Government Response to ALRC Judicial Impartiality Recommendations

Watch the Attorney-General deliver the Australian Government’s response to the ALRC’s final report and recommendations in the Judicial Impartiality Inquiry, followed by reflections on different aspects of the report by three members of the Inquiry’s Advisory Committee.

The ALRC Report, Without Fear or Favour: Judicial Impartiality and the Law on Bias (Report 138, 2021) was tabled in Parliament by the Attorney-General of Australia, the Hon Mark Dreyfus KC MP on 2 August 2022
The report makes 14 recommendations to promote and protect judicial impartiality and public confidence in the Commonwealth judiciary.

Judicial Impartiality eNews

27 October 2022

Government Response to ALRC Judicial Impartiality Recommendations

Watch the Attorney-General deliver the Australian Government’s response to the ALRC’s final report and recommendations in the Judicial Impartiality Inquiry, followed by reflections on different aspects of the report by three members of the Inquiry’s Advisory Committee.

The ALRC Report, Without Fear or Favour: Judicial Impartiality and the Law on Bias (Report 138, 2021) was tabled in Parliament by the Attorney-General of Australia, the Hon Mark Dreyfus KC MP on 2 August 2022
The report makes 14 recommendations to promote and protect judicial impartiality and public confidence in the Commonwealth judiciary.

WEBINAR

Legislation Renovation: What Interim Report B means for you

Re-designing, Renovating and Renewing the Legislative Framework for Corporations and Financial Services

Wednesday 16 November 2022 at 1.00pm AEDT | 12.00pm AEST

Join the ALRC to examine Interim Report B and its proposed legislative model. Hear about the research and novel data analysis underpinning the ALRC’s most recent report into simplifying the legislative framework for corporations and financial services legislation.

Ask questions, as the panel outlines the ALRC’s proposed legislative model for Chapter 7 of the Corporations Act, which could produce a more user-friendly legislative framework for financial services.

Second interim report proposes a simpler model for financial services legislation

Interim Report B contains proposals for an alternative legislative model that aims to be more coherent and principled, to accommodate change, and to make the law easier to navigate. The ALRC’s proposed legislative model combines existing legislative tools with a more principled approach to legislative design. The ALRC anticipates the reform ideas in Interim Report B would offer considerable benefits to consumers, industry, and regulated entities with a shorter, clearer, and more navigable legal framework that should significantly reduce compliance costs.

Interim Report B contains 6 recommendations, 16 proposals, and 2 questions.

The ALRC is seeking submissions from the public in response to the proposals and questions by 30 November 2022. Submissions and further consultations will help the ALRC to formulate its ultimate recommendations at the conclusion of the Inquiry.

LATEST BACKGROUND PAPER

New Business Models, Technologies, and Practices (FSL7)

ICOs, DAOs, DLT and crypto — with such fast-moving technology, how can the law keep up?

This Paper examines the regulation of new business models, technologies, and practices.

Inquiry Background Papers

The ALRC has published Background Papers which aim to provide a high-level overview of key principles and research on topics of relevance to the Financial Services Legislation Inquiry.

• Initial Stakeholder Views (FSL1)
• Complexity and Legislative Design (FSL2) 
• Improving the Navigability of Legislation (FSL3)
• Historical Legislative Developments (FSL4)
• Risk and Reform in Australian Financial Services Law (FSL5)
• Reflecting on Reforms – Submissions to Interim Report A (FSL6)

Pressed for time?

Take a few minutes to read Dr William Isdale & Christopher Ash’s article on the Interim Report B:

“If Australia’s corporations and financial services statutes were likened to a house, it would be a large and disordered one. A house in which new annexes have been added with little thought to overall design, and in which objects are scattered and hidden, with little regard to how they may be found in the future. In short, a house that is thoroughly disordered. A house that needs re-design and serious tidying.”

Re-designing, Renovating and Renewing the Legislative Framework for Corporations and Financial Services

Wednesday 16 November 2022 at 1.00pm AEDT | 12.00pm AEST

In daily life, it helps if you know where to find things. The same is true of the law.

Join the ALRC to examine Interim Report B and its proposed legislative model. Hear about the research and novel data analysis underpinning the ALRC’s most recent report into simplifying the legislative framework for corporations and financial services legislation.

Ask questions, as the panel outlines the ALRC’s proposed legislative model for Chapter 7 of the Corporations Act, which could produce a more user-friendly legislative framework for financial services.

Topics of discussion include:

• What goes where (and why) in the legislative hierarchy?
• Who makes the law, and how can they make it easier to find?
• Who should create offences and set penalties?

The panel will also foreshadow key questions to be addressed in Interim Report C, focused on how Chapter 7 of the Corporations Act could be restructured or reframed to simplify the law.

Chair:

• Dr Andrew Godwin, Special Counsel, ALRC

Panel:

• Christopher Ash, Principal Legal Officer (A/g), ALRC
• Cindy Davies, Legal Officer, ALRC
• Dr William Isdale, Senior Legal Officer, ALRC

Submit your questions to the panel on registration or via [email protected].

Monday 5 December 2022 at 5.00pm AEDT
Federal Court of Australia, 305 William Street, Melbourne, or via live streaming

This annual lecture celebrates the law reform legacy of the Hon Michael Kirby AC CMG both as the inaugural Chairman of the ALRC and as one of Australia’s leading jurists.

The 2022 keynote address will be delivered by the Attorney-General of Australia, the Hon Mark Dreyfus KC MP.

As the inaugural Chairman of the ALRC from 1975 until 1984, Michael Kirby laid the foundation for the Commission’s community consultative approach to law reform that continues today. Those consultative processes are recorded in the photos that line the walls of the ALRC office of the community circles undertaken on Country as part of the Recognition of Aboriginal Customary Laws (ALRC Report 31).

This event will also provide the opportunity to formally thank outgoing ALRC Commissioner, the Hon Justice John Middleton AM, for his significant contributions to law reform. Justice Middleton was first appointed as a part-time Commissioner in 2012 and has provided invaluable expertise and guidance to numerous ALRC Inquiries over the last ten years.

Attendance available in person in Melbourne, or via live streaming. 

Please note that due to a last minute commitment interstate the Attorney-General will be appearing virtually.

For any queries regarding this event, please contact: [email protected].

Dr William Isdale and Christopher Ash

If Australia’s corporations and financial services statutes were likened to a house, it would be a large and disordered one. A house in which new annexes have been added with little thought to overall design, and in which objects are scattered and hidden, with little regard to how they may be found in the future. In short, a house that is thoroughly disordered. A house that needs re-design and serious tidying. 

Today, the ALRC launches Interim Report B as part of its Review of the Legislative Framework for Corporations and Financial Services Regulation. The report focuses on the role of legislative design and hierarchy in ensuring that the law is coherent and navigable, while remaining flexible enough to meet future needs. If implemented, the proposals would ensure that relevant legislation adopts a more rational and navigable architecture — so that our house of law remains habitable into the future.  The key focus of some proposals is Chapter 7 of the Corporations Act (concerning financial services), but many of the proposals could be applied more broadly, and others are general in nature.

Stakeholders are invited to provide feedback on the proposals and questions in Interim Report B by 30 November 2022.

The current problem

Over several decades, corporations and financial services legislation has developed in an ad hoc manner. Amendments spurred by crises, and schemes underpinned by differing approaches to regulation (from the pithy and principled to the painfully prescriptive), have slowly accumulated. The law as it stands today is the work of many architects, each following different plans.

Unfortunately, this history means that the law today does not reflect any single design philosophy. It is disorganised, unwieldy, incoherent, and difficult to navigate (let alone comprehend). For example, core obligations are currently scattered across different layers of the legislative hierarchy – the Act, regulations, and other legislative instruments. Little-known regulations or instruments sometimes provide for hefty terms of imprisonment, but are difficult to find or understand. The Act itself, far from covering only core principles, is stuffed full of prescriptive minutiae (including more than 96,000 words on the topic of disclosure alone).

As a result, the current law is unnecessarily complex, undermining the likelihood that its substance and intent will be understood and followed. As the ALRC has previously observed:

Complexity matters because it makes the law difficult to understand. In turn, this makes it harder for consumers and their advocates to know their rights and be able to exercise them; for practitioners to be able to advise their clients confidently; for regulated entities to know how to comply with the law; and for regulators to enforce the law.

In the ALRC’s view, the introduction of a more rational legislative design and hierarchy is key to resolving much of the byzantine complexity that currently afflicts corporations and financial services law. While fixing this problem will be no small task, it can be undertaken in a staged approach — one room at a time. Without change, the law is on track for even greater complexity and incomprehensibility. It is time to put our house in order.

What goes where (and why)

Everyone knows that rooms should serve a purpose, and that it doesn’t make sense to put the stovetop in the bathroom or the bathtub in the kitchen. In other words, a plan as to what goes where, and why, is essential in matters of design. The ALRC proposes such a plan for key financial services legislation, in which the law would be located in:

• the Act;
• a Scoping Order; and
• thematically consolidated rules.

Just as different tradespeople work together to produce a structurally sound house, the ALRC’s model ensures that multiple law-makers — Parliament, the Minister, and ASIC — use the right tools to produce coherent and navigable laws.

Under the ALRC’s proposed model, Parliament would continue to set the core policy of the regulatory regime in the Corporations Act. The Act should establish the broad parameters and key objectives of regulation, providing a clear picture of what the law requires in broad outline. To maintain transparency and democratic legitimacy, all significant criminal offences and civil penalties should be in the Act. By principally containing matters of core policy and principle, the Act would be flexible enough to meet the needs of new situations (supplemented with detail provided by the other layers of the hierarchy). The Act should not be filled with prescriptive detail, as it currently is.

A Scoping Order would contain the vast majority of exclusions and exemptions from the Act, and other detail that helps to set the Act’s scope. Currently, exclusions and exemptions are spread across numerous locations, and are often expressed in tediously intricate ways. For example, hundreds of legislative instruments create bespoke laws for certain entities by ‘notionally amending’ the Corporations Act. The resulting labyrinth — and the onerous expectation it places on readers to ‘piece together’ the law — is inconsistent with the rule of law ideal that the law should be accessible and knowable. In comparison, a Scoping Order would provide a single and clearly identifiable ‘home’ for exclusions, exemptions, and other detail defining the Act’s scope.

Finally, to the extent further prescriptive detail may be necessary, it can be provided by rules in thematically consolidated legislative instruments — or ‘rulebooks’. Rulebooks would be readily adaptable to meet the needs of changing circumstances, and organised by topic to ensure navigability. Rules would contain prescriptive detail that is consistent with, and controlled by, the overarching principles in the Act. For example, the Act would contain a core obligation to provide appropriate disclosure before issuing certain products, while a disclosure rulebook may descend to the level of page length, presentation, and other specifics. Rulebooks organised by theme would reduce the number of places a person needs to look to find the law.

As experience teaches, it is easier to find things if they are put where you expect to find them. Shoes are best placed on a shoe-rack and keys put in a drawer. Frequently used appliances are best located on a bench, with crockery and utensils stored in drawers organised by theme or function. The ALRC’s proposed legislative model aims to bring a similar logic to financial services legislation.

Putting (and keeping) things in order

The ALRC’s legislative design proposals are complemented by a range of measures designed to put, and keep, our law in proper order. Broadly, these relate to:

• how the legislative hierarchy should be used (including processes for the making of delegated legislation); and
• the need for a more general tidying-up of legislation, including through fixing mistakes and infelicities, and removing redundant provisions.

These measures reflect the desirability of legislative stewardship, in which there is a long-term focus on the care and maintenance of the law.

Making better use of the legislative hierarchy

In the ALRC’s proposed model, delegated legislation adds flesh to the bones of the core regulatory regime. Delegated law-making is both necessary and beneficial, but may lack the same level of democratic accountability as laws enacted by Parliament. Given the ever-increasing volume and significance of delegated law-making, it should be guided by sound principles and subject to appropriate review.

The ALRC proposes that consolidated and improved guidance on using the legislative hierarchy would help legislative designers create better legislation. Draft guidance developed by the ALRC would, if implemented, help lawmakers determine ‘what goes where’, and how powers to create delegated legislation should be expressed. Further, the ALRC has suggested improvements to the processes for making delegated legislation — for example, requiring consultation with an expert Advisory Committee to promote its quality and appropriateness; and requiring periodic sunsetting, to help ensure it remains fit for purpose.

Tidying-up the existing stock of legislation

The existing stock of corporations and financial services legislation needs substantial tidying-up. Over time, countless errors and infelicities have crept in. For example, the ALRC has identified over 100 spent provisions and cross-references to repealed provisions. Other examples include two sections numbered 5C.2 (in Part 5C of Sch 10A of the Corporations Act), and multiple references to disclosure for ‘managed investment schemes’ in Ch 6D of the Corporations Act, despite the removal of such schemes from that chapter in 2004. Existing processes for repealing redundant provisions, or for engaging in other forms of legislative ‘tidying-up’, are not keeping pace with legislative change. As Simoes da Silva and Isdale have observed, this is a house of law in which:

Lawyers are understandably scared of opening the cupboards. Things will fall out, or be near impossible to find. We have stuffed things in every nook and cranny for years, only rarely bothering to clean our house out.

The ALRC proposes a program of tidying-up that includes the identification and repeal of spent transitional provisions and instruments, redundant definitions, references to repealed provisions, and redundant regulation-making powers. Further, there is a need to fix unclear and incorrect provisions, and various outdated notes and references. These steps should be accompanied by measures designed to prevent the accumulation of such provisions in the future.

Perhaps most importantly, there is a need to make our law simpler. A key step to achieving this would be the removal of ‘notional amendments’ as a form of law-making — which the ALRC’s proposed legislative model seeks to achieve — and the transposition of notional amendments into textual amendments where possible. Currently, over 1,200 distinct notional amendments affect more than 600 provisions in the Corporations Act and Corporations Regulations. Instruments containing notional amendments make changes to the law without those changes being visible on the face of the legislation. Piecing together this puzzle is an enormous challenge and cost for business, legal professionals, and other users of legislation.

Conclusion

The ALRC’s latest report makes the case that Australia’s corporations and financial services legislation would benefit from a consistent design and hierarchy, and from substantial tidying-up. In short, that we might embrace a bit more minimalism, relocate some of our clutter, and throw out the broken toys and scattered pizza boxes. If implemented, the ALRC’s proposals would make our house of law much more inviting, for all those required to visit.

 To learn more, please download the ALRC’s Interim Report B (in both summary and complete forms). The ALRC welcomes submissions in response by 30 November 2022. 

Today the Australian Law Reform Commission’s (ALRC’s) second Interim Report in its three year review to reduce complexity in corporations and financial services legislation was tabled in Parliament by the Attorney-General of Australia, the Hon Mark Dreyfus KC MP.

Interim Report B contains proposals for an alternative legislative model that aims to be more coherent and principled, to accommodate change, and to make the law easier to navigate.

The ALRC’s proposed legislative model combines existing legislative tools with a more principled approach to legislative design.

The ALRC anticipates the reform ideas in Interim Report B would offer considerable benefits to consumers, industry, and regulated entities with a shorter, clearer, and more navigable legal framework that should significantly reduce compliance costs.

Interim Report B contains 6 recommendations, 16 proposals, and 2 questions.

The ALRC is seeking submissions from the public in response to the proposals and questions by 30 November 2022. Submissions and further consultations will help the ALRC to formulate its ultimate recommendations at the conclusion of the inquiry.

To demonstrate the potential for substantial reduction in the length and complexity of financial services regulation the ALRC has also published Prototype Legislation. A 66% reduction in length is achieved when the proposed model is applied to select parts of the Corporations Act.  That is a reduction of more than 24,000 words. Adding delegated legislation, the ALRC’s Prototype Legislation is one third shorter than the current legal regime for financial services.

These reductions can be achieved without changing the substantive effect of the law — there is no diminution of existing consumer protections under the ALRC’s legislative model. At the same time, the proposed model is no less flexible and enables tailoring for particular industry sectors.

The ALRC’s proposed legislative model is made up of three elements:

• a de-cluttered Corporations Act, containing key obligations and offences;
• a Scoping Order, containing exclusions and exemptions; and
• thematic rulebooks, which enable the prescriptive detail to organised in a more coherent and navigable way.

Interim Report B demonstrates that many aspects of existing complexity in the legal regime for corporations and financial services are unnecessary. The ALRC’s proposals seek to promote the rule of law — the law should be accessible and knowable.

President of the ALRC, the Hon Justice SC Derrington, said the groaning complexity in the law regulating corporations and financial services comes at a significant cost to industry and ultimately consumers.

“That complexity is steadily increasing — the Corporations Act has grown 597 pages since the ALRC’s Inquiry commenced.”

“To be fit for purpose, the legislative framework must reflect the dynamic nature of the financial services sector and its significant contribution to the Australian economy. In addition, the regulatory framework must meet the needs of consumers of financial products and services trying to understand their legal entitlements,” Justice Derrington said.

The Inquiry is part of the Government’s response to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry released in February 2019. A third interim report is due in August 2023, with the final report due by 25 November 2023.

ENDS

Financial Services Legislation: Interim Report B (ALRC Report 139) and Summary Report: https://www.alrc.gov.au/publication/fsl-report-139/

Financial Services Legislation Inquiry: https://www.alrc.gov.au/inquiry/review-of-the-legislative-framework-for-corporations-and-financial-services-regulation/

Financial Services Legislation Inquiry Terms of Reference: https://www.alrc.gov.au/inquiry/review-of-the-legislative-framework-for-corporations-and-financial-services-regulation/terms-of-reference/

Further information on the work of the ALRC:  https://www.alrc.gov.au/

Download Media Release >>

In September 2022, 26 judges of State and Federal Courts attended a cultural immersion program in the Kimberley. ALRC President, the Hon Justice SC Derrington AM, joined judges from across Australia to gain greater knowledge of Aboriginal cultures, history and languages.

The program was hosted by the University of Notre Dame Nulungu Research Institute, a Kimberley-based organisation of Indigenous and non-Indigenous researchers.

Justice Derrington said that cross-cultural education is critical for upholding judicial impartiality and public confidence in it.

“Programs such as this provide exceptional opportunities to better understand Aboriginal and Torres Strait Islander peoples’ experiences and perspectives, providing an invaluable reference for judicial officers in potential court interactions,” Justice Derrington said.

The ALRC made recommendations in its recent Judicial Impartiality Inquiry regarding the importance of cross-cultural judicial education (see Chapter 12). Attendance at this immersion program aligns with recommendations made by the ALRC to develop a structured and ongoing program for judges which is led by Aboriginal and Torres Strait Islander people and organisations (see Recommendation 10). This built on similar recommendation made by a number of previous inquiries, including the Royal Commission into Aboriginal Deaths in Custody in 1991.

Watch more on the program documented by the WA District and Supreme Court:  https://www.supremecourt.wa.gov.au/T/transcripts_video_2015_2019.aspx

ABC News article: Judges go bush to learn about Indigenous culture, with aim to deliver fairer justice in courts

Download Without Fear or Favour: Judicial Impartiality and the Law on Bias (ALRC Report 138)

The Australian Law Reform Commission (ALRC) welcomes today’s announcement by the Attorney-General of Australia, the Hon Mark Dreyfus KC MP committing the Government to implementing all three recommendations made to it in Without Fear or Favour: Judicial Impartiality and the Law on Bias (Report 138, 2021).

The Attorney-General confirmed that the Government accepted in principle:

• Recommendation 5 – establishment of a Federal Judicial Commission;
• Recommendation 7 – development of a more transparent process for appointing federal judicial officers on merit involving publication of criteria for appointment and public calls for expressions of interest, and expressed the Government’s commitment to promoting diversity in the judiciary;
• Recommendation 8 – collection and reporting of statistics on judicial diversity.

Implementation of these recommendations by Government, following further consultation, will support litigant and public confidence in judicial impartiality and strengthen institutional structures to support judges and address systemic biases.

President of the ALRC, the Hon Justice SC Derrington, said the Inquiry had found that public confidence in Australian judges was generally high, and that judges took their oath of office to administer impartial justice seriously.

“The implementation of the recommendations will strengthen an already good system. The establishment of a federal judicial commission would build on the successful work of judicial commissions in the states and territories upholding the integrity and independence of the judiciary.”

The Government’s acceptance of the ALRC’s recommendations demonstrates the value of independent evidence-based law reform, and the ALRC’s highly consultative approach. Over the course of the Inquiry, more than 2000 people across Australia contributed their views to the ALRC through surveys and consultations. Those consulted included litigants and other court users, current and former members of the judiciary and tribunals, the legal profession, non-profit legal services, community groups, and academics. The consultations informed the recommendations which will now be implemented.

The Inquiry relates to the law as it applies to judges in the High Court, Federal Court, and Federal Circuit and Family Court. The Inquiry was prompted by decision of a Full Court of the Family Court of Australia in Charisteas v Charisteas concerning personal contact between the trial judge and counsel for one of the parties.

ENDS

Download Media Release >>

View the Government’s Response >>

Watch the Attorney-General deliver the Australian Government’s response to the ALRC’s final report and recommendations in the Judicial Impartiality Inquiry, followed by reflections on different aspects of the report by three members of the Inquiry’s Advisory Committee.

Download the Without Fear or Favour: Responses to the ALRC Report on Judicial Impartiality transcript >>

View the Government’s Response >>

The Hon Justice SC Derrington opened the webinar by giving a brief overview of the Inquiry before introducing keynote speaker, Commonwealth Attorney-General the Hon Mark Dreyfus KC MP.

In his presentation, the Attorney-General formally welcomed the ALRC’s report Without Fear or Favour: Judicial Impartiality and the Law on Bias (Report 138, 2021), and committed the Government to implementing all three recommendations directed to it for consideration. The Attorney-General confirmed that the Government accepted in principle:

• Recommendation 5 – establishment of a Federal Judicial Commission;
• Recommendation 7 – development of a more transparent process for appointing federal judicial officers on merit involving publication of criteria for appointment and public calls for expressions of interest, and expressed the Government’s commitment to promoting diversity in the judiciary; and
• Recommendation 8 – collection and reporting of statistics on judicial diversity.

The Attorney-General also noted the 11 recommendations directed at the federal courts, Council of Chief Justices of Australia and New Zealand and the Law Council of Australia, and committed to undertaking broad consultations to support relevant entities to consider and implement the recommendations where appropriate to do so. He acknowledged that the implementation of some recommendations may have financial, resourcing, or other operational impacts for the courts and committed the Government to engaging with the courts in relation to these impacts.

The Attorney-General’s address was followed by a panel discussion between three members of the Inquiry’s advisory committee moderated by Sarah Fulton, Principal Legal Officer for the Inquiry. Panellists gave brief reflections on a cross-section of topics covered by the report:

• The Hon Robert French AC, former Chief Justice, High Court of Australia, reflected on the nature of judicial impartiality, and its importance to the judicial function;
• Professor Gabrielle Appleby, UNSW Faculty of Law and Director of the Judiciary Project at the Gilbert + Tobin Centre of Public Law, discussed procedural reforms and the establishment of a Federal Judicial Commission recommended by the Inquiry; and
• Mr Anthony McAvoy SC, barrister and Chair of the Indigenous Legal Issues Committee of the Law Council of Australia, spoke about the report’s focus on institutional and systemic aspects of bias in judicial decision-making, and responses to them.

The webinar was rounded off by panellists responding to questions from the audience on topics including:

• practical steps to enhance litigant confidence in judicial impartiality;
• the potential for a federal judicial commission to consider complaints about past cases;
• the potential role of any federal judicial commission in responding to mental and physical health challenges faced by judges; and
• the benefits of a more transparent and structured judicial appointments process.

Chair:

• The Hon Justice SC Derrington AM, President, ALRC and Judge, Federal Court of Australia

Keynote Speaker:

• The Hon Mark Dreyfus KC MP, Attorney-General of Australia

Panel Moderator:

• Sarah Fulton, Principal Legal Officer (A/g), ALRC

Panellists:

• The Hon Robert French AC, former Chief Justice of Australia, High Court of Australia
• Professor Gabrielle Appleby, Director, The Judiciary Project, Gilbert + Tobin Centre of Public Law, University of New South Wales
• Mr Anthony McAvoy SC, Barrister, Frederick Jordan Chambers