- New laws restricting lawyers’ involvement in managed investment schemes and mortgage practices are expected to commence on 1 July 2018.
- The Legal Services Council is making Rules for the implementation of the new laws following a public inquiry conducted in 2017.
- Breach of the new laws can carry serious consequences for law practices.
This July, the final piece of the puzzle restricting lawyers’ involvement in investing clients’ money will fall into place following the passage of the Justice Legislation Amendment (Access to Justice) Bill (2018) and the subsequent commencement of section 258 of the Legal Profession Uniform Law NSW (‘Uniform Law’). These changes will be accompanied by a number of new Legal Profession Uniform General Rules 2015 (‘Uniform Rules’). At the time of writing, the Bill has been passed by the Victorian Parliament but the changes to the Uniform Rules are still in consultation. The new provisions are expected to commence in Victoria and New South Wales on 1 July 2018.
The legislation is not limited to mortgage schemes and should be on the radar for all practitioners. It covers the:
- promotion or operation of a Managed Investment Scheme (‘MIS’) by law practices or their related entities;
- provision by law practices of legal services in relation to MIS in which an associate of the law practice has an interest; and
- provision by law practices of certain mortgage-related services to private lenders in circumstances where the law practice (or its agent or associate) has introduced the borrower to the lender.