCPDactivities.Iftheyhavenotcomplied,practitionerscanapplyforanexemptionorsubmitarectificationplan.TheLIVastheBoard’sdelegateaudited500practitionersforCPDcompliance.Figure23showstheoutcomeoftheseaudits.

Figure 23 cpd audits conducted By tHe LiV

2010-11 2011-12

Totalnumberofpractitionersaudited 500 500

Practitionerswhocomplied 480 489

Practitionerswhodidnotcomply/hadnotprovedcompliance

2 6

Practitionersexcluded* 18 5

*Reasonsforexclusiontypicallyinclude:beingonmaternityleave,havingbeen/beingreviewedinthecomplianceprocessorhavingbeenauditedbytheLIVinthepasttwoyears.


prOfeSSiOnaL inDemnity inSuranceTheActrequireslawpractices(otherthancommunitylegalcentres)toobtainprofessionalindemnityinsurancebeforecommencingtoengageinlegalpracticeinVictoria.LawpracticesmustmaintainprofessionalindemnityinsuranceatalltimeswhileengagedinlegalpracticeinVictoria.ProfessionalindemnityinsurancemustbeheldwiththeLegalPractitionersLiabilityCommittee(LPLC).TherequirementtoholdinsurancewiththeLPLCdoesnot,however,applytoAustralian-registeredforeignlawyersortocommunitylegalcentreswhicharerequiredtoobtainandmaintaininsuranceontermsandconditionsapprovedbytheBoard.Theinsuranceheldbyalawpracticemustcoverthecivilliabilitiesofthelawpracticeandeachpersonwhoisorwasaprincipaloranemployeeofthelawpractice,inconnectionwiththelegalpracticeandtheadministrationoftrustsinVictoria.

exemption from professional indemnity insurance requirementsTheBoardcangrantanexemptiontoalawpracticeoracommunitylegalcentrefromtherequirementtoobtainormaintainprofessionalindemnityinsurance.Forexample,apracticethatholdsinsuranceinaccordancewiththerequirementsofanotherjurisdictionmaybeexempted.TheBoard’sprofessionalindemnityinsuranceexemptionpolicyisavailableontheBoard’swebsite.ThemajorityofexemptionapplicationsreceivedbytheBoardarefrominterstatelawpracticesthatalreadyholdprofessionalindemnityinsurancewithaninterstateinsurerandarethereforeseekinganexemptionfromholdinginsurancewiththeLPLC.

During2011-12,theBoardreceived87applicationsforexemptionfromprofessionalindemnityinsurancerequirementscomparedwith61in2010-11.TheBoardgrantedexemptionsto77oftheapplicationscomparedwith58inthepreviousyear.Figure24showstheoutcomeoftheapplications.

Figure 24 appLications For exemption From proFessionaL indemnity insurance requirements

2010-11 2011-12


Exemptionsgranted 58 77



Applicationwithdrawn 0 7

fOreign LaWyer appLicatiOnSTheBoardisresponsibleforregisteringforeignlawyersinVictoria.Registrationallowsthelawyertopractise,inVictoria,thelawoftheforeignjurisdictioninwhichtheyarecurrentlyentitledtopractise.TheBoardreceived19foreignlawyerapplicationsin2011-12comparedwith29in2010-11.Figure25showstheoutcomeoftheapplications.

Figure 25 appLications For Foreign LaWyer registration

2010-11 2011-12


Applicationsgranted 14 22



Applicationswithdrawn 1 2

regiSter Of DiScipLinary actiOnTheBoardmaintainsaRegisterofDisciplinaryAction(theRODA),whichrecordsdisciplinaryactiontakenagainstAustralianlegalpractitionersundertheAct.InformationisretainedontheRODAforfiveyearsafterthedisciplinaryactionistakenor,ifithaseffectforlongerthanfiveyears,thelongerperiod.TheRODAispublishedontheBoard’swebsiteandincludes:

• disciplinaryactiontakenundertheActagainstAustralianlegalpractitioners

• disciplinaryactiontakenunderacorrespondinglawinterstate,againstAustralianlegalpractitionerswhoareorwereenrolledorpractisinginVictoriawhentheconductthatisthesubjectofthedisciplinaryactionoccurred,and

• somedisciplinaryorderswhichhavebeenmadeunderthepreviouslegislation,theLegalPracticeAct1996(Vic)andarestillineffect:forexample,anorderwhichprohibitsapractitionerfromapplyingforapractisingcertificateuntil2014oranordertostrikeaparticularpractitionerofftheSupremeCourtrollofpractitioners(andthatpractitionerhasnotsincebeenre-instatedontheroll).

SimilartotheRegister,theRODAisanothermechanismforensuringconsumerprotection.MembersofthepubliccanrefertotheRODAtodeterminewhetherdisciplinaryactionhasbeentakenagainstaparticularlegalpractitioner.TheBoardupdatestheRODAthroughouttheyeartoreflectrecentdisciplinaryorders.TheRODAcanbeviewedontheBoard’swebsiteatwww.lsb.vic.gov.au.ABoardprojecttoenhancethefunctionalityoftheRODAandprovideaninteractiveonlinesearchpagehasbeenundertakenandisanticipatedtobecompletedduringthelatterhalfof2012.

http://www.lplc.com.au/

http://www.lplc.com.au/



ensuRInG tHe pRopeR mAnAGement of tRust Accountsthe Board is responsible for the administration of trust accounts in Victoria. law practices are required to maintain trust money in an account known as a general trust account. these accounts must be maintained in accordance with the Act, its regulations and any applicable legal profession rules. law practices are entrusted with money in the course of or in connection with the provision of legal services. trust money includes general trust money, controlled money and transit money. further information on the financial activity of general trust accounts can be found on page 42 of this report.

SuperviSing the management Of generaL truSt accOuntSTheBoardperformsanumberoffunctionswhichensurethesupervisionofgeneraltrustaccounts.Theseinclude:

• providingdirectionsandguidelinesfortheconductoftrustaccountaudits

• prescribingappropriateeducationalcoursesforapprovedexternalexaminerswhoauditthetrustaccounts

• monitoringgeneraltrustaccountstoensurecompliancewiththeAct,includingtheidentificationofirregulartransactions,and

• monitoringandrecordingdailygeneraltrustaccountmovementsandbalances.

truSt accOunt inveStigatiOnSTheBoardhasdelegateditsfunctionforgeneraltrustaccountsurveillanceandinvestigationstotheLIVandtheBar.Toensurecompliancewiththegeneraltrustaccountregulations,theLIVcarriedoutinvestigationsinto419ofthetotal1,800trustaccountsheldbylawpracticesunderDivision3ofPart3.3oftheAct.InvestigationscanbeconductedonreferralfromacomplaintreceivedbytheLSCorontherecommendationoftheBoard.Trustaccountinvestigationsaimtoidentifyunusualactivityinconnectionwithmoneyheldintrustaccounts.Investigationsusuallyinvolveanalysingtrustaccountrecordsandinterviewingthelawpracticeorpractitionerassociatedwiththetrustaccount.Insomecases,furtherinformationmayberequired,forexampleinformationfromVictoriaPolice,theAustralianSecuritiesandInvestmentsCommission,theStateRevenueOfficeandtheProbateOffice.Mostinvestigationsarefinalisedwithintwodays.Somehowever,maytakelongerdependingonthevolumeofinformationthatneedstobereviewed.

Figure 26 trust account inVestigations

ToTAL

2010-11 401

2011-12 419


StatutOry DepOSit accOuntSInaccordancewiththeAct,lawpracticesandapprovedclerkswhomaintainageneraltrustaccountmustmakequarterlydepositsintoaStatutoryDepositAccount(SDA).IndividualSDAsareallocatedforeachlawpracticeorclerk,andlinkedtoalawpractice’sorclerk’strustaccount.TheSDAsareheldbytheBoardwithWestpacBankingCorporation.ElectronicFundstransferarrangementsensurethatwithdrawalsfromtheSDAcanbemadewithminimumdisruptiontoalawpracticeorapprovedclerk.

AnamountcalculatedusingaformulasetoutundertheActmustbedepositedintotheSDAwithin21daysoftheendofeachdesignatedquarterinwhichthe“requiredamount”exceeds$10,000.ThebalanceremaininginthegeneraltrustaccountafterthetransferoffundstotheSDAisknownastheresidualtrustaccountbalance.TheSDAismaintainedwithinthePublicPurposeFund(PPF)heldbytheBoard.DetailsoftheSDAholdingsandaverageresidualtrustaccountbalancesattheendofthecurrentandprecedingfinancialyearsareshowninFigure27.

Figure 27 sda HoLdings and montH end residuaL BaLances

2010-11 2011-12

$’000 $’000 $’000 $’000 $’000 $’000

MoNTH sdA ResIduAL BALANCe ToTAL sdA ResIduAL BALANCe ToTAL

July 463,841 1,275,039 1,738,880 476,438 958,122 1,434,560

August 535,486 928,255 1,463,742 547,434 882,748 1,430,181

September 508,840 1,034,175 1,543,015 512,903 833,054 1,345,957

October 486,706 1,005,270 1,491,975 485,505 859,381 1,344,887

November 545,434 1,086,282 1,631,716 536,840 913,640 1,450,480

December 498,444 768,801 1,267,245 493,023 644,798 1,137,821

January 479,587 872,638 1,352,224 471,223 812,198 1,283,421

February 523,189 837,715 1,360,904 503,200 845,161 1,348,361

March 492,480 846,246 1,338,726 468,189 874,029 1,342,219

April 473,528 939,588 1,413,116 449,059 937,120 1,386,179

May 522,694 939,588 1,462,282 499,814 893,403 1,393,217

June 504,366 1,116,869 1,621,235 463,739 992,130 1,455,869

aSSiSting LegaL practiceS tO iDentify anD mitigate riSkAspartoftheSDAmonitoringsystem,whenthereismovementbetweenalawpractice’sgeneraltrustaccountandthelinkedSDA,theBoardprovidesdailystatementstothelawpractice.Thisenablesthelawpracticetomonitorandreconcileeachoftheaccountsonadailybasis.Whennegativebalancesinageneraltrustaccountareidentified,theyarereportedtothelawpracticedaily.Whereseriousdiscrepanciesareidentified,thesearereferredtotheLIV,astheBoard’sdelegate,forinvestigation.

truSt accOunt cOurSeTobeeligibletoreceivetrustmoneyandoperateatrustaccountinVictoria,legalpractitionersmustholdaprincipalpractisingcertificateandcompletealawpracticetrustaccountcourse,whichincludesthecompletionofaworkbookthatisassessedbytheLIV,astheBoard’sdelegate.Dependingontheoutcomeoftheassessment,thelegalpractitionermaybegrantedauthorisationtoreceivetrustmoneyoraskedtoundertakefurthertraining.Atotalof156practitionerscompletedthetrustaccountcourseinthereportingyear.


ensuRInG tHAt tHe VIctoRIAn sYstem Is At tHe foRefRont of ReGulAtIonthe Board strives to ensure that the Victorian system is at the forefront of the regulation of legal practitioners. the Board achieves this in part through engaging with and informing the profession and interested groups about significant issues. the Board is also committed to identifying and responding to current and emerging issues that are relevant to Victorian legal practitioners.

amenDmentS tO the LegaL Profession act 2004Duringtheyear,theRegulatoryReformandPolicyTeamworkedcloselywiththeVictorianDepartmentofJusticeonseveralamendmentstotheLegalProfessionAct2004.Theamendmentstookeffecton2May2012.Oneamendmentinparticularallowscorporatelegalpractitioners(includinggovernmentlawyers)whoholdavalidpractisingcertificatetoprovideprobonolegalservicesoutsideofacommunitylegalcentreprovidedtheyhavetherequisiteprofessionalindemnityinsurance(PII).

Followingthisamendment,theBoardapprovedasetofPIItermsandconditionstoallowin-houselawyersandparalegalsincorporationsandgovernmenttocarryoutlegalworkonaprobonobasiswhilecomplyingwiththeirregulatoryobligations.TheBoardapprovedaPIIPolicytakenoutbytheNationalProBonoResourceCentre(NPBRC),whichenablescorporatelawyerstoundertakeunpaidworkonprojectsapprovedbytheNPBRC.UndertheNPBRCPIIPolicyscheme,lawyersarenotrequiredtopayanapplicationfeeorpremium.TheNPBRChasalsocommittedtopayanyexcessrequiredtobepaidintheeventofaclaim.

natiOnaL LegaL prOfeSSiOn refOrm prOJectInOctober2011,anannouncementwasmaderegardingthearrangementsoftheNationalLaw.TheCouncilofAustralianGovernments(COAG)agreedtotheNationalLawpresentedtoitbytheNationalLegalProfessionReformTaskforce.TheNationalLawcreatesnewnationalbodies(aNationalLegalServicesBoardandaNationalLegalServicesCommissioner)tooverseetheregulationofthelegalprofession,alongwithStateandTerritorySupremeCourts.ItisexpectedtobeinitiallyenactedinVictoria,NewSouth

Wales,Queensland,andtheNorthernTerritory.AlthoughtheNationalLegalServicesBoardandtheNationalLegalServicesCommissionerareexpectedtobelocatedinNewSouthWales,theparticipatingjurisdictionshaveagreedthatVictoriawillintroducelegislationtoimplementthereforms.Thatlegislationwillsubsequentlybeappliedinallotherparticipatingjurisdictions.

Duringtheyear,theCEOoftheBoardandtheRegulatoryReformandPolicyTeamcontinuedpreparationsfortheimplementationoftheNationalLawthroughliaisonwiththeVictorianDepartmentofJusticeontransitionalarrangementsandthepossiblestructureofthelocalrepresentativeoftheNationalLegalServicesCommissioner.TheBoardandLSChavealsoundertakenascopingprojecttoidentifychangesinthewaytheregulatorwilloperateundertheNationalLaw.

auStraLian SOLicitOrS cOnDuct ruLeS fOr the victOrian LegaL prOfeSSiOnTheLawCouncilofAustraliaendorsedtheAustralianSolicitorsConductRuleson18June2011andrequestedthattheseRulesbeadoptedacrossAustralia.BoardstaffintheRegulatoryReformandPolicyTeamworkedwithstaffintheRegulationandComplaintsareaoftheLSC,representativesoftheLawCouncilofAustralia,officersoftheLIVandlegalregulatoryagenciesinotherjurisdictionsinconsideringtheRules.On24May2012,theBoarddeclinedtoadopttheRules,butresolvedtofurtherengagewiththeLawCouncilofAustraliaandotherjurisdictionsregardingtheguidelinesbeingdeveloped,possibleamendmentsandtimingoftheadoptionoftheRules.

Meeting with the Attorney-General, The Hon. Robert Clark mp

TheBoardCEOandBoardChairperson,alongwiththeBoardmembersandseniorstaff,metwithTheHon.RobertClarkMPonanumberofoccasionsthroughout2011-12.Mattersthatwerediscussedincludedfundedorganisations,thenationallegalprofessionreforms,andthefuturefeessettingprocessviaregulation.

Meeting with the shadow Attorney-General, Mr Martin Pakula mp

TheBoardCEOandtheBoardChairpersonalsometwiththeShadowAttorney-General,MartinPakulaMPinAugust2011.MrPakulavisitedtheofficesoftheBoardandtheLSC,wasintroducedtostaffandprovidedwithanoverviewoftheoperationsofthetwoorganisations.Further,inApril2012theChairpersonandtheCEOvisitedMrPakulaatParliamentHousetoprovideanupdatedbriefingofoperations.

Meetings with interested groups and professional organisationsTheBoardCEOandBoardstaffcontinuedtoholdregularmeetingswithstafffromtheDepartmentofJusticeinrelationtotheNationalLegalProfessionReformProject.TheCEOandrelevantstaffalsoparticipatedinthemonthlymeetingsoftheInterstateRegulators’CollaborativeGroup,whichiscomprisedoftheNSWandQLDLegalServicesCommissioners,amemberoftheWesternAustraliaLegalProfessionComplaintsCommittee,andtheCEOsoftheWesternAustraliaLegalPracticeBoardandNorthernTerritoryLawSociety.Thesemeetingspromotethesharingofinformationandideasinrelationtoimportantcommonandnationallegalregulatoryissues.


Meeting with delegates from the Hong Kong Law societyInFebruary2012,theBoardCEOmetwithfourdelegatesoftheHongKongLawSocietywhotravelledtoVictoria.ThemeetinginvolvedthelawfirmSlaterandGordon,theLIVandtheLawCouncilofAustralia.TheBoardCEOdiscussed,amongstothermatters,thewaylawyersareregulatedinVictoria.

Conference of Regulatory officers (CoRo 2011)TheannualConferenceofRegulatoryOfficers(CORO),hostedbyNewSouthWales,wasattendedby10membersofstaffrepresentingboththeBoardandtheLSC.Thethemefor2011wasthefutureoflegalservices.Ofparticularinterestwasthenewroleforregulatorsindealingwithvirtuallawservices,overseas“commoditised”servicesandnewchallengesposedbytheinternetandsocialnetworking.

Legal Laneway Breakfast – opening of the 2012 Legal yearTheBoardco-sponsoredthe9thannualLegalLanewayBreakfastorganisedbytheVictoriaLawFoundation.Thiseventmarkedtheopeningofthe2012legalyearandwasattendedbyapproximately300membersofthelegalcommunity.

memOranDum Of unDerStanDing With the Office Of the migratiOn agentS regiStratiOn authOritySomecomplaintstotheLSCandBoardraiseissuesaboutlawyerswhopractiseintheareaofmigrationlaw.OftenthesecomplaintsmaynotfallwithinthejurisdictionoftheLSCortheBoardandwouldbemoreappropriatelyhandledbytheMigrationAgentsRegistrationAuthority.Accordingly,duringthereportingperiod,theBoardandtheLegalServicesCommissionersignedaMemorandumofUnderstandingwiththeOfficeoftheMigrationAgentsRegistrationAuthorityinordertoexchangeinformationandcollaborateonjointprojectsintothefuture.Thememorandumisasingle-pagedocument,setoutinplainEnglishthatcaneasilybeunderstoodbystaffinbothorganisationswhomayberequiredtoimplementjointinvestigationsanddisclosematerialtoeachother.

WOrking With the LaW inStitute Of victOria anD the victOrian BarDuring2011-12,theBoardandLIVstaffcontinuedtomeetregularlytodiscussissuesrelatingtothedelegatedfunctions.UndertheAct,theBoardhasthepowertodelegatefunctionstoprescribedregulatorybodies,whichcurrentlymeanseithertheLIVortheVictorianBar.Alistofdelegationsinplacewiththedelegatesisavailableonpage54ofthisreport.

TheBoardprovidesfundingtotheLIVandtheBartocovercostsassociatedwithcarryingoutthefunctionsdelegatedbytheBoardandperformingotherrelatedfunctionssuchaspractisingcertificaterenewalsorexternalinterventions.Figures28and29showtheamountoffundingprovidedtotheprofessionalassociationsin2011-12.

Aservicelevelagreement(SLA)hasbeendevelopedandapprovedbetweentheBoardandtheLIV,aswellasbetweentheBoardandtheBar.

Figure 28 payments made to tHe LaW institute oF Victoria For tHe discHarge oF Board Functions in 2011-12*

LAw INsTITuTe of VICToRIA 2010-11 $’000

2011-12 $’000

Trustaccountregulation 2,214 2,295

Practisingcertificates 807 840

Otherregulatorycosts 22 Nil

ExternalInterventions 1,335 1,377

Total 4,378 4,512

Figure 29 payments made to tHe Victorian Bar For tHe discHarge oF Board Functions in 2011-12*

VICToRIAN BAR 2010-11 $’000

2011-12 $’000

Trustaccountregulation Nil Nil

Practisingcertificates 112 121

Otherregulatorycosts 23 Nil

ExternalIntervention Nil Nil

Total 135 121

*NotincludingpaymentsmadeforthedischargeoffunctionsdelegatedbytheCommissioner;namely,complaintinvestigations.


pRomotInG tHe DelIVeRY of BetteR leGAl seRVIces AnD lAWs In VIctoRIAthrough the effective regulation of the legal profession, the Board aims to promote high professional standards among legal practitioners. In particular, the Board promotes the delivery of better legal services and legal standards in Victoria.

LegaL ServiceS BOarD grantS prOgramTheGrantsProgramwasestablishedin2007todistributefundingtoorganisationsthataimtoimprovetheadministrationandoperationoflaws,increaseaccesstojusticeandinformandeducatethewidercommunityaboutlegalservices.TheGrantsProgramisfundedfromthesurplusinthePublicPurposeFund–GeneralAccount(seepage42forfurtherinformationaboutthePublicPurposeFund).

InaccordancewiththeAct,grantsmaybemadefor:

• lawreform

• legalandjudicialeducation

• legalresearch,or

• anypurposerelatingtothelegalprofessionorthelawthattheBoardconsidersappropriate.

AllgrantsmustbeapprovedbytheAttorney-GeneralbeforefundingisdistributedbytheBoard.

funding streams

TheBoarddistributesgrantsintwostreams:namely,ProjectGrantsandMajorGrants.ProjectGrantsareawardedtosmall-scaleprojectswithabudgetoflessthan$60,000andamaximumdurationofapproximatelyoneyear.

MajorGrantsaredistributedtoprojectswithabudgetofmorethan$60,000andamaximumdurationofuptothreeyears.MajorGrantsprovidefundingforprogramsorresearchthatareprojectedtohavewide,far-reachingimpactswithstrongpublicbenefit.

Priorityfortheallocationoffundingisusuallygivento:

• non-profitorganisations

• projectsthatimproveaccesstojusticeandequity,and

• specificandfiniteprojects.

Preferencemayalsobegivento:

• applicantswhodonothaveanyotheraccesstothePublicPurposeFund,and

• ruralandregionalVictoria.


Project Grants awarded in 2011-12TheBoarddistributed$411,547infundingtoeightprojectsin2011-12.

Figure 30 2011-12 project grants aWarded

oRGANIsATIoN PRoJeCT desCRIPTIoN

AMouNT AwARded

BarwonYouth ThisprojectwillprovideyoungpeoplefromtheGeelongregionaged12to25yearsaccessviaskypetoalawyerfromYouthlaw’sMelbourneoffice.Communitylegaleducationwillalsobedeliveredatalocalleveltoyoungpeople,BarwonYouthstaffandthebroaderyouthandcommunitysector.

$58,000

ConsumerActionLawCentre

AnexperiencedlawyerfromConsumerActionLawCentrewillvisitcommunitylegalcentres(CLCs)toprovidetrainingandrelatedmaterials,whichcoverthelegalimplicationsandclientoptionswhenalow-incomeclientisfacedwithlegalactioninrelationtoadebt.FollowupadvicewillbeavailablebytelephoneandemailtoprovidelegaladviceandsupporttoCLClawyers.

$56,655

LaTrobeUniversity Thisprojectwillseekexpertmediators’responsestoreallifescenariostoproduceasetofpracticalguidelinesabouthowtoensurethatmediationenhancesaccesstojustice.Theresultingpublicationwillprovideadviceandguidancetomediatorsandlegalpractitionersaboutjusticeissuesinmediation.

$59,634

LegalServicesBulletinCo-opLtd(akaAlternativeLawJournal)

ThisprojectisdesignedtopromotethedistinctiveAustralianapproachtoclinicallegaleducation,pioneeredatMonashUniversityandthenatLaTrobeUniversitythroughpublicationanddistributionofanaccessiblebook.Theprojectteamwillengagewiththejudiciaryandtheprofessionaswellaslawschoolstofosterapproachesdesignedtointegrateclinicalmethodsintolegaleducation.

$7,066

PublicInterestLawClearingHouse(PILCH)

ThisprojectwillexaminethelargenumberofpeopleexperiencinghomelessnessandotherformsofdisadvantagewhoarealsolikelytohaveinfringementsandlargedebtstotheState.Throughcasework,PILCHwillidentifyopportunitiestochange/improvelawsandpracticestoreducethenumberoffinesissuedtohomelessVictoriansandproblemareaswherecommunitylegaleducationandothersupportswillpreventhomelessVictoriansfromcontinuingtooffend.

$50,199

SocialSecurityRights

SocialSecurityOnlineisaninnovativeweb-basedprojectaimedataddressingthelegalneedsofthoseinreceiptofincomesupportpayments.Participantsintheprojectwillbeabletologstoriesandexperiencesofthesocialsecuritysystemeitheranonymouslyorotherwise.Jobservicesproviders,aswellascommunityandlegalservices,willbeabletosubscribetothewebsiteandofferresponsesandadvicetoindividualcases.Theresultwillbeanintegratedandmulti-disciplinedapproachtoprovidingassistanceinthisneedyarea.

$60,000

WyndhamLegalService

ThisprojectaimstoexplorethelackofaccesstojusticeintheoutersuburbsofWyndham(particularlyforlowincomeandnewlyarrivedcommunities)andtoidentifyandexperimentwithnewandimprovedmodelsforlegalservicedeliveryforthedisadvantagedinthatlocation.

$60,000

YouthDisabilityAdvocacyServiceauspicedbytheYouthAffairsCouncilofVictoria

ThisprojectwilldeveloptheDisabilityRightsHub,aone-stoponlineresourceforyoungpeoplewithdisabilities,theirfamiliesandcarerstolearnaboutthelawsthataffectthem.Educationworkshopswillalsobeprovidedtopromotethehubandraiseawarenessofyoungpeoples’rightsinsignificantareasoflife.

$59,993


Figure 31 projects Funded in response to tHe priority tHeme

oRGANIsATIoN PRoJeCT desCRIPTIoN

AMouNT AwARded

DomesticViolenceVictoria

DomesticViolenceVictoriawillestablishaformalFamilyViolenceWomen’sAdvisoryGroupwherebywomeninVictoriawhohaveexperiencedfamilyviolencecanofferfeedbackandrecommendationsonwaysinwhichlegalservicescanimproveservicedelivery.

$149,400

ImmigrantWomensDomesticViolenceService

Throughtheestablishmentofapilotlegalservicewithintheservice(inTouch),theprojectwillworktowardsamoreintegratedandculturallyappropriateapproachtopreventionandinterventionoffamilyviolenceinmulticulturalcommunities.

$200,000

LoddonCampaspeCommunityLegalCentreBendigo

Thisprojectaimstoimprovesafety,socialandhealthoutcomesforwomenatriskof,orexperiencingfamilyviolence,bydeliveringlegalassistancethroughamulti-disciplinarymodelandthroughtheprovisionofcomprehensivelegalservices(education,adviceandcasework)intheCentralVictorianregion.

$448,844

NorthMelbourneLegalServiceInc(NMLS)

‘Actingonthewarningsigns’isacollaborativepartnershipbetweenlegalandnon-legalorganisationstoreduceviolenceagainstwomenthroughlegaleducationofhealthpractitionersandcommunity,earlyinterventionandoutreachlegalassistanceinthesettingoftheRoyalWomen’sHospital.

$293,332

PeninsulaHealthCommunityHealth

Thisprojectwillmapthelegalandcriminaljusticeresponsetoadolescentviolenceinthehome,analyseVictorianpoliceandjusticedatafortrends,anddocumenttheexperienceofvictimsandadolescentoffendersinthelegalsystemwithaviewtorecommendationsforimprovement.

$242,000

StKildaLegalServiceCooperativeLtd

Thisprojectwilltrialamodelfortheprovisionoffamilyviolencesupportservicesatsmallcourtsthroughconsolidationandprovisionofintegratedlegal,communityandfamilyviolenceservicesattheMoorabbinMagistratesCourt.

$415,060

VictoriaLegalAid Thisprojectaimstoincreasenewlyemergingcommunities’knowledgeoffamilyviolencelawsinVictoriabyestablishinganetworkofCommunityLiaisonandEducationWorkerswhowillworkwiththenon-governmentorganisationsandcommunityworkers/guideswhodeliverservicestonewly-arrivedcommunitiesinthefirst12-18monthsoftheirsettlementinVictoria.

$300,000

WomensHealthintheNorth(WHIN)

PilotingalegaladvicesystemthatrespondsholisticallytopreventfamilyviolenceintheNorthernMetropolitanandHumeregions.

$307,223

WomenwithDisabilitiesVictoria

ThisresearchprojectwillassesstheincidenceofViolenceagainstWomenwithDisabilitiesinVictoriaandbuildanevidence-basedcaseforlegal,socialandservicesystemreform.

$216,188

2011 Major Grants Inthe2010-11annualreport,theBoardreportedthattheGrantsTeamhadidentifiedthepreventionofviolenceagainstwomenastheprioritythemeforthe2011MajorGrantsround.TheBoardsubmittedtheirrecommendationsfortheMajorGrantstotheAttorney-Generalinthe2010-11reportingperiodandwereawaitinghisapprovalasat30June2011.Atotalof

$3.7millioninfundingwasdistributedto15projectsinthe2011MajorGrantsround.Ofthe15projectsfunded,nineaddressedtheviolenceagainstwomenprioritytheme.TheprojectsthatwerefundedintheMajorGrantsroundarelistedinthefollowingtables.


other projects funded through the Major GrantsThefollowingprojectsalsoreceivedfundingthroughtheMajorGrantsroundbutdidnotfocusontheprioritytheme.

Figure 32 2011-12 otHer major grants aWarded

oRGANIsATIoN PRoJeCT desCRIPTIoN AMouNT AwARded

FederationofCommunityLegalCentres(Victoria)Inc.

ThisprojectaimstodelivermoreeffectivecommunitylegalservicesacrossVictoriabyrecruitingandtrainingexcellentlawgraduatesforVictoriancommunitylegalcentres(CLCs)bycontinuingtheLawGraduateSchemefor3years,whichwillconsolidateapathwaytoCLCpracticeforthebestlawstudents.

$330,000

FederationofCommunityLegalCentres(Victoria)Inc.

Thisprojectaimstodevelopabetterandfairerlegalsystembyconductingproactivelawreformandpolicywork,andbydevelopingresourcesandtrainingtoassistcommunitylegalcentresandothernongovernmentorganisationstoconducteffectivepolicyandlawreformwork.

$329,935

HumanRightsLawResourceCentreLtd

The‘PromotingEqualityforaFairandJustVictoria’isatwo-yearprojectthatwillbuildupontheinstitutionalcapacityandexpertiseoftheHumanRightsLawResourceCentreandVictorianlegalandcommunitysectororganisationstopromoteandprotecttherighttoequalityinVictoria.

$140,650

JesuitSocialServices

ThislegalresearchprojectwilldocumenttheremandexperiencesofyoungpeopleinVictoriaaged10-18yearsintheyouthjusticesystem,anddevelopproposalstoimprovelegislation,policies,systemsandconditionspertainingtoyoungpeopleinyouthjusticecentresonremand.

$100,086

LawInstituteofVictoria(LIV)

Thisprojectaimstoreducetheincidenceofstress,depressionandanxietyinlawyersthroughtheestablishmentofapilotLawyer’sHelplinetoincreaseretentionratesandgoodhealthwithintheprofession.

$150,000

TrustforNature(Victoria)

Thisprojectaimstobuildthecapacityoffarmers,privatelandmanagers’andthoseorganisationsthatsupportandworkwiththemtobebetterinformedaboutthelawsandlegalframeworksguidingemergingEcoMarkets.

$81,500


stRenGtHenInG ouR oRGAnIsAtIonAl cApABIlItIesthe Board is committed to developing and strengthening its organisational capabilities including systems, infrastructure and people.

Staffing DataSection6.4.1oftheActprescribesthatstaffemployedbytheBoardareclassifiedasemployeesoftheLSC.ForworkforcedatarelatingtotheBoardandtheLSC,includingExecutiveOfficerdisclosures,refertotheLSC’s2011-12AnnualReportatwww.lsc.vic.gov.au

Restructure of the LsC and LsB TheLegalServicesCommissionerandBoardCEO,MichaelMcGarvie,implementedarestructureinthereportingperiodtoaligntheLSCandBoardwiththeproposedstructureoftheimpendingnationallaw.ThisresultedintheestablishmentofanewteamintheRegulationandComplaintsunitoftheLSC,knownastheInvestigationsandRegulationTeam.ThisteamisresponsibleforcarryingoutworkundertheregulatorypowersoftheBoardsuchasbreachesoftheAct,regulationsandtherules,andworkingwiththestaffoftheLIVandBar,whodealwithnon-compliancemattersasdelegatesoftheBoard.ThesefunctionswerepreviouslyperformedbytheLegalandPolicyTeam,whichwasdisbandedthroughtherestructureprocess.

Mostnon-compliancemattersoverlapwithorrelatetotheLSC’scomplainthandlingfunction.ItthereforeseemedappropriatetopositionthisteamwithintheComplaintsandInvestigationsunitoftheLSC.ThisplacementhasenhancedtheabilityofstafftocarryoutacoordinatedapproachbetweenBoardandLSCfunctionsinrespectofanumberofmattersinvolvingILPsandindividualpractitioners.Thisnewinitiativehasenabledinvestigationsandlitigationtobeconductedmoreefficientlyandensuresthemostappropriateactionistakeninanygivenmatter,takingintoaccountthewiderangeofregulatorypowers.Therestructurealsoledtothecreationofasinglepolicyteam,knownastheRegulatoryReformandPolicyTeam,toservicebothorganisations.

recOrD keeping StrategyAllfilesarchivedbytheBoardareclassifiedusingtheRetentionandDisposalAuthority(RDA),whichwasapprovedbythePublicRecordOfficeofVictoria(PROV)inearly2009.ContinuedimplementationoftheRDAoccurredduringthereportingyear,withthesentencingandbarcodingofover4,000practitionerfilesandapproximately1,900lawpracticefiles.Thismeansthatallpractitionerandlawpracticefilescanbeuniquelyidentifiedandsearchedbyusingavarietyofindexes.During2011-12,theBoardcompletedthedestructionofagedfiles,whichwereprimarilyceasedlawpracticesthathadpassedtheirretentionperiod.BoardstaffalsocontinuedtoworkwiththeLIVtoensurefilesrelatedtodelegatedfunctionsarecorrectlyarchived.AprojectiscurrentlybeingundertakentoreviewandimplementthesevenPROVRecordKeepingStandards,whichprovidethebestpracticestandardsforrecordkeepingforpublicrecords.Furtherworkontherecordkeepingstandardsprojectwillcontinuein2012-13.

eLectrOnic DOcument recOrDS management SyStemExtensiveworkforthespecificationofrequirementsandvendorselectionforanorganisationwideElectronicDocumentRecordsManagementSystem(EDRMS)wasconductedthisyear.TheBoardiscurrentlyassessingthesystemoptionsavailable.

it imprOvementS/enhancementS

Incorporated Legal Practice (ILP) Audit Reports TheBoardhasthepowertoconductmanagementandcomplianceauditsofILPs.ILPsarerequiredtoimplementappropriatemanagementsystemsandcompleteaself-assessmentaudittoassesstheeffectivenessoftheirmanagementsystems.During2011-12,theBoarddevelopedanonlineversionoftheself-assessmentauditforminLSBOnlinetoremovetheneedforpractitionerstosubmitalengthypaperversion.TheBoard’sdatabase,Axiom,wasalsoupdatedtohelpadministerbatchesoftheself-assessmentforms.

Application/Variation of Practising Certificate formDuringthereportingperiod,workcommencedondevelopinganonlineversionoftheapplication/variationformtoenablelegalpractitionerstoapplyfortheirfirstpractisingcertificateonlinedirectlyaftertheadmissionprocessandvaryanexistingpractisingcertificateatanytime.

http://www.lsc.vic.gov.au


Axiom enhancementsAxiomisarepositorythatallowstheBoardanditsdelegatestomanagedatarelatingtothelegalprofessioninVictoria,andisaccessedbyanumberofusersacrossfiveorganisations.UsingAxiom,theBoardanditsdelegatescanrecordinformationaboutlegalpractitioners,lawpracticesandbarristers’clerks;processpractisingcertificates;maintainrecordsaboutclaimsagainsttheFidelityFund;monitorstatutorydepositaccountsandtrustaccounts;andmaintainrecordsofexternalexaminationreports,trustaccountinvestigationsandexternalinterventions.

Professional Indemnity Insurance

Duringtheyear,enhancementsweremadetothePIImoduleofAxiom,resultinginautomationofPIIpaymentsintoAxiom.ThisreplacedthemanualdataentryprocesspreviouslyperformedbytheLPLC,thussavinglabourandgreatlyimprovingthedata’sintegrityandaccuracy.

Continuing Professional Development

AnewmodulewascreatedinAxiomtoenableaccuraterecordingofcontinuingprofessionaldevelopmentactivityrelatingtoindividualpractitioners.

DeveLOpment Of a three-year Strategic pLanIn2011-12,BoardandLSCstaffcommencedaprocessfordevelopingacombinedthree-yearstrategicplanfortheperiod2012to2015.Allstaffwereinvitedtoparticipateintheplanningprocess,withworkshopsbeingheldattheworkunitlevelandmanagementleveltoidentifyanddiscussinternalandexternalissuesandorganisation-widegoalsandobjectives.Directorsandmanagementacrossthetwoorganisationsfurtherconsideredtheissuesthatwerediscussedduringtheseworkshops.Theideasweresubsequentlyconsolidatedintoasimpleandpracticalstrategicplan.TheBoardalsoprovidedinputintothestrategicplanthroughitsplanningdayheldinJune2012.Businessplanscoveringthe2012-13periodwerealsodevelopedtoaccompanythethree-yearstrategicplan.Thestrategicplanisanticipatedtobefinalisedintheearlypartof2012-13.

stRenGtHenInG ouR fInAncIAl pRActIcesthe Board is responsible for supervising a number of key accounts and funds. Accordingly, it is important that the Board has sound financial practices in place. one of the fundamental aims of the Board is to continue to strengthen its own financial practices.

puBLic purpOSe funDPart6.7oftheActrequirestheBoardtomaintainaPublicPurposeFund(PPF)inthreeseparateaccounts;theGeneralAccount,theStatutoryDepositAccount(SDA)andtheDistributionAccount.TheActsetsoutdetailsaboutwhatmoneyistobepaidintoandwithdrawnfromeachaccount.

General AccountUndersection6.7.3oftheAct,themoneydepositedintotheGeneralAccountincludesinterestfromlawpractices’residualtrustaccounts;interestfromthestatutorydepositaccounts;earningsfrominvestments;finesasaresultofhearingsbytheVCATLegalPracticeList;practisingcertificatefees;moneytransferredfromtheFidelityFundandprofitsfromtherealisationorrevaluationofanyinvestmentinthePPF.

Paymentsaremadefromthisaccountto:

• theLegalServicesBoard(undersection6.7.6)

• theLegalServicesCommissioner(undersection6.7.7)

• theVCATLegalPracticeList(undersection6.7.8)

• theCouncilofLegalEducationandtheBoardofExaminers(undersection6.7.3(2)(a)(viii)),and

• theprofessionalassociationsforcontinuinglegaleducationprograms(undersection6.7.14).

statutory deposit AccountUndersection6.7.4oftheAct,eachlawpracticewithageneraltrustaccounthasanindividualSDAheldinitsnamebytheBoard.ThebalanceintheaccountisthesumofeachoftheindividualSDAs.

ThefundsheldintheaccountareinvestedbytheBoardaccordingtoitsInvestmentPolicyStatement.TheBoard’sInvestmentPolicyStatementisexplainedinfurtherdetailonpage46ofthisreport.

distribution AccountUndersection6.7.5oftheAct,50%ofthesurplusintheGeneralAccountat30JuneistobetransferredtotheDistributionAccountduringthefollowingyear.Fundingisprovidedundersection6.7.9fortheLegalAidFundandsection6.7.10forfundingoflaw-relatedservicesandactivities.ThisincludesfundingfortheVictorianLawReformCommission.

Attheendofthereportingyearthesurplusinthegeneralaccountwas$81,619,000comparedwith$82,632,000asat30June2011.Thedistributionsmadeduring2011-12,asdeterminedbytheBoardandwiththeapprovaloftheAttorney-General,aresetoutinFigure33andinthestatementsofthisreport.


Figure 33 Board distriButions

2012 $’000

2013 $’000

PuBLIC PuRPose fuNd GeNeRAL ACCouNT BALANCe

General Account balance as at 30 June 73,321 81,619

Allocationoffund

Allocated to distribution Account (36,661) (40,809)

LegalServicesCommissioner (8,050) (7,988)

Paymentstoprofessionalassociationsforprograms (2,902) (2,835)

LegalPracticeList–VCAT (1,527) (1,527)

CouncilforLegalEducationandBoardofExaminers (1,172) (1,172)

Delegatedfunctions:LawInstituteofVictoria (4,512) (4,486)*

Delegatedfunctions:VictorianBar (121) (98)

Costofprofessionaldevelopment:LawInstituteofVictoria (168) (167)

subtotal (18,452) (18,273)

FundingavailableforLegalServicesBoard&Investment 18,208 22,537

*ThisminordecreaseinfundingisfullyoffsetbyanincreaseinfundingprovidedfortheFidelityFunddelegation.

dIsTRIBuTIoN ACCouNT

opening balance – Actual 13,074 16,935

Transfer from General Account 36,661 40,809

Projectgrantsapprovedandpaid (352) (9)

Projectgrantsapprovednotpaid–surplus 14 -

Majorgrantspaid#* (2,932) (3,083)

subtotal – Grants (3,270) (3,092)

Funding/grantsapprovedfordistributionduringthenextfinancialyear

VictoriaLegalAid (25,662) (25,663)

VictorianLawReformCommission (1,828) (1,828)

VictoriaLawFoundation (1,760) (1,760)

JudicialCollegeofVictoria (280) -

subtotal – funding Grants (29,530) (29,251)

Actual/forecast closing balance 16,935 25,401

-

# Major grants approved but unpaid as at 30 June 4,726 4,143

* Budgeted new major projects to be approved 2,500


vagO perfOrmance auDit Of JuStice pOrtfOLiO truSt funDSIn2011-12,theVictorianAuditorGeneral’sOffice(VAGO)carriedoutareviewintotheperformanceofthePublicPurposeFund(PPF)whichisadministeredbytheBoardinaccordancewiththeAct.ThescopeofthereviewalsoassessedarangeofotherBoardandLSCfunctions,includingtheLSC’scomplainthandlingfunction,practitionercompliancewithtrustfundregulations,theBoard’sGrantsProgram,theFidelityFundandtheBoard’sbudgetingprocesses.

VAGOsummarisedtheirfindingsinareportentitledManagementofTrustFundsintheJusticePortfolio,whichwastabledinParliamenton23May2012.ThefindingswereoverwhelminglypositiveoftheBoard’smanagementofthePPF.VAGOnotedinthereportthatthePPFiswelladministeredandeffectivelysupportsthepurposeforwhichitwasestablished,andtheBoard’soversightofthePPFissoundanddiligent.InrelationtotheBoard’sinvestmentfunctions,VAGOsaidtheBoardisthoroughanddiligentinitsoversightandmanagementofthePPFinvestmentsandthatithassetconservativeinvestmentobjectivessince2005.Further,VAGOidentified

thattheBoardhadalwaysachieveditsprimaryinvestmentobjectiveofavoidinganegativeannualreturnandthattheBoarddemonstrateseffectiveattentiontoinvestmentrisk.

VAGOfoundthattheBoardwasnotcompliantwiththeCentralisedTreasuryandInvestmentPolicypriortoFebruary2011.However,theBoarddidnotagreewiththisfinding,asthereisnolegalobligationontheBoardtocomplywiththispolicybecausetheBoardhastreasuryandinvestmentpowersinitsenablinglegislation,theLegalProfessionAct2004.

InrespectoftheBoard’sGrantsProgram,VAGOfoundthattheBoardhaswellmanagedprocessesforidentifyingneeds,attractingandassessingapplicationsandmanagingfundedprojects.VAGOalsofoundthattheBoardhasthoroughforecastingandbudgetingprocessestodeterminethefundingavailablefordistributionandhasathoroughapproachtodeterminingannualfundingallocationsfromthePPF.

TheVAGOreportalsonotedthattheLSC’scomplainthandlingpracticeshadimprovedsignificantlysincetheOmbudsman’sreviewintothe

operationsoftheLSCin2009.VAGOfeltthattheLSChassoundcomplainthandlingpracticesthataredesignedtoidentifyseriousmattersandquicklyresolveminorcomplaints.Wheretrustaccountbreachesareidentified,theLSCisquicktorespondandenforcerulesforoperationoftrustaccounts.

VAGOmadeanumberofrecommendationswithrespecttothePPF:

• activelymonitorfeespaidtoinvestmentassetmanagerstoensurefeesarewithintheprevailingmarketpricerange

• strengthenreadinesstorespondtoextremefinancialmarketeventsbyscenarioandcontingencyplanning,and

• activelymonitoragainsttargetsfortimelyresponsetofidelityfundclaimsprocessing.

TheLSBacceptsalltherecommendationsandhasimmediatelyaddressedsomeoftheissues.Theremainingissueswillbedealtwithin2012-13.

revieW Of the BOarD’S financiaL OperatiOnS anD cOnDitiOn ThefollowingtableprovidesthefiveyearfinancialconditionoftheBoard.

Figure 34 FinanciaL operation and condition oF tHe Board

2007-08

$’0002008-09

$’0002009-10

$’0002010-11

$’0002011-12

$’000

fINANCIAL PeRfoRMANCe

Revenuefrominvestmentsandsolicitors’trustaccounts 83,952 59,499 47,398 70,171 62,185

Otherrevenue 4,667 6,244 6,735 7,007 7,983

Totalrevenue 88,619 65,743 54,133 77,178 70,168

Totalexpenditure 71,350 58,096 67,902 64,133 60,652

Netoperatingresult 17,269 7,647 (13,769) 13,045 9,516

Netgain/(loss)onfinancialinstrumentsoractuarialvaluations (28,124) (16,549) 5,512 9,650 (5,795)

Netresultsfromcontinuingoperations (10,855) (8,902) (8,257) 22,695 3,721

fINANCIAL PosITIoN

Total Assets 525,961 525,932 615,216 652,789 619,526

Total Liabilities 408,949 417,817 515,361 530,240 493,256


expLanatiOn Of reSuLtSThenetresultof$3.72millionfor2011-12was$18.97milliondownonlastyear’s$22.69million.Thisreductionwasprimarilydueto:

• changesinActuarialValuationforFidelityFund(expenserecognisedup$8.99million)

• thenetlossonfinancialinstruments$3.35million.Thiswasdown$6.46millionfromlastyear’sgainof$3.10million,and

• reducedinterestincomereflectinglowerinterestrates–down$7.99million.

Thesereductionswereoffsetbyareductioninoperatingexpensesof$3.48million.

incOme• InterestreturnsfrombothResidual

TrustAccountsandtheCashcomponentofStatutoryDepositAccountshavebeenretardedduethereductionintheleveloftherollingaveragefundsondepositandlowerinterestratesinthecurrentenvironment.

• Inlinewiththeoverallmarketsituation,Investmentfunds,whenmarkedtomarket,realiseda$3.35millionlosscomparedwitha$3.10milliongainin2010-11.Theinvestmentportfoliohowevercontinuestoachieveinterestresultsinlinewithapprovedstrategies.

expenDiture• Grantsandfundingreducedby$2.26

million.Althoughallfundedbodiesreceivedfundinginaccordancewithapprovedbudgetsadecisionwastakentolimittheapprovedmajorgrantsfortheyear.Thisresultedina$1.63millionsaving.

• NetrechargesbetweentheLSCandtheBoardincreasedfrom$10.47millionby8%to$11.30million.ThesecostsincludethecostofstaffsuppliedbyLSCtoBoardandLSCoperatingexpenses.

• FidelityFundcapitalclaimspaidreducedfrom$1.11millionto$0.75millionor33.8%buttheOutstandingClaimsProvisionwasincreasedby$2.44million(including$0.77millionfornon-clientclaims)to$13.77million.This21.5%increaseisinlinewithactuarialvaluations.

• DuringtheyeartheBoarddecidedtochangeassetcapitalisationrulestoalignwithnormalgovernmentpractice.Onlyassetsgreaterthan$5,000willberetainedintheFixed/IntangibleAssetRegisters.Theimpactoftheimplementationofthispolicyonthe2011-12resultisaonceoff$0.23million.Assetsremovedfromtheassetregistercontinuetobetracked.

SummaryThesmallimprovementinthefinancialpositionoftheBoardreflectstightcostcontrolduringatimeofreducinginterestrates,reducingfundsinStatutoryandResidualdepositsandanambivalentinvestmentenvironment.

TheBoardisconstantlymonitoringappropriatemeasurestoimprovereturnswithinagreedriskparametersbuttheoutlookfor2012-13isexpectedtobeasmalldeficit.


inveStment pOLicy StatementTheBoardheld$614.93millionininvestmentsandoperatingaccountsasat30June2012,comparedwith$645.61millionin2011.

Figure 35 inVestments managed By tHe Board as at 30 june 2012 ($’000)

fuNd/ACCouNT Au

sTR

ALI

AN

eq

uIT

Ies

Au

sTR

ALI

AN

LIs

Ted

P

Ro

PeR

Ty

CAsH

MA

NA

GeM

eNT

fIxe

d IN

TeR

esT

oVe

Rse

As

equ

ITIe

s

TeR

M d

ePo

sITs

CAsH

TR

usT

AC

Co

uN

Ts

ToTAL

PublicPurposeFund

GeneralAccount 15,983 (191) - 50,854 6,926 1 8,045 81,618

StatutoryDepositAccount 25,950 7,000 67,314 34,510 46,500 67,731 214,735 463,740

DistributionAccount - - - - - - 16,935 16,935

Total Public Purpose fund 41,933 6,809 67,314 85,364 53,426 67,732 239,715 562,293

FidelityFund 4,045 712 18,698 19,480 5,170 - 2,634 50,739

Net funds managed by Legal services Board 45,978 7,521 86,012 104,844 58,596 67,732 242,349 613,032

TheinvestmentobjectivesfortheSDAandFidelityFundareasfollows:

a. TheBoardaimstorestrictthefrequencyofanegativereturntonotexceedoneinevery30yearsfortheSDAwhenmodellingitslongtermassetallocationandrisk/returnobjectives.

b. TheBoardaimstorestrictthefrequencyofanegativereturntonotexceedoneinevery20yearsfortheFidelityFundwhenmodellingitslongtermassetallocationandrisk/returnobjectives.

c. Achievea2%perannumreturnfortheSDA.

d. MaintainaCPI+3%perannumreturnfortheFidelityFund.

Theassetallocationsdeterminedtoachievetheobjectivesaresetoutbelow.

Figure 36 asset aLLocations

sdA fIdeLITy fuNd

AsseT ALLoCATIoN BeNCHMARK RANGes

ACTuAL 30/6/12

BeNCHMARK RANGes

ACTuAL 30/6/12

Australianshares 5.0–14.0% 7.5% 5.0–15.0% 8.0%

Overseasshares 5.0–14.0% 9.5% 5.0–15.0% 10.2%

Diversifiedproperty 0.0–7.5% 1.2% 0.0–5.0% 1.4%

GrowthAssets 0.0–40.0% 18.2% 0.0–40.0% 19.6%

Fixedincome 12.5–22.5% 15.2% 30.0–45.0% 38.4%

Cash 50.0–70.0% 66.6% 30.0–70.0% 42.0%

DefensiveAssets 60–100% 81.8% 60–100% 80.4%

Total 100.0% 100.0% 100.0% 100.0%


the fiDeLity funD ThepurposeoftheFidelityFundistocompensatepeoplewhohavesufferedalossbecauseofadefaultbyalawpracticeorapprovedclerkinrelationtotrustmoneyortrustproperty.Part3.6oftheActsetsouttherelevantdefinitionsandthebasisforinvestigatinganddeterminingclaims.Part3.6alsosetsoutexclusionsfromtheschemeandunderwhatcircumstancestheBoardmaydisalloworreduceaclaimeventhoughadefaulthasoccurred.

ClaimsmustbelodgedwiththeBoardwithinsixmonthsoftheclaimantbecomingawareofthedefault.IntheeventthataclaimismadeoutsidethesixmonthclaimperiodtheBoardmaystillaccepttheclaim.Claimsmadeoutsidethestatutorytimeframemustbeaccompaniedbyadetailedexplanationforthedelay.IftheBoarddoesnotacceptalateclaim,theclaimantisentitledtoapplytotheSupremeCourttohavethestatutorytimeframeextended.UponpaymentofaclaimtheBoardissubrogatedtothe

rightsoftheclaimantinrelationtothedefaultandmayrecoveragainstthepersonresponsibleforthedefault.

ActuarialvaluationsarepreparedandreportedannuallybytheBoard’sindependentactuaries,amActuaries.Thevaluationincludestheamountofalloutstandingclaimsonthefund,theactualclaimsreceived,anallowanceforclaimsthatthefundmayincur(butwhichhavenotyetbeenlodged),andafurtherriskmargin.ThisinformationispresentedinFigure37.

Figure 37 FideLity Fund cLaims in 2011-12

2010-11 2011-12

No. of CLAIMs AMouNT $’000 No. of CLAIMs AMouNT $’000

Claimsreceivedduringperiod 36 2,775 23 6,568

Claimspaidduringtheperiod 16 1,112 14 804

Claimsoutstandingasat30June 28 3,618 29 5,561

ActuarialValuation NA 11,330 NA 13,770

FidelityFundrecoveries 15 -

neW cLaimS inveStigatOr pOSitiOnIn2011-12,theBoardcreatedanewpositiontitledClaimsInvestigator,whichwasestablishedtomanageFidelityFundclaimsmadetotheBoard.ThispositioninvolvestheinvestigationandmanagementofFidelityFundclaimsreceivedinconjunctionwiththeLIV,andtomanageanyassociatedlitigationarisingfromtheseclaims.

fiDeLity funD cOntriButiOn rateS TheActrequirestheBoardtodetermineannuallycontributionstobemadetotheFidelityFundbycontributionclassesdrawnfrom:

• Victorianpractitioners

• InterstatepractitionerswhoareauthorisedtowithdrawmoneyfromaVictoriantrustaccount

• Communitylegalcentres,and

• Approvedclerks.

TheBoardmustannuallydeterminetheamountoftheFidelityFundcontributionpayablebycontributionclasses.Indoingso,itmusthaveregardtotheadviceofanactuaryengagedbytheBoardandthesolvencyleveloftheFidelityFund.IfatanytimetheBoardisoftheopinionthatthecreditoftheFidelityFundisinsufficienttothemeetitsliabilities,theBoardmayimposealevyoncontributionclasses.LegalpractitionerswhoholdacurrentVictorianpractisingcertificatepaytheircontributiontothefundwiththeirpractisingcertificatefees.InterstatepractitionersandapprovedclerksarerequiredtopaytheircontributiondirectlytotheBoard.Thecontributionsthatweretobepaidbetween1July2011and30June2012arelistedinFigure38.TheBoardactingunderDivision3ofPart6.7oftheActdeterminestheFidelityFundcontributionrates.


Figure 38 FideLity Fund contriBution rates For 2011-12

CLAss TyPe CoNTRIBuTIoN

1 Local Practitioner

Authorisedtoreceivetrustmoney–exceeding$500,000Anapprovedclerkortheholderofalocalpractisingcertificatethatauthorisesthereceiptoftrustmoneywhoreceived,orwasaprincipal,employeeoradirectorofalawpracticethatreceivedtrustmoneyexceeding$500,000intotalduringtheyearendingon31October2010.

$380


Principalpractisingcertificatenotauthorisedtoreceivetrustmoney–whoisaprincipalofalawpracticethatreceivedtrustmoneyexceeding$500,000Theholderofaprincipalpractisingcertificatethatauthorisesthepersontoengageinlegalpracticebutthatdoesnotauthorisethereceiptoftrustmoneyandwhoistheprincipaloremployeeofalawpracticethatreceivedtrustmoneyexceeding$500,000intotalduringtheyearending31October2010.

$380


Authorisedtoreceivetrustmoney–notexceeding$500,000Anapprovedclerkortheholderofalocalpractisingcertificatethatauthorisesthereceiptoftrustmoneywhoreceived,orwasaprincipal,employeeoradirectorofalawpracticethatreceivedtrustmoneywithintherangeofNil–$500,000intotalduringtheyearendingon31October2010.

$190


PrincipalpractisingcertificatenotauthorisedtoreceivetrustmoneywhoisaprincipalofalawpracticethatreceivedtrustmoneywithintherangeofNil–$500,000TheholderofaprincipalpractisingcertificatethatauthorisesthepersontoengageinlegalpracticebutthatdoesnotauthorisethereceiptoftrustmoneyandwhoistheprincipaloremployeeofalawpracticethatreceivedtrustmoneywithintherangeofNil–$500,000intotalduringtheyearendingon31October2010.

$190

5 Employee practising certificate and not authorised to receive trust money

Theholderofanemployeepractisingcertificatethatauthorisesthepersontoengageinlegalpracticebutthatdoesnotauthorisethereceiptoftrustmoneyandwhoisemployedbyalawpracticethatisauthorisedtoreceivetrustmoney.

$95

6 Exempt Practitioners

Corporatepractitioners,interstatepractitionersnotauthorisedtoreceivetrustmoneyfromalocaltrustaccount,solepractitionersnotauthorisedtoreceivetrustmoney,employeepractitionersemployedbyasolepractitionerorlawfirmnotauthorisedtoreceivetrustmoneyandemployeesatcommunitylegalcentresarenotrequiredtomakeacontribution.

Nil

7 Interstate Practitioner

AuthorisedtoReceiveTrustMoney–exceeding$500,000Aninterstatelegalpractitionerwhoisauthorisedtowithdrawmoneyfromalocaltrustaccountandwhoisaprincipal,employeeoradirectorofalawpracticethatreceivedtrustmoneyinVictoriaexceeding$500,000intotalduringtheyearendingon31October2010.

$380

8 Interstate Practitioner

AuthorisedtoReceiveTrustMoney–notexceeding$500,000Aninterstatelegalpractitionerwhoisauthorisedtowithdrawmoneyfromalocaltrustaccountandwhoisaprincipal,employeeoradirectorofalawpracticethatreceivedtrustmoneyinVictoriawithintherangeofNil–$500,000intotalduringtheyearendingon31October2010.

$190


cLaim aLLOWeD

Lisa decided to downsize from her house to an apartment after her children left home. she engaged a lawyer to act for her in selling her house and buying an apartment. AftersellingherhouseLisahadenoughmoneytobuyanapartmentwithoutneedinganyfinanceormortgage.TwoweeksafterLisamovedintoherapartmentshereceivedaletterfromherlawyeradvisingherthatshehadbeenregisteredastheowneroftheapartmentandaphotocopyofthecertificateoftitleshowingthatshewastheownerwasenclosed.Theletteralsostatedthatthelawpracticehadcreatedadeedpacketinhernameandthecertificateoftitlewouldbeheldsecurelybythelawpractice.

AfterLisahadbeenlivinginherapartmentformanyyearsshereceivedaletterfromapersonwhohadbeenappointedthereceiverofthelawpractice,whichincludedcopiesofthecontentsofherdeedpacket.ToLisa’ssurprisetherewasamortgageregisteredoverherapartment,buttherewasnocopyofthecertificateoftitle.

Thesignatureonthemortgagewhereshewassupposedtohavesigneditwasclearlynothers.LisamadeaclaimagainsttheFidelityFundwiththeBoard.

TheclaimwasinvestigatedbytheLIV,asadelegateoftheBoard.Theinvestigatorwasabletotracethemoneyadvancedunderthemortgagetotheaccountofanemployeeofthelawpracticefromwhichithadbeenwithdrawninlargecashamounts.Basedontheinvestigator’sreport,theBoarddeterminedadefaulthadoccurredbecauseLisa’scertificateoftitlehadbeenfraudulentlydealtwithbyanemployeeofthelawpractice.TheBoardallowedtheclaimandpaidLisatheamountrequiredtodischargethemortgagewhichrepresentedthevalueoftrustpropertythatLisahadlostbecauseofthedefault.

fIDelItY funD cAse stuDIes

cLaim partLy aLLOWeD

denise was the executor of her father’s will and engaged a lawyer to assist in the administration of the estate. early in the administration of the estate $500,000 in cash was called into the estate. Deniseinstructedherlawyertoinvestthemoneyinacashmanagementtrust,thatshehadalsoinvestedintopersonally,untiltheestatewasfullycalledinandreadyfordisbursementbetweenthebeneficiaries.

Beforetheestatewascalledin,Denise’slawyerdied.Thelawyerwasasolepractitioner.Areceiverwasappointedtothelawpractice.Theestatetrustledgeraccountshowedthe$500,000beingpaidtothecashmanagementtrustbutthefilecontainednorecordsofthemoneyactuallybeinginvested.Denisemadea$555,000claimontheFidelityFundcomprisingtheinitial$500,000and$55,000interestthatwouldhavebeenearnedifthemoneyhadbeenplacedinthecashmanagementtrust.

TheclaimwasinvestigatedbytheLIV,asadelegateoftheBoard.TheInvestigatorfoundrecordsandconductedbanktracesthatshowedthe$500,000thatDeniseplacedintotrustwastransferredtoherlawyer’saccountwithanonlinebookmaker.TheBoarddeterminedthattheclaimshouldbepartlyallowedintheamountof$500,000andpartlydisallowedintheamountof$55,000becausetheFidelityFunddoesnotcompensateconsequentiallosses.TheBoardplacedthereceiverofthelawpracticeonnoticeofitssubrogatedrightsandthereceiversubsequentlypaidtheBoard$300,000thatwasrecoveredfromthelatelawyer’sestate.


fIDelItY funD cAse stuDIes

cLaim DiSaLLOWeD

alan met his lawyer when he purchased his first home 30 years ago. over the years alan had used the same lawyer to draft his will, perform the conveyance on several property transactions, act for him in a dispute that he had with an employee and in his divorce. Alanwasinvolvedinanaccidentthatmeanthecouldnolongerworkandreceivedacompensationpayoutof$300,000thatwaspaidintohislawyer’strustaccount.Alan’slawyeraskedhimwhatheintendedtodowiththemoneyandAlansaidthatheintendedtouse$50,000tomakealterationstohispropertytomakeiteasiertolivewithhisinjuriesandinvesttheremainingamount.Alan’slawyeradvisedhimthathehadinvestedinaconstructioncompanythatwasdevelopingahighrisecomplexinMelbournethatwouldreturn18%perannumandwouldpayoutintwoyears.Alan’slawyerrecommendedtheinvestmenttohimandAlanagreed.Aweeklater,Alanreceivedaletteracknowledginghisinvestmentintheconstructioncompanyfromhislawyer.

About18monthslaterAlansawinthenewspaperthathislawyerhadbeenarrestedonfraudcharges.Alancontactedthelawpracticetodiscoverthatareceiverhadbeenappointedandthereceiveradvisedhimthathehadnorecordofhisinvestmentandnomoneyintrustforhim.AlanmadeaclaimagainsttheFidelityFund.

Uponreceiptoftheclaim,thestaffattheBoardidentifiedthatthemoneyentrustedbyAlantohislawyerwasforaninvestmentpurpose.TheBoarddisallowedAlan’sclaimbecausethemoneywaspaidtothelawyerforinvestmentpurposes.UndertheAct,theBoardgenerallycannotpayoutcompensationfromtheFidelityFundformoneythathasbeenentrustedtolawyersforinvestmentpurposesunlessthemoneyisheldintheordinarycourseoflegalpractice,primarilyinconnectionwiththeprovisionoflegalservicesandtheinvestmentismadefortheancillarypurposeofmaintainingorenhancingthevalueofthemoneypendingthecompletionofalegalmatterorastageofalegalmatter.AlanwasadvisedthathecouldmakeadisciplinarycomplainttotheLegalServicesCommissioner.Theoutcomeofadisciplinarycomplaintmayinvolveapenaltyimposedonthepractitionersuchasalicensesuspension,butmaynotnecessarilyresultinacompensationorderinAlan’sfavour.


freeDOm Of infOrmatiOnTheFreedomofInformationAct1982allowsthepublicarightofaccesstodocumentsheldbytheBoard.TheBoardreceivedoneapplicationduring2011-12,whichwassubsequentlywithdrawn.

Making a RequestAccesstodocumentsmaybeobtainedthroughawrittenrequesttotheBoard,asdetailedinsection17oftheFreedomofInformationAct1982.Insummary,therequirementsformakingarequestare:

• itshouldbeinwriting

• itshouldidentifyasclearlyaspossiblewhatdocumentsarebeingrequested,and

• itshouldbeaccompaniedbytheappropriateapplicationfee(thefeemaybewaivedincertaincircumstances).

RequestsfordocumentsinthepossessionoftheBoardshouldbeaddressedtotheFreedomofInformationOfficerat:

Legal Services Board Level 10, 330 Collins Street MELBOURNE VIC 3000

Accesschargesmayalsoapplyoncedocumentshavebeenprocessedandadecisiononaccessmade,forexample,photocopyingandsearchandretrievalcharges.TheBoardhasdevelopedaFreedomofInformationPolicywhichisavailablefromtheBoardwebsiteorfromtheBoard’sofficeonrequest.FurtherinformationregardingFreedomofInformationcanbefoundonFOIOnlineatwww.foi.vic.gov.au

cOmpLiance With the BuiLding act 1993TheBoarddoesnotownorcontrolanygovernmentbuildingsandconsequentlyisexemptfromnotifyingitscompliancewiththebuildingandmaintenanceprovisionsoftheBuildingAct1993.

natiOnaL cOmpetitiOn pOLicyIn1995,allAustralianGovernments(Federal,StateandTerritory)agreedtoreviewand,whereappropriate,reformallexistinglegislativerestrictionsoncompetition.UndertheNationalCompetitionPolicy,theguidinglegislativeprincipleisthatlegislation,includingfuturelegislativeproposals,shouldnotrestrictcompetitionunlessitcanbedemonstratedthat:

• thebenefitsoftherestrictiontothecommunityasawholeoutweighthecosts,and

• theobjectivesofthelegislationcanonlybeachievedbyrestrictingcompetition.

TheBoardcontinuestocomplywiththerequirementsoftheNationalCompetitionPolicy.

WhistLeBLoWers Protection act 2001TheWhistleblowersProtectionAct2001(theWhistleblowersAct)encouragesandassistspeopleinmakingdisclosuresofimproperconductbypublicofficersandpublicbodies.TheBoardissubjecttotheWhistleblowersAct.TheWhistleblowersActprovidesprotectiontopeoplewhomakedisclosuresinaccordancewiththeActandestablishesasystemforthemattersdisclosedtobeinvestigatedandrectifyingactiontobetaken.

TheBoardhasdevelopedaWhistleblowersProtectionPolicywhichisavailablefromtheBoardwebsiteorfromtheBoardofficeonrequest.During2011-12therewerenodisclosuresmaderegardingtheBoardandnodisclosuresreferredbytheBoardtotheOmbudsman.

DisclosureofimproperconductbytheBoard,ortheBoardstaff,maybemadetothefollowingpeople:

The Executive Director Corporate and Governance Legal Services Board Level 10, 330 Collins Street Melbourne VIC 3000 Tel: 9679 8000 Fax: 9679 8100 Email: [email protected]

Alternatively,disclosuresmaybemadedirectlytotheOmbudsman.

Ombudsman Victoria Level 9, 459 Collins Street (North tower) Melbourne VIC 3000 Tel: 9613 6222 Toll Free: 1800 806 314 Internet: www.ombudsman.vic.gov.au Email: [email protected]

impLementatiOn Of the victOrian inDuStry participatiOn pOLicyInOctober2003,theVictorianParliamentpassedtheVictorianIndustryParticipationPolicyAct2003,whichrequirespublicbodiesanddepartmentstoreportontheimplementationoftheVictorianIndustryParticipationPolicy.Departmentsandpublicbodiesarerequiredtoapplythispolicytoalltendersover$3millioninmetropolitanMelbourne,and$1millioninregionalVictoria.Forthereportingperiod,theBoarddidnotcommenceanycontractstowhichthepolicyapplies.

cHApteR 04 complIAnce stAtements

http://www.foi.vic.gov.au

http://www.ombudsman.vic.gov.au


cOnSuLtancieS

details of consultancies over $10,000Figure39liststheconsultantsengagedin2011-12wherethecostoftheengagementwas$10,000orabove.

details of consultancies under $10,000

During2011-12,theBoardengagedotherconsultancieswherethetotalfeespayablewerelessthan$10,000.Thetotalvalueoftheseconsultancieswas$38,387excludingGST.

FIGURE39CONSULTANCIESOVER$10,000

CoNsuLTANT PuRPose of CoNsuLTANCy

sTART dATe

eNd dATe

exPeNdITuRe 1/7/11 To 30/6/12 (exCLudING GsT)

fuTuRe exPeNdITuRe Re (exCLudING GsT)

EffectiveChange Grantevaluation 1/07/11 30/06/12 $20,454 0

VicHealthPromotion Violenceagainstwomen 1/07/11 30/06/12 $12,000 0

aDDitiOnaL infOrmatiOn avaiLaBLe On reQueStTheBoardmaintainsfurtherinformationwhichisavailableonrequesttotherelevantMinisters,theMembersofParliamentandthepublic,subjecttofreedomofinformationrequirements.Informationretainedincludes:

• notificationsandapplicationsbylegalentitiesandlegalpractitionersforregistration

• astatementthatdeclarationsofpecuniaryinterestshavebeendulycompletedbyallrelevantofficers

• detailsofpublicationsproducedbytheBoardaboutitself,andhowthesecanbeobtained

• detailsofchangesinprices,fees,charges,ratesandleviescharged

• detailsofanymajorexternalreviewscarriedout

• detailsofmajorresearchanddevelopmentactivitiesundertaken

• detailsofoverseasvisitsundertakenincludingasummaryoftheobjectivesandoutcomesofeachvisit

• detailsofmajorpromotional,publicrelationsandmarketingactivitiesundertakentodevelopcommunityawarenessofservices

• detailsofassessmentsandmeasuresundertakentoimprovetheoccupationalhealthandsafetyofemployees

• ageneralstatementonindustrialrelationsanddetailsoftimelostthroughindustrialaccidentsanddisputes,and

• alistofmajorcommitteessponsored,thepurposesofeachcommitteeandtheextenttowhichthepurposeshavebeenachieved.

Office-BaSeD envirOnmentaL impactSAspreviouslynoted,allstaff,includingthosesupportingtheBoard’sfunctionsareclassifiedasemployeesoftheLSC(seepage41forexplanation).Assuch,thesummaryofofficebasedenvironmentalimpactsforBoardstaffisincorporatedwithintheOffice-BasedEnvironmentalImpactsstatementoftheLSC’s2011-12AnnualReport,whichisavailableontheLSCwebsiteatwww.lsc.vic.gov.au



DeLegateD functiOnS aS at 30 June 2012Pursuanttosection6.2.21(a)oftheAct,theBoardisrequiredtoreportondelegationsinforceasattheendofthereportingperiodandthoserevokedduringthereportingperiod.Figure40showsthecurrentdelegationsasat30June2012.

Figure 40 internaL deLegations made By tHe LegaL serVices Board current as at 30 june 2012

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deLeGATIoNs MAde To THe LeGAL seRVICes CoMMIssIoNeR

s.2.2.6(1) 24May2012 ApplytoTribunalfororderthatapersonisadisqualifiedperson

s.2.4.3(1) 24May2012 Grantlocalpractisingcertificates

s.2.4.3(2) 24May2012 Approveformoflocalpractisingcertificate

s.2.4.3(3) 24May2012 Determineconditionsonlocalpractisingcertificates

s.2.4.3(4) 24May2012 Conditionsonlocalpractisingcertificates

s.2.4.3(5) 24May2012 Conditionstoappearonfaceofcertificate

s.2.4.4 24May2012 Considerifapersonisfitandpropertoholdalocalpractisingcertificate

s.2.4.7 24May2012 Assesscriteriaforgrantorrenewaloflocalpractisingcertificate

s.2.4.8(1) 24May2012 Receiveapplicationforgrantorrenewaloflocalpractisingcertificate

s.2.4.9(1) 24May2012 Approveformforgrantorrenewalofalocalpractisingcertificate

s.2.4.9(4) 24May2012 Refundsurcharge

s.2.4.9(5) 24May2012 Receiveevidenceofprofessionalindemnityinsurance

s.2.4.9(6) 24May2012 Givenoticeoffailuretocomplyortorestoredeficiencyintrustaccount

s.2.4.9(7) 24May2012 Assesswhetherfailuretocomplyorrestoredeficiencyhasbeenremedied

s.2.4.9(8) 24May2012 Requestsurrenderofcertificate

s.2.4.11 24May2012 Receivelateapplicationforlocalpractisingcertificateonpaymentofsurcharge

s.2.4.12 24May2012 Grant,reneworrefuselocalpractisingcertificate

s.2.4.13 24May2012 Amendorissuenewlocalpractisingcertificatewithconditions

s.2.4.14 24May2012 Imposeconditionsonlocalpractisingcertificate

s.2.4.16(1) 24May2012ApplytotheTribunaltoimposeorvaryconditionsonlocalpractisingcertificatependingcriminalproceedings

s.2.4.18(3) 24May2012Exemptaperson(orreduceperiod)fromthestatutoryconditiononalocalpractisingcertificatethatthepersonmustonlyengageinsupervisedlegalpractice

s.2.4.21 24May2012 Amend,suspendorcancellocalpractisingcertificateandprovideshowcausenotice

s.2.4.22 24May2012 Immediatesuspensionoflocalpractisingcertificate

s.2.4.23 24May2012 Liftsuspensionoflocalpractisingcertificate

s.2.4.24 24May2012 Otheramendmentorcancellationoflocalpractisingcertificate

s.2.4.26 24May2012 Receivewrittenstatementfromapplicantforlocalpractisingcertificateifshowcauseeventapplies

s.2.4.27 24May2012Receiveshowcausenoticeandstatementfromholderoflocalpractisingcertificate;Approvetheformofnotice

s.2.4.28 24May2012Refusetograntorrenew,amend,suspendorcancellocalpractisingcertificate–failuretoshowfitandproperperson

s.2.4.29 24May2012 Restrictentitlementtoapplyforlocalpractisingcertificateforaspecifiedperiod

s.2.4.30 24May2012 Receivesurrenderedlocalpractisingcertificate

s.2.4.31 24May2012 Requirereturnoflocalpractisingcertificate

s.2.4.40 24May2012Requireprovisionofinformationordocumentsforpurposeofconsideringanapplicationforgrantorrenewaloflocalpractisingcertificate


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s.2.5.3 24May2012 Requestcriminalrecordcheck

s.2.5.4 24May2012 Requirepersontoundergohealthassessment

s.2.5.5 24May2012 Appointhealthassessor

s.2.5.6 24May2012 Receivehealthassessmentreport

s.2.6.5(2) 24May2012 Givewrittennoticeofactiontakenortheresultofappealtocorrespondingauthority

s.2.6.5(5) 24May2012GivewrittennoticeofaconditionimposedonanAustralianlawyers’localpractisingcertificatetocorrespondingauthorities

s.2.6.10(3) 24May2012NotificationofdateonwhichBoardproposestocancellocalpractisingcertificateofpersonwhohasbeenremovedfrominterstateroll

s.2.6.13 24May2012InformationreceivedfromauthorityofanotherjurisdictionmaybefurnishedtootherauthoritiesofthisjurisdictionthathavefunctionsundertheAct

s.2.7.7(1) 24May2012 Approveformofwrittennoticeofcorporation’sintentiontocommenceengaginginlegalpractice

s.2.7.7(3) 24May2012Approveformofwrittennoticeofcorporation’sfailuretonotifyintentiontocommenceengaginginlegalpractice

s.2.7.9(1) 24May2012 Approveformofwrittennoticeofcorporation’scessationoflegalpractice

s.2.7.22 24May2012 Auditincorporatedlegalpractice

s.2.7.23(1) 24May2012Requireincorporatedlegalpracticesubjecttoaudittoprovideorverifyexplanation,informationordocuments

s.2.7.23(2) 24May2012 Requirepersontogiveaccesstodocumentsorinformationforpurposeofaudit

s.2.7.23(7) 24May2012 Copyandretaininformationordocuments

s.2.7.24 24May2012 ApplytotheSupremeCourtfororderbanningincorporatedlegalpractice

s.2.7.25 24May2012ApplytotheSupremeCourtfororderdisqualifyinganAustralianlegalpractitionerfrommanaginganincorporatedlegalpractice

s.2.7.26 24May2012 DiscloseinformationtoAustralianSecuritiesandInvestmentsCommission

s.2.7.38 24May2012Approveformofnoticeoflegalpractitionerpartner’sintentiontostartprovidinglegalservicesasamemberofamulti-disciplinarypartnership

s.2.7.50 24May2012ApplytoSupremeCourtfororderprohibitinganAustralianlegalpractitionerfrombeingapartnerinamulti-disciplinarypartnership

s.2.8.19(1)(a) 24May2012 Approveformforthegrantorrenewalofregistrationasaforeignlawyer

s.2.8.19(6) 24May2012 Specifycontentofformforgrantorrenewalofregistrationasaforeignlawyer



s.2.8.20(2) 24May2012 Specifyrequirementsofapplicationforgrantorrenewalofregistrationasaforeignlawyer

s.2.8.21 24May2012 Grantorrenewalofregistrationofforeignlawyers;Approveformofnoticeofrenewal

s.2.8.22 24May2012 Requirementtograntorrenewregistrationofforeignlawyersifcriteriasatisfied

s.2.8.23 24May2012 Refusaltograntorrenewregistrationofforeignlawyers

s.2.8.31 24May2012 Receiveshowcausenoticefromlocallyregisteredforeignlawyer;Approvetheformofnotice

s.2.9.3(1) 24May2012Receivenotificationoftemporaryengagementofasupervisedlegalpractitionerbyacommunitylegalcentre

s.3.2.21 24May2012RequirelawpracticeorAustralianlegalpractitionertoprovideinformationordocumentsregardingcompetitioninvestigation

s.3.2.22 24May2012GiveopportunitytolawpracticeorAustralianlegalpractitionertocommentonadversereportregardingcompetitioninvestigation

s.3.3.4 24May2012 Determineifmoneyistrustmoney


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s.3.3.27 24May2012 Requesttrustbalanceofanytrustaccount

s.3.3.28 24May2012 Conducttrustinvestigation

s.3.3.29 24May2012 Appointtrustinspector

s.3.3.30(1) 24May2012 Issueidentitycardtotrustinspector;Approveformofcard

s.3.3.47 24May2012 Receivetrustinspectorsreport

s.3.3.48 24May2012 Determineifcostsofinvestigationarepayablebyalawpractice

s.3.3.51(2) 24May2012 Exemptapersonfromtheexternalexaminerrequirements

s.3.3.65 24May2012 Determineamountandtimingofrequiredstatutorydeposit

s.3.3.68 24May2012 Exemptalawpracticeoranapprovedclerkfromstatutorydepositrequirements

s.3.5.3 24May2012 ApproveprofessionalindemnityinsuranceforAustralian-registeredforeignlawyer

s.3.5.4(1) 24May2012Approveprofessionalindemnityinsuranceforcommunitylegalcentrebeforeitcommencesengaginginlegalpractice

s.3.5.4(2) 24May2012Approveprofessionalindemnityinsuranceforcommunitylegalcentrewhileitisengaginginlegalpractice

s.3.5.4A(1) 24May2012Approveprofessionalindemnityinsuranceforcorporatelegalpractitionerengaginginlegalpracticeonaprobonobasis

s.3.5.7 24May2012Exemptalawpracticeorcommunitylegalcentre,orclassesoflawpracticesorcommunitylegalcentres,fromprofessionalindemnityinsurancerequirements

s.3.6.7 24May2012 ReceiveclaimsagainstthefidelityfundaboutdefaultsApproveformforclaim

s.3.6.8 24May2012 Allowfurtherperiodtolodgefidelityfundclaim

s.3.6.12(1) 24May2012 Investigatefidelityfundclaims

s.3.6.12(2) 24May2012 Requirefidelityfundclaimanttoproducesecurity,documentorstatementofevidence

s.3.6.19 24May2012 Subrogationonpaymentoffidelityfundclaim

s.3.6.21 24May2012 Notifyapplicantofdelayindeterminationoffidelityfundclaim

s.3.6.34(2) 24May2012 Requestcorrespondingauthoritytoinvestigatedefault

s.3.6.35 24May2012Actasagentofcorrespondingauthority–regardingadefaulttowhichacorrespondinglawapplies

s.3.6.36 24May2012 Investigationofinterstatedefaults

s.3.6.39(1) 24May2012RequestacorrespondingauthoritytoarrangeinvestigationofaclaimbeingdealtwithbytheBoard

s.7.2.5(3) 24May2012 Certifycopyoflegalprofessionrules

s.7.2.6(b) 24May2012 Appointinvestigator

s.7.2.8 24May2012 Receiveinvestigator’sreport

s.7.2.10(1)(a) 24May2012 FilechargeforoffenceunderAct

s.7.2.13(1) 24May2012ApplyforinjunctionregardingconductthatconstitutescontraventionofAct/RegulationsorattemptingtocontraveneAct/Regulations

s.7.2.14 24May2012 Disclosureofinformationbylocalregulatoryauthorities

reg2.7.2(2) 24May2012Publicisedisqualifyingorderregardingincorporatedlegalpracticeandmulti-disciplinarypartnership

reg2.7.2(3) 24May2012Givenoticeofdisqualifyingorderregardingincorporatedlegalpracticetocorrespondingauthority

reg3.3.38(1)(a)

24May2012 Requirestatementastowhethertrustmoneyheldbylawpracticeorclerk

reg3.3.38(1)(b)

24May2012 Requirestatementspecifyingcategoriesoftrustmoneyheld

reg3.3.40(3) 24May2012 Approveexternalexaminerwhoisotherwisenoteligible


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reg3.3.40(4) 24May2012 Approveformofwrittenconsent

reg3.3.41 24May2012 Receivenoticeofappointmentofexternalexaminerandexaminer’sconsent

reg3.3.42(1) 24May2012Requirelawpracticeorclerktoprovideshowcausewhyexternalexaminer’sappointmentshouldnotbeterminated

reg3.3.42(2) 24May2012 Requireterminationofappointmentofexternalexaminer

reg3.3.43(2) 24May2012 Approveexternalexaminerotherwisedisqualified

reg3.3.44(3) 24May2012 Approverequestforterminationofexternalexaminerbylawpracticeorclerk

reg3.3.44(4) 24May2012 Requireevidencererequestforterminationofexternalexaminerbylawpracticeorclerk

reg3.3.44(5) 24May2012Receivenoticeofterminationofexternalexaminerbylawpracticeorclerk;Approvetheformofnotification

reg3.3.46(1) 24May2012Receivestatementoftrustmoneywithinonemonthafterendofaudityear;Approvetheformofnotification

reg3.3.48(a) 24May2012 Approveformofreportandcertificatebyapprovedexternalexaminer

reg3.3.52 24May2012Exemptalawpracticeorapprovedclerkfromcomplyingwiththetrustmoneyandtrustaccountprovisions

deLeGATIoNs MAde To THe exeCuTIVe dIReCToR, CoRPoRATe & GoVeRNANCe






s.2.6.5(5) 24May2012GivewrittennoticeofaconditionimposedonanAustralianlawyers’localpractisingcertificatetocorrespondingauthorities




s.2.8.21 24May2012Grantorrenewalofregistrationofforeignlawyers(exceptapprovalofformofnoticeofrenewal)













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deLeGATIoNs MAde To THe exeCuTIVe dIReCToR, ReGuLATIoN & CoMPLAINTs










s.3.3.47 24May2012 Receivetrustinspectorsreport



deLeGATIoNs MAde To THe dIReCToR, ReGuLAToRy RefoRM & PoLICy






deLeGATIoNs MAde To GeNeRAL CouNseL





s.2.6.5(5) 24May2012GivewrittennoticeofaconditionimposedonanAustralianlawyerslocalpractisingcertificatetocorrespondingauthorities




s.2.8.21 24May2012Grantorrenewalofregistrationofforeignlawyers(exceptapprovalofformofnoticeofrenewal)





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deLeGATIoNs MAde To THe MANAGeR, INVesTIGATIoNs & ReGuLATIoN





deLeGATIoNs MAde To THe MANAGeR, CoRPoRATe seRVICes


Figure 41 externaL deLegations made By tHe LegaL serVices Board current as at 30 june 2012

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deLeGATIoNs MAde To THe LAw INsTITuTe of VICToRIA

s.2.2.6(1) 24May2012 ApplytoTribunalfororderthatapersonisadisqualifiedperson

s.2.4.3(1) 24May2012 Grantlocalpractisingcertificates

s.2.4.3(3) 24May2012 Determineconditionsonlocalpractisingcertificates

s.2.4.3(5) 24May2012 Conditionstoappearonfaceofcertificate

s.2.4.4 24May2012 Considerifapersonisfitandpropertoholdalocalpractisingcertificate

s.2.4.7 24May2012 Assesscriteriaforgrantorrenewaloflocalpractisingcertificate

s.2.4.8(1) 24May2012 Receiveapplicationforgrantorrenewaloflocalpractisingcertificate


s.2.4.9(5) 24May2012 Receiveevidenceofprofessionalindemnityinsurance



s.2.4.9(8) 24May2012 Requestsurrenderoflocalcertificate

s.2.4.11 24May2012 Receivelateapplicationforlocalpractisingcertificateonpaymentofsurcharge

s.2.4.12 24May2012 Grant,reneworrefuselocalpractisingcertificate

s.2.4.13 24May2012 Amendorissuenewlocalpractisingcertificatewithconditions

s.2.4.14 24May2012 Imposeconditionsonlocalpractisingcertificate

s.2.4.16(1) 24May2012ApplytotheTribunaltoimposeorvaryconditionsonlocalpractisingcertificatependingcriminalproceedings

s.2.4.21 24May2012 Amend,suspendorcancellocalpractisingcertificate&provideshowcausenotice

s.2.4.22 24May2012 Immediatesuspensionoflocalpractisingcertificate



dATe of deLeGATIoN


s.2.4.23 24May2012 Liftsuspensionoflocalpractisingcertificate

s.2.4.24 24May2012 Otheramendmentorcancellationoflocalpractisingcertificate

s.2.4.26 24May2012Receivewrittenstatementfromapplicantforlocalpractisingcertificateifshowcauseeventapplies

s.2.4.27 24May2012Receiveshowcausenoticeandstatementfromholderoflocalpractisingcertificate(excludingthefunctionofapprovingtheformofnotice)

s.2.4.28 24May2012Refusetograntorrenew,amend,suspendorcancellocalpractisingcertificate–failuretoshowcauseastobeingfit&properperson

s.2.4.29 24May2012 Restrictentitlementtoapplyforlocalpractisingcertificateforaspecifiedperiod

s.2.4.30 24May2012 Receivesurrenderedlocalpractisingcertificateandcancelcertificate

s.2.4.31 24May2012 Requirereturnoflocalpractisingcertificate


s.2.5.3 24May2012 Requestcriminalrecordcheck

s.2.5.4 24May2012 Requirepersontoundergohealthassessment

s.2.5.5 24May2012 Appointhealthassessor

s.2.5.6 24May2012 Receivehealthassessmentreport

s.2.5.7 24May2012 Payforhealthassessment


s.3.3.27 24May2012 Requesttrustbalanceofanytrustaccount



s.3.3.47 24May2012 Receivetrustinspector’sreport

s.3.3.54 24May2012 Receiveannualreportoftrustrecordsexaminationorstatutorydeclaration

s.3.3.55(3) 24May2012 Receivereportonfinalexaminationoftrustaccount

s.3.6.7(3) 24May2012 Requirefidelityfundclaimanttoprovidefurtherinformation/verifyclaim

s.3.6.12(1) 24May2012 Investigatefidelityfundclaims

s.3.6.12(2) 24May2012 Requirefidelityfundclaimanttoproducesecurity,documentorstatementofevidence

s.6.2.24 24May2012Requirealawpractice&locallegalpractitionertonotifyBoardofchangeofinformationkeptonRegister(excludingnotificationsofnewlawpractices)

s.7.2.5(1) 24May2012 Producecertificatestatingwhetherpersonholdspractisingcertificate



s.7.2.10(1)(a) 24May2012 FilechargeforoffenceunderAct–onlylocallawyers,locallegalpractitioners

s.7.2.13(1) 24May2012ApplyforinjunctionregardingconductthatconstitutescontraventionofAct/regulationsorattemptingtocontraveneAct/regulationsotherthaninrelationtounqualifiedpractice

r.3.3.38(1)(a) 24May2012 Requirestatementastowhethertrustmoneyheldbypracticeorclerk

r.3.3.38(1)(b) 24May2012 Requirestatementspecifyingcategoriesoftrustmoneyheld

r.3.3.40(3) 24May2012 Approveexternalexaminerotherwisenoteligible

r.3.3.42(1) 24May2012Terminationofappointmentofexternalexaminer–mayrequirelawpracticeorclerktoprovideshowcause

r.3.3.42(2) 24May2012 Requireterminationofappointmentofexternalexaminer

r.3.3.43(2) 24May2012 Approveexternalexaminerotherwisedisqualified



dATe of deLeGATIoN


r.3.3.44(2) 24May2012 PriorapprovalofBoardrequiredforterminationofexternalexaminerbylawpracticeorclerk

r.3.3.44(3) 24May2012 Approverequestforterminationofexternalexaminerbylawpracticeorclerk

r.3.3.44(4) 24May2012Requireevidenceregardingrequestforterminationofexternalexaminerbylawpracticeorclerk

r.3.3.44(5) 24May2012Receivenoticeofterminationofexternalexaminerbylawpracticeorclerk(exceptanyfunctiondutyorpowerinr.3.3.44(5)toapprovetheformofnotification)

r.3.3.46(1) 24May2012Receivestatementoftrustmoneywithin1monthafterendofaudityear(exceptanyfunctiondutyorpowerinr.3.3.46(1)toapprovetheformofinformation)

deLeGATIoNs MAde To THe Ceo of THe LAw INsTITuTe of VICToRIA




s.3.3.47 24May2012 Receivetrustinvestigator’sreport


LSBCPDRules2008rule6

30April2008 ReceiveCPDcompliancecertifications


30April2008 VerificationofCPDactivities


30April2008 RectificationofCPDnon-compliance


30April2008 GrantexemptionsfromCPDrequirements

deLeGATIoNs MAde To THe GeNeRAL MANAGeR, PRofessIoNAL sTANdARds, LAw INsTITuTe of VICToRIA











dATe of deLeGATIoN


deLeGATIoNs MAde To THe VICToRIAN BAR

s.2.2.6(1) 11October2011 ApplytoTribunalfororderthatapersonisadisqualifiedperson

s.2.4.3(1) 11October2011 Grantlocalpractisingcertificates

s.2.4.3(3) 11October2011 Determineconditionsonlocalpractisingcertificates

s.2.4.3(5) 11October2011 Conditionstoappearonfaceofcertificate

s.2.4.4 11October2011 Considerifapersonisfitandpropertoholdalocalpractisingcertificate

s.2.4.7 11October2011 Assesscriteriaforgrantorrenewaloflocalpractisingcertificate

s.2.4.8(1) 11October2011 Receiveapplicationforgrantorrenewaloflocalpractisingcertificate

s.2.4.9(4) 11October2011 Refundsurcharge

s.2.4.9(5) 11October2011 Receiveevidenceofprofessionalindemnityinsurance

s.2.4.9(6) 11October2011 Givenoticeoffailuretocomplyorrestoredeficiency

s.2.4.9(7) 11October2011 Assesswhetherfailuretocomplyorrestoredeficiencyhasbeenremedied

s.2.4.9(8) 11October2011 Requestsurrenderoflocalcertificate

s.2.4.11 11October2011 Receivelateapplicationforlocalpractisingcertificateonpaymentofsurcharge

s.2.4.12 11October2011 Grant,reneworrefuselocalpractisingcertificate

s.2.4.13 11October2011 Amendorissuenewlocalpractisingcertificatewithconditions

s.2.4.14 11October2011 Imposeconditionsonlocalpractisingcertificate

s.2.4.16(1) 11October2011ApplytotheTribunaltoimposeorvaryconditionsonlocalpractisingcertificatependingcriminalproceedings

s.2.4.21 11October2011 Amend,suspendorvarylocalpractisingcertificate&provideshowcausenotice

s.2.4.22 11October2011 Immediatesuspensionoflocalpractisingcertificate

s.2.4.23 11October2011 Liftsuspensionoflocalpractisingcertificate

s.2.4.24 11October2011 Otheramendmentorcancellationoflocalpractisingcertificate

s.2.4.26 11October2011Receivewrittenstatementfromapplicantforlocalpractisingcertificateifshowcauseeventapplies

s.2.4.27 11October2011Receiveshowcausenoticeandstatementfromholderoflocalpractisingcertificate(exceptanyfunction,dutyorpowerin2.4.27toapprovetheformofnotice)

s.2.4.28 11October2011Refusetograntorrenew,amend,suspendorcancellocalpractisingcertificate–failuretoshowcauseastobeingfit&properperson

s.2.4.29 11October2011 Restrictentitlementtoapplyforlocalpractisingcertificateforaspecifiedperiod

s.2.4.30 11October2011 Receivesurrenderedlocalpractisingcertificateandcancelcertificate

s.2.4.31 11October2011 Requirereturnoflocalpractisingcertificate

s.2.4.40 11October2011Requireprovisionofinformationordocumentsforpurposeofconsideringanapplicationforgrantorrenewaloflocalpractisingcertificate

s.2.5.3 11October2011 Requestcriminalrecordcheck

s.2.5.4 11October2011 Requirepersontoundergohealthassessment

s.2.5.5 11October2011 Appointhealthassessor

s.2.5.6 11October2011 Receivehealthassessmentreport

s.2.5.7 11October2011 Payforhealthassessment

s.3.3.4 11October2011 Determineifmoneyistrustmoney

s.3.3.27 11October2011 Requesttrustbalanceofanytrustaccount

s.3.3.28 11October2011 Conducttrustinvestigation



dATe of deLeGATIoN


s.3.3.29 11October2011 Appointtrustinspector

s.3.3.47 11October2011 Receivetrustinspector’sreport

s.6.2.24 11October2011Requirealawpractice&locallegalpractitionertonotifyBoardofchangeofinformationkeptonRegister(excludingnotificationsofnewlawpractices)

s.7.2.5(1) 11October2011 Producecertificatestatingwhetherpersonholdspractisingcertificate

s.7.2.6(b) 11October2011 Appointinvestigator

s.7.2.8 11October2011 Receiveinvestigator’sreport

s.7.2.10(1)(a) 11October2011 FilechargeforoffenceunderAct–onlylocallawyers,locallegalpractitioners

s.7.2.13(1) 11October2011ApplyforinjunctionreconductthatconstitutescontraventionofAct/regulationsorattemptingtocontraveneAct/regulationsotherthaninrelationtounqualifiedpractice

r.3.3.38(1)(a) 11October2011 Requirestatementastowhethertrustmoneyheldbypracticeorclerk

r.3.3.38(1)(b) 11October2011 Requirestatementspecifyingcategoriesoftrustmoneyheld

r.3.3.40(3) 11October2011 Approveexternalexaminerotherwisenoteligible

deLeGATIoNs MAde To THe CoNTINuING LeGAL eduCATIoN CoMMITTee of THe VICToRIAN BAR










revOcatiOn Of DeLegatiOnSFigure42liststhedelegationsthatwererevokedbytheBoardinthe2011-12reportingperiod.

Figure 42 reVocation oF deLegations

seCTIoN/ ReGuLATIoN

dATe of deLeGATIoN

fuNCTIoN dATe of ReVoCATIoN

deLeGATIoNs MAde To THe LeGAL seRVICes CoMMIssIoNeR

s2.5.7 11Oct2011 Payforhealthassessment 24May2012

s2.6.10(2) 11Oct2011Cancellocalpractisingcertificateassoonaspracticableafterreceivingofficialwrittennotificationoftheremovalfrominterstateroll

24May2012

s2.6.10(4) 11Oct2011Givepersonremovedfrominterstaterollnoticeofcancellationoflocalpractisingcertificateassoonaspracticable,unlessnoticepreviouslygiven

24May2012

deLeGATIoNs MAde To THe exeCuTIVe dIReCToR, CoRPoRATe & GoVeRNANCe

s2.6.10(2) 12Dec2011Cancellocalpractisingcertificateassoonaspracticableafterreceivingofficialwrittennotificationoftheremovalfrominterstateroll

24May2012

s2.6.10(4) 12Dec2011Givepersonremovedfrominterstaterollnoticeofcancellationoflocalpractisingcertificateassoonaspracticable,unlessnoticepreviouslygiven

24May2012

deLeGATIoNs MAde To THe exeCuTIVe dIReCToR, ReGuLATIoN & CoMPLAINTs

s3.3.51(2) 12Dec2011 Exemptapersonfromtheexternalexaminerrequirements 24May2012

s3.6.36 12Dec2011 Investigationofinterstatedefaults 24May2012

s3.6.39(1) 12Dec2011RequestacorrespondingauthoritytoarrangeinvestigationofaclaimbeingdealtwithbytheBoard

24May2012

deLeGATIoNs MAde To GeNeRAL CouNseL

s2.6.10(2) 11Oct2011Cancellocalpractisingcertificateassoonaspracticableafterreceivingofficialwrittennotificationoftheremovalfrominterstateroll

24May2012

s2.6.10(4) 11Oct2011Givepersonremovedfrominterstaterollnoticeofcancellationoflocalpractisingcertificateassoonaspracticable,unlessnoticepreviouslygiven

24May2012

deLeGATIoNs MAde To THe MANAGeR, fINANCe & INVesTMeNT

s3.3.68 11Oct2011Exemptalawpracticeoranapprovedclerkfromstatutorydepositrequirements

24May2012

s3.6.8 11Oct2011 Allowfurtherperiodtolodgefidelityfundclaim 24May2012

StanDarD DeLegatiOn cOnDitiOnS (appLy tO aLL unLeSS OtherWiSe nOteD):1. thedelegationdoesnotpreventthedischarge,exerciseorperformancebytheBoardofthefunctionsdutiesandpowers

delegated,and

2. iftheBoardgivesnoticetothedelegatethattheBoardintendstodischarge,exerciseorperformitsfunctionsdutiesandpowersdelegated,thedelegateshallnotcommencetodischarge,exerciseorperformthosefunctionsdutiesandpowers,orshallceasetodoso,asthecasemaybe.


tHIs fInAncIAl RepoRt coVeRs tHe leGAl seRVIces BoARD (BoARD) As An InDIVIDuAl entItY AnD Is pResenteD In AustRAlIAn cuRRencY. the Board is a not-for-profit government agency of the state of Victoria. the Board was established pursuant to the Legal Profession Act 2004. Its principal address is level 10, 330 collins street melbourne.

A description of the nature of the Board’s operations and its principal activities is included in the report of operations on pages 27 to 50 which does not form part of this financial report.

for queries in relation to the Board’s reporting please call 03 9679 8000, email [email protected] or see the website www.lsb.vic.gov.au

cHApteR 05 fInAncIAl RepoRt

for the financial year ended 30 June 2012

http://www.lsb.vic.gov.au/

http://www.lsb.vic.gov.au/


accOuntaBLe Officer’S anD chief finance 67 anD accOunting Officer’S DecLaratiOn

cOmprehenSive Operating Statement 68

BaLance Sheet 69

Statement Of changeS in eQuity 70

Statement Of caSh fLOWS 71

nOteS tO the financiaL StatementS 1 Summaryofsignificantaccountingpolicies 722 FundsadministeredbytheBoard 863 Incomefromtransactions 874 Expensesfromtransactions 885 Othereconomicflowsincludedinnetresult 906 Cashanddeposits 907 Receivables 918 Investmentsandotherfinancialassets 929 Plantandequipment 9310 Intangibleassets 9411 Payables 9512 Currentliabilities–Borrowings 9513 Provisions 9614 Incomereceivedinadvance 9715 Statutorydepositaccountbalances–PublicPurposeFund 9716 Contingentassetsandcontingentliabilities 9717 Commitmentsforexpenditure 9818 Financialinstruments 9919 Responsiblepersons 11220 RemunerationoftheBoard 11221 Remunerationofexecutives 11322 Remunerationofauditors 11323 Superannuation 11324 Relatedpartytransactions 11325 Subsequentevents 11326 Glossaryoftermsandstyleconventions 114

inDepenDent auDitOrS repOrt 116

contents


AccountABle offIceR’s AnD cHIef fInAnce AnD AccountInG offIceR’s DeclARAtIon


compReHensIVe opeRAtInG stAtement fOr the year enDeD 30 June 2012

2012 2011

Notes $’000 $’000

Income from transactions

Interestanddividends 3(a) 62,185 70,171

Otherincome 3(b) 7,983 7,007

Total income from transactions 70,168 77,178

expenses from transactions

Grantsandotherpayments 4(a) (45,739) (47,997)

Paymentstoserviceproviders 4(b) (8,688) (8,171)

Fidelityfundclaims/costsandadministrationexpenses 4(c) (997) (3,572)

Depreciationandamortisationexpense 4(d) (612) (752)

Directorsfees 4(e) (272) (274)

Otheroperatingexpenses 4(f) (4,344) (3,367)

Total expenses from transactions (60,652) (64,133)

Net result from transactions 9,516 13,045

other economic flows included in net result

Netgain/(loss)onfinancialinstruments 5 (3,355) 3,102

Changesduetoactuarialvaluations 13(b) (2,440) 6,548

Total other economic flows included in net result (5,795) 9,650

Net result for the year 3,721 22,695

Othereconomicflows–othernon-ownerchangesinequity - -

Comprehensive result 3,721 22,695

Theabovecomprehensiveoperatingstatementshouldbereadinconjunctionwiththeaccompanyingnotes.


BAlAnce sHeet aS at 30 June 2012

2012 2011

Notes $’000 $’000

AsseTs

fINANCIAL AsseTs

Cashanddeposits 6(a),18 397,988 436,291

Receivables 7,18 3,164 5,303

Investmentsandotherfinancialassets 8 216,939 209,323

Total financial assets 618,091 650,917

NoN-fINANCIAL AsseTs

Plantandequipment 9 854 1,221

Intangibleassets 10 497 560

Prepayments 84 91

Total non-financial assets 1,435 1,872

ToTAL AsseTs 619,526 652,789

LIABILITIes

Payables 11,18 5,810 8,164

Borrowings 12 2,585 -

Provisions 13 13,770 11,330

Incomereceivedinadvance 14 7,352 6,380

Statutorydepositaccountbalances 15,18 463,739 504,366

ToTAL LIABILITIes 493,256 530,240

NeT AsseTs 126,270 122,549

equITy

Accumulatedsurplus 126,270 122,549

Net worth 126,270 122,549

Theabovebalancesheetshouldbereadinconjunctionwiththeaccompanyingnotes.


stAtement of cHAnGes In equItY fOr the year enDeD 30 June 2012

ACCuMuLATed suRPLus

ToTAL equITy

Notes $’000 $’000

Balance at 1 July 2010 99,854 99,854

Comprehensiveresultfortheyearending30June2011 22,695 22,695

Balance at 30 June 2011 122,549 122,549

Balance at 1 July 2011 122,549 122,549

Comprehensiveresultfortheyearending30June2012 3,721 3,721

Balance at 30 June 2012 126,270 126,270

Theabovestatementofchangesinequityshouldbereadinconjunctionwiththeaccompanyingnotes.


stAtement of cAsH floWs fOr the year enDeD 30 June 2012

2012 2011

Notes $’000 $’000

Cash flows from operating activities

Receipts

ReceiptsfrompractisingfeesandFidelityFundcontributions 7,758 6,672

Interestreceived 63,022 69,950

GoodsandServicesTaxrecoveredfromATO 1,379 1,218

Total receipts 72,159 77,840

Payments

PaymentstoFidelityFundclaims,suppliersandemployees (7,299) (7,917)

Paymentsofgrants (53,740) (55,177)

Total payments (61,039) (63,094)

Net cash flows from/(used in) operating activities 6(b) 11,120 14,746

Cash flows from investing activities

Paymentsfornon-financialassets 9 (250) (303)

Paymentsforintangibleassets 10 (163) (434)

Paymentsforinvestmentsandotherfinancialassets (10,969) (15,100)

Net cash flows from/(used in) investing activities (11,382) (15,837)

Cash flows from financing activities

Loanfromrelatedparty 12 2,585 -

Depositsintostatutorydepositaccountsbysolicitors 379,015 428,096

Withdrawalfromstatutorydepositaccountsbysolicitors (419,641) (408,416)

Net cash flows from/(used in) financing activities (38,041) 19,680

Netincrease/(decrease)incashandcashequivalents (38,303) 18,589

Cashandcashequivalentsatthebeginningofthefinancialyear 436,291 417,702

Cash and cash equivalents at end of year 397,988 436,291

Theabovestatementofcashflowsshouldbereadinconjunctionwiththeaccompanyingnotes.


1 Summary Of Significant accOunting pOLicieS

TheannualfinancialstatementsrepresenttheauditedgeneralpurposefinancialstatementsfortheBoardfortheperiodending30June2012.

ThepurposeofthereportistoprovideuserswithinformationabouttheBoard’sstewardshipofresourcesentrustedtoit.

(a) statement of Compliance ThesegeneralpurposefinancialstatementshavebeenpreparedinaccordancewiththeFinancialManagementAct1994(FMA)andapplicableAustralianAccountingStandards(AAS)whichincludeInterpretations,issuedbytheAustralianAccountingStandardsBoard(AASB).Inparticular,theyarepresentedinamannerconsistentwiththerequirementsoftheAASB1049WholeofGovernmentandGeneralGovernmentSectorFinancialReporting.

Whereappropriate,thoseparagraphsoftheAASsapplicabletonot-for-profitentitieshavebeenapplied.

Accountingpoliciesareselectedandappliedinamannerwhichensuresthattheresultingfinancialinformationsatisfiestheconceptsofrelevanceandreliability,therebyensuringthatthesubstanceoftheunderlyingtransactionsorothereventsisreported.

Togainabetterunderstandingoftheterminologyusedinthisreport,aglossaryoftermsandstyleconventionscanbefoundinnote26.

TheseannualfinancialstatementswereauthorisedbytheChairmanoftheBoardoftheLegalServicesBoardon30August2012.

(b) Basis of accounting preparation and measurement Theaccrualbasisofaccountinghasbeenappliedinthepreparationofthesefinancialstatementswherebyassets,liabilities,equity,incomeandexpensesarerecognisedinthereportingperiodtowhichtheyrelate,regardlessofwhencashisreceivedorpaid.

Judgements,estimatesandassumptionsarerequiredtobemadeaboutcarryingvaluesofassetsandliabilitiesthatarenotreadilyapparentfromothersources.Theestimatesandassociatedassumptionsarebasedonprofessionaljudgementsderivedfromhistoricalexperienceandvariousotherfactorsthatarebelievedtobereasonableunderthecircumstances.Actualresultsmaydifferfromtheseestimates.

Revisionstoaccountingestimatesarerecognisedintheperiodinwhichtheestimateisrevisedandalsoinfutureperiodsthatareaffectedbytherevision.JudgementsandassumptionsmadebymanagementintheapplicationoftheAASsthathavesignificanteffectonthefinancialstatementsrelatetofairvalueofplantandequipment.

ThesefinancialstatementsarepresentedinAustraliandollarsandpreparedinaccordancewiththehistoricalcostconventionexceptfor:

• non-financialphysicalassetswhich,subsequenttoacquisition,aremeasuredatarevaluedamountbeingtheirfairvalueatthedateoftherevaluationlessanysubsequentaccumulateddepreciationandsubsequentimpairmentlosses.Revaluationsaremadewithsufficientregularitytoensurethatthecarryingamountsdonotmateriallydifferfromtheirfairvalue;

• theFidelityFundclaimsprovisionthatarecalculatedwithregardtoactuarialassessments;and

• available-for-saleinvestmentswhicharemeasuredatfairvaluewithmovementsreflectedinequityuntiltheassetisderecognised.

Wheredisclosureshavebeenchangedcomparativeshavebeenrealigned.

(c) Reporting entity ThefinancialstatementscovertheBoardasanindividualreportingentity.AdditionaldisclosurehasbeenincludedinthenotestothefinancialstatementsforthePublicPurposeFundandLegalPractitioner’sFidelityFund.

TheBoardcommencedon12December2005followingtheproclamationoftheLegalProfessionAct2004.Itsprincipaladdressis:

Legal Services Board Level 10, 330 Collins Street Melbourne Victoria 3000


(d) scope and presentation of financial statements

Comprehensive operating statement

Incomeandexpensesinthecomprehensiveoperatingstatementareclassifiedaccordingtowhetherornottheyarisefrom‘transactions’or‘othereconomicflows’.ThisclassificationisconsistentwiththewholeofgovernmentreportingformatandisallowedunderAASB101Presentationoffinancialstatements.

‘Transactions’and‘othereconomicflows’aredefinedbytheAustralianSystemofGovernmentFinanceStatistics:Concepts,SourcesandMethods2005andAmendmentstoAustralianGovernmentFinanceStatistics,2005(ABSCat.No.5514.0).(theGFSmanual,refertonote26).

‘Transactions’arethoseeconomicflowsthatareconsideredtoariseasaresultofpolicydecisions,usuallyinteractionsbetweentwoentitiesbymutualagreement.Transactionsalsoincludeflowswithinanentity,suchasdepreciationwheretheownerissimultaneouslyactingastheownerofthedepreciatingassetandastheconsumeroftheserviceprovidedbytheasset.TaxationisregardedasmutuallyagreedinteractionsbetweentheGovernmentandtaxpayers.Transactionscanbeinkind(e.g.assetsprovided/givenfreeofchargeorfornominalconsideration)orwherethefinalconsiderationiscash.

‘Othereconomicflows’arechangesarisingfrommarketremeasurements.Theyinclude:

• gainsorlossesfromdisposals,revaluationsandimpairmentsofnon-financialphysicalandintangibleassets;and

• fairvaluechangesoffinancialassets.

ThenetresultisequivalenttoprofitorlossderivedinaccordancewithAASs.

Balance sheet

Assetsandliabilitiesarepresentedinliquidityorderwithassetsaggregatedintofinancialassetsandnon-financialassets.

Currentandnon-currentassetsandliabilities(non-currentbeingthoseassetsorliabilitiesexpectedtoberecoveredorsettledbeyond12months)aredisclosedinthenotes,whererelevant.

Cash flow statement

Cashflowsareclassifiedaccordingtowhetherornottheyarisefromoperating,investing,orfinancingactivities.ThisclassificationisconsistentwithrequirementsunderAASB107StatementofCashFlows.

Forcashflowstatementpresentationpurposes,cashandcashequivalentsincludebankoverdrafts,whichareincludedincurrentborrowingsonthebalancesheet.

Statement of changes in equity

Thestatementofchangesinequitypresentsreconciliationsofeachnon-ownerandownerequityopeningbalanceatthebeginningofthereportingperiodtotheclosingbalanceattheendofthereportingperiod.

Rounding

Amountsinthefinancialstatementshavebeenroundedtothenearest$1,000unlessotherwisestated.PleaserefertotheendofNote26forastyleconventionexplainingthatminordiscrepanciesintotalsoftablesareduetorounding.

(e) Income from transactions Incomeisrecognisedtotheextentthatitisprobablethattheeconomicbenefitswillflowtotheentityandtheincomecanbereliablymeasuredatfairvalue.

Interest and dividend income

Interestincomeincludesinterestreceivedondepositsandbanktermdepositsotherinvestmentsandtheunwindingovertimeofdiscountsonfinancialassets.

Interestincomeisrecognisedusingtheeffectiveinterestmethodwhichallocatestheinterestovertherelevantperiod.

Netrealisedandunrealisedgainsandlossesontherevaluationofinvestmentsdonotformpartofincomefromtransactions,butarereportedaspartofincomefromothereconomicflowsinthenetresultorasunrealisedgainsorlossestakendirectlytoequityformingpartofthetotalchangeinnetworthinthecomprehensiveresult.

Practising certificate fees

PractisingcertificatefeesareprescribedbyregulationundertheLegalProfessionAct2004.Thefeesarepayablebypractitionersinordertoengageinlegalpractice.

Practisingcertificatesforthefinancialyear1July2012to30June2013arerequiredbylegislationtobepaidandissuedpriorto30June2012.Incomefromsuchpractisingcertificateshasbeenaccountedforasincomereceivedinadvance.

Fidelity Fund contributions

Pursuanttosection6.7.25(1)oftheLegalProfessionsAct2004fidelityfundcontributionsaredeterminedbytheBoard.Thecontributionsforthefinancialyear1July2012to30June2013arepayableatthesametimeasthepractisingcertificatefeesandaccountedforinthesamewayi.e.treatedasincomereceivedinadvance.

Fidelity Fund recoveries

FidelityFundrecoveriesarereceivedbytheBoardasaresultoftheexerciseofarightandremedy.Therecoveriesarerecognisedwhenreceived.

AllincomereceivedbytheBoardisgenerallyrequiredtobepaidintothePublicPurposeFundwiththeexceptionoftheFidelityFundcontributionswhicharepaidintotheLegalPractitioners’FidelityFund.

Dividendincomeisrecognisedwhentherighttoreceivepaymentisestablished.


1 Summary Of Significant accOunting pOLicieS continued

(f) expenses from transactions Expensesarerecognisedastheyareincurredandreportedinthefinancialyeartowhichtheyrelate.

Depreciation and amortisation expense

Allplantandequipmentandothernon-financialphysicalassetsthathavefiniteusefullivesaredepreciated.

Depreciationisgenerallycalculatedonastraight-linebasis,atratesthatallocatetheasset’svalue,lessanyestimatedresidualvalue,overitsestimatedusefullife.Refertonote1(j)forthedepreciationpolicyforleaseholdimprovements.

Thefollowingaretypicalestimatedusefullivesforthedifferentassetclassesforcurrentandprioryears:

2012 2011

Leaseholdimprovements 10years 10years

Officeequipment 5to10years 5to10years

Officefurniture 5to10years 5to10years

Computerequipment 3to5years 3to5years

Intangibleassets 5years 5years

Intangibleproducedassetswithfiniteusefullivesaredepreciatedasanexpensefromtransactionsonasystematic(typicallystraight-line)basisovertheasset’susefullife.Depreciationbeginswhentheassetisavailableforuse,thatis,whenitisinthelocationandconditionnecessaryforittobecapableofoperatinginthemannerintendedbymanagement.

Directors fees

TheamountchargedtothecomprehensiveoperatingstatementinrespectofdirectorsfeesrepresentsfeessetbytheGovernor-in-Council.

Grants and other payments

Grantsandotherpaymentstothirdparties(otherthancontributionstoowners)arerecognisedasanexpenseinthereportingperiodinwhichtheyarepaidorpayable.Theyincludetransactionssuchas:grants,subsidies,personalbenefitpaymentsmadeincashtoindividualsandothertransferpaymentsmadetoStateownedagenciesandcommunitygroups.RefertoGlossaryoftermsandstyleconventionsinnote26foranexplanationofgrantsandothertransfers.

Other operating expenses

Otheroperatingexpensesgenerallyrepresenttheday-todayrunningcostsincurredinnormaloperations.

supplies and services

Suppliesandservicescostswhicharerecognisedasanexpenseinthereportingperiodinwhichtheyareincurred.

Bad and doubtful debts

Refertonote1(i)Impairmentoffinancialassets.

Recharge of services

the Board to the Legal services commissioner (Lsc)

ExpensesincurredinnormaloperationsbytheBoardforoccupancy,depreciationandotherrelevantoperatingcostshavebeenproportionedbeforebeingexpensedandarechargeddirectlytotheLSC.

Lsc to the Board

Undersection6.4.1oftheLegalProfessionAct2004,staffsupportingtheactivitiesoftheBoardareclassifiedasemployeesoftheLSC,whoemploysallstaffunderPart3ofthePublicAdministrationAct2004.

TheLSCrechargesstaffcoststotheBoardforthosestaffundertakingBoardfunctions.

(g) other economic flows included in the net result Othereconomicflowsmeasurethechangeinvolumeorvalueofassetsorliabilitiesthatdonotresultfromtransactions.

Net gain/(loss) on non-financial assets

Netgain/(loss)onnonfinancialassetsandliabilitiesincludesrealisedandunrealisedgainsandlossesasfollows:

revaluation gains/(losses) of non-financial physical assets

RefertoNote1(j)Revaluationsofnon-financialphysicalassets.

disposal of non financial assets

Anygainorlossonthedisposalofnonfinancialassetsisrecognisedatthedateofdisposalandisdeterminedafterdeductingfromtheproceedsthecarryingvalueoftheassetatthattime.


impairment of non financial assets

Intangibleassetswithindefiniteusefullives(andintangibleassetsnotyetavailableforuse)aretestedannuallyforimpairment(asdescribedbelow)andwheneverthereisanindicationthattheassetmaybeimpaired.

Allotherassetsareassessedannuallyforindicationsofimpairment.

Ifthereisanindicationofimpairment,theassetsconcernedaretestedastowhethertheircarryingvalueexceedstheirrecoverableamount.Whereanasset’scarryingvalueexceedsitsrecoverableamount,thedifferenceiswrittenoffasanothereconomicflow,excepttotheextentthatthewrite-downcanbedebitedtoanassetrevaluationsurplusamountapplicabletothatclassofasset.

Ifthereisanindicationthattherehasbeenachangeintheestimateofanasset’srecoverableamountsincethelastimpairmentlosswasrecognised,thecarryingamountshallbeincreasedtoitsrecoverableamount.Thisreversaloftheimpairmentlossoccursonlytotheextentthattheasset’scarryingamountdoesnotexceedthecarryingamountthatwouldhavebeendetermined,netofdepreciationoramortisation,ifnoimpairmentlosshadbeenrecognisedinprioryears.

Itisdeemedthat,intheeventofthelossordestructionofanasset,thefutureeconomicbenefitsarisingfromtheuseoftheassetwillbereplacedunlessaspecificdecisiontothecontraryhasbeenmade.Therecoverableamountformostassetsismeasuredatthehigherofdepreciatedreplacementcostandfairvaluelesscoststosell.Therecoverableamountforassetsheldprimarilytogeneratenetcashinflowsismeasuredatthehigherofthepresentvalueoffuturecashflowsexpectedtobeobtainedfromtheassetandfairvaluelesscoststosell.

Net gain/(loss) on financial instruments

Netgain/(loss)onfinancialinstrumentsincludes:

• realisedandunrealisedgainsandlossesfromrevaluationsoffinancialinstrumentsatfairvalue;

• impairmentandreversalofimpairmentforfinancialinstrumentsatamortisedcost;and

• disposalsoffinancialassets.

revaluations of financial instruments at fair value

Refertonote1(h)Financialinstruments.

Fidelity Fund claims cost and movement in provisions

FidelityFundclaimscostsincludescapitalandinterestclaimspaid,themovementintheoutstandingclaimsliabilityandcostsassociatedwiththeadministrationofthefidelityfund.

DetailsrelatingtotheFidelityFundprovisionsarereportedinnote1(k)Provisions–FidelityFund.

other gains/(losses) from other economic flows

Othergains/(losses)fromothereconomicflowsincludethegainsorlossesfromthetransferofamountsfromthereservesand/oraccumulatedsurplustonetresultduetodisposalorderecognitionorreclassification.

(h) financial instruments Financialinstrumentsariseoutofcontractualagreementsthatgiverisetoafinancialassetofoneentityandafinancialliabilityorequityinstrumentofanotherentity.DuetothenatureoftheBoard’sactivities,certainfinancialassetsandfinancialliabilitiesariseunderstatuteratherthanacontract.SuchfinancialassetsandfinancialliabilitiesdonotmeetthedefinitionoffinancialinstrumentsinAASB132FinancialInstruments:Presentation.Forexample,statutoryreceivablesarisingfromtaxes,finesandpenaltiesdonotmeetthedefinitionoffinancialinstrumentsastheydonotariseundercontract.

Whererelevant,fornotedisclosurepurposes,adistinctionismadebetweenthosefinancialassetsandfinancialliabilitiesthatmeetthedefinitionoffinancialinstrumentsinaccordancewithAASB132andthosethatdonot.

Thefollowingreferstofinancialinstrumentsunlessotherwisestated.

Categories of non-derivative financial instruments

Loans and receivables

Loansandreceivablesarefinancialinstrumentassetswithfixedanddeterminablepaymentsthatarenotquotedonanactivemarket.Theseassetsareinitiallyrecognisedatfairvalueplusanydirectlyattributabletransactioncosts.Subsequenttoinitial

measurement,loansandreceivablesaremeasuredatamortisedcostusingtheeffectiveinterestmethod,lessanyimpairment.

Loansandreceivablescategoryincludescashanddeposits(refertonote1(i)),termdepositswithmaturitygreaterthanthreemonths,tradereceivablesandotherreceivables.

Financial assets and liabilities at fair value through profit and loss

Financialassetsarecategorisedatfairvaluethroughprofitorlossattradedateiftheyareclassifiedasheldfortradingordesignatedassuchuponinitialrecognition.Financialinstrumentassetsaredesignatedatfairvaluethroughprofitorlossonthebasisthatthefinancialassetsformpartofagroupoffinancialassetsthataremanagedbytheentityconcernedbasedontheirfairvalues,andhavetheirperformanceevaluatedinaccordancewithdocumentedriskmanagementandinvestmentstrategies.

Financialinstrumentsatfairvaluethroughprofitorlossareinitiallymeasuredatfairvalueandattributabletransactioncostsareexpensedasincurred.Subsequently,anychangesinfairvaluearerecognisedinthenetresultasothereconomicflows.Anydividendorinterestonafinancialassetisrecognisedinthenetresultfromtransactions.

Financial liabilities at amortised cost

Financialinstrumentliabilitiesareinitiallyrecognisedonthedatetheyareoriginated.Theyareinitiallymeasuredatfairvalueplusanydirectlyattributabletransactioncosts.Subsequenttoinitialrecognition,thesefinancialinstrumentsaremeasuredatamortisedcostwithanydifferencebetweentheinitialrecognisedamountandtheredemptionvaluebeingrecognisedinprofitandlossovertheperiodoftheinterest-bearingliability,usingtheeffectiveinterestratemethod.

Financialinstrumentliabilitiesmeasuredatamortisedcostincludeallpayables,depositsheldandinterest-bearingarrangementsotherthanthosedesignatedatfairvalethroughprofitorloss.



(i) financial assets

Cash and deposits

Cashanddeposits,includingcashequivalents,comprisecashonhandandcashatbank,depositsatcallandthosehighlyliquidinvestmentswithanoriginalmaturityofthreemonthsorless,whichareheldforthepurposeofmeetingshorttermcashcommitmentsratherthanforinvestmentpurposes,andwhicharereadilyconvertibletoknownamountsofcashandaresubjecttoaninsignificantriskofchangesinvalue.

Receivables

Receivablesconsistof:

• contractualreceivables,whichincludemainlydebtorsinrelationtogoodsandservicesandaccruedinvestmentincome.

• accruedincome;and

• GSTinputtaxcreditsrecoverable.

Contractualreceivablesareclassifiedasfinancialinstrumentsandcategorisedasloansandreceivablesforrecognitionandmeasurement.Statutoryreceivables,arerecognisedandmeasuredsimilarlytocontractualreceivables(exceptforimpairment),butarenotclassifiedasfinancialinstrumentsbecausetheydonotarisefromacontract.

Receivablesaresubjecttoimpairmenttestingasdescribedbelow.Aprovisionfordoubtfulreceivablesisrecognisedwhenthereisobjectiveevidencethatthedebtsmaynotbecollected,andbaddebtsarewrittenoffwhenidentified(refertonote1(i)Impairmentoffinancialassets).

Investments and other financial assets

Investmentsareclassifiedinthefollowingcategories:

• financialassetsatfairvaluethroughprofitorloss;and

• receivables.

Theclassificationdependsonthepurposeforwhichtheinvestmentswereacquired.Managementdeterminestheclassificationofitsinvestmentsatinitialrecognition.

Anydividendorinterestearnedonthefinancialassetisrecognisedinthecomprehensiveoperatingstatementasatransaction.

Derecognition of financial assets

Afinancialasset(or,whereapplicable,apartofafinancialassetorpartofagroupofsimilarfinancialassets)isderecognisedwhen:

• therightstoreceivecashflowsfromtheassetshaveexpired;or

• theBoardretainstherighttoreceivecashflowsfromtheasset,buthasassumedanobligationtopaytheminfullwithoutmaterialdelaytoathirdpartyundera‘passthrough’arrangement;or

• theBoardhastransferreditsrightstoreceivecashflowsfromtheassetandeither:

(a) hastransferredsubstantiallyalltherisksandrewardsoftheasset,or

(b) hasneithertransferrednorretainedsubstantiallyalltherisksandrewardsoftheasset,buthastransferredcontroloftheasset.

WheretheBoardhasneithertransferrednorretainedsubstantiallyalltherisksandrewardsortransferredcontrol,theassetisrecognisedtotheextentoftheBoard’scontinuinginvolvementintheasset.

Impairment of financial assets

AttheendofeachreportingperiodtheBoardassesseswhetherthereisobjectiveevidencethatafinancialassetorgroupoffinancialassetsisimpaired.Allfinancialassets,exceptthosemeasuredatfairvaluethroughprofitorloss,aresubjecttoannualreviewforimpairment.

Receivablesareassessedforbadanddoubtfuldebtsonaregularbasis.Thosebaddebtsconsideredaswrittenoffbymutualconsentareclassifiedasatransactionexpense.Baddebtsnotwrittenoffbymutualconsentandtheallowancefordoubtfulreceivablesareclassifiedas‘othereconomicflows’inthenetresult.

Theamountoftheallowanceisthedifferencebetweenthefinancialasset’scarryingamountandthepresentvalueofestimatedfuturecashflows,discountedattheeffectiveinterestrate.

Inassessingimpairmentofstatutory(non-contractual)financialassets,whicharenotfinancialinstrumentsprofessionaljudgementisappliedinassessingmaterialityandusingestimates,averagesandcomputationalshortcutsinaccordancewithAASB136Impairmentofassets.

(j) Non-financial assets

Plant and equipment

Allnon-financialcurrentphysicalassets,aremeasuredinitiallyatcostandsubsequentlyrevaluedatfairvaluelessaccumulateddepreciationandimpairment.Whereanassetisacquiredfornoornominalcost,thecostisitsfairvalueatthedateofacquisition.Assetstransferredaspartofamachineryofgovernmentchangearetransferredattheircarryingamount.

Thefairvalueofplantandequipmentisnormallydeterminedbyreferencetotheasset’sdepreciatedreplacementcost.Forplant,equipmentandvehicles,existingdepreciatedhistoricalcostisgenerallyareasonableproxyfordepreciatedreplacementcostbecauseoftheshortlivesoftheassetsconcerned.

Whereanassetisreceivedfornoornominalconsideration,thecostistheasset’sfairvalueatthedateofacquisition.

Fortheaccountingpolicyonimpairmentofnon-financialphysicalassets,refertoimpairmentofnon-financialassetsundernote1(i)Impairmentofnon-financialassets.

Leasehold improvements

Thecostofaleaseholdimprovementiscapitalisedasanassetanddepreciatedovertheremainingtermoftheleaseortheestimatedusefullifeoftheimprovements,whicheveristheshorter.


Physical assets

Purchasedphysicalassetsareinitiallyrecognisedatcost.Subsequently,physicalassetswithfiniteusefullivesarecarriedatcostlessaccumulateddepreciationandaccumulatedimpairmentlosses.

Whereanassetisreceivedfornoornominalconsideration,thecostbookedistheasset’sfairvalueatthedateofacquisition.

Intangible assets

Purchasedintangibleassetsareinitiallyrecognisedatcost.Subsequently,intangibleassetswithfiniteusefullivesarecarriedatcostlessaccumulatedamortisationandaccumulatedimpairmentlosses.CostsincurredsubsequenttoinitialacquisitionarecapitalisedwhenitisexpectedthatadditionalfutureeconomicbenefitswillflowtotheBoard.

WheretherecognitioncriteriainAASB138IntangibleAssetsaremet,internallygeneratedintangibleassetsarerecognisedandmeasuredatcostlessaccumulateddepreciation/amortisationandimpairment.

Change in accounting policy

TheBoardresolvedduringtheyeartoonlycapitalisebothphysicalandintangibleassetswithacostexceeding$5,000.Allnewphysicalandintangibleassetswithavalueoflessthan$5,000willbechargedtogeneralexpensesinthefuture.Theimpactonthisyear’sresulttoeffectthischangeinpolicyis$231,150.

Other non-financial assets

prepayments

Othernon-financialassetsincludeprepaymentswhichrepresentpaymentsinadvanceofreceiptofgoodsandservicesorthatpartofexpendituremadeinoneaccountingperiodcoveringatermextendingbeyondthatperiod.

Impairment of non-financial assets

Refertonote1(g)Othereconomicflowsincludedinnetresult.

(k) Liabilities

Payables

Payablesconsistof:

• contractualpayables,suchasaccountspayable,andunearnedincomeincludingdeferredincomefromconcessionarrangements.AccountspayablerepresentliabilitiesforgoodsandservicesprovidedtotheBoardpriortotheendofthefinancialyearthatareunpaid,andarisewhentheBoardbecomesobligedtomakefuturepaymentsinrespectofthepurchaseofthosegoodsandservices;and

• statutorypayables,suchasgoodsandservicestaxandfringebenefitstaxpayables.

Contractualpayablesareclassifiedasfinancialinstrumentsandcategorisedasfinancialliabilitiesatamortisedcost.Statutorypayablesarerecognisedandmeasuredsimilarlytocontractualpayables,butarenotclassifiedasfinancialinstrumentsandnotincludedinthecategoryoffinancialliabilitiesatamortisedcost,becausetheydonotarisefromacontract.

Provisions

ProvisionsarerecognisedwhentheBoardhasapresentobligation,thefuturesacrificeofeconomicbenefitsisprobable,andtheamountoftheprovisioncanbemeasuredreliably.

Theamountrecognisedasaprovisionisthebestestimateoftheconsiderationrequiredtosettlethepresentobligationattheendofthereportingperiod,takingintoaccounttherisksanduncertaintiessurroundingtheobligation.Whereaprovisionismeasuredusingthecashflowsestimatedtosettlethepresentobligation,itscarryingamountisthepresentvalueofthosecashflows,usingthediscountratethatreflectsthetimevalueofmoneyandrisksspecifictotheprovision.

Whensomeoralloftheeconomicbenefitsrequiredtosettleaprovisionareexpectedtobereceivedfromathirdparty,thereceivableisrecognisedasanassetifitisvirtuallycertainthatrecoverywillbereceivedandtheamountofthereceivablecanbemeasuredreliably.

provisions – Fidelity fund

TheBoardappointedactuariestocarryouttheannualindependentactuarialassessmentoftheliabilityoftheLegalPractitionersFidelityFund,asrequiredbysection6.7.25oftheLegalProfessionAct2004.

TheFidelityFundLiabilityforoutstandingclaimsisinrespectofclaimsincurredbutnotyetpaid,claimsincurredbutnotyetlodged,andtheanticipateddirectandindirectcostsofsettlingthoseclaims

IncurredButNotlodged(IBNL)areincidentswhereadefalcationhasoccurredbuttheclaimamounthasnotyetbeenlodged.IBNLclaimsarisefromsolicitorsinrespectofwhomsomeclaimsamountshavealreadybeenlodgedaswellassolicitorswhosedefalcationshaveyettobediscovered.

payables – grants

TheBoard’sliabilityforgrantsisinrespectofgrantsapprovedduring2011-12orearlierwhichhavenotyetpaid.Insomecases,thegrantswillbepaidininstalmentsoveraperiodoftwoorthreeyears.

statutory deposit account balances (sda)

EachlawpracticewithTrustAccountshasanindividualSDAheldintheirnamebytheBoard,thebalanceinthisaccountislinkedtotheirTrustAccount.TheliabilityrepresentsthetotalsumoftheirindividualSDAbalances.

Derecognition of financial liabilities

Afinancialliabilityisderecognisedwhentheobligationundertheliabilityisdischarged,cancelledorexpires.

Whenanexistingfinancialliabilityisreplacedbyanotherfromthesamelenderonsubstantiallydifferentterms,orthetermsofanexistingliabilityaresubstantiallymodified,suchanexchangeormodificationistreatedasaderecognitionoftheoriginalliabilityandtherecognitionofanewliability.Thedifferenceintherespectivecarryingamountsisrecognisedasanothereconomicflowintheestimatedconsolidatedcomprehensiveoperatingstatement.



(l) Leases

Aleaseisarighttouseanassetforanagreedperiodoftimeinexchangeforpayment.

Leasesareclassifiedattheirinceptionaseitheroperatingorfinanceleasesbasedontheeconomicsubstanceoftheagreementsoastoreflecttherisksandrewardsincidentaltoownership.Leasesofproperty,plantandequipmentareclassifiedasfinanceinfrastructureleaseswheneverthetermsoftheleasetransfersubstantiallyalltherisksandrewardsofownershipfromthelessortothelessee.Allotherleasesareclassifiedasoperatingleases.

Board as lessee

Operatingleasepayments,includinganycontingentrentals,arerecognisedasanexpenseinthecomprehensiveoperatingstatementonastraight-linebasisovertheleaseterm,exceptwhereanothersystematicbasisismorerepresentativeofthetimepatternofthebenefitsderivedfromtheuseoftheleasedasset.Theleasedassetisnotrecognisedinthebalancesheet.

(m) Commitments Commitmentsforfutureexpenditureincludeoperatingandcapitalcommitmentsarisingfromcontracts.Thesecommitmentsaredisclosedbywayofanote(refertoNote17)attheirnominalvalueandinclusiveofthegoodsandservicestax(GST)payable.Inaddition,whereitisconsideredappropriateandprovidesadditionalrelevantinformationtousers,thenetpresentvaluesofsignificantindividualprojectsarestated.Thesefutureexpendituresceasetobedisclosedascommitmentsoncetherelatedliabilitiesarerecognisedinthebalancesheet.

(n) Contingent assets and contingent liabilities

Contingentassetsandcontingentliabilitiesarenotrecognisedinthebalancesheet,butaredisclosedbywayofanote(note16)and,ifquantifiable,aremeasuredatnominalvalue.ContingentassetsandliabilitiesarepresentedinclusiveofGSTreceivableorpayablerespectively.

(o) Accounting for the Goods and services Tax (GsT) Income,expensesandassetsarerecognisednetoftheamountofassociatedGST,exceptwhereGSTincurredisnotrecoverablefromthetaxationauthority.Inthiscase,theGSTpayableisrecognisedaspartofthecostofacquisitionoftheassetoraspartoftheexpense.

ReceivablesandpayablesarestatedinclusiveoftheamountofGSTreceivableorpayable.ThenetamountofGSTrecoverablefrom,orpayableto,thetaxationauthorityisincludedwithotherreceivablesorpayablesinthebalancesheet.

Cashflowsarepresentedonagrossbasis.TheGSTcomponentsofcashflowsarisingfrominvestingorfinancingactivitieswhicharerecoverablefrom,orpayabletothetaxationauthority,arepresentedasoperatingcashflow.

CommitmentsandcontingentassetsandliabilitiesarealsostatedinclusiveofGST.

(p) events after the reporting period

Assets,liabilities,incomeorexpensesarisefrompasttransactionsorotherpastevents.WherethetransactionsresultfromanagreementbetweentheBoardandotherparties,thetransactionsareonlyrecognisedwhentheagreementisirrevocableatorbeforetheendofthereportingperiod.Adjustmentsaremadetoamountsrecognisedinthefinancialstatementsforeventswhichoccurafterthereportingperiodandbeforethedatethefinancialstatementsareauthorisedforissue,wherethoseeventsprovideinformationaboutconditionswhichexistedinthereportingperiod.Notedisclosureismadeabouteventsbetweentheendofthereportingperiodandthedatethefinancialstatementsareauthorisedforissuewheretheeventsrelateconditionswhicharoseaftertheendofthereportingperiodandwhichmayhaveamaterialimpactontheresultsofsubsequentyears.

(q) AAss issued that are not yet effective CertainnewAASshavebeenpublishedthatarenotmandatoryfor30June2012reportingperiod.TheDepartmentofTreasuryandFinanceassessestheimpactofthesenewstandardsandadvisestheBoardoftheirapplicabilityandearlyadoptionwhereapplicable.

Asat30June2012,thefollowingstandardshavebeenissuedbytheAASBbutarenotyeteffective.Theybecomeeffectiveforthefirstfinancialstatementsforthereportingperiodscommencingafterthestatedoperativedatesasfollows:


sTANdARd/ INTeRPReTATIoN

suMMARy APPLICABLe foR ANNuAL RePoRTING PeRIods BeGINNING oN

IMPACT fINANCIAL sTATeMeNTs

AASB9Financialinstruments

ThisstandardsimplifiesrequirementsfortheclassificationandmeasurementoffinancialassetsresultingfromPhase1oftheIASB’sprojecttoreplaceIAS39FinancialInstruments:RecognitionandMeasurement(AASB139FinancialInstruments:RecognitionandMeasurement).

1Jan2013 Detailofimpactisstillbeingassessed.

AASB10Consolidatedfinancialstatements

ThisStandardestablishesprinciplesforthepresentationandFinancialStatementspreparationofconsolidatedfinancialstatementswhenanentitycontrolsoneormoreotherentitiesandsupersedesthoserequirementsinAASB127ConsolidatedandSeparateFinancialStatementsandInterpretation112Consolidation–SpecialPurposeEntities.

1Jan2013 Not-for-profitentitiesarenotpermittedtoapplythisStandardpriortothemandatoryapplicationdate.TheAASBisassessingtheapplicabilityofprinciplesinAASB10inanot-for-profitcontext.Assuch,impactwillbeassessedafterAASB’sdeliberation.

AASB11JointArrangements

ThisStandardrequiresentitiesthathaveaninterestinarrangementsthatarecontrolledjointlytoassesswhetherthearrangementisajointoperationorjointventure.AASB11shallbeappliedforanarrangementthatisajointoperation.ItalsoreplacespartsofrequirementsinAASB131InterestsinJointVentures.


AASB12DisclosureofInterestsinOtherEntities

ThisStandardrequiresdisclosureofinformationthatenablesusersoffinancialstatementstoevaluatethenatureof,andrisksassociatedwith,interestsinotherentitiesandtheeffectsofthoseinterestsonthefinancialstatements.ThisStandardreplacesthedisclosurerequirementsinAASB127andAASB131.






AASB13FairValueMeasurement

ThisStandardoutlinestherequirementsformeasuringthefairvalueofassetsandliabilitiesandreplacestheexistingfairvaluedefinitionandguidanceinotherAASs.AASB13includesa‘fairvaluehierarchy’whichranksthevaluationtechniqueinputsintothreelevelsusingunadjustedquotedpricesinactivemarketsforidenticalassetsorliabilities;otherobservableinputs;andunobservableinputs.

1Jan2013 Disclosureforfairvaluemeasurementsusingunobservableinputsarerelativelyonerouscomparedtodisclosureforfairvaluemeasurementsusingobservableinputs.Consequently,theStandardmayincreasethedisclosuresforpublicsectorentitiesthathaveassetsmeasuredusingdepreciatedreplacementcost.

AASB119EmployeeBenefits

InthisrevisedStandardfordefinedbenefitsuperannuationplans,thereisachangetothemethodologyinthecalculationofsuperannuationexpenses,inparticularthereisnowachangeinthesplitbetweensuperannuationinterestexpense(classifiedastransactions)andactuarialgainsandlosses(classifiedas‘Othereconomicflows–othermovementsinequity’)reportedonthecomprehensiveoperatingstatement.

1Jan2013 Not-for-profitentitiesarenotpermittedtoapplythisStandardpriortothemandatoryapplicationdate.Whilethetotalsuperannuationexpenseisunchanged,therevisedmethodologyisexpectedtohaveanegativeimpactonthenetresultfromthetransactionsofthegeneralgovernmentsectorandforthosefewVictorianpublicsectorentitiesthatreportsuperannuationdefinedbenefitplans.

AASB127SeparateFinancialStatements

ThisrevisedStandardprescribestheaccountinganddisclosurerequirementsforinvestmentsinsubsidiaries,jointventuresandassociateswhenanentitypreparesseparatefinancialstatements.

1Jan2013 Not-for-profitentitiesarenotpermittedtoapplythisStandardpriortothemandatoryapplicationdate.TheAASBisassessingtheapplicabilityofprinciplesinAASB127inanot-for-profitcontext.Assuch,impactwillbeassessedaftertheAASB’sdeliberation.

AASB128InvestmentsinAssociatesandJointVentures.

ThisrevisedStandardsetsouttherequirementsfortheapplicationoftheequitymethodwhenaccountingforinvestmentsinjointventures.

1Jan2013 Not-for-profitentitiesarenotpermittedtoapplythisStandardpriortothemandatoryapplicationdate.TheAASBisassessingtheapplicabilityofprinciplesinAASB128inanot-for-profitcontext.Assuch,impactwillbeassessedaftertheAASB’sdeliberation.





AASB1053ApplicationofTiersofAustralianAccountingStandards

ThisStandardestablishesadifferentialfinancialreportingframeworkconsistingoftwotiersofreportingrequirementsforpreparinggeneralpurposefinancialstatements.

1Jan2013 TheVictorianGovernmentiscurrentlyconsideringtheimpactsofReducedDisclosureRequirements(RDRs)forcertainpublicsectorentitiesandhasnotdecidedifRDRswillbeimplementedintheVictorianpublicsector

AASB2009-11AmendmentstoAustralianAccountingStandardsarisingfromAASB9[AASB1,3,4,5,7,101,102,108,112,118,121,127,128,131,132,136,139,1023and1038andInterpretations10and12

ThisStandardgiveseffecttoconsequentialchangesarisingfromtheissuanceofAASB9.

1Jan2013 Nosignificantimpactisexpectedfromtheseconsequentialamendmentsonentityreporting

AASB2010-2AmendmentstoAustralianAccountingStandardsarisingfromReducedDisclosureRequirements

ThisStandardmakesamendmentstomanyAustralianAccountingStandards,includingInterpretations,tointroducereduceddisclosurerequirementstothepronouncementsforapplicationbycertaintypesofentities.

1July2013 TheVictorianGovernmentiscurrentlyconsideringtheimpactsofReducedDisclosureRequirements(RDRs)forcertainpublicsectorentitiesandhasnotdecidedifRDRswillbeimplementedintheVictorianpublicsector.

AASB2010-7AmendmentstoAustralianAccountingStandardsarisingfromAASB9(December2010)[AASB1,3,4,5,7,101,102,108,112,118,120,121,127,128,131,132,136,137,139,1023&1038andInterpretations2,5,10,12,19&127]

TheseconsequentialamendmentsareinrelationtotheintroductionofAASB9.

1Jan2013 Nosignificantimpactisexpectedfromtheseconsequentialamendmentsonentityreporting.

AASB2010-8AmendmentstoAustralianAccountingStandards–DeferredTax:RecoveryofUnderlyingAssets[AASB112]

ThisamendmentprovidesapracticalapproachformeasuringdeferredtaxassetsanddeferredtaxliabilitieswhenmeasuringinvestmentpropertybyusingthefairvaluemodelinAASB140InvestmentProperty.

Beginning1Jan2012 Thisamendmentprovidesadditionalclarificationthroughpracticalguidance.

AASB2010-10FurtherAmendmentstoAustralianAccountingStandards–RemovalofFixedDatesforFirst-timeAdopters.[AASB2009-11&AASB2010-7]

TheamendmentsultimatelyaffectAASB1First-timeAdoptionofAustralianAccountingStandardsandprovidereliefforfirst-timeadoptersofAustralianAccountingStandardsfromhavingtoreconstructtransactionsthatoccurredbeforetheirdateoftransitiontoAustralianAccountingStandards.

1Jan2013 Nosignificantimpactisexpectedonentityreporting.





AASB2011-2AmendmentstoAustralianAccountingStandardsarisingfromtheTrans-TasmanConvergenceProject–ReducedDisclosureRequirements[AASB101&AASB1054]

TheobjectiveofthisamendmentistoincludesomeadditionaldisclosurefromtheTrans-TasmanConvergenceProjectandtoreducedisclosurerequirementsforentitiespreparinggeneralpurposefinancialstatementsunderAustralianAccountingStandards–ReducedDisclosureRequirements.

1July2013 TheVictorianGovernmentiscurrentlyconsideringtheimpactsofReducedDisclosureRequirements(RDRs)andhasnotdecidedifRDRswillbeimplementedintheVictorianpublicsector.

AASB2011-3AmendmentstoAustralianAccountingStandards–OrderlyAdoptionofChangesdisclosurestotheABSGFSManualandRelatedAmendments[AASB1049]

ThisamendsAASB1049toclarifythedefinitionoftheABSGFSManual,andtofacilitatetheadoptionofchangestotheABSGFSManualandrelateddisclosures.

1July2012 ThisamendmentprovidesclarificationtouserspreparingthewholeofgovernmentandgeneralgovernmentsectorfinancialreportsontheversionoftheGFSManualtobeusedandwhattodiscloseifthelatestGFSManualisnotused.Noimpactondepartmentalorentityreporting.

AASB2011-4AmendmentstoAustralianAccountingStandardstoRemoveIndividualKeyManagementPersonnelDisclosureRequirements[AASB124]

ThisStandardamendsAASB124RelatedPartyDisclosuresbyremovingthedisclosurerequirementsinAASB124inrelationtoindividualkeymanagementpersonnel(KMP).

1July2013 Nosignificantimpactisexpectedfromtheseconsequentialamendmentsonentityreporting.

AASB2011-6AmendmentstoAustralianAccountingStandards–ExtendingRelieffromConsolidation,theEquityMethodandProportionateConsolidation–Requirements[AASB127,AASB128&AASB131]

TheobjectiveofthisStandardistomakeamendmentstoAASB127ConsolidatedandSeparateFinancialStatements,AASB128InvestmentsinAssociatesandAASB131InterestsinJointVenturestoextendthecircumstancesinwhichanentitycanobtainrelieffromconsolidation,theequitymethodReducedDisclosureorproportionateconsolidation.






AASB2011-7AmendmentstoAustralianAccountingStandardsarisingfromtheConsolidationandJointArrangementsStandards[AASB1,2,3,5,7,9,2009-11,101,107,112,118,121,124,132,133,136,138,139,1023&1038andInterpretations5,9,16&17]

ThisStandardoutlinesconsequentialchangesarisingfromtheissuanceofthefive‘newStandards’tootherStandards.Forexample,referencestoAASB127ConsolidatedandSeparateFinancialStatementsareamendedtoAASB10ConsolidatedFinancialStatementsorAASB127SeparateFinancialStatements,andreferencestoAASB131InterestsinJointVenturesaredeletedasthatStandardhasbeensupersededbyAASB11andAASB128(August2011).


AASB2011-8AmendmentstoAustralianAccountingStandardsarisingfromAASB13[AASB1,2,3,4,5,7,9,2009-11,2010-7,101,102,108,110,116,117,118,119,120,121,128,131,132,133,134,136,138,139,140,141,1004,1023&1038andInterpretations2,4,12,13,14,17,19,131&132]

ThisamendingStandardmakesconsequentialchangestoarangeofStandardsandInterpretationsarisingfromtheissuanceofAASB13.Inparticular,thisStandardreplacestheexistingdefinitionandguidanceoffairvaluemeasurementsinotherAustralianAccountingStandardsandInterpretations.

1Jan2013 Disclosuresforfairvaluemeasurementsusingunobservableinputsispotentiallyonerous,andmayincreasedisclosuresforassetsmeasuredusingdepreciatedreplacementcost.

AASB2011-9AmendmentstoAustralianAccountingStandards–PresentationofItemsofOtherComprehensiveIncome[AASB1,5,7,101,112,120,121,132,133,134,1039&1049]

ThemainchangeresultingfromthisStandardisarequirementforentitiestogroupitemspresentedinothercomprehensiveincome(OCI)onthebasisofwhethertheyarepotentiallyreclassifiabletoprofitorlosssubsequently(reclassificationadjustments).Theseamendmentsdonotremovetheoptiontopresentprofitorlossandothercomprehensiveincomeintwostatements,norchangetheoptiontopresentitemsofOCIeitherbeforetaxornetoftax.

1July2012 ThisamendingStandardcouldchangethecurrentpresentationof‘Othereconomicflows–othermovementsinequity’thatwillbegroupedonthebasisofwhethertheyarepotentiallyreclassifiabletoprofitorlosssubsequently.Noothersignificantimpactwillbeexpected.





AASB2011-10AmendmentstoAustralianAccountingStandardsarisingfromAASB119(September2011).[AASB1,AASB8,AASB101,AASB124,AASB134,AASB1049&AASB2011-8andInterpretation14]

ThisStandardmakesconsequentialchangestoarangeofotherAustralianAccountingStandardsandInterpretationarisingfromtheissuanceofAASB119EmployeeBenefits.


AASB2011-11AmendmentstoAASB119(September2011)arisingfromReducedDisclosureRequirements

ThisStandardmakesamendmentstoAASB119EmployeeBenefits(September2011),toincorporatereduceddisclosurerequirementsintotheStandardforentitiesapplyingTier2requirementsinpreparinggeneralpurposefinancialstatements.


AASB2011-12AmendmentstoAustralianAccountingStandardsarisingfromInterpretation20.[AASB1]

ThisStandardmakesamendmentstoAASB1First-timeAdoptionofAustralianAccountingStandards,asaconsequenceoftheissuanceofIFRICInterpretation20StrippingCostsintheProductionPhaseofaSurfaceMine.ThisStandardallowsthefirst-timeadopterstoapplythetransitionalprovisionscontainedinInterpretation20.

1Jan2013 TheremaybeanimpactfornewagenciesthatadoptAustralianAccountingStandardsforthefirsttime.NoimplicationisexpectedforexistingentitiesintheVictorianpublicsector.





2011-13AmendmentstoAustralian–ImprovementstoAASB1049

ThisStandardaimstoimprovetheAASB1049WholeofGovernmentandGeneralGovernmentSectorAccountingStandardFinancialReportingattheoperationallevel.ThemainamendmentsclarifyanumberofrequirementsinAASB1049,includingtheamendmenttoallowdisclosureofothermeasuresofkeyfiscalaggregatesaslongastheyareclearlydistinguishedfromthekeyfiscalaggregatesanddonotdetractfromtheinformationrequiredbyAASB1049.Furthermore,thisStandardprovidesadditionalguidanceandexamplesontheclassificationbetween‘transactions’and‘othereconomicflows’forGAAPitemswithoutGFSequivalents.

1July2012 Nosignificantimpactisexpectedfromtheseconsequentialamendmentsonentityreporting.

2012-1AmendmentstoAustralianAccountingStandards–FairValueMeasurement–ReducedDisclosureRequirements[AASB3,AASB7,AASB13,AASB140&AASB141]

ThisamendingStandardprescribesthereduceddisclosurerequirementsinanumberofAustralianAccountingStandardsValueMeasurementasaconsequenceoftheissuanceofAASB13FairValueMeasurement.

1July2013 AstheVictorianwholeofgovernmentandthegeneralgovernment(GG)sectoraresubjecttoTier1reportingrequirements(refertoAASB1053ApplicationofTiersofAustralianAccountingStandards),thereduceddisclosurerequirementsincludedinAASB2012-1willnotaffectthefinancialreportingforVictorianwholeofgovernmentandGGsector.

AASBInterpretation20StrippingCostsintheProductionPhaseofaSurfaceMine

ThisInterpretationclarifieswhenproductionstrippingcostsshouldleadtotherecognitionofanassetandhowthatassetshouldbeinitiallyandsubsequentlymeasured.

1Jan2013 Nosignificantimpactisexpectedonentityreporting.


2 funDS aDminiStereD By the BOarD

TheBoardcommencedon12December2005followingtheproclamationoftheLegalProfessionAct2004(theAct).

TheBoardisanindependentstatutoryauthoritywithperpetualsuccession,andapublicentity,butitdoesnotrepresenttheCrown.TheAttorney-General,theHon.RobertClarkMPistheresponsibleMinister.

TheBoard’sstatutoryobjectiveasstatedins.6.2.3oftheActareto:

• ensuretheeffectiveregulationofthelegalprofessionandthemaintenanceofprofessionalstandards;

• addresstheconcernsofclientsoflawpracticesandlegalpractitionersthroughtheregulatorysystemandprovidefortheprotectionoflegalservices;

• ensuretheadequatemanagementoftrustaccounts;and

• ensurethattheVictoriansystemisattheforefrontofregulationandlegalpractitioners.

TheBoardisaestablishedasabodycorporateundersection6.2.1(2)oftheAct.UndertheprovisionsoftheActitisrequiredtomaintaintwofunds.ThesearethePublicPurposeFund(section6.7.1(1))andtheLegalPractitionersFidelityFund(section6.7.15(1)).

Public Purpose fund comprises:

Statutory Deposit Account (SDA): Section 6.7.4

EachlawpracticeorapprovedclerkwithTrustAccountshasanindividualSDAheldintheirnamebytheBoard,thebalanceinthisaccountislinkedtotheirtrustaccount.LawpracticesorapprovedclerksarerequiredtohavedepositedintheirSDA,70%ofthesumofthelowestdailybalanceintheirtrustaccountatanytimeduringthequarterplustheSDAbalanceonthelastdayofthepreviousquarter(section3.3.63(1))unlessthecalculatedfigureusingthatformulainrespectofanyquarterislessthan$10,000,inwhichcasetherequireddepositamountinrespectofthatquarteriszero(section3.3.63(2)).TheSDAbalanceintheBoard’sFinancialStatementsisthesumoftheindividualSDAs.

General Account: Section 6.7.3

TheGeneralAccountderivesincomefromfinesimposedbyanorderoftheTribunal,moneytransferredtothePublicPurposeFundfromtheFidelityFund,moneyderivedfromanyinvestmentofthePublicPurposeFund,profitsarisingontherealisationorrevaluationofanyinvestmentofthePublicPurposeFundandothermoneyreceivedbytheBoardthatisnotrequiredtobecreditedtoanotheraccountinthePublicPurposeFundortotheFidelityFund,including(butnotlimitedto)allfeesreceivedinrespectofapplicationsforthegrantorrenewaloflocalpractisingcertificatesandinterestamountsreceivedinaccordancewitharrangementsmadewithApprovedDepositInstitutions(fromLawPracticesResidualTrustAccount)andinterestearnedfromcashheldintheStatutoryDepositAccountnotinvested.

UnderSection3.3.59theLSBcanmakearrangementswithbanksforthekeepingoftrustaccounts.Underthearrangementsinplace,interestearnedonlawpracticestrustaccountsisreceivedbytheLSBandpaidtotheGeneralAccountofthePublicPurposeFund.

FundingfortheLSB,VCAT(LegalList),theCouncilofLegalEducationandBoardofExaminers,theLSC,andpaymentstoprofessionalassociationsforcontinuinglegaleducationprogramsandotherprogramsaredebitedtothisaccount.

TheLSBhastwooperatingbankaccountsforadministrationpurposes:

• PractisingCertificateFees:forthereceiptofpractisingcertificatefees;

• GeneralAccount:forthepaymentofexpensesincurredincarryingoutitsfunctionsotherthanregulatinglawpracticesortheirtrustaccountorfunctionsrelatingtoinvestigationsoftrustaccounts.

Distribution Account: Section 6.7.5

TheActrequiresthat50%ofthesurplusintheGeneralAccountat30JuneistransferredtotheDistribution

Accountduringthefollowingyear.Grantsmadeundersections6.7.9and6.7.10arepaidfromtheDistributionAccount.

Legal Practitioners fidelity fund: section 6.7.15 ReceiptsincludeFidelityFundcontributionsandlevies,incomefrominvestmentsoftheFidelityFund,moniestransferredfromthePublicPurposeFund(GeneralAccount),andmoniesreceivedasaresultoftheexerciseofanyrightorremedyarisingfromtheclaim.Paymentsincludeanyclaimincludinginterest,costsanddisbursementsallowedagainsttheFund,andlegalandotherexpensesincurredbytheLSBininvestigatingordefendingclaimsagainsttheFund.

AllmoniesheldintheFidelityFundarekeptseparatefromanyothermoneyheldbytheLSBandisheldintrust.

summary of Net funds Managed by Legal services Board as at 30 June

2012 2011

$’000 $’000

Public Purpose fund

GeneralAccount 81,619 82,632

StatutoryDepositAccount 463,739 504,366

DistributionAccount 16,935 13,074

Total Public Purpose fund 562,293 600,072

fidelity fund 50,739 46,532

Net funds Managed by Legal services Board 613,032 646,604


3 incOme frOm tranSactiOnS continued

2012 2011

$’000 $’000

(a) Interest and dividends

Public Purpose Fund – Interest and dividend revenue:

StatutoryDepositAccount 27,350 30,651

LawPracticeResidualTrustAccounts 31,730 35,953

OperatingAccounts 571 711


Legal Practitioners Fidelity Fund – Interest and dividend revenue:

LegalPractitionersFidelityFund 2,534 2,856

Total fidelity fund 2,534 2,856

Total interest and dividends revenue 62,185 70,171

(b) other income

Public Purpose Fund

Practisingcertificatefees 4,986 4,810

Sundryincome 1,166 542


Fidelity Fund

FidelityFundcontributions 1,831 1,640

FidelityFundrecoveries - 15

Total fidelity fund 1,831 1,655

Total other income 7,983 7,007

Total income from transactions 70,168 77,178


4 expenSeS frOm tranSactiOnS

2012 2011

$’000 $’000

(a) Grants and funding

Grants and funding (Public Purpose Fund)

GrantspaidduringtheyearfromprioryearaccumulatedsurplusintheDistributionAccount

VictoriaLegalAid 25,663 25,769

LeoCussenInstitute - 1,766

VictorianLawReformCommission 1,828 1,785

VictoriaLawFoundation 1,760 1,700

JudicialCollegeofVictoria 280 -

Supplementarypaymentsforprojectsapprovedinprioryears 479 478

30,010 31,498

FundingpaidduringtheyearfromtheGeneralAccount

LegalServicesCommissioner 8,050 7,553

Paymentstoprofessionalassociationsforprograms 2,902 2,728

LegalLawList–VictorianCivilandAdministrationTribunal 1,527 1,382

CouncilforLegalEducationandBoardofExaminers 1,172 1,132

13,651 12,795

43,661 44,293

Majorgrantsapprovedduringtheyear 2,078 3,704

Total grants and funding 45,739 47,997

(b) Payments to service providers

Public Purpose Fund

RechargefromtheLegalServicesCommissioner

CostofservicesprovidedbyLegalServicesCommissionerstaff 3,887 3,497

CostoffunctionsdelegatedtotheLawInstituteofVictoria:

Issuingofpractisingcertificates 840 807

Trustaccountinspections 2,295 2,214

Externalinterventions 1,377 1,335

Costofotherdelegatedservices - 22

Total cost of functions delegated to the Law Institute of Victoria 4,512 4,378

Other payments to the Law Institute of Victoria:

Costofprofessionaldevelopment 168 161

Total payments to the Law Institute of Victoria 4,680 4,539

PaymentstotheVictorianBar:

Issuingofpractisingcertificates 121 112

Costofotherdelegatedservices - 23

Total payments to the Victorian Bar 121 135

Total payments to service providers 8,688 8,171


4 expenSeS frOm tranSactiOnS continued

2012 2011

$’000 $’000

(c) fidelity fund claims costs and movement in provisions

Legal Practitioners Fidelity Fund

FidelityFundclaimsdetails

Capitalclaimspaid 747 1,112

Interestclaimspaid 47 169

Costspaid 46 65

Increase/(decrease)inclaimspayable (347) 1,939

Administrationexpenses 504 287

Total fidelity fund claims costs and movements in provisions 997 3,572

(d) depreciation and amortisation expense

Public Purpose Fund

Leaseholdimprovements 202 198

Officeequipment 28 30

Officefurniture 65 64

Computerequipment 94 106

Intangibleassets 223 354

Total depreciation and amortisation 612 752

(e) directors fees

Public Purpose Fund

DirectorsoftheBoardremuneration 254 251

Superannuation 18 23

Total directors fees 272 274

(f) other operating expenses

Public Purpose Fund

Investigationsandlegalexpenses 1,600 1,164

Informationtechnologyexpenses 574 561

Occupancyexpenses 435 425

Administrativeexpenses 972 697

Grantsandconsultantsexpenses 315 168

Externalauditfees 58 60

Internalauditfees 62 68

Investmentadviceandmanagementexpenses 147 170

Otherstaffcosts 123 54

Provisionfordoubtfuldebts 58 -

Total other operating expenses 4,344 3,367


5 Other ecOnOmic fLOWS incLuDeD in net reSuLt

2012 2011

$’000 $’000

Net gain/(loss) on financial instruments

Financial assets at fair value through profit and loss – held for trading

PublicPurposeFund (3,341) 2,931

LegalPractitionersFidelityFund (14) 171

Total gain/(loss) on financial instruments (3,355) 3,102

6 caSh anD DepOSitS

2012 2011

$’000 $’000

(a) Reconciliation of cash and cash equivalents

Public Purpose Fund

GeneralAccount

Cashonhand 1 1

GeneralOperatingAccount 2,303 2,370

PractisingCertificateFees 1,603 384

LegalServicesBoard - 856

CashManagement 6,035 2,938

TermDeposits–nonSDA 1 7,452

9,943 14,001

Distribution Account 16,935 13,074

StatutoryDepositAccount

CashTrustAccounts 214,733 255,362


TermDeposits 67,731 67,731

349,778 390,408



LegalPractitionersFidelityFundOperatingAccount 2,634 899


21,332 18,808

Balances per statement of cash flows 397,988 436,291


6 caSh anD DepOSitS continued

2012 2011

$’000 $’000

(b) Reconciliation of net result for the period to net cashflows from operating activities

Comprehensiveresultfortheyear 3,721 22,695

Non-cash movements:

Depreciationandamortisation 613 752

Net(gain)/lossonfinancialinstruments 3,355 (3,102)

Writeoffofassets 231 -

Other (4) -

Movements in assets and liabilities:

(Increase)/decreaseinreceivables 2,139 (737)

(Increase)/decreaseinprepayments 7 (61)

Increase/(decrease)inpayables (2,354) 1,432

Increase/(decrease)inprovisions 2,440 (6,548)

Increase/(decrease)inincomereceivedinadvance 972 315

Net cash inflow (outflow) from operating activities 11,120 14,746

7 receivaBLeS

2012 2011

$’000 $’000

Public Purpose fund

Contractual receivables

Tradereceivables 191 88

Provisionforimpairmentofreceivables (58) -

AccruedInterest–ResidualTrustAccounts 2,261 3,099

AccruedInterest–StatutoryDepositAccounts 689 992

Total contractual receivables 3,083 4,179

Statutory receivables

GSTrecoverable 78 173

Total statutory receivables 78 173

Total receivables – Public Purpose fund 3,161 4,352

fidelity fund

Contractual receivables

Tradereceivables - 950

Total contractual receivables - 950

Statutory receivables

GSTrecoverable 3 1

Total statutory receivables 3 1

Total receivables – fidelity fund 3 951

Total receivables 3,164 5,303

Allreceivablesarecurrent.


8 inveStmentS anD Other financiaL aSSetS

2012 2011

$’000 $’000

Current investments and other financial assets

Public Purpose Fund

Australianequities 41,933 45,954

Australianlistedproperty 6,809 6,153

Fixedinterest 85,364 76,962

Overseasequities–hedged 26,938 28,531

Overseasequities–unhedged 26,488 23,999




Australianlistedproperty 712 643




Total Legal Practitioners fidelity fund 29,407 27,724

Total investments and other financial assets 216,939 209,323

(a) Ageing analysis of investments in other financial assets Pleaserefertonote18(e)fortheageinganalysisofinvestmentsandotherfinancialassets.

(b) Nature and extent or risk arising from investments in other financial assets Pleaserefertonote18(a)forthenatureandextentofrisksarisingfrominvestmentsandotherfinancialassets.


9 pLant anD eQuipment

Plantandequipmentareclassifiedprimarilybythepurposeforwhichtheassetsareusedaccordingtooneofthefive‘PurposesGroups’baseduponGovernmentClassification(GPC).Allassetswithina‘PurposesGroup’arefurthersubcategorisedtotheasset’snature,witheachsub-categorybeingclassifiedasaseparateclassofassetforfinancialreportingpurposes.

(a) Classification by ‘Purpose Groups’ – Carrying amounts

PuBLIC sAfeTy ANd eNVIRoNMeNT

2012 2011

$’000 $’000

Computer equipment

Atcost 321 409

Less:accumulateddepreciation (241) (285)

Net carrying amount – computer equipment 80 124

office equipment

Atcost 202 236


Net carrying amount – office equipment 47 52

Leasehold improvements

Atcost 1,892 1,795

Less:accumulateddepreciation (1,193) (1,012)

Net carrying amount – leasehold improvements 699 783

office furniture

Atcost 83 649


Net carrying amount – office furniture 28 262

Net carrying amount of plant and equipment 854 1,221


(b) Movements in carrying amounts – classification by ‘Public safety and environment’ purpose group

CoMPuTeRequIPMeNT

offICeequIPMeNT

LeAseHoLdIMPRoVeMeNTs

offICefuRNITuRe

ToTAL

$’000 $’000 $’000 $’000 $’000

year ended 30 June 2012

Openingbalance 124 52 783 262 1,221

Additions 96 28 126 - 250

Disposals (46) (5) (8) (169) (228)

Depreciation (94) (28) (202) (65) (389)

Closing balance 80 47 699 28 854


Openingbalance 191 77 743 305 1,316

Additions 47 5 238 21 311

Depreciation (114) (30) (198) (64) (406)

Closing balance 124 52 783 262 1,221

10 intangiBLe aSSetS

CoMPuTeR sofTwARe

CoMPuTeR sofTwARe

2012 2011

$’000 $’000

Atcost 2,464 2,314

Less:accumulatedamortisationandimpairment (1,967) (1,754)

Net book value at end of financial year 497 560


Openingbalance 560

Additions 163

Disposals (3)

Amortisationexpense (223)

Closing balance 497


Openingbalance 480

Additions 434

Amortisationexpense (354)

Closing balance 560


11 payaBLeS

2012 2011

$’000 $’000

Public Purpose fund

Contractualpayablesandaccruedexpenses 1,020 2,340

Majorgrants 4,726 5,439

Total payables Public Purpose fund 5,746 7,779

fidelity fund

Contractualpayablesandaccruedexpenses 64 385

Total payables fidelity fund 64 385

Total payables 5,810 8,164

(a) Maturity analysis of contractual payables PleaserefertoTable18(e)innote18forthematurityanalysisofcontractualpayables.Allpayablesarecurrent.

12 current LiaBiLitieS – BOrrOWingS

TheLegalServicesBoardfundstheactivitiesoftheLegalServicesCommissioner.

UndertheprovisionsoftheLegalProfessionAct2004(theAct)theBoardisobligedtomeettheexpensesanddischargetheliabilitiesoftheCommissionerintheperformanceoftheCommissioner’sdutiesundertheAct.

TheBoardcontinuestofulfilitsobligationsbutinsteadoftransferringcashtomeettheagreedamounttomeettheexpensesoftheCommissioneritisprovidingfundingbywayofaloan.ThereisacorrespondingcurrentloanreceivableintheaccountsoftheLegalServicesCommissioner.

2012 2011

$’000 $’000

unsecured

Loansfromrelatedparties 2,585 -

Total unsecured current borrowings 2,585 -


13 prOviSiOnS

(a) Provisions for fidelity fund claims TheFidelityFundclaimsprovisionatbalancedatehasbeensetbythemembersoftheBoardafterappropriateconsiderationofactuarialadviceprovidedbyanindependentactuarialfirm,amactuaries.

Thefollowingdiscountrateswereusedinestimatingtheliabilityforoutstandingclaims.Noexplicitrateofdefalcationisadopted.Defalcationsareassumedtoincreaseatthesamerateasexperiencedinthepast.

2012 2011

$’000 $’000

Claims expected to be paid

Laterthanoneyeardiscountrate 3.75% 4.75%

Provisions for lodged claims and anticipated claims against the fidelity fund

Currentliability 2,470 3,500

Non-currentliability 11,300 7,830

13,770 11,330

estimated outstanding defalcation liability as at 30 June

Actuarial central estimate

Undiscountedliabilityoflodgedclaims 4,210 3,570

Plus:estimatedliabilityforclaimsalreadyincurredbutnotlodged 4,170 4,260

estimated undiscounted liability for incurred defalcations 8,380 7,830

Plus/(minus) adjustments

Less:discountedtonetpresentvalue (690) (1,070)

Plus:Claimexpenditure 1,150 1,020

Plus:Loadingnon-clientclaims 770 -

Plus:RiskMargin(30%)(2011:30%) 2,890 2,340

Plus:Allowanceforlargeclaimdisputesettlement 1,270 1,210

Net provision 13,770 11,330

(b) Net movements in provisions for fidelity fundMovementsineachclassofprovisionduringthefinancialyear,otherthanemployeebenefits,aresetoutbelow:

2012 2011

$’000 $’000

Openingbalance 11,330 17,878

Additions/reductionsinprovisionsrecognised 2,440 (6,548)

Closing balance 13,770 11,330


14 incOme receiveD in aDvance

2012 2011

$’000 $’000

Practisingcertificatefees 5,542 4,796

FidelityFundcontributions 1,810 1,584

Total income received in advance 7,352 6,380

15 StatutOry DepOSit accOunt BaLanceS – puBLic purpOSe funD

2012 2011

$’000 $’000

Accounts held by the Board in individual law practice names totalled and were represented by the following investments:

statutory deposit Account 463,739 504,366


Australianlistedproperty 7,000 7,000

Cashmanagement 67,314 67,315




Termdeposits 67,731 67,731

Cashtrustaccounts 214,735 255,362

Total statutory deposit account balances 463,740 504,367

16 cOntingent aSSetS anD cOntingent LiaBiLitieS

Atbalancedatetherewerenocontingentassetsorcontingentliabilities.Atbalancedatein2011therewasaCourtappealofaBoarddecisioninrelationtoaFidelityFundclaimpending.ThestatusoftheappealwasconsideredwhenestablishingtheFidelityFundoutstandingclaimprovisionatbalancedateandwasincludedintheprovision’sriskmargins.


17 cOmmitmentS fOr expenDiture

(a) Capital commitments

Capitalexpenditurecontractedforatthereportingdatebutnotrecognisedasliabilitiesisasfollows:

2012 2011

$’000 $’000

Plant and equipment

Notlongerthan1year 129 -

PLANT ANd equIPMeNT 129 -

Intangible Assets

Withinoneyear - 225

Intangible assets - 225

(b) operating commitments

Commitmentsinrelationtooperatingcontractscontractedforatthereportingdatebutnotrecognisedasliabilities,payable:

Notlongerthanoneyear 597 250

Longerthanoneyearbutnotlaterthanfiveyears - 250

Total operating lease commitments 597 500

(i) Statutory commitments

TheLegalProfessionAct2004requiresthat50%ofthePublicPurposeFundGeneralAccountbalanceasat30JuneeachyearistobetransferredtotheDistributionAccountinthefollowingyear.Theamounttobedistributedfromthe2012balanceis$40,809k(2011:$36,618k).Fundingundersections6.7.9and6.7.10arepaidtorecipientsfromtheDistributionAccounts.RecipientsincludetheLegalAidFund,theVictorianLawReformCommissionandsuccessfulProjectandMajorGrantsapplicants.Forfurtherdetailsrefertothereportofoperationsonpages42and43ofthisreport.

(c) operating lease commitments TheBoardholdsaleaseforLevel9andLevel10,330CollinsStreet,Melbourne.TheleaseiseffectiveuntilSeptember2014.AtpresentLevel9isoccupiedbytheLegalServicesCommissioner.LeasecostsforLevel9arerechargedtotheLSC.

2012 2011

$’000 $’000

Commitments in relation to operating leases and contracts contracted for at the reporting date but not recognised as liabilities, payable:

Notlongerthanoneyear 664 643

Longerthanoneyearbutnotlaterthanfiveyears 801 1,988

1,465 2,631


18 financiaL inStrumentS

(a) financial risk management objectives and policiesTheBoard’sprincipalfinancialinstrumentscompriseof:

• cashassets;• termdeposits;• receivables(excludingstatutoryreceivables);• investmentsinequitiesandmanagedinvestmentschemes;• payables(excludingstatutorypayables);and• statutorydepositaccountbalances.

Detailsofthesignificantaccountingpoliciesandmethodsadopted,includingthecriteriaforrecognition,thebasisofmeasurement,andthebasisonwhichincomeandexpensesarerecognised,withrespecttoeachclassoffinancialasset,financialliabilityandequityinstrumentabovearedisclosedinnote1tothefinancialstatements.

ThemainpurposeinholdingfinancialinstrumentsistoprudentiallymanagetheBoard’sfinancialcommitmentsandriskswithintheBoard’spolicyparameters.

TheBoard’smainfinancialrisksincludecreditrisk,liquidityrisk,interestraterisk,foreigncurrencyriskandequitypricerisk.TheBoardmanagesthesefinancialrisksinaccordancewithitsinvestmentmanagementpolicy.

TheBoardusesdifferentmethodstomeasureandmanagethedifferentriskstowhichitisexposedandhasestablishedasub-committeeoftheBoard,theFinanceandInvestmentCommittee,toassistinthistask.


18 financiaL inStrumentS continued

(b) Categorisation of financial instruments

ThecarryingamountsoftheBoard’scontractualfinancialassetsandfinancialliabilitiesaredisclosedbelow.

2012 CoNTRACTuAL fINANCIAL AsseTs/

LIABILITIes desIGNATed AT fAIR

VALue THRouGH PRofIT/Loss

CoNTRACTuAL fINANCIAL

AsseTs - LoANs ANd

ReCeIVABLes

CoNTRACTuAL fINANCIAL

LIABILITIes AT AMoRTIsed CosT

ToTAL

$’000 $’000 $’000 $’000

Contractual financial assets

Cashanddeposits - 330,256 - 330,256

Receivables:

Saleofgoodsandservices - 133 - 133

Accruedinvestmentincome - 2,950 - 2,950

Investments and other contractual financial assets:

Equitiesandmanagedinvestmentschemes 216,937 - - 216,937

Termdeposits 67,732 - - 67,732

Contractual financial assets 284,669 333,339 - 618,008

Contractual financial liabilities

Suppliesandservices - - 1,084 1,084

Otherpayables - - 4,726 4,726

Borrowings:

Borrowingsfromrelatedparty - 2,585 - 2,585

StatutoryDepositAccountbalances - 463,739 - 463,739

Total contractual financial liabilities - 466,324 5,810 472,134

2011


Cashanddeposits - 361,107 - 361,107

Receivables:

Saleofgoodsandservices - 1,038 - 1,038

Accruedinvestmentincome - 4,091 - 4,091


Equitiesandmanagedinvestmentschemes 209,323 - - 209,323

Termdeposits 75,183 - - 75,183

Total contractual financial assets 284,506 366,236 - 650,742


Suppliesandservices - - 2,725 2,725

Otherpayables - - 5,439 5,439

Borrowings:

Borrowingsfromrelatedparty - - - -

StatutoryDepositAccountbalances - 504,366 - 504,366

Total contractual financial liabilities - 504,366 8,164 512,530



(c) Net holding gain/(loss) on financial instruments by category

2012 NeT HoLdING GAIN / (Loss)

ToTAL INTeResT INCoMe /

(exPeNse)

ToTAL

$’000 $’000 $’000


Financialassetsdesignatedatfairvaluethroughprofit/loss (3,355) 27,350 23,995

Total contractual financial assets (3,355) 27,350 23,995

2011


Financialassetsdesignatedatfairvaluethroughprofit/loss 3,102 30,651 33,753

Total contractual financial assets 3,102 30,651 33,753

(d) Credit risk CreditriskarisesfromthecontractualfinancialassetsoftheBoard,whichcomprisecashandcashdepositsandreceivables.TheBoard’sexposuretocreditriskarisesfromthepotentialdefaultofacounterpartyontheircontractualobligationsresultinginfinanciallosstotheBoard.Creditriskismeasuredatfairvalueandismonitoredonaregularbasis.

CreditriskassociatedwiththeBoard’scontractualfinancialassetsisminimalbecausethemainassetsarecashatbankandotherinvestments.TheBoard’spolicyistodealwithbanksandotherfinancialinstitutionswithhighcreditratings.Abankmustbeanapproveddeposittakinginstitution.ThemajorityofallfinancialassetsareheldbyWestpacBankingCorporation.

TheBoardhasaninvestmentpolicydetailingcontrolsinregardtocreditrisk.AnyinvestmentsinafinancialinstitutionmustbeapprovedbytheBoard.InvestmentsareregularlymonitoredbymanagementandanexternalassetconsultantandarereportedtotheBoardonamonthlybasis.AnyinvestmentdepositorredemptionisapprovedbytheBoard.

Inaddition,theBoarddoesnotengageinactivehedgingforitscontractualfinancialassetsandhascontractualfinancialassetsthataremainlycashatbankbutalsoincludesfundsinvestedinBoardapprovedfundmanagersafterconsideringadvicefromanindependentexpertinvestmentadvisor.

ProvisionsforimpairmentofcontractualfinancialassetsarerecognisedwhenthereisobjectiveevidencethattheBoardwillnotbeabletocollectareceivable.Objectiveevidenceincludesfinancialdifficultiesofthedebtor,defaultonpaymentsanddebtswhicharemorethen60daysoverdue.

Aswiththepolicyfordebtors,theBoard’spolicyistoonlydealwithbankswithhighcreditratings.

Exceptasotherwisedetailedinthefollowingtable,thecarryingamountofcontractualfinancialassetsrecordedinthefinancialstatements,netofanyallowancesforlosses,representstheBoard’smaximumexposuretocreditriskwithouttakingaccountofthevalueofanycollateralobtained.



Credit Quality of contractual financial assets that are neither past due nor impaired

2012 2011

$’000 $’000

Cash and deposits

FinancialinstitutionsAAAm(S&P) 86,012 -

Financialinstitutions:TripleAcreditrating - 20,847

Financialinstitutions:DoubleAcreditrating - 415,444

Financialinstitutions:AA-(S&P) 311,975 -

Other 1 -

397,988 436,291

Receivables

Financialinstitutions:AA-(S&P) 2,950 4,091

Other 59 1,038

3,009 5,129

Investments and other financial assets

Financialinstitutions:PreferredProvider(Mercerrating) 6,809 -

Financialinstitutions:Acreditrating(Mercerrating) 188,139 202,527

Financialinstitutions:B+creditrating(Mercerrating) 21,991 -

Other - 6,796

216,939 209,323



(e) Ageing analysis of contractual financial assets

2012 CARRyING AMouNT

VARIABLe INTeResT

RATe

NoN- INTeResT BeARING

NoT PAsT due ANd NoT

IMPAIRed

PAsT due

IMPAIRMeNT

$’000 $’000 $’000 $’000 $’000 $’000

Receivables:

LawPracticeResidualTrustAccountaccruedinterest 2,261 - 2,261 2,261 - -

StatutoryDepositAccountaccruedinterest 689 - 689 689 - -

Tradedebtors 133 - 191 59 132 (58)

Total non-derivatives 3,083 - 3,141 3,009 132 (58)


Cashanddeposits 397,988 397,988 - 397,988 - -

Investmentsatfairvaluethroughprofitorloss–heldfortrading 216,937 216,937 - 216,937 - -

614,925 614,925 - 614,925 - -

Total 618,008 614,925 3,141 617,934 132 (58)


VARIABLe INTeResT

RATe


NoT PAsT due ANd NoT

IMPAIRed

PAsT due

IMPAIRMeNT

$’000 $’000 $’000 $’000 $’000 $’000

Receivables:

LawPracticeResidualTrustAccountaccruedinterest

3,099 - 3,099 3,099 - -

StatutoryDepositAccountaccruedinterest

992 - 992 992 - -

Tradedebtors 1,038 - 1,038 1,038 - -

5,129 - 5,129 5,129 - -


Cashanddeposits 436,291 436,291 - 436,291 - -

Investmentsatfairvaluethroughprofitorloss–heldfortrading

209,323 209,323 - 209,323 - -

645,614 645,614 - 645,614 - -

Total 650,743 645,614 5,129 650,743 - -

(i) Contractual financial assets that are either past due or impaired

Therearenomaterialfinancialassetswhichareindividuallydeterminedtobeimpaired.CurrentlytheBoarddoesnotholdanycollateralassecuritynorcreditenhancementsrelatingtoanyofitsfinancialassets.

Therearenofinancialassetsthathavehadtheirtermsrenegotiatedsoastopreventthemfrombeingpastdueorimpaired,andtheyarestatedatthecarryingamountsasindicated.Theageinganalysistableabovedisclosestheageingonlyofcontractualfinancialassetsthatarepastduebutnotimpaired.



(f) Liquidity risk

LiquidityriskistheriskthattheBoardwouldbeunabletomeetitsfinancialobligationsasandwhentheyfalldue.TheBoardoperatesundertheGovernment’sfairpaymentpolicyofsettlingfinancialobligationswithin30daysandintheeventofadispute,makingpaymentswithin30daysfromthedateofresolution.

TheBoard’smaximumexposuretoliquidityriskisthecarryingamountsoffinancialliabilitiesasdisclosedonthefaceofthebalancesheet.TheBoardmanagesitsliquidityriskby:

• maintaininganadequatelevelofcashtohonourallshorttermStatutoryDepositAccountwithdrawalrequests.Thecashlevelsmaintainedaregenerallyinexcessof$250million;

• holdinginvestmentsandothercontractualfinancialassetsthatarereadilytradeableinthefinancialmarkets;and

• carefulmaturityplanningofitsfinancialobligationsbasedonforecastsoffuturecashflows.

TheBoard’sexposuretoliquidityriskisdeemedinsignificantbasedonpriorperiod’sdataandcurrentassessmentofrisk.Cashforunexpectedeventsisgenerallysourcedfromliquidationofavailable-for-salefinancialinvestments.

ThefollowingtabledisclosesthecontractualmaturityanalysisfortheBoard’scontractualfinancialliabilities.

(g) Maturity analysis of contractual financial liabilities

INTeResT RATe exPosuRe

MATuRITy dATes


NoMINAL AMouNT

Less THAN 1 MoNTH

$’000 $’000 $’000

Payables:

AccountsPayablesPublicPurposeFund 1,020 1,020 1,512

AccountsPayablesLegalPractitionersFidelityFund 64 64 64

Borrowingsfromrelatedparty 2,585 - 2,585

MajorGrants 4,726 - 4,726

StatutoryDepositAccountbalances 463,739 463,739 463,739

Total 472,135 464,824 472,627


MATuRITy dATes


NoMINAL AMouNT

Less THAN 1 MoNTH

$’000 $’000 $’000

Payables:

AccountsPayablesPublicPurposeFund 2,340 2,340 2,340

AccountsPayablesLegalPractitionersFidelityFund 385 385 385

Borrowingsfromrelatedparty - - -

MajorGrants 5,439 - 5,439

StatutoryDepositAccountbalances 504,366 504,366 504,366

Total 512,529 507,090 512,529



(h) Market risk TheBoard’sexposurestomarketriskareprimarilythroughinterestrateriskandforeigncurrencyriskandwithsomeexposuretoequitypricerisk.Objectives,policiesandprocessesusedtomanageeachoftheserisksaredisclosedbelow:

(i) Foreign currency risk

TheBoardisexposedtoforeigncurrencyriskmainlythroughitsinvestmentsinglobalequities.Theinvestmentpolicyistoinvest50%ofallglobalequitiesinafullyhedgedinvestmentproductand50%inanunhedgedinvestmentproduct.Theinvestmentbenchmarkistoinvest9%oftotalinvestmentsinglobalequities.Investmentsinglobalequitiesare$58.60masat30June2012comparedwith$54.91mforprioryear.

AllinvestmentsinglobalequitiesarereportedinAustraliandollarsandtheexposureismanagedbytheinvestmentfundmanagerbasedonparameterssetbytheBoard.Basedonpastandcurrentassessmentofeconomicoutlook,itisdeemedunnecessaryfortheBoardtoenterintoanyfurtherhedgingarrangementstomanagetherisk.

(ii) Interest rate risk

Fairvalueinterestrateriskistheriskthatthefairvalueofafinancialinstrumentwillfluctuatebecauseofchangesinmarketinterestrates.

TheBoardhassignificantexposuretoFixedInterestinvestments.

TheBoardalsohassignificantexposuretocashflowinterestraterisksthroughitscash,termdepositsanddepositsthatareatfloatingrates.Note18(k)illustratesthepotentialimpactofa100basispointsmovementontheBoard’srevenue.

TheBoardmanagesthisinterestrateriskthroughadiversifiedassetsallocationstrategyandbytheestablishmentandmaintenanceofDeedsofArrangementwithApprovedDepositInstitutionsandSDAmanagementcontractsinplacewithWestpacbank.Thediversifiedassetallocationstrategyisreviewedatleastannuallyandthebankingarrangementsaresubjecttoperiodicreviewandre-negotiation.Managementmonitorsmovementininterestratesonadailybasis.

(iii) Equity price risk

TheBoardisexposedtoequitypriceriskthroughitsinvestmentsinmanagedinvestmentschemes.Suchinvestmentsareallocatedandtradedtomatchtheapprovedinvestmentobjectives.TheBoardhasappointedMercerAssetConsultantstoreviewandproviderecommendationsonitsinvestmentstrategies,assetallocationandfundmanagers.ManagementandMercercloselymonitorinvestmentperformanceandprovidereportingtotheBoardonamonthlybasis.



(i) Interest rate exposure of financial instruments


2012 weIGHTed AVeRAGe

INTeResT RATe%

CARRyING AMouNT

fIxed INTeResT

RATe

VARIABLe INTeResT

RATe


$’000 $’000 $’000 $’000

financial assets

Cash and deposits 4.33 330,256 - 330,256 -

Receivables

Financeleasereceivables - - - - -

Saleofgoodsandservices - 133 - - 133

Accruedinvestmentincome - 2,950 - - 2,950

Investments and other contractual financial assets

Equitiesandmanaged

investmentschemes 3.57 216,937 104,844 - 112,093

Termdeposits 5.72 67,732 67,732 - -

Total financial assets 618,008 172,576 330,256 115,176

financial liabilities

Payables

Suppliesandservices - 1,084 - - 1,084

StatutoryDepositAccountbalances - 463,739 - - 463,739

Total financial liabilities 464,823 - - 464,823


2011 weIGHTed AVeRAGe

INTeResT RATe%

CARRyING AMouNT

fIxed INTeResT

RATe

VARIABLe INTeResT

RATe


$’000 $’000 $’000 $’000

financial assets

Cash and deposits 4.43 361,108 - 361,108 -

Receivables

Financeleasereceivables - - - - -

Saleofgoodsandservices - 1,038 - - 1,038

Accruedinvestmentincome - 4,091 - - 4,091


Equitiesandmanaged

investmentschemes 8.94 209,323 114,798 - 94,525

Termdeposits 5.84 75,183 75,183 - -

Total financial assets - 650,743 189,981 361,108 99,654

financial liabilities

Payables

Suppliesandservices - 2,725 - - 2,725

StatutoryDepositAccountbalances - 504,366 - - 504,366

Total financial liabilities - 507,091 - - 507,091



(i) Sensitivity disclosure analysis and assumptions

TheBoard’ssensitivitytomarketriskisdeterminedbasedontheobservedrangeofactualhistoricaldatafortheprecedingfouryearperiod,withallvariablesotherthentheprimaryriskvariableheldconstant.TheBoard’sfundmanagerscannotbeexpectedtopredictmovementsinmarketratesandprices.Sensitivityanalysesshownareforillustrativepurposesonly.Thefollowingmovementsare‘reasonablypossible’overthenext12months:

• amovementof100basispointsupanddown(2011:100downand100up)inmarketinterestrates(AUD);

TheimpactontheBoard’snetresultforeachcategoryoffinancialinstrumentheldbytheBoardatyearendaspresentedtokeymanagementpersonnel,iftheabovemovementsweretooccur,asfollows:

TheBoardhasnofinancialliabilitiessubjecttomovementsinmarketratesandprices.

(j) foreign exchange risk sensitivity

foReIGN exCHANGe RIsK

-10% +10%


NeT ResuLT

IMPACT oN ReTAINed eARNINGs

NeT ResuLT


$’000 $’000 $’000 $’000

financial assets

Investmentsandothercontractualfinancialassets

216,939 (2,902) (2,902) 2,902 2,902

Total impact (2,902) (2,902) 2,902 2,902

foReIGN exCHANGe RIsK

-10% +10%


NeT ResuLT


NeT ResuLT


$’000 $’000 $’000 $’000

financial assets


209,323 (2,632) (2,632) 2,632 2,632

Total impact (2,632) (2,632) 2,632 2,632



(k) Interest rate sensitivity

INTeResT RATe RIsK

-100 BAsIs PoINTs +100 BAsIs PoINTs

AT 30 JuNe 2012 CARRyING AMouNT

NeT ResuLT IMPACT oN ReTAINed eARNINGs


$’000 $’000 $’000 $’000 $’000


Cashanddeposits 397,988 (3,980) (3,980) 3,980 3,980


216,939 - -

Total impact (3,980) (3,980) 3,980 3,980

INTeResT RATe RIsK

-100 BAsIs PoINTs +100 BAsIs PoINTs




$’000 $’000 $’000 $’000 $’000


Cashanddeposits 436,291 (4,363) (4,363) 4,363 4,363


209,323 - - -

Total impact (4,363) (4,363) 4,363 4,363

TheaboveanalysisdoesnotreflecttheimpactontheBoard’srevenuefrominterestratechangesonreturnsfromResidualTrustaccounts.

UndertheprovisionsoftheLegalProfessionAct2004,theBoardreceivesinterestfromApprovedDepositInstitutionsforfundsdepositedinnon-SDAResidualTrustaccountsheldbylegalpractitionersorapprovedclerks.Thequantumofinterestreceivedonresidualtrustfundsfortheyearended30June2012was$31.73m(2011:$35.95m).

BasedonarollingaveragebalanceinResidualTrustFundsof$889masat30June2012,a100basispointmovementwouldimpacttherevenueattributabletotheBoardby$8.89m.



(l) other price risk sensitivity

oTHeR PRICe

-1% +1%




$’000 $’000 $’000 $’000

financial assets


216,939 (2,169) (2,169) 2,169 2,169

Total impact (2,169) (2,169) 2,169 2,169

oTHeR PRICe

-1% +1%




$’000 $’000 $’000 $’000

financial assets


209,323 (2,093) (2,093) 2,093 2,093

Total impact (2,093) (2,093) 2,093 2,093



(i) Other price risk sensitivity

Exposuretootherpriceriskarisesduetotheinherentriskduetothepossibilityoffallsinthemarketvalueoftheinvestmentsheldfortrading.TheBoard’sobjectiveofmanagingotherpriceriskistominimisenegativeimpactsoninvestmentvalueduetothevolatilityofthestockmarket.

policy in managing other price risk:

TheBoardhasappointedMercerasitsexternal,independentinvestmentmanagerstomonitorthevolatilityofstockmarketinvestmentsinlightofperformancebenchmarks.TheinvestmentmanagerisexpectedtomanagethisriskwithparameterssetbytheBoardandwithappropriateoversightbymanagementandtheBoard.Theriskismanagedthroughtheappropriatediversificationofspecificstocksanddiversificationthroughdifferentassetclassesasperthemandatedallocations.

TheBoardmanagesotherpriceriskatleastonceayear.

foReIGN exCHANGe RIsK oTHeR PRICe RIsK

10% -5% -15% 10%

(A) (B) (C) (d)

30 JuNe 2012

CAR

RyI

NG

A

Mo

uN

T

NeT

R

esu

LT

equ

ITy

NeT

R

esu

LT

equ

ITy

NeT

R

esu

LT

equ

ITy

NeT

R

esu

LT

equ

ITy

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

financial assets

Otherfinancialassets 216,939 2,902 2,902 (1,451) (1,451) (32,541) (32,541) 21,694 21,694

Total increase/ (decrease) 2,902 2,902 (1,451) (1,451) (32,541) (32,541) 21,694 21,694

foReIGN exCHANGe RIsK oTHeR PRICe RIsK

10% -5% -15% 10%

(A) (B) (C) (d)

30 JuNe 2011

CAR

RyI

NG

A

Mo

uN

T

NeT

R

esu

LT

equ

ITy

NeT

R

esu

LT

equ

ITy

NeT

R

esu

LT

equ

ITy

NeT

R

esu

LT

equ

ITy

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

financial assets

Otherfinancialassets 209,323 2,632 2,632 (1,361) (1,361) (31,398) (31,398) 20,939 20,939

Total increase/ (decrease) 2,632 2,632 (1,361) (1,361) (31,398) (31,398) 20,939 20,939

(a) TheBoard’sManagementhasestimatedaccordingtopastperformanceandfutureexpectationsanaveragemaximumdecreaseinthevalueofAU$whenexchangingforeigncurrenciesof10%.

(b) TheBoard’sManagementhasestimatedaccordingtopastperformanceandfutureexpectationsanaveragemaximumincreaseinthevalueofAU$whenexchangingforeigncurrenciesof5%.

(c) Thecurrencyriskhasbeenestimatedbasedontheclosingbalanceforunhedgedglobalequitiesasat30June(Note8).ThebalanceofOtherFinancialAssetsincludestheinvestmentsinglobalequitiessubjecttoexchangeratemovements.Sensitivityto+or–10%inmovementinis$2,902minabsoluteterms,similarlya+or–5%movementis$1.451m.

(d) TheBoard’sManagementhasestimatedthatmovementsinOtherPriceRiskwillbefrompositive10%tonegative15%inthenext12months.TheBoard’sManagementdoesnotbelievethatitispossibletoreasonablyestimatethevariablesused(interestrates)furtherthanfor12months.



(m) fair value Thefairvaluesandnetfairvaluesoffinancialinstrumentassetsandliabilitiesaredeterminedasfollows:

• Level 1–thefairvalueoffinancialinstrumentwithstandardtermsandconditionsandtradedinactiveliquidmarketsaredeterminedwithreferencetoquotedmarketprices;

• Level 2–thefairvalueisdeterminedusinginputsotherthanquotedpricesthatareobservableforthefinancialassetorliability,eitherdirectlyorindirectly;and

• Level 3–thefairvalueisdeterminedinaccordancewithgenerallyacceptedpricingmodelsbasedondiscountedcashflowanalysisusingobservablemarketinputs.

TheBoardconsidersthatthecarryingamountoffinancialinstrumentassetsandliabilitiesrecordedinthefinancialstatementstobeafairapproximationoftheirfairvalues,becauseoftheshorttermnatureofthefinancialinstrumentsandtheexpectationthattheywillbepaidinfull.

Thefollowingtableshowsthatthefairvaluesofthecontractualfinancialassetsandliabilitiesarethesameasthecarryingamounts.

CARRyING AMouNT

fAIR VALue

CARRyING AMouNT

fAIR VALue

2012 2012 2011 2011

$’000 $’000 $’000 $’000


Cashanddeposits 397,988 397,988 436,291 436,291

Receivables

LawPracticeResidualTrustAccountaccruedinterest 2,261 2,261 3,099 3,099

StatutoryDepositAccountaccruedinterest 689 689 992 992

Tradedebtors 133 133 1,038 1,038


Investmentsatfairvaluethroughprofitorlossheldfortrading 216,937 216,937 209,323 209,323

Total contractual financial assets 618,008 618,008 650,743 650,743


Payables

AccountspayablesPublicPurposeFund 5,746 5,746 7,779 7,779

AccountspayablesLegalPractitionersFidelity

Fund 64 64 385 385

Borrowingfromrelatedparty 2,585 2,585 - -

StatutoryDepositAccountbalances 463,739 463,739 504,366 504,366

Total contractual financial liabilities 472,134 472,134 512,530 512,530



(n) financial assets measured at fair value

30 JuNe 2012 30 JuNe 2011

CARRyING AMouNT

fAIR VALue MeAsuReMeNT

AT eNd of RePoRTING

PeRIod – LeVeL 1

CARRyING AMouNT

fAIR VALue MeAsuReMeNT

AT eNd of RePoRTING

PeRIod – LeVeL 1

$’000 $’000 $’000 $’000

financial assets at fair value through profit or loss

Investmentsinotherfinancialassetsatfairvaluethroughprofitorloss 216,937 216,937 209,323 209,323

19 reSpOnSiBLe perSOnS

InaccordancewiththeMinisterialDirectionsissuedbytheMinisterforFinanceundertheFinancialManagementAct1994,thefollowingdisclosuresaremaderegardingresponsiblepersonsforthereportingperiod.

(a) Names ThepersonswhoheldthepositionsofMinistersandAccountableOfficerintheLegalServicesBoardareasfollows:

Attorney-General TheHon.RobertClark,MP 1July2011to30June2012

Accountable officer MrMichaelMcGarvie 1July2011to30June2012

(b) Remuneration RemunerationreceivedorreceivablebytheAccountableOfficerinconnectionwiththemanagementoftheBoardduringthefinancialyearhasbeenincludedintheLegalServicesCommissioner’sfinancialstatements.AportionoftheseexpenseshavebeenrechargedbytheLSCtotheBoardthroughtheServiceLevelAgreementbetweenthetwoentities.

AmountsrelatingtoMinistersarereportedinthefinancialstatementsoftheDepartmentofPremierandCabinet.

20 remuneratiOn Of the BOarD

S6.3.4oftheLegalProfessionAct2004statesthattheLegalServicesCommissioneristheChiefExecutiveOfficeroftheBoard.

ReMuNeRATIoN of THe BoARd

2012 2011

No. No.

$ $

Income Band

Lessthan$10000 - 3

$20,000–$29,999 1 -

$30,000–$39,999 5 6

$70,000–$79,999 1 1

Total numbers 7 10

Total amount 270,663 279,942


21 remuneratiOn Of executiveS

executive officers Thereweretwoexecutiveofficers,otherthantheMinisterandAccountableOfficer;theremunerationreceivedorreceivableduringthefinancialyearfortheseofficershasbeenincludedintheLegalServiceCommissioner’sFinancialStatements.AportionofthesesalarieshavebeenrechargedbytheCommissionertotheBoardthroughtheServiceLevelAgreementbetweenthetwoentities.

other personnel i.e. Contractors with significant management responsibilities Therewerenocontractorschargedwithsignificantmanagementresponsibilitiesduringtheperiod1July2011to30June2012.

22 remuneratiOn Of auDitOrS

(a) Victorian Auditor-General’s office

2012 2011

$’000 $’000

Auditoffinancialstatements 58 60

Totalremunerationforauditandotherassuranceservices 58 60

23 SuperannuatiOn

SuperannuationpaidtoemployeesoftheBoardhasbeenincludedintheLSC’sfinancialstatements.AportionoftheseexpenseshavebeenchargedbytheLSCtotheLSBthroughtheServiceLevelAgreementbetweenthetwoentities.TheBoardmadedirectsuperannuationcontributionsforitsDirectorsoftheBoard.Thecontributionstotalled$17,556.

24 reLateD party tranSactiOnS

AsperNote1(f)thefollowingrelatedpartytransactionsoccuredbetweentheLegalServicesBoardandtheLegalServicesCommissioner:

2012 2011

$’000 $’000

ExpensesrecoveredfromtheLegalServicesCommissioner 646 592

ExpenseschargedbytheLegalServicesCommissioner (11,948) (11,060)

Inter company loan with Legal services Commissioner as per note 12. (2,585) -

TheLegalServicesCommissionersharecostsandserviceswiththeLegalServicesBoard.Alltransactionsareatarmslength.Sharedcostsarerechargedonagreedrates.

25 SuBSeQuent eventS

Therewerenosubsequenteventstoreport.


26 gLOSSary Of termS anD StyLe cOnventiOnS

Glossry

Commitments

Commitmentsincludethoseoperating,capitalandotheroutsourcingcommitmentsarisingfromnoncancellablecontractualorstatutorysources.

Comprehensive result

Totalnetresultofallitemsofincomeandexpenserecognisedfortheperiod.Itistheaggregateofoperatingresultandothernon-ownermovementsinequity.

Depreciation

Depreciationisanexpensethatarisesfromtheconsumptionthroughwearandtearortimeofaproducedphysicalorintangibleasset.Thisexpenseisclassifiedasa‘transaction’andsoreducesthe‘netresultfromtransaction’.

Employee benefits expenses

Employeebenefitsexpensesincludeallcostsrelatedtoemploymentincludingwagesandsalaries,leaveentitlements,redundancypaymentsandsuperannuationcontributions.

Financial asset

Afinancialassetisanyassetthatis:

(a) cash;

(b) anequityinstrumentofanotherentity;

(c) acontractualright;

• toreceivecashoranotherfinancialassetfromanotherentity;or

• toexchangefinancialassetsorfinancialliabilitieswithanotherentityunderconditionsthatarepotentiallyfavourabletotheentity;or

(d) acontractthatwillormaybesettledintheentity’sownequityinstrumentsandis:

• anon-derivativeforwhichtheentityisormaybeobligedtoreceiveavariablenumberoftheentity’sownequityinstruments;or

• aderivativethatwillormaybesettledotherthenbytheexchangeofafixedamountofcashoranotherfinancialassetforafixednumberoftheentity’sownequityinstruments.

Fidelity Fund

TheFidelityFundismaintainedundersection6.7.15oftheLegalProfessionAct2004.ThepurposeoftheFidelityFundistocompensateclientsforlossesarisingoutofdefaultsbylawpracticesarisingfromactsoromissionsofassociatesanddefaultsbyapprovedclerks.TheamountintheFidelityFundmustbekeptseparatefromanyothermoneyheldbytheBoardandbeheldintrust.TheBoardmayinvestanymoneyintheFidelityFundthatisnotimmediatelyrequiredforthepurposesoftheFidelityFundinthemannerinwhichmoneymaybeinvestedundertheTrusteeAct1958.

Financial instrument

Afinancialinstrumentisanycontractthatgivesrisetoafinancialassetofoneentityandafinancialliabilityorequityinstrumentofanotherentity.Financialassetsorliabilitiesthatarenotcontractualarenotfinancialinstruments.

Financial liability

Afinancialliabilityisanyliabilitythatis:Acontractualorstatutoryobligation;

• todelivercashoranotherfinancialassettoanotherentity;or

• toexchangefinancialassetsorfinancialliabilitieswithanotherentityunderconditionsthatarepotentiallyunfavourabletotheentity.

Financial statements

Dependingonthecontextofthesentencewheretheterm‘financialstatements’isused,itmayincludeonlythemainfinancialstatements(i.e.comprehensiveoperatingstatement,balancesheet,cashflowstatements,andstatementofchangesinequity);oritmayalsobeusedtoreplacetheoldterm‘financial’reportusedintherevisedAASB101(September2007),whichmeansitmayincludethemainfinancialstatementsandthenotes.

Grants

Transactionsinwhichoneunitprovidesgoods,services,assets(orextinguishesaliability)orlabourtoanotherunitwithoutreceivingapproximatelyequalvalueinreturn.Grantscaneitherbeoperatingorcapitalinnature.Whilegrantstogovernmentsmayresultintheprovisionofsomegoodsorservicestothetransferor,theydonotgivethetransferoraclaimtoreceivedirectlybenefitsofapproximatelyequalvalue.Receiptandsacrificeofapproximatelyequalvaluemayoccur,butonlybycoincidence.Forexample,governmentsarenotobligedtoprovidecommensuratebenefits,intheformofgoodsandservices,toparticulartaxpayersinreturnfortheirtaxes.Forthisreason,grantsarereferredtobytheAASBasinvoluntarytransfersandaretermednonreciprocaltransfers.


TheBoardprovidegrantsforanyofthefollowingpurposes:

(a) lawreform;

(b) legaleducation;

(c) legalresearch;

(d) anypurposerelatingtothelegalprofessionorthelawthattheBoardconsidersappropriate.

TheconditionsofthegrantpaymentsareprovidedintheLegalProfessionAct2004.

Grantscanbepaidasgeneralpurposegrantswhichrefertograntsthatarenotsubjecttoconditionsregardingtheiruse.Alternatively,theymaybepaidasspecificpurposegrantswhicharepaidforaparticularpurposeand/orhaveconditionsattachedregardingtheiruse.

Intangible assets

Intangibleassetsrepresentidentifiablenonmonetaryassetswithoutphysicalsubstance.

Interest income

Interestincomeincludesinterestreceivedonbanktermdeposits,interestfrominvestments,andotherinterestreceived.

Net result

Netresultisameasureoffinancialperformanceoftheoperationsfortheperiod.Itisthenetresultofitemsofrevenue,gainsandexpenses(includinglosses)recognisedfortheperiod,excludingthosethatareclassifiedas‘othernon-ownerchangesinequity’.

net result from transactions/net operating balance

Anetresultfromtransactionsornetoperatingbalanceisakeyfiscalaggregateandisrevenuefromtransactionsminusexpensesfromtransactions.Itisasummarymeasureoftheongoingsustainabilityofoperations.Itexcludesgainsorlossesresultingfromchangesinpricelevelsandotherchangesinthevolumeofassets.Itisthecomponentofthechangeinnetworththatisduetotransactionsandcanbeattributeddirectlytogovernmentpolicies.

Net worth

Assetslessliabilities,whichisaneconomicmeasureofwealth.

Non-financial assets

Non-financialassetsareallassetsthatarenot‘financialassets’.

Other economic flows

Othereconomicflowsarechangesinthevolumeorvalueofanassetorliabilitythatdonotresultfromtransactions.Itincludesgainsandlossesfromdisposals,revaluationsandimpairmentsofnon-currentphysicalandintangibleassets,fairvaluechangesinfinancialinstrumentsanddepletionofnaturalassets(non-produced)fromtheiruseorremoval.Insimpleterms,othereconomicflowsarechangesarisingfrommarketre-measurements.

Payables

Includesshortandlongtermtradedebtandaccountspayable,grantsandinterestpayable.

Public Purpose Fund

ThePublicPurposeFundismaintainedundersection6.7.1oftheLegalProfessionAct2004.TheFundiscomprisedofthreeseparateaccounts–theGeneralAccount,StatutoryDepositAccountandtheDistributionAccount.ThefundingandexpenditurerequirementsofeachoftheaccountsaredetailedintheLegalProfessionAct2004.TheamountinthePublicPurposeFundmustbekeptseparatefromanyothermoneyheldbytheBoardandbeheldintrust.TheBoardmayinvestanymoneystandingtothecreditoftheFundthatisnotimmediatelyrequiredforthepurposesofthePublicPurposeFundinthemannerinwhichmoneymaybeinvestedundertheTrusteeAct1958.

Receivables

Includesshortandlongtermcreditandaccountsreceivable,grants,taxesandinterestreceivable.

Statutory Deposit account balances (SDA)

EachlawpracticewithTrustAccountshasanindividualSDAheldintheirnamebytheBoard,thebalanceinthisaccountislinkedtotheirTrustAccount.TheliabilityrepresentsthetotalsumoftheindividualSDAbalances.

Transactions

Transactionsarethoseeconomicflowsthatareconsideredtoariseasaresultofpolicydecisions,usuallyaninteractionbetweentwoentitiesbymutualagreement.Theyalsoincludeflowswithinanentitysuchasdepreciationwheretheownerissimultaneouslyactingastheownerofthedepreciatingassetandastheconsumeroftheserviceprovidedbytheasset.Transactionscanbeinkind(e.g.assetsprovided/givenfreeofchargeorfornominalconsideration)orwherethefinalconsiderationiscash.Insimpleterms,transactionsarisefromthepolicydecisionsoftheBoard.

style conventions Figuresinthetablesandinthetexthavebeenrounded.Discrepanciesintablesbetweentotalsandsumsofcomponentsreflectrounding.

Thenotationusedinthetablesisasfollows:

–zero,orroundedtozero

(xxx)negativenumbers20xxyearperiod

20xxxxyearperiod

Thefinancialstatementsandnotesarepresentedbasedontheillustrationforagovernmentdepartmentinthe2011-12ModelReportforVictorianGovernmentdepartments.ThepresentationofotherdisclosuresisgenerallyconsistentwiththeotherdisclosuresmadeinearlierpublicationsoftheBoard’sannualreports.




LeGIsLATIoN RequIReMeNT PAGe RefeReNCe

MINIsTeRIAL dIReCTIoNs

RePoRT of oPeRATIoNs – fRd GuIdANCe

CHARTeR ANd PuRPose

FRD22B MannerofestablishmentandtherelevantMinisters 3,112

FRD22B Objectives,functions,powersandduties 3-4

FRD22B Natureandrangeofservicesprovided 4

MANAGeMeNT ANd sTRuCTuRe

FRD22B Organisationalstructure 9

fINANCIAL ANd oTHeR INfoRMATIoN

FRD8B Budgetportfoliooutcomes N/A

FRD10 Disclosureindex 118-120

FRD12A Disclosureofmajorcontracts N/A

FRD15B Executiveofficerdisclosures 41,113

FRD22B,SD4.2(k) Operationalandbudgetaryobjectivesandperformanceagainstobjectives 27-50

FRD22B Employmentandconductprinciples 41

FRD22B Occupationalhealthandsafetypolicy 41

FRD22B Summaryofthefinancialresultsfortheyear 44

FRD22B Significantchangesinfinancialpositionduringtheyear 45

FRD22B Majorchangesorfactorsaffectingperformance NIL

FRD22B Subsequentevents NIL

FRD22B ApplicationandoperationofFreedomofInformationAct1982 51

DIsclosuRe InDex

the Annual Report of the legal services Board is prepared in accordance with all relevant Victorian legislation. this index has been prepared to facilitate identification of the Board’s compliance with the statutory disclosure requirements.




FRD22B CompliancewithbuildingandmaintenanceprovisionsofBuildingAct1993 51

FRD22B StatementonNationalCompetitionPolicy 51

FRD22B ApplicationandoperationoftheWhistleblowersProtectionAct2001 51

FRD22B Detailsofconsultanciesover$10,000 52

FRD22B Detailsofconsultanciesunder$10,000 52

FRD22B Statementofavailabilityofotherinformation 52

FRD24C Reportingofoffice-basedenvironmentalimpacts 52

FRD25A VictorianIndustryParticipationPolicydisclosures 51

FRD29 WorkforceDatadisclosures 41

SD4.5.5 Riskmanagementcomplianceattestation 53

SD4.2(g) Generalinformationrequirements 3-64

SD4.2(j) Sign-offrequirements ii

fINANCIAL RePoRT

fINANCIAL sTATeMeNTs RequIRed uNdeR PART 7 of THe fMA

SD4.2(a) Statementofchangesinequity 70

SD4.2(b) Operatingstatement 68

SD4.2(b) Balancesheet 69

SD4.2(b) Cashflowstatement 71

oTHeR RequIReMeNTs uNdeR sTANdING dIReCTIoNs 4.2

SD4.2(c)CompliancewithAustralianaccountingstandardsandotherauthoritativepronouncements

72

SD4.2(c) CompliancewithMinisterialDirections 72

SD4.2(d) Roundingofamounts 73

SD4.2(c) Accountableofficer’sdeclaration 67

SD4.2(f) CompliancewithModelFinancialReport 115




oTHeR dIsCLosuRes As RequIRed By fRds IN NoTes To THe fINANCIAL sTATeMeNTs

FRD9A Departmentaldisclosureofadministeredassetsandliabilities N/A

FRD11 Disclosureofexgratiapayments N/A

FRD13 Disclosureofparliamentaryappropriations N/A

FRD21A Responsiblepersonandexecutiveofficerdisclosures 41,112

FRD102 Inventories N/A

FRD103D Noncurrentphysicalassets 93

FRD104 Foreigncurrency 107

FRD106 Impairmentofassets 103

FRD109 Intangibleassets 94

FRD107 Investmentproperties N/A

FRD110 Cashflowstatements 71

FRD112C Definedbenefitsuperannuationobligations N/A

FRD113 Investmentsinsubsidiaries,jointlycontrolledentitiesandassociates N/A

FRD114AFinancialInstruments–GeneralGovernmentEntitiesandpublicnonfinancialcorporations

99-112

FRD119 Contributionsbyowners N/A

LeGIsLATIoN

FreedomofInformationAct1982 51

BuildingAct1993 51

WhistleblowersProtectionAct2001 51

VictorianIndustryParticipationPolicyAct2003 51

FinancialManagementAct1994 67

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Level 10, 330 Collins Street MELBOURNE VICTORIA 3000

Telephone: (03) 9679 8000 Fax: (03) 9679 8100 Email: [email protected] Website: www.lsb.vic.gov.au

Documents

LEGAL SERVICES BOARD ANNUAL REPORT 2012 · 6 LegaL ServiceS BOarD AnnuAl RepoRt 2012 Our greatest achievement was the release of LSB Online, an online system, to all Victorian legal