Budget Estimates 2012-2013

Legal Services Directions 2005

as amended

made under section 55ZF of the

Judiciary Act 1903

This compilation was prepared on 4 April 2006

taking into account amendments up to Legal Services Amendment Directions 2006

(No. 1)

Prepared by the Office of Legislative Drafting and Publishing,

Attorney-General’s Department, Canberra

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Contents

Page

Legal Services Directions 2005

Contents

1 Name of instrument [see Note 1] 3

2 Commencement 3

3 Repeal of previous instrument 3

4 Schedule 1 3

Schedule Legal Services Directions 4

Part 1

FMA agencies 4

Part 2

Extended and modified application of the Directions 12

Part 3

Sanctions for non-compliance 14

Part 4

Dictionary 14

Appendix A

Tied areas of Commonwealth legal work 16

Appendix B

The Commonwealth’s obligation to act as a model litigant 20

Appendix C

Handling monetary claims 23

Appendix D

Engagement of counsel 25

Appendix E

Assistance to Commonwealth employees for legal

proceedings 29

Notes 35

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Section 4

Legal Services Directions 2005

1 Name of instrument [see Note 1]

This instrument is the Legal Services Directions 2005.

2 Commencement

This instrument commences on 1 March 2006.

3 Repeal of previous instrument

The Legal Services Directions issued with effect from 1 September 1999, as

amended on 9 February 2000, 28 May 2000, 1 July 2000 and 30 September

2004, are repealed on the commencement of this instrument.

4 Schedule 1

Schedule 1 to this instrument sets out Directions made by the

Attorney-General under section 55ZF of the Judiciary Act 1903.

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Schedule Legal Services Directions

Part 1 FMA agencies

Legal Services Directions 2005

Schedule Legal Services Directions

Part 1 FMA agencies

1 Arrangements for legal services

1.1 Arrangements made by an FMA agency for the provision of legal services

are to ensure the delivery of efficient and effective services.

2 Tied work

2.1 Constitutional, Cabinet, national security, public international law and most

drafting work undertaken for an FMA agency is tied to government

providers of legal services, in accordance with the Directions on Tied Areas

of Commonwealth Legal Work, at Appendix A.

Note For the application of this provision to Australian Government bodies other than

FMA agencies, see paragraph 12.

3 Reporting on significant issues

3.1 An FMA agency is to report as soon as possible to the Attorney-General or

OLSC on significant issues that arise in the provision of legal services,

especially in handling claims and conducting litigation. These issues will

include matters where:

(a) the size of the claim, the identity of the parties or the nature of the

matter raises sensitive legal, political or policy issues

(b) a dispute or disagreement exists between different agencies (whether or

not FMA agencies), other than matters arising under legislation which

contemplates that two or more agencies may be on different sides in a

case

required

(d) a significant precedent for other agencies could be established, either

on a point of law or because of its potential significance for other

agencies, or

(e) a dispute exists with an agency of a State or Territory government.

Note 1 In dealing with personal or sensitive information, agencies need to comply with the

Privacy Act 1988, the Freedom of Information Act 1982, the Archives Act 1983 and the

Crimes Act 1914.

Note 2 The obligation to report significant issues also requires the relevant agency to

regularly update the Attorney-General or OLSC on any developments involving the

significant issue. There may also be more than one issue that should be reported as a

significant issue over the course of a proceeding.

Note 3 A fresh obligation to report to the Attorney-General or OLSC will arise on appeal

if the significant issue remains relevant to the appeal. The making of an appeal may itself

constitute a significant issue.

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Note 4 The obligation to report on significant issues extends beyond handling claims and

conducting litigation, and includes all significant issues that arise in the provision of legal

services.

Note 5 If an agency is unsure about whether an issue is a significant issue that should be

reported, it should contact OLSC to discuss the issue.

Note 6 For the application of this provision to Australian Government bodies other than

FMA agencies, see paragraph 12.

3.2 A claim that is required to be reported by an agency to the Attorney-General

or OLSC under paragraph 3.1 is not to be settled without the agreement of

the Attorney-General.

4 Claims and litigation by or against the Commonwealth or FMA

agencies

Agencies to comply with instructions from the Attorney-General

4.1 An FMA agency is to comply with any instructions by the Attorney-General

about the handling of claims or the conduct of litigation. In particular, the

FMA agency is to comply with an instruction to provide information about

a particular claim or litigation, or to provide copies of, or access to, material

relating to the claim or litigation.

Note 1 An instruction could relate to such matters as the arguments to be put to the court

and the lawyers to handle the matter. (In extreme cases, it could require that the agency

change its lawyers in a matter). The need to give instructions could occur, for example,

where constitutional or ‘whole of government’ issues arise or where the proposed conduct

of a matter might be inconsistent with the Attorney-General’s First Law Officer role (eg the

Attorney-General’s responsibility for ensuring that the Commonwealth acts as a model

litigant). The FMA agency will be responsible for any costs incurred by it or the lawyers

involved in complying with the instruction.

Note 2 Other provisions of the Directions may also be relevant to the handling of a claim

by or against the Commonwealth, including the requirements:

(a) to act in accordance with the Directions on The Commonwealth’s obligation to act as a

model litigant, at Appendix B

(b) to handle monetary claims in accordance with the Directions on Handling monetary

claims, at Appendix C, and

at Appendix D.

The Model Litigant Obligation

4.2 Claims are to be handled and litigation is to be conducted by the agency in

accordance with the Directions on The Commonwealth’s Obligation to Act

as a Model Litigant, at Appendix B.

Note For the application of this provision to Australian Government bodies other than

FMA agencies, see paragraph 12.

Acting in accordance with legal principle and practice

4.3 Claims are to be handled and litigation is to be conducted by the agency in

accordance with legal principle and practice, taking into account the legal

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rights of the parties and the financial risk to the Commonwealth (including

the agency) of pursuing its rights.

Note 1 Some examples of handling claims and conducting litigation in accordance with

legal principle and practice are:

(a) acting in the Commonwealth’s financial interest to defend fully and firmly claims

brought against the Commonwealth where a defence is properly available, subject to

the desirability of settling claims wherever possible and appropriate, and

(b) generally enforcing costs orders in favour of the Commonwealth.

Note 2 In addition to the obligations arising under these Directions, the Financial

Management and Accountability Act 1997 imposes obligations on Chief Executives

concerning the recovery of amounts owing to the Commonwealth. Amounts should

generally be recovered, but it may in some circumstances be appropriate to consider

compromise for a lesser amount, deferral of the debt, write-off or waiver of amounts

owing. Reference should also be had to any guidance material published by the Department

of Finance and Administration on FMA Act obligations and on recovery of amount owing

and to any relevant Chief Executive Instructions.

Handling monetary claims

4.4 Monetary claims by and against the Commonwealth or the agency (other

than claims that are to be determined under a legislative or contractual

mechanism) are to be handled in accordance with the Directions on

Handling Monetary Claims, at Appendix C.

Disclosure of terms of settlement

4.5 The agency is only to agree that the terms of settlement are confidential and

cannot be disclosed where this is necessary to protect the Commonwealth’s

interests. Before imposing or agreeing to such a condition, the agency is to

satisfy itself, including by raising the matter with a party requesting the

condition, that the condition is necessary. The agency should also seek to

incorporate an exception to enable voluntary disclosure of the settlement (in

whole or in part) to the Parliament or to a Parliamentary Committee. Where

practicable, the responsible Minister is to be consulted before an agency

agrees to a settlement inhibiting voluntary disclosure to the Parliament or to

a Parliamentary Committee.

4.5A The agency is to tell the other party to a confidential settlement that

disclosure of the settlement may nevertheless be required by law; in

particular, to the Parliament or to a Parliamentary Committee which has

power to compel disclosure.

Note 2 An example of when it may be in the Commonwealth’s interests to agree to a

confidential settlement is if the Commonwealth seeks to settle a claim against it on

condition that the terms of settlement not be disclosed, with a view to avoiding prejudice in

responding to other similar claims against it.

Jurisdiction of State and Territory courts and tribunals

4.6 An objection on behalf of the Commonwealth to the jurisdiction of a State

or Territory court on the basis that it is not a court authorised under section

56 of the Judiciary Act 1903 is not to be made by the agency without the

approval of the Attorney-General.

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Note The High Court has held that section 56 of the Judiciary Act does not limit the

jurisdiction conferred on State courts by subsection 39(2) of that Act, but enables the

Commonwealth to object to a court proceeding which is not authorised under section 56:

Breavington v Godleman and others (1988) 169 CLR 41. An objection is normally only to

be taken if the Commonwealth is prejudiced by the plaintiff’s choice of court (eg due to

location of witnesses or differences in applicable law).

4.6A The Commonwealth or a Commonwealth agency is not to submit, or object,

to the jurisdiction of a State or Territory tribunal, unless approval has been

given by the Attorney-General for that position to be taken.

Agencies are to receive written legal advice before starting court

proceedings

4.7 An FMA agency is not to start court proceedings unless the agency has

received written legal advice from lawyers whom the agency is allowed to

use in the proceedings indicating that there are reasonable grounds for

starting the proceedings. In urgent cases, an FMA agency may start court

proceedings on the basis of oral legal advice that there are reasonable

grounds for starting the proceedings. Confirmation of that advice is to be

obtained in writing at the earliest opportunity.

Responsibility for litigation

4.8 In addition to the power to issue directions under section 55ZF of the

Judiciary Act 1903, the Attorney-General may issue guidelines governing

the allocation of responsibility for litigation between FMA agencies, and the

handling of litigation where more than one FMA agency may be involved.

5 Use of in-house lawyers for court litigation

5.1 An FMA agency may only use an in-house lawyer to conduct court

litigation as solicitor on the record or as counsel with the approval of the

Attorney-General. Factors relevant to giving approval will include:

(a) whether the agency is able to demonstrate a capacity to conduct the

litigation properly and efficiently

(b) whether the agency is able to conduct the litigation at a lower cost than

using external solicitors, taking into account accrual accounting and,

where relevant, competitive neutrality principles, and

independent of government.

5.2 The use of in-house lawyers may be approved, either in specific cases or

generally, subject to compliance with conditions specified by the

Attorney-General.

6 Engagement of counsel

6.1 Counsel are to be engaged by or on behalf of an FMA agency in accordance

with the Directions on Engagement of Counsel, at Appendix D.

Note For the application of this provision to Australian Government bodies other than

FMA agencies, see paragraph 12.

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6.2 Briefs to counsel in matters covered by the model litigant policy are to

enclose a copy of the Directions on The Commonwealth’s Obligation to Act

as a Model Litigant, at Appendix B, and instruct counsel to comply with the

policy.

7 Public interest immunity

7.1 If a request or demand to provide documents or information in the conduct

of litigation being handled by one agency could give rise to a claim of

immunity on a public interest ground for which another agency has

administrative responsibility (the PII agency), the agency responsible for the

conduct of the litigation is to refer the decision whether to make the claim to

the PII agency or that agency’s Minister.

Note The appropriate PII agency or Minister will vary according to the nature of the

material, and more than one agency or Minister may need to be involved. The following

agencies are commonly involved in a claim for public interest immunity:

(a) the Australian Federal Police for some law enforcement matters

(b) the Attorney-General’s Department (Security and Critical Infrastructure Division) and

the Australian Security Intelligence Organisation for national security matters

Chapter 7 of the Cabinet Handbook), and

(d) the Department of Foreign Affairs and Trade for matters relating to relations with

foreign countries.

For example, in the course of litigation about a contract with a foreign government agency,

a Cabinet document relating to international relations might be identified as relevant to the

proceedings. In such a case, the agency responsible for giving instructions on the litigation

is to refer the document in question to the Departments of the Prime Minister and Cabinet

and Foreign Affairs and Trade for decision about any public interest immunity claim that

might be made.

7.2 If a claim for public interest immunity is being resisted by another party in

litigation, the PII agency is to be responsible for the handling of the claim

after consultation with the agency responsible for the conduct of the

litigation. If a disagreement arises as to the handling of the claim, the matter

is to be referred to the Attorney-General or OLSC.

Note For the application of this provision to Australian Government bodies other than

FMA agencies, see paragraph 12.

8 Reliance on limitation periods

Agencies are to get approval before waiving or agreeing to extend

limitation periods

8.1 A defence based on the expiry of an applicable limitation period is to be

pleaded by an FMA agency, unless approval not to do so is given by the

Attorney-General. Approval will normally be given only in exceptional

circumstances, for example, where the Commonwealth has through its own

conduct contributed to the delay in the plaintiff bringing the claim.

8.2 An application for an extension of a limitation period is to be opposed by

the agency unless approval to consent to the application is given by the

Attorney-General. Approval will normally be given only in exceptional

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circumstances which would justify not pleading a limitation defence or

where it is expected that the application will succeed (in which case not

consenting would be likely to result in unnecessary costs and delay.)

When Attorney-General’s approval is not required

8.3 Although paragraph 8.1 requires an FMA agency to plead a defence based

on the expiry of an applicable limitation period, this does not prevent the

agency from settling a claim involving a limitation period without the

approval of the Attorney-General in the following circumstances:

(a) where legal advice has been obtained recommending settlement of a

claim, based (among other things) on an assessment of the plaintiff’s

prospects of success regarding the limitation period issue, and

(b) to the extent that there are perceived to be weaknesses in the plaintiff’s

position in that regard, these weaknesses are taken into account when

determining an appropriate discount to the offer of settlement.

Meaning of ‘limitation period’

8.4 Reference to the term ‘limitation period’ in paragraphs 8.1 and 8.2 is

intended to cover only the initial commencement of court proceedings

where the court is exercising original jurisdiction. It is not intended to

cover, for example:

(a) time limits applicable to procedural steps in litigation (eg time for

filing a statement of claim or providing discovery)

(b) periods in which to appeal (eg from a single judge of the Federal Court

to the Full Court of the Federal Court), or

decisions.

9 Assistance to Commonwealth employees in legal proceedings

9.1 Financial assistance to a Commonwealth employee for legal proceedings in

which the employee is involved is to be provided in accordance with the

Directions on Assistance to Commonwealth Employees for Legal

Proceedings, at Appendix E.

10 Sharing of advice within Government

Consultation

10.1 If an FMA agency (the requesting agency) wishes to obtain legal advice

(whether from an in-house or external source) on the interpretation of

legislation administered by another agency (the administering agency), the

requesting agency is to provide the administering agency with:

(a) a reasonable opportunity to consult on the proposal to seek advice

(b) a copy of the request for advice

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being finalised, including consultation with the requesting agency’s

legal services provider, as required by the administering agency, and

(d) a copy of the advice.

Exceptions to consultation requirement

10.2 The requesting agency is not required to provide an opportunity for prior

consultation if advice is needed urgently (eg to enable a response to an

urgent request by a Minister or a request arising without notice in

litigation). However, the requesting agency is to consult the administering

agency and copy the request for advice and the advice to the administering

agency as soon as practicable thereafter.

10.3 Prior consultation is not required, and the request for advice and the advice

do not have to be copied to the administering agency, if:

(a) disclosure would constitute a breach of law

(b) a Cabinet, law enforcement or national security matter would be

inappropriately disclosed, or

paragraph 10.2.

Where paragraph 10.3 (a) or (b) is applicable, the requesting agency is to

inform the administering agency that a request for advice covered by

subparagraph 10.3 has been made, and to disclose the substance of advice it

receives to the extent that is possible without disclosing information which

needs to remain confidential.

Where paragraph 10.3 (c) is applicable, the requesting agency is to comply

with any conditions to which the exemption is subject.

10.4 Consultation and disclosure are not required for advice on a routine matter

which does no more than advise on the application of the law to particular

facts, by relying on the settled interpretation of the legislation. Without

limiting the requirement, consultation would, however, be required where:

(a) advice relates to legislative provisions that have not been considered by

the courts, is contrary to existing policy or could raise new policy

issues in respect of the legislation

(b) the matter could create a precedent, or

legislation.

Responsibility of administering agency

10.5 If an administering agency is consulted in accordance with this paragraph, it

is to carefully consider the advice given to the requesting agency, to

determine whether the advice indicates an ambiguity or other issue in the

legislation that should be addressed by remedial action to be taken by the

administering agency (such as proposing a legislative amendment to the

responsible Minister).

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Resolving disagreements about interpretation of legislation

10.6 Any disagreement as to the correct interpretation of legislation is to be

resolved as far as possible by negotiation between the requesting agency

and the administering agency. Issues should be referred to OLSC if further

advice is sought from the Solicitor-General to resolve the matter.

Sharing of advice generally

10.7 The Attorney-General is entitled to obtain access to any legal advice

obtained by the FMA agency (subject to any legislative restriction).

Note Legal professional privilege is not waived by providing advice to the

Attorney-General in accordance with these Directions: see section 55ZH of the Judiciary

Act 1903.

10.8 Where an FMA agency receives legal advice that it considers is likely to be

significant to other agencies, it is to take reasonable steps to make that

advice available to those agencies, subject to paragraph 10.4.

Note 1 The purpose of paragraph 10 is to promote consultation between agencies on the

interpretation of legislation with the aim of reaching, as far as possible, consistency in

statutory interpretation across the Commonwealth. Agencies are not to act in a manner that

may be inconsistent with or undermine Commonwealth policy in respect of a particular

piece of legislation. Concerns about interpretation are to be raised with the administering

agency so that it has the opportunity to consider whether the policy requires change, and

agencies are to seek to minimise cost by first seeing if the administering agency has an

answer to their question rather than commissioning fresh advice.

Note 2 The Administrative Arrangements Orders will not define ‘administering agency’ in

all cases, but will provide the starting point. If a department and one of its portfolio

agencies have agreed that consultation will be with the portfolio agency, it is recommended

that OLSC be notified so that details of those consultation arrangements can be made

available on the OLSC website. It is also recommended that OLSC be notified of

consultation arrangements where departments share policy responsibility.

10.9 The Attorney-General may exempt an agency from compliance with

paragraph 10, or particular requirements in this paragraph.

11 Agency responsibility

11.1 The Chief Executive of an FMA agency is responsible for ensuring that:

(a) the agency’s arrangements for legal services, especially any litigation

for which the agency is responsible, are handled efficiently and

effectively

(b) appropriate management strategies and practices are adopted so as to

achieve compliance with these Directions

(ba) the agency’s legal services purchasing, including expenditure, is

appropriately recorded and monitored and that, by 30 October each

year, the agency makes publicly available records of its legal services

expenditure for the previous financial year

Attorney-General’s Department, private lawyers, counsel or in-house

lawyers) providing legal services to the agency are aware of, and are

required to assist in ensuring that the agency complies with, these

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Directions (including compliance by legal services providers with these

Directions through contractual arrangements wherever possible)

(d) the agency gives reports as soon as practicable to the Attorney-General

or OLSC about any possible or apparent breaches of the Directions by

the agency, or allegations of breaches by the agency of which the

agency is aware, and about any corrective steps that have been taken or

are proposed to be taken, by the agency

(e) any matters required to be approved by the Attorney-General are raised

promptly, and

(f) any other matters of which the Attorney-General or OLSC is required

to be informed are notified promptly.

Note The protection that is to be given to classified material is set out in the Protective

Security Manual (PSM). It is advisable that the agency’s contracts with legal services

providers require the providers to maintain an appropriate level of security for classified

material (including electronic material) that comes into their possession, as well as material

that is subsequently provided by the legal services provider to a third party, in the course of

providing services to the agency. Any questions about the requirements of the PSM are to

be directed, in the first instance, to the Assistant Secretary, Policy and Services Branch,

Protective Security Coordination Centre, Attorney-General’s Department.

11.2 The Chief Executive of an FMA agency is responsible for giving to OLSC,

within 60 days after the end of each financial year, a certificate setting out

the extent to which the Chief Executive believes there has been compliance

by the agency with the Directions. The certificate should:

(a) give details of any apparent or possible breach of the Directions not

previously reported to OLSC

(b) give details of actions taken to address the causes of any breaches of

the Directions during the financial year, and

the Directions.

Part 2 Extended and modified application of the

Directions

11A Third parties

11A.1 An FMA agency is required, when entering into a contract with a third party

that includes a right of subrogation in favour of the third party, to use its

best endeavours to ensure that the contract includes a provision requiring

the third party, and its agents:

(a) to comply with Appendix B of the Directions when undertaking that

litigation on behalf of the Commonwealth, and

(b) to consult with that agency if any matters relevant to paragraphs 2 and

10 of the Directions arise in the course of undertaking that litigation on

behalf of the Commonwealth.

11A.2 The operation of these Directions extends to any legal services which the

FMA agency has the ability to control as a result of an indemnity given to,

or an arrangement made with, another agency, body or person.

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12 Extended application of Directions to non-FMA bodies

12.1 This paragraph deals with the application of the Directions to bodies which

are not FMA agencies.

Obligations of non-FMA bodies

12.2 A non-FMA body which handles claims, or conducts litigation in the name

of, or on behalf of, the Commonwealth, is to comply with the Directions in

respect of such claims and litigation.

12.3 In all other circumstances, a non-FMA body, that is not a government

business enterprise prescribed under the CAC Act or a Corporations Act

company controlled by the Commonwealth, is to:

(a) inform the Attorney-General or OLSC of the details of any litigation

(including threatened or proposed litigation) which gives rise to

constitutional issues and comply with any specific instructions given

by the Attorney-General concerning the conduct of the litigation

(including as to the choice of lawyers to be used and the arguments to

be put on constitutional issues)

(b) inform the Attorney-General or OLSC of any claim or litigation

proposed to be brought against, or involving, another Commonwealth

agency

on The Commonwealth’s Obligations to Act as Model Litigant, at

Appendix B

(d) engage counsel in accordance with the Directions on Engagement of

Counsel, at Appendix D, and

(e) comply with the requirements of paragraph 7 of these Directions,

concerning the handling of claims of public interest immunity.

Attorney-General may make decisions about compliance with

Directions

12.4 In addition, the Attorney-General may decide that a particular body or

person is to comply with some or all of the Directions that apply to FMA

agencies.

12.5 If the Attorney-General makes a decision under paragraph 12.4, the

Attorney-General is to tell the body about the decision.

13 Exemptions from complying with Directions

13.1 The Attorney-General may decide, in relation to a particular FMA agency

or other body, that it:

(a) is not required to comply with some or all of the Directions, or

(b) is to comply with modified obligations.

13.2 If the Attorney-General makes a decision under paragraph 13.1, the

Attorney-General is to notify the agency or body about the decision.

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Part 3 Sanctions for non-compliance

14 Sanctions for non-Compliance

14.1 The Attorney-General may impose sanctions for non-compliance with the

Directions.

Note Examples demonstrating the range of sanctions and the manner in which OLSC

approaches allegations of a breach of the Directions are set out in the Compliance Strategy

for Enforcement of the Legal Services Directions. Complaints alleging a breach of the

Directions may be made to OLSC at olsc@ag.gov.au.

14.2 When entering into a contract for legal services, agencies are to include a

provision stating that the contract includes appropriate penalties in the event

of a breach of the Directions to which the legal services provider has

contributed, including the termination of the contract in an appropriate case.

Part 4 Dictionary

15 Dictionary

In these Directions, the following terms have the stated meanings:

CAC Act means the Commonwealth Authorities and Companies Act 1997.

FMA agency means an agency which is subject to the Financial

Management and Accountability Act 1997.

litigation, unless otherwise indicated, includes proceedings before courts,

tribunals, inquiries and in arbitration and other alternative dispute resolution

processes, and the preparation for such proceedings, and

OLSC means the Office of Legal Services Coordination in the

Attorney-General’s Department, or any person within the Department on

whom the Secretary confers the function of administering these Directions.

General notes

Lawful expenditure

1. Expenditure of public moneys on legal services, in a manner inconsistent with the Directions by an

FMA agency, may constitute a breach of the Financial Management and Accountability Regulations

1997. Those Regulations require that a person to whom they apply must not approve a proposal to

spend public money unless satisfied, after making such enquiries as are reasonable, that the proposed

expenditure is in accordance with the policies of the Commonwealth. The Regulations also require

approval of a proposal to spend money before an FMA agency enters into a contract, agreement or

arrangement involving the expenditure of public money.

Examples of situations which could breach the Regulations include expenditure of public money by an

agency in instructing a lawyer:

(a) to perform tied work - if the lawyer is not authorised to do so

(b) to act in breach of the model litigant obligations

(d) to make a public interest immunity claim in breach of the direction concerning such claims.

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Who can institute proceedings in the name of the Commonwealth

2. If an FMA agency wishes to institute proceedings in the name of the Commonwealth, the

proceedings will need to be instituted by a person appointed by the Attorney-General under section 61

of the Judiciary Act 1903. In these circumstances, if a relevant appointment is not in place, the details

should be forwarded to OLSC to enable the issue of an appointment under section 61 to be referred for

decision by the Attorney-General.

Appointments under section 61 include appointments of chief executives of FMA agencies and senior

Australian Government Solicitor lawyers.

Other relevant rules and policies

3. In addition to these Directions, other rules and policies are relevant for the provision of legal

services, including:

(a) the policy on what legal work is undertaken by the Australian Government Solicitor and the

Attorney-General’s Department on a non-billable basis (information on this policy can be

obtained from OLSC and its website)

(b) the policy on giving indemnities and guarantees by the Commonwealth and its agencies

(information on this policy can be obtained from the Department of Finance and

Administration or OLSC)

operate under the Commonwealth’s self-managed fund for insurable risks, COMCOVER

(information on COMCOVER can be obtained from the Department of Finance and

Administration)

(d) the Parliamentary Entitlements Regulations 1997 which deal with the provision of assistance

to Ministers for legal proceedings (information on these Regulations can be obtained from

OLSC), and

(e) Judiciary Act 1903, section 63, which deals with service of process when the Commonwealth

or a State is a party to a suit.

Directions do not apply in certain circumstances

4. The Directions are not intended to cover the handling of criminal prosecutions and related

proceedings unless expressly referred to.

5. The Directions are not intended to override any legislative requirement or authority concerning an

agency’s functions (in particular, the role of the Director of Public Prosecutions).

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Appendix A Tied areas of Commonwealth legal work

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Appendix A Tied areas of Commonwealth legal

work

Categories of tied work

1 Legal work is tied to the Australian Government Solicitor and the

Attorney-General’s Department if it involves:

(a) constitutional law issues

(b) national security issues, or

(i) legal advice which is to be considered by Cabinet or relied on in

preparing a Cabinet submission or memorandum, or

(ii) legal advice on a legislative proposal to be considered for

adoption by government or on draft legislation for introduction

into Parliament.

Public international law work

2 Public international law work of the following kinds is tied to the

Attorney-General’s Department, the Australian Government Solicitor and

also, in relation to sub-paragraphs (a) to (d), the Department of Foreign

Affairs and Trade.

(a) International litigation and arbitration (ie Government to Government)

This work covers proceedings before the International Court of Justice, a

World Trade Organisation dispute panel or appellate body, an arbitral

tribunal or some other form of internationally constituted tribunal.

(b) Advice involving Australia’s or another country’s obligations under

international law

This work covers requests concerning Australia’s or another country’s

obligations under international law generally or under a particular treaty to

which Australia or the country is a party. It also, more indirectly, covers

requests for advice under legislation which implements a treaty where the

obligations under that treaty are an issue. For example, a request for advice

about whether certain conduct by the Commonwealth is permitted by

legislation which implements a treaty might give rise to a question whether

Australia had met its international law obligations under that treaty.

However, it does not cover advice on procedural aspects of an exercise of

power under the legislation where those procedural aspects are unrelated to

a question of Australia's international law obligations.

This work covers legal advice preparatory to, or in the course of, treaty

negotiations.

Note Australian treaty practice, as reflected in the Department of Foreign Affairs and

Trade manual Negotiation, Conclusion and Implementation of International Treaties and

Arrangements, will be relevant to this category of advice.

Federal Register of Legislative Instruments F2006C00178

Legal Services Directions Schedule

Tied areas of Commonwealth legal work Appendix A

Legal Services Directions 2005

(d) Advice on implementing a treaty (including bilateral agreements)

This work includes advice on changes to legislation and practice necessary

to become a party to a treaty.

(e) Domestic litigation involving a significant public international law

issue

This work covers litigation where a court will or may decide whether

Australia or another country has acted in conformity with its international

law obligations (including as an incidental or indirect aspect of the case).

Litigation involving legislation which implements a treaty will not be tied if

it merely involves interpretation of that legislation or of the treaty for the

purposes of applying that legislation and it does not raise the question

whether Australia has complied with its international obligations.

Note 1 A reference to a ‘treaty’ in this paragraph includes international instruments of less

than treaty status (eg memoranda of understanding between Australia and other countries

and non-binding declarations and recommendations adopted by international

organisations).

Note 2 Litigation referred to in the second sentence of sub-paragraph (e) is to be referred

to OLSC if it raises significant issues as described in paragraph 3.1 of the Directions.

Drafting work

3 Drafting work is tied so that only:

(a) the Office of Parliamentary Counsel is to undertake, or arrange for, the

drafting of government Bills and parliamentary amendments of Bills,

and

(b) the Office of Legislative Drafting and Publishing in the

Attorney-General’s Department is to undertake, or arrange for, the

drafting of:

(i) Regulations

(ii) Ordinances and Regulations of non-self-governing Territories,

and

(iii) other legislative instruments made or approved by the

Governor-General, or published in the Statutory Rules series.

Meaning of ‘tied work’ and ‘tied provider’

3A Work of a kind described in paragraphs 1, 2 or 3 of this Appendix is ‘tied

work’, and legal services providers who, in accordance with those

paragraphs, are permitted to undertake tied work are ‘tied providers’.

Providers other than tied providers may be approved to do tied work

3B The Attorney-General may give approval for a legal services provider other

than a tied provider to undertake tied work. An approval may be subject to

conditions, for example:

(a) that any advice prepared by the provider is to be settled in consultation

with, and reflecting any comments made by, a tied provider, and

(b) that the instructing agency pay the costs of the tied provider to consider

and prepare comments about the advice.

Federal Register of Legislative Instruments F2006C00178

Schedule Legal Services Directions

Appendix A Tied areas of Commonwealth legal work

Legal Services Directions 2005

Briefing counsel and other legal experts

4 Briefing counsel or other legal experts such as academics on constitutional,

national security, Cabinet and public international law work is to be done

through the Australian Government Solicitor, the Attorney-General’s

Department in respect of areas where the Department undertakes tied work

and the Department of Foreign Affairs and Trade in respect of work it

undertakes on public international law.

Categories of work not covered by the tied work rules

5 The tying of constitutional, national security, Cabinet, public international

law and drafting work is not intended to affect:

(a) the role of the Director of Public Prosecutions or any statutory rights

conferred on agencies concerning the conduct of their legal affairs

(b) the in-house work currently undertaken by agencies in the negotiation

of standard bilateral treaties such as double taxation and social security

agreements

use of the agency’s in-house legal area in the performance of that work,

(d) the role of the Solicitor-General.

Note Where an agency in-house legal unit was exempt from the tied work rules in relation

to public international law work under paragraph 5 (b) of the Legal Services Directions

issued in September 1999 because a relevant category of public international law work was

‘currently undertaken’ at the commencement of those Directions, and that work is not

exempt under paragraph 5 (b) of the Legal Services Directions 2005, an exemption may be

sought from the Attorney-General if the agency has recognised expertise in relation to that

category of tied legal work.

Public international law work – further rules

6 The in-house work referred to in clause 5 (b) refers to the in-house

preparation of bilateral agreements on specific matters (eg social security)

in a standard format which has already been the subject of international law

advice from the Office of International Law in the Attorney-General’s

Department, the Australian Government Solicitor or the Department of

Foreign Affairs and Trade. However, it does not extend to agencies using

in-house lawyers to undertake constitutional work or, in the absence of

approval, court litigation.

When to consult with the Office of International Law

7 Where an agency requests advice on a public international law issue from

the Australian Government Solicitor, the agency is to notify the Office of

International Law to ensure that the Office of International Law has the

opportunity to express a view on the matter (whether from a policy or legal

perspective).

Note 1 This requirement is intended to ensure compliance with Australia’s international

obligations and avoid any risk that Australia might take inconsistent positions on

international matters which might arise from portfolio-specific policy approaches.

Federal Register of Legislative Instruments F2006C00178

Legal Services Directions Schedule

Tied areas of Commonwealth legal work Appendix A

Legal Services Directions 2005

Non-tied providers doing tied work are to provide copies of opinions to

OLSC

8 If:

(a) the Attorney-General gives an approval under clause 3B for a provider

other than a tied provider to do tied work, and

(b) in the course of doing the work, that provider prepares an opinion or

advice relating to tied work,

the opinion or advice is to be given to OLSC in an electronically searchable

form.

9 OLSC may give an opinion, which it has received under paragraph 8, to any

tied provider of the relevant category of legal work.

Federal Register of Legislative Instruments F2006C00178

Schedule Legal Services Directions

Appendix B The Commonwealth’s obligation to act as a model litigant

Legal Services Directions 2005

Appendix B The Commonwealth’s obligation to act

as a model litigant

The obligation

1 Consistently with the Attorney-General’s responsibility for the maintenance

of proper standards in litigation, the Commonwealth and its agencies are to

behave as model litigants in the conduct of litigation.

Nature of the obligation

2 The obligation to act as a model litigant requires that the Commonwealth

and its agencies act honestly and fairly in handling claims and litigation

brought by or against the Commonwealth or an agency by:

(a) dealing with claims promptly and not causing unnecessary delay in the

handling of claims and litigation

(b) paying legitimate claims without litigation, including making partial

settlements of claims or interim payments, where it is clear that liability

is at least as much as the amount to be paid

(d) endeavouring to avoid, prevent and limit the scope of legal proceedings

wherever possible, including by giving consideration in all cases to

alternative dispute resolution before initiating legal proceedings and by

participating in alternative dispute resolution processes where

appropriate

(e) where it is not possible to avoid litigation, keeping the costs of

litigation to a minimum, including by:

(i) not requiring the other party to prove a matter which the

Commonwealth or the agency knows to be true, and

(ii) not contesting liability if the Commonwealth or the agency

knows that the dispute is really about quantum

(f) not taking advantage of a claimant who lacks the resources to litigate a

legitimate claim

(g) not relying on technical defences unless the Commonwealth’s or the

agency’s interests would be prejudiced by the failure to comply with a

particular requirement

(h) not undertaking and pursuing appeals unless the Commonwealth or the

agency believes that it has reasonable prospects for success or the

appeal is otherwise justified in the public interest, and

(i) apologising where the Commonwealth or the agency is aware that it or

its lawyers have acted wrongfully or improperly.

Note 1 The obligation applies to litigation (including before courts, tribunals, inquiries,

and in arbitration and other alternative dispute resolution processes) involving

Commonwealth Departments and agencies, as well as Ministers and officers where the

Commonwealth provides a full indemnity in respect of an action for damages brought

against them personally. Ensuring compliance with the obligation is primarily the

responsibility of the agency which has responsibility for the litigation. In addition, lawyers

Federal Register of Legislative Instruments F2006C00178

Legal Services Directions Schedule

The Commonwealth’s obligation to act as a model litigant Appendix B

Legal Services Directions 2005

engaged in such litigation, whether Australian Government Solicitor, in-house or private,

will need to act in accordance with the obligation and to assist their client agency to do so.

Note 2 In essence, being a model litigant requires that the Commonwealth and its

agencies, as parties to litigation, act with complete propriety, fairly and in accordance with

the highest professional standards. The expectation that the Commonwealth and its

agencies will act as a model litigant has been recognised by the Courts. See, for example,

Melbourne Steamship Limited v Moorhead (1912) 15 CLR 133 at 342; Kenny v State of

South Australia (1987) 46 SASR 268 at 273; Yong Jun Qin v The Minister for Immigration

and Ethnic Affairs (1997) 75 FCR 155.

Note 3 The obligation to act as a model litigant may require more than merely acting

honestly and in accordance with the law and court rules. It also goes beyond the

requirement for lawyers to act in accordance with their ethical obligations.

Note 4 The obligation does not prevent the Commonwealth and its agencies from acting

firmly and properly to protect their interests. It does not therefore preclude all legitimate

steps being taken to pursue claims by the Commonwealth and its agencies and testing or

defending claims against them. It does not preclude pursuing litigation in order to clarify a

significant point of law even if the other party wishes to settle the dispute. The

commencement of an appeal may be justified in the public interest where it is necessary to

avoid prejudice to the interests of the Commonwealth or an agency pending the receipt or

proper consideration of legal advice, provided that a decision whether to continue the

appeal is made as soon as practicable. In certain circumstances, it will be appropriate for

the Commonwealth to pay costs (for example, for a test case in the public interest.)

Note 5 The obligation does not prevent the Commonwealth from enforcing costs orders or

seeking to recover its costs.

Merits review proceedings

3 The obligation to act as a model litigant extends to agencies involved in

merits review proceedings.

4 An agency should use its best endeavours to assist the tribunal to make its

decision.

Note The term 'litigation' is defined in paragraph 15 of these Directions in terms that

encompass merits review before tribunals. There are particular obligations in relation to

assisting a tribunal engaged in merits review to arrive at a decision. Agencies should pay

close attention to the legislation under which a tribunal is established, and any practice

directions issued by the tribunal. In the case of the Administrative Appeals Tribunal see in

particular subsection 33(1AA) of the Administrative Appeals Tribunal Act 1975 and the

explanatory memorandum to the Administrative Appeals Tribunal Amendment Bill 2005.

Alternative dispute resolution

5 When participating in alternative dispute resolution, the Commonwealth

and its agencies are to:

(a) participate fully and effectively, and

(b) wherever practicable, ensure that their representatives have authority to

settle the matter, or at least clear instructions on the possible terms of

settlement that would be acceptable to the Commonwealth, so as to

facilitate appropriate and timely resolution of a dispute.

Note Agencies are encouraged to develop dispute management plans addressing the place

of litigation and alternative strategies in addressing disputes.

Federal Register of Legislative Instruments F2006C00178

Schedule Legal Services Directions

Appendix B The Commonwealth’s obligation to act as a model litigant

Legal Services Directions 2005

6 An agency which agrees to participate in an alternative dispute resolution

process is to tell the other party to the process whether or not a

representative attending the process will have the authority to settle the

matter to finality.

Note When participating in alternative dispute resolution processes, regard is still to be

had to the requirements for settling major claims under paragraph 4.4 and Appendix C. In

practical terms, this may mean that a representative attending an alternative dispute

resolution process may not be given authority to settle a matter to finality.

Federal Register of Legislative Instruments F2006C00178

Legal Services Directions Schedule

Handling monetary claims Appendix C

Legal Services Directions 2005

Appendix C Handling monetary claims

1 This policy concerns the handling of monetary claims against the

Commonwealth or an agency, and monetary claims by the Commonwealth

or an agency, other than claims that need to be determined under a

legislative mechanism (for example, a Comcare benefit) or under a

mechanism provided by contract (for example, an arbitration of a disputed

contractual right).

Note An action to enforce a penalty imposed under Commonwealth legislation is not

considered to be a monetary claim for the purposes of Appendix C.

Criteria for settlement

2 Monetary claims covered by this policy are to be settled in accordance with

legal principle and practice, whatever the amount of the claim or proposed

settlement. A settlement on the basis of legal principle and practice requires

the existence of at least a meaningful prospect of liability being established.

In particular, settlement is not to be effected merely because of the cost of

defending what is clearly a spurious claim. If there is a meaningful prospect

of liability, the factors to be taken into account in assessing a fair settlement

amount include:

(a) the prospects of the claim succeeding in court

(b) the costs of continuing to defend or pursue the claim, and

claim (eg a risk of disclosing confidential government information).

3 Settlements for amounts not exceeding $25,000 may be approved by the

Chief Executive of the agency (as defined under the Financial Management

and Accountability Act 1997), or the Chief Executive’s authorised officer,

on the basis of a common sense view that the settlement is in accordance

with legal principle and practice. However, if a claim, together with any

related claim, cannot be settled for $25,000 or less, it is to be treated as a

major claim.

4 Major claims may only be settled if:

(a) written advice is received from the Australian Government Solicitor or

other legal adviser external to the agency that the settlement is in

accordance with legal principle and practice, and

(b) the Chief Executive (or authorised officer) agrees with the settlement.

5 If an agency considers that a claim raises exceptional circumstances which

justify a departure from the normal mechanism for settling a claim, it is to

refer the matter to OLSC. The Attorney-General may permit a departure

from the normal policy, but may impose different or additional conditions

as the basis for doing so.

Federal Register of Legislative Instruments F2006C00178

Schedule Legal Services Directions

Appendix C Handling monetary claims

Legal Services Directions 2005

Release

6 It should ordinarily be a condition of any settlement involving the payment

of money to a claimant that the claimant sign a suitable release and, where

appropriate, an indemnity against claims by third parties that arise from the

event giving rise to the settlement.

6A Paragraph 6 does not apply if the claimant is the Commonwealth.

Federal Register of Legislative Instruments F2006C00178

Legal Services Directions Schedule

Engagement of counsel Appendix D

Legal Services Directions 2005

Appendix D Engagement of counsel

1 The Commonwealth policy in engaging counsel is to seek to rely on its

position as a major purchaser of legal services in agreeing on the level of

fees payable to counsel engaged on behalf of the Commonwealth or its

agencies.

2 Commonwealth agencies and legal service providers are encouraged to brief

a broad range of counsel and, in particular, women. While the selection of

counsel needs to take into account the interests of the Commonwealth in

securing suitable and expert counsel in a particular case, this is not to occur

in a manner which results in a narrow pool of counsel for any particular

category of Commonwealth work.

Application

3 The policy applies to the engagement of counsel by agencies themselves, by

the Australian Government Solicitor, or by private lawyers who are acting

for the Commonwealth or its agencies. The policy also applies to lawyers

who, although not from the bar, are briefed as counsel in lieu of a private

barrister to conduct or advise on litigation for the Commonwealth or its

agencies.

4 The policy applies to briefs to advise and briefs to appear before courts,

tribunals and inquiries. It also applies to the use of counsel to represent the

Commonwealth and its agencies in arbitration and other alternative dispute

resolution processes. Briefs should ordinarily be marked with an hourly rate

up to a maximum daily rate inclusive of conferences, consultations,

preparation and other necessary work. A fee on brief (inclusive of

preparation time) is only to be marked if it is considered more economical

than agreeing to pay a fee based on the appropriate hourly or daily rate for

the counsel.

Bankruptcy

4A A brief issued to counsel is to contain a condition that, in accepting the

brief, counsel is taken to warrant that he or she has not, at any time, been

declared bankrupt, unless counsel advises of any such bankruptcy.

4B Counsel who have been declared bankrupt, and who have been the subject

of an adverse disciplinary finding by a professional body in relation to the

circumstances of that bankruptcy, are only to be engaged as counsel with

the approval of the Attorney-General.

Note OLSC can provide advice on counsel for whom approval is required under

paragraph 4B.

Federal Register of Legislative Instruments F2006C00178

Schedule Legal Services Directions

Appendix D Engagement of counsel

Legal Services Directions 2005

Rules about selection of counsel

4C All barristers are to be selected for their skills and competency

independently of their gender. An agency is to ensure that arbitrary and

prejudicial factors do not operate to exclude the engagement of female

barristers or to limit the range of barristers being considered for the brief.

4D In selecting counsel, all reasonable endeavours are to be made to:

(a) identify all counsel in the relevant practice area

(b) genuinely consider engaging such counsel, and

Note Agencies are encouraged to publish annually, in a manner which does not disclose

the rates paid to individual counsel, the number and gender of counsel engaged on their

behalf, whether engaged directly or through external lawyers, and the comparative value of

the briefing for each gender.

Fees payable to counsel

4E Any agency that proposes to brief a counsel who does not have an approved

rate for performing Commonwealth legal work, is to ask OLSC to approve

an initial rate, even if the agency proposes to brief the counsel at a rate

below the applicable threshold specified in paragraph 5. If OLSC is asked to

approve an initial rate, OLSC is to make a decision about the request within

a reasonable time and tell the agency about its decision as soon as

practicable after the decision is made.

5 Senior counsel are not to be paid a daily rate above $2,400 (inclusive of

GST) without the approval of the Attorney-General. Junior counsel are not

to be paid a daily rate above $1,600 (inclusive of GST) without such

approval. Any out of chamber fee is to be treated as part of the daily rate for

the purpose of considering the appropriateness of that rate. Where an out of

chamber fee is agreed or approved, it is to be marked separately on the

brief.

6 Hourly rates greater than one-sixth of the daily rate are not to be agreed

with counsel unless approved by the Attorney-General.

7 A cancellation fee is to be agreed with counsel only in exceptional

circumstances (eg to cover the possibility of a matter being resolved shortly

before a lengthy trial). Any such fee is to be agreed at the time counsel is

engaged for a trial. A cancellation fee greater than two days of counsel’s

normal Commonwealth rate is to be approved by the Attorney-General

before it is agreed with counsel.

8 Payment of retainers (concerning counsel’s availability for future matters),

both new and renewed, is not ordinarily to be agreed with counsel and, if

considered to be justified, the terms of the agreement are first to be

approved by the Attorney-General.

Federal Register of Legislative Instruments F2006C00178

Legal Services Directions Schedule

Engagement of counsel Appendix D

Legal Services Directions 2005

Approval

9 Unless agreed otherwise by the Attorney-General, requests for approval to

pay counsel amounts higher than the rates referred to in paragraphs 5 and 6,

and approvals required by paragraphs 7 and 8 for cancellation fees and

retainers, are to be made to OLSC. Proposals to pay senior counsel in

excess of $5,000 per day (inclusive of GST) will be referred by OLSC to

the Attorney-General for decision.

10 Approval is to be sought as far as possible in advance of the scheduled date

for the delivery of a brief to counsel. In considering a request to pay counsel

above the specified rate, the following factors will be taken into account:

(a) the special expertise or skill of the counsel who is proposed to be

briefed

(b) the availability of counsel generally to appear in the matter

(d) the specific request of an agency that a particular person be briefed and

the reasons for that preference

(e) the importance of the matter, including any special sensitivity, and

(f) the normal market daily fee at which the relevant counsel is briefed.

11 If approval for a daily fee in excess of $2400 or $1600 (as applicable) has

been given, subsequent approval for using the same barrister at the

approved rate is not required unless, at the time the approval is given, the

fee is designated as a ‘one-off’ rate.

Other matters

12 The fees referred to in paragraph 5 are not to be regarded as the standard or

starting point for fee negotiations. In many cases, particularly in relation to

junior counsel, the normal market rates of counsel may be less, or even

considerably less, than the threshold fees.

13 Counsel are not to be paid more than reasonable costs of accommodation

and travel, taking into account levels applicable to Senior Executive Service

officers in the Australian Public Service. Accommodation and class of

travel is not to be approved so as to increase the approved Commonwealth

daily rate.

Administration of the policy

14 OLSC will normally consult the Australian Government Solicitor, in light

of its experience with the conduct of Commonwealth litigation and with the

engagement of counsel generally, in considering whether a fee in excess of

the limits in paragraph 5 of this Appendix should be approved and in

making recommendations to the Attorney-General in respect of a request to

approve a fee in excess of $5,000.

Federal Register of Legislative Instruments F2006C00178

Schedule Legal Services Directions

Appendix D Engagement of counsel

Legal Services Directions 2005

15 Subject to the availability of counsel at the approved rates, the choice of

counsel is a matter for individual agencies, taking into account any advice

from the solicitors instructed by the agency. However, agencies and their

instructing solicitors are encouraged to inform OLSC, either in general

terms or in relation to a specific matter, if they have any concerns about the

operation of the policy.

16 To facilitate administration, agencies are to provide OLSC, upon request,

with information or access to information about the engagement of all or

certain counsel.

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Legal Services Directions Schedule

Assistance to Commonwealth employees for legal proceedings Appendix E

Legal Services Directions 2005

Appendix E Assistance to Commonwealth

employees for legal proceedings

Application

1 Appendix E concerns the handling of requests for assistance in relation to

legal proceedings (including potential legal proceedings) as well as

inquests, inquiries and subpoenas.

1A Appendix E applies to a request for assistance by a person who, at the time

of the alleged event or occurrence, was:

(a) an official employed in an agency to which the Financial Management

and Accountability Act 1997 applies (an FMA agency employee)

(b) an official employed by an agency that became an FMA agency, or by

a part of an agency that is, at the time that the application is made,

within an FMA agency

member of the Minister’s staff under the Members of Parliament (Staff)

Act 1984 (a MOPS Act employee), or

(d) a person who held a position that would, following the commencement

of the Members of Parliament (Staff) Act 1984, have become subject to

that Act.

2 These Directions do not cover administrative law challenges which do not

include damages claims. The costs of defending administrative law

challenges are paid by the Commonwealth. However, where an

administrative law challenge is coupled with a damages claim, the

Directions apply to the defence of the damages claim.

2A These Directions do not apply to disciplinary proceedings taken against an

FMA agency employee, or a MOPS Act employee, by the employee’s

employing body.

3 Expenditure to assist a Commonwealth employee in respect of activities the

employee undertakes for a Commonwealth authority or company covered

by the Commonwealth Authorities and Companies Act 1997 (in particular,

by being on the board) is to be approved only to the extent that the

employee is not indemnified or insured by the authority or company.

Note See Department of Finance and Administration Finance Circular 1997/19.

General policy

4 The general policy underlying the provision of assistance to employees for

legal proceedings is the prospect of some benefit to the Commonwealth

(which is intended to include the employing agency, even if the agency is

not strictly part of the Commonwealth) as a result of the protection of:

(a) its financial interests (in particular, the avoidance or limitation of the

Commonwealth’s vicarious liability), or

Federal Register of Legislative Instruments F2006C00178

Schedule Legal Services Directions

Appendix E Assistance to Commonwealth employees for legal proceedings

Legal Services Directions 2005

(b) its general interests (in particular, its interest to act properly as an

employer in supporting employees who have acted reasonably and

responsibly in circumstances where the Commonwealth may not be

vicariously liable for their actions).

Criteria for assistance

5 Expenditure should normally be approved to assist an employee who is a

defendant in civil or criminal proceedings if:

(a) the proceedings arose out of an incident that:

(i) in relation to an FMA agency employee - relates to their

employment with the employing agency, or

(ii) in relation to a MOPS Act employee - relates to the performance

(or non-performance) of their duties assisting the Minister in

performing ministerial duties, and

(b) the employee acted reasonably and responsibly.

6 The criteria in paragraph 5 (b) do not preclude the provision of assistance

under the Directions to an employee who has acted, or is alleged to have

acted, negligently (ie failed to exercise the legal standard of ‘reasonable

care’ owed in the circumstances). Rather, the criteria are intended to

preclude the provision of assistance in circumstances where the

Commonwealth is likely to seek contribution or indemnity from the

employee if the Commonwealth were itself sued in relation to the same

matter. A decision to seek contribution or indemnity will normally be

appropriate only where the employee’s conduct involved serious or wilful

misconduct or culpable negligence.

7 If it is not clear whether the employee has acted reasonably and responsibly,

it may be appropriate to defer a decision on assistance until the conclusion

of the proceedings, or to agree to fund the employee’s defence but to defer a

decision on whether to fund any costs or damages payable to another party

by the employee until after the facts are ascertained, for example, by a

court. However, expenditure is not to be approved to assist an employee for

proceedings arising out of a motor vehicle incident where the employee’s

liability is insured or where the employing agency considers that the

employee’s liability should reasonably have been insured (in particular,

where the employee has received an allowance that includes an insurance

component).

Basis for approving indemnification of employees against costs or

damages

8 The indemnification of an employee against any costs or damages payable

to another party by the employee (including as a result of agreeing to a

reasonable settlement) in civil proceedings is only to be approved on

condition that the employee has agreed that the employee’s defence will be

controlled by the Commonwealth and that the employee will provide all

assistance required by the Commonwealth in the conduct of the defence.

Federal Register of Legislative Instruments F2006C00178

Legal Services Directions Schedule

Assistance to Commonwealth employees for legal proceedings Appendix E

Legal Services Directions 2005

8A The indemnification of an employee against costs incurred in criminal

proceedings against the employee and any penalty payable by the employee

as a result of those criminal proceedings is not to be conditional upon that

employee agreeing that the employee’s defence will be controlled by the

Commonwealth. However, an indemnity may be expressed to be subject to

the condition that it extends only to expenses to which the agency gives

approval.

9 Indemnification may be refused if an employee has failed to notify the

employing agency of the proceedings within a reasonable time of becoming

aware of them and the delay may prejudice the Commonwealth’s position.

10 Payment of any amount by way of assistance may nevertheless be refused if

assistance is not provided as required by paragraph 8 of this Appendix.

Level of assistance

11 The assistance may involve approval to pay:

(a) the costs of an employee’s legal representation or related costs of the

employee’s involvement in the proceedings (for example, to travel to

attend the proceedings)

(b) any damages and legal costs awarded against the employee

proceedings, and

(d) a fine or penalty imposed on the employee.

11A Unless the approval expressly applies to an appeal or consideration of a

possible appeal, a request for approval to give assistance is not to be taken

as applying to an appeal or consideration of a possible appeal.

11B Where the approval given under paragraph 11 extends to an appeal, that

approval may be revoked by notice given to the employee.

12 Approval of expenditure for an employee’s legal representation, for related

costs or for legal costs payable by the employee to another party is only to

be given for an amount that is reasonable, having regard to the nature of the

matter. In particular, payments for counsel are to be made in accordance

with the Directions on Engagement of Counsel, at Appendix D. The

employing agency will need to monitor the conduct of the proceedings to

ensure that the employee’s costs of legal representation and other related

costs and the Commonwealth’s possible ultimate exposure to liability are

within reasonable limits. In addition, the agency is to take appropriate steps

to satisfy itself that any legal costs or damages payable by the employee to

another party are reasonable.

Note Even if there is no requirement to obtain legal advice in relation to a request for

assistance, it may be appropriate in particular cases for an agency to do so. In particular,

this may be desirable to ensure that Commonwealth payments for an employee’s legal

representation are reasonable in the circumstances. Obtaining legal advice in appropriate

cases may enable the agency to discharge its obligations under section 44 of the Financial

Management and Accountability Act 1997.

Federal Register of Legislative Instruments F2006C00178

Schedule Legal Services Directions

Appendix E Assistance to Commonwealth employees for legal proceedings

Legal Services Directions 2005

13 Approval to pay assistance in relation to the defence of an indictable

offence is to be limited initially to the preparation and conduct of committal

proceedings.

14 Approval to pay assistance in the form of a fine or penalty imposed or costs

awarded against the employee in criminal proceedings is not to be approved

until the fine or penalty is imposed or the costs are awarded.

15 Any settlement for which assistance is given under paragraph 10 (c) above

is to be in accordance with the Directions on Handling monetary claims, at

Appendix C.

Note The legal advice obtained by the agency in respect of the settlement of a major claim

under this policy may be the same advice as is provided to the employee by their legal

adviser. (However, the agency may nevertheless wish to obtain separate legal advice in

some cases.)

Inquests and inquiries

16 Expenditure may be approved for an employee to be legally represented in

connection with an inquest or inquiry and other costs (eg travel) related to

the inquest or inquiry if this is in the interests of the Commonwealth and:

(a) in relation to an FMA Agency employee - relates to their employment,

(b) in relation to MOPS Act employee - relates to the performance (or

non-performance) of their duties assisting the Minister in performing

ministerial duties.

Approval of expenditure is only to be given for an amount that is

reasonable, having regard to the nature of the inquest or inquiry.

16A Expenditure may only be approved to a challenge to the validity, or

conduct, of an inquiry, with the approval of the Attorney-General.

Note Applications seeking the approval of the Attorney-General under clause 16A should,

in the first instance, be referred to OLSC.

Assistance to employees for subpoenas

17 Expenditure may be approved for the costs of legal representation and other

related costs in responding to a subpoena:

(a) in relation to an FMA agency employee - relating to their employment,

(b) in relation to a MOPS Act employee - relating to the performance (or

non performance) of their duties assisting the Minister in performing

ministerial duties.

The approval is only to be given for an amount that is reasonable, having

regard to the nature of the subpoena.

18 A decision to provide assistance is to be made subject to the condition that

the Commonwealth is to be consulted in relation to disclosure or

non-disclosure of Commonwealth documents and information to ensure that

an appropriate position can be taken.

Federal Register of Legislative Instruments F2006C00178

Legal Services Directions Schedule

Assistance to Commonwealth employees for legal proceedings Appendix E

Legal Services Directions 2005

Assistance to employees as plaintiffs

19 Except in the case of actions for defamation, expenditure to assist an

employee to institute proceedings in a matter arising from their employment

may be approved where this is in the interests of the Commonwealth. For

example, it may be appropriate to assist an employee to seek a restraining

order against a person arising from alleged harassment in the workplace.

20 Expenditure is not to be approved to assist an employee to institute

proceedings for defamation arising in the course of the performance of their

duties (either for representation or the payment of legal costs). Similarly,

assistance is not to be provided for any other action relating to alleged

defamation, such as assistance to uphold a person’s reputation, legally

challenge comments damaging to a person’s reputation, or in obtaining an

apology (as distinct from a letter merely seeking to correct the record). The

policy is the same even if the employee offers to pay to the Commonwealth

any damages which they may receive. (Funding defamation proceedings

could give rise to a public perception that the Government was seeking to

prevent legitimate criticism.)

Who makes the decision to assist

21 A decision whether to provide assistance to an employee for legal

proceedings is normally a matter for the employing agency. However,

where the request for assistance is made by the Chief Executive of an

agency (as defined under the Financial Management and Accountability Act

1997) the decision is to be made by the responsible Minister. If it is

inappropriate for the Minister or the Chief Executive to make a decision on

assistance because of their involvement in the proceedings, the request is to

be referred to the Attorney-General to enable a decision to be made on how

the matter is to be handled.

21A A decision whether to provide assistance to an MOPS Act employee is to be

made by the Special Minister of State after consultation with the

Attorney-General.

Legal representation

22 If an employee has been indemnified for any costs or damages payable in

civil proceedings, and the Commonwealth is also a party to the proceedings,

the solicitors engaged to represent the Commonwealth are also to be

engaged to represent the employee. (This will save on legal costs and assist

in the proper conduct of the proceedings, while the agreement required

under paragraph 8 will avoid a conflict of interest arising.)

23 If a decision on assistance has been partially or totally deferred, the

employee and the agency are to have separate legal representation. If the

employing agency has agreed to pay the cost of the employee’s legal

representation, the Directions on Engagement of Counsel, at Appendix D,

apply. If the employing agency provides a full indemnity, the Directions on

The Commonwealth’s obligation to act as a model litigant, at Appendix B,

apply.

Federal Register of Legislative Instruments F2006C00178

Schedule Legal Services Directions

Appendix E Assistance to Commonwealth employees for legal proceedings

Legal Services Directions 2005

Sensitive and exceptional cases

24 Any request for assistance which raises sensitive legal, political or policy

issues is to be reported to OLSC as soon as possible in writing by the

employing agency. The requests are not to be approved without consultation

with OLSC.

25 If an agency considers that a request raises exceptional circumstances which

justify a departure from the normal policy, it is to refer the matter to OLSC.

The Attorney-General may permit a departure from the normal policy, but

may impose different or additional conditions as the basis for doing so.

Note 1 Expenditure of public moneys in a manner inconsistent with this policy by an

agency covered by the FMA Act may constitute a breach of the Regulations under that Act.

The Regulations require that a person to whom they apply must not approve a proposal to

spend public money unless satisfied, after making such enquiries as are reasonable, that the

proposed expenditure is in accordance with the policies of the Commonwealth. (The

Regulations also require approval of a proposal to spend money before an FMA agency

enters into a contract, agreement or arrangement involving the expenditure of public

money.)

Note 2 In addition to the assistance in relation to legal proceedings that may be provided

to employees under this policy, other assistance may also be available. Some examples are

set out below.

(a) Section 73 of the Public Service Act 1999 enables payments to be made to persons in

relation to Commonwealth employment. The equivalent power in the Public Service

Act 1922 was rarely used, but section 73 provides a discretion to enable the

reimbursement of legal costs incurred by staff in the course of, or in connection with,

their employment in exceptional circumstances.

(b) The Guidelines for the Provision of Financial Assistance for Legal Costs before

Commissions and Inquiries enable payments to be made in accordance with the criteria

set out in the Guidelines. The Guidelines are administered by the Legal Assistance

Branch in the Attorney-General’s Department and apply where the Attorney-General

has Ministerial responsibility for the subject-matter of the Commission or inquiry.

(Where the Attorney-General does not have this responsibility, assistance may be

available from the responsible Minister.) Specific guidelines have also been approved

for certain Commissions.

enables financial assistance for legal costs and related expenses to be given to an

employee in various circumstances where no other scheme is available. Funding in

respect of proceedings brought by or against the employee may be provided, in

accordance with the criteria specified in the guidelines for the Scheme.

Federal Register of Legislative Instruments F2006C00178

Notes to the Legal Services Directions 2005

Table of Instruments

Legal Services Directions 2005

Notes to the Legal Services Directions 2005

Note 1

The Legal Services Directions 2005 (in force under section 55ZF of the Judiciary Act

1903) as shown in this compilation is amended as indicated in the Tables below.

Table of Instruments

Title Date of FRLI

registration

Date of

commencement

Application,

saving or

transitional

provisions

Legal Services Directions 2005 1 Feb 2006 (see

F2006L00320)

1 Mar 2006

Legal Services Amendment

Directions 2006 (No. 1)

31 Mar 2006 (see

F2006L00961)

3 Apr 2006 —

Federal Register of Legislative Instruments F2006C00178

Notes to the Legal Services Directions 2005

Table of Amendments

Legal Services Directions 2005

Table of Amendments

ad. = added or inserted am. = amended rep. = repealed rs. = repealed and substituted

Provision affected How affected

Schedule

Part 1

Para. 3.2 ............................. ad. 2006 No. 1

Note to para 4.1 .................. rep. 2006 No. 1

Notes 1, 2 to para. 4.1......... ad. 2006 No. 1

Para. 4.5A........................... ad. 2006 No. 1

Note 1 to para. 4.5A............ rep. 2006 No. 1

Para. 10.5 ........................... am. 2006 No. 1

Note 2 to para. 10.8 ............ rs. 2006 No. 1

Part 2

Para. 12.1 ........................... am. 2006 No. 1

Para. 12.3 ........................... am. 2006 No. 1

Appendix A

Note to para. 5 .................... ad. 2006 No. 1

Note to para. 6 .................... rep. 2006 No. 1

Note 2 to para. 7 ................. rep. 2006 No. 1

Para. 9 ................................ ad. 2006 No. 1

Para. 10 .............................. rep. 2006 No. 1

Appendix B

Notes 1, 2 to para. 5 ........... rep. 2006 No. 1

Note to para. 5 .................... ad. 2006 No. 1

Para. 6 ................................ ad. 2006 No. 1

Appendix C

Note to para. 1 .................... ad. 2006 No. 1

Para. 6A.............................. ad. 2006 No. 1

Para. 7 ................................ rep. 2006 No. 1

Federal Register of Legislative Instruments F2006C00178