Express law No. 34

27 February 2006

The Legal Services Directions 2005

The Attorney-General has issued new Legal
Services Directions (LSDs), known as the Legal
Services Directions 2005
to replace the Legal Services
Directions issued in 1999. The new LSDs commence on 1 March

In the Explanatory Statement accompanying the Directions,
the Office of Legal Services Coordination (OLSC) advises:

For clarity and ease of use, the Attorney-General has
decided not to amend the existing Directions, but to
issue a new instrument which comprises certain changes
to the Directions in their previous form.

Major changes at a glance

Foremost among the new changes are:

  • the threshold for a 'major claim' rises from
    $10,000 to $25,000
  • extension of the coverage of Appendix C ('Handling
    monetary claims') to claims by the Commonwealth,
    as well as claims against the Commonwealth
  • agency heads must make available records of their
    agency's legal services expenditure
  • agency heads must after the end of each financial
    year disclose to OLSC any possible breach of the LSDs
    not previously reported
  • barristers who have been or are presently bankrupt
    and who have been the subject of an adverse disciplinary
    finding on that account, are only to be briefed with
    the approval of the Attorney-General
  • agencies conferring subrogation rights on contractors
    must use their best endeavours to ensure that the contractor
    agrees to comply with the model litigant policy, and
    consult with the agency if matters arise relevant to
    the tied work or 'sharing of advice' obligations
    under the LSDs
  • the type of limitation period that is to be invoked,
    in the absence of approval otherwise, now excludes those
    applying to judicial or merits review
  • the Attorney-General may impose sanctions for non-compliance
    with the LSDs.

What is the overall effect of the new LSDs?

Of particular note, there is a strengthening of:

  • agency accountability for LSD compliance
  • the 'whole of government' focus in the provision of
    legal services to agencies.

What is the application of the new LSDs?

As with the former LSDs, the new LSDs apply to all agencies
that are FMA agencies (that is, prescribed agencies for
the purposes of the Financial Management and Accountability
Act 1997). They have the same limited application as
the former LSDs to bodies covered by the Commonwealth
Authorities and Companies Act 1997 that are not government
business enterprises (GBEs) or companies under the Corporations
Act controlled by the Commonwealth (see cl 12).

What are the new requirements on reporting and LSD compliance
by agencies?

Agency heads under cl 11 will now be required by 30 October
each year to make publicly available records of their agency's
legal services expenditure for the previous financial year.
Further, the agency head is responsible for giving to OLSC,
within 60 days after the end of each financial year:

  • details of any possible breach of the LSDs not reported
    to OLSC
  • details of actions taken to address breaches occurring
    during the financial year
  • any other information relevant to the agency's LSD

Do the new LSDs affect the model litigant policy?

The model litigant policy detailed in Appendix B has been
given further definition in new cl 2(d) to make clear that
the requirement to limit legal proceedings wherever possible
includes giving consideration to alternative dispute resolution
before initiating legal proceedings, and participating
in alternative dispute resolution processes where appropriate.

Have there been changes to the requirements for consulting
administering agencies on requests for advice?

Clause 10, addressing advices sought on legislation administered
by other agencies, has been amended to clarify and expand
upon the obligation to consult on a request for advice,
requiring, among other things:

  • the provision of a copy of the request for advice
    to the administering agency
  • such reasonable consultation with that agency as it
    may require before the advice is finalised.

The exemption for advices on a routine matter that merely
applies a settled interpretation has been tightened slightly.
As a result, even routine advices will need to be provided
to an administering agency (or at least the agency consulted)

  • the advice relates to legislative provisions not previously
    considered by the courts, is contrary to existing policy,
    or could raise new policy issues in respect of the legislation
  • the matter could create a precedent, or
  • the requesting agency has identified a potential weakness
    in the legislation.

Has there been any change to requirements on the conduct
of litigation using in-house lawyers?

There has been no change to cll 5.1 and 5.2, which stipulate
that an agency may only conduct litigation using in-house
lawyers with the Attorney-General's permission.

Where can the new LSDs be found?

The new LSDs are accessible through OLSC's
. In addition, the website carries an Information
Briefing and Explanatory Statement outlining the changes.
The contact officers in OLSC for queries about the new
LSDs are Susan Cochrane, Principal Legal Officer (02)
6250 6599 and Karl Alderson, Assistant Secretary, (02)
6250 6611, email

AGS, as the leading legal services provider to Commonwealth
agencies, stands in a unique position to help agencies
to understand and comply with the new LSDs as they may
apply to the conduct of matters.

Simon Daley
Special Counsel Litigation
T 02 9581 7490 F 02 9581 7732

Important: The material in Express
law is provided to clients as an early, interim
view for general information only, and further analysis
on the matter may be prepared by AGS. The material
should not be relied upon for the purpose of a particular
matter. Please contact AGS before any action or decision
is taken on the basis of any of the material in this