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Australian Government Solicitor
4 National Circuit Barton ACT 2600
Locked Bag 7246 Canberra Mail Centre ACT 2610
T 02 6253 7000 DX 5678 Canberra
28 September 2015
CANBERRA ACT 2600
AGS Annual Report 2014–15
I have great pleasure in submitting to you, for presentation to each House of Parliament, the annual report of the Australian Government Solicitor (AGS) covering the period 1 July 2014 to 30 June 2015.
The report has been prepared in accordance with section 46 of the Public Governance, Performance and Accountability Act 2013.
Ian Govey AM
The Australian Government Solicitor
AGS consolidation with the Attorney-General's Department
On 1 July 2015, AGS ceased to be a separate Commonwealth agency and government business enterprise, and was consolidated into the Attorney-General's Department (AGD).
This resulted from a decision announced in the Mid-Year Economic Fiscal Outlook statement in December 2014 as part of the Government's Smaller Government Reform Agenda that was foreshadowed in the report from the National Commission of Audit in 2014.
Following the announcement, AGS and AGD established a steering committee (led by AGS CEO Ian Govey and AGD Deputy Secretary David Fredericks), a joint project team (led by AGD's Carmen Miragaya and AGS's Daryl Adam) and several working groups, to bring about consolidation by 1 July. Key undertakings to achieve consolidation included:
- determining AGS's new governance arrangements and amending its enabling legislation, the Judiciary Act 1903
- defining the nature and financial basis of AGS's operations going forward
- transferring AGS staff to AGD (and the Australian Public Service)
- ensuring AGS clients experienced no disruption or decline in standards of legal service and client care.
Details of these undertakings are covered in the body of this report. A summary of outcomes as at 1 July 2015 follows:
Governance and legislation
AGS is now a group within AGD, headed by the Australian Government Solicitor, who reports directly to the Secretary. The appointment of AGS's CEO Ian Govey AM as the Australian Government Solicitor was announced on 23 June 2015.
AGS retains its name and branding and AGS lawyers continue to appear in that name as solicitor on the record. The consolidation was effected through legislation – the Judiciary Amendment Bill 2015 – which came into effect on 1 July 2015.
Financial basis and commercial operation
AGS continues to be a Commonwealth trading enterprise operating in the marketplace, providing the full range of legal services as a self-funded, competitive, fee-for-service operation. It has no Budget appropriation. It continues to operate as a legal services provider on the Legal Services Multi-Use List and competes in the market for the great majority of work.
Pricing arrangements for tied work and outposted lawyers have changed and will now be provided on a cost-recovery basis.
All AGS staff (employed under the Judiciary Act) transferred to AGD and, by means of a determination under section 72 (1) of the Public Service Act 1999, became employed by the Commonwealth of Australia in AGD within the public service. This entailed assessing the job role classifications of all staff to APS levels.
The AGS Enterprise Agreement continues to apply to AGS staff until new arrangements are in place.
The solicitor–client relationship continues to exist between AGS and its clients. AGD is exempt from the Freedom of Information Act 1982for documents relating to AGS's legal activities.
A new Confidentiality Protocol ensures information provided to AGS by clients will be kept confidential. Persons within AGS continue to discharge their obligations in relation to that information under legislation, including the Judiciary Act, which requires equitable, contractual and professional duties of confidence.
A review of Commonwealth legal services, to be carried out by AGD's Secretary, was also announced in December 2014. The review will seek to identify potential efficiencies and deliver the best outcomes for the Government from the full array of legal services available.
This is the final annual report from AGS as a government business enterprise (GBE). As of 1 July 2015, AGS became part of AGD.
As we plan for 2015–16, as a self-funded commercial operation within AGD, I see continuing success ahead. We will retain our focus on providing excellent legal advice and representation, outstanding client service, and on being effective and efficient in our business operations.
The transition to AGD has been smooth and I look forward to us developing closer professional relationships with our colleagues.
As a GBE, AGS had one of our best years yet in 2014–15. Our trading over the 12 months was excellent. Our clients increased their use of AGS and we significantly increased our legal trading profit compared with the previous year. Our operating margin and return on capital were also well in excess of our corporate plan targets.
These results continue a positive trend from recent years, and mark a good result overall for AGS as a GBE. Since we became a GBE in 1999, AGS has made total profits (before tax) of $173 million and made payments to the Commonwealth of $262 million, covering dividends, taxation, competitive neutrality payments and loans.
We continue to be by far the largest single provider of government legal services, with a steady market share of around 41%, 3 times greater than our nearest competitor.
We had a very full year again advising on major legal matters. Some of them include:
- The Royal Commission into Institutional Responses to Child Sexual Abuse
- the Royal Commission into the Home Insulation Program
- the sale of Medibank Private
- proposed foreign fighters legislation
- the second Sydney airport
- application of the Public Governance, Performance and Accountability Act 2013 (PGPA Act)
- immigration matters, including a number before the High Court or Full Federal Court
- the implications of the High Court's decision in Williams No. 2 for government agencies' spending
- constitutional support for the proposed introduction of data retention obligations on telecommunications service providers
- constitutional recognition of Indigenous Australians and the proposal for a referendum.
AGS uses regular client surveys to ensure we understand client needs and continue to provide high-quality service. This year's survey, conducted in February by an independent consultant, delivered very positive results – with a client satisfaction rating of 96%.
Our outpost practice was again in higher demand than previous years and provided valuable contact for our lawyers with client in-house teams. Our outposts worked on some of the Government's most challenging matters, including major commercial and litigation matters and legislative proposals.
Our training courses, legal forums, Government Law Group seminars and publications continue to be highly valued. Our programs, which we often offer as 'value- add' services to clients, help maintain high standards of practice in government law generally and provide valuable contact and relationship development between AGS and client teams.
I want to take this opportunity to thank everyone involved in the consolidation process. It is a challenging job to bring 2 organisations with different governance arrangements together and I appreciate the efforts of everyone who worked so hard to make it happen. In particular, I thank the Secretary of AGD, Chris Moraitis PSM, Deputy Secretary David Fredericks, the Joint Project Team and the various working groups.
I wish to thank our clients for their continuing support for AGS throughout the year, particularly in the lead up to the consolidation, and our shareholder Ministers and AGS Advisory Board for their guidance. I am very grateful to the AGS Board and the executive team for their unstinting support and guidance, and all AGS staff for their patience and ongoing commitment to delivering excellent work during a time of change.
While returning to AGD is a big change for AGS, it is also a change for the Department. From 1 July, AGD includes a highly- competitive, commercial business operation, with staff comprising about a quarter of the newly-consolidated Department.
I believe this is a great opportunity for us all to build on the strengths of both organisations, to combine our talents and experiences and, together, deliver the best possible services to government.
Ian Govey AM