Pitfalls of multistate and international practice: avoiding the eye of the storm in Australia.

• Author: Clark, S. Stuart
• Position: U.S. attorneys practicing in Australia

Don't be fooled by common cultural and legal heritages, there are marked differences between the U.S. and Australian systems

BECOMING a lawyer probably was not the first career choice for those who wanted to travel the world as a by-product of their professional life. Lawyers traditionally carried on their practices at a local level. Many lawyers rarely crossed their cities, let alone traveled outside their home states. Foreign travel was virtually unheard of for most lawyers.

In Australia, and indeed in other parts of the British Commonwealth, a few lawyers were lucky enough to have a case go to what, in years gone by, was the ultimate appellate court--the Privy Council in London. And for Australian lawyers, even that prospect was removed when Australia abolished appeals to the Privy Council in 1986, leaving the High Court of Australia as the final appellate authority.

The globalization of the world's economy and capital markets has bought about a radical change in the life and practice of many lawyers throughout the world. Today their professional life may entail carrying on their practices from a suitpack or whatever else they can convince an airline staff member can be carried aboard the aircraft. Many spend more time in hotel rooms than at home, tapping at their laptops balanced on inadequate desks, fighting off jet lag, and more often than not working in effect one and a half days per day as a consequence of operating in a different time zone.

An ever-increasing number of clients carry on business throughout the world. Banks and other lenders are willing to finance projects in the most obscure places, although often requiring the deal to be documented by utilizing London or New York law, while litigators can be found defending the same claims all over the globe. Indeed, litigation, and more particularly product liability law, appears to have created a new breed of lawyer who find themselves resisting the multi-tentacled octopus of the plaintiffs' network in many comers of the world.

Given the number of American lawyers on the world legal scene, it is instructive to focus on the issues and pitfalls facing them when they go to foreign shores, and in this instance, particularly Australia and New Zealand. So this is written from the perspective of a foreign lawyer--an Australian lawyer--who has had the pleasure of working with many American colleagues over the years.

AUSTRALIA: AN OUTLINE

While Australia is enormous in geographic terms, it has a population of only 19 million, the bulk of which is clustered in a handful of major cities on its southeastern seaboard.

It is a federation of seven states and two self-governing territories. The legal system throughout is homogenous. Each state and territory has a superior court of record, known as the supreme court. Each supreme court has an appeal division, which hears appeals from decisions of single judges. The appeal courts generally sit in benches of three, with the first level of appeal within the individual state or territorial system. The ultimate court of appeal for all Australian courts is the High Court of Australia, a court with similar functions to those of the U.S. Supreme Court.

In addition to the state and territory judicial systems, there is the Federal Court of Australia, known as the Federal Court. This is a superior court of record with an appellate division. As with the state system, the ultimate court of appeal is the High Court of Australia.

Each of the states and territories and the Federal Parliament has enacted what is known as "cross-vesting" legislation, which in effect invests the supreme court of each state and territory and the Federal Court with the jurisdiction of every other court. Thus, as a general rule, an action can be heard in any court in the legal system, regardless of whether it is brought under federal, state or territory law. Class actions, however, can be commenced only in the Federal Court and then only in relation to a matter of federal law.

As a result of recent agreements between the various states and territories, lawyers once admitted in their own state or territory can effectively practise throughout Australia. In addition, because of the significant similarities between the Australian and New Zealand legal systems, both procedural and substantive, it is commonplace for Australian lawyers to practise in New Zealand, where they can obtain admission easily.

The Australian Capital Territory is a self-governing entity and has its own court system and supreme court. It also has its own bar and separate admission to practice.

Judges are appointed by the incumbent governments of the states and territories. Judges of the Federal Court and the High Court of Australia are appointed by the federal government. There is no confirmation process, as in the United States. The federal attorney general is obliged to consult with the state and territorial attorneys general with respect to appointments to the High Court of Australia, but that is only consultation.

FOREIGN LAWYERS IN AUSTRALIA

1. Legal Restraints

   In each of the Australian states and territories, there is legislation prohibiting the practise of law by persons who have not been admitted in that jurisdiction. In some cases, the legislation provides that breach of the prohibition is a criminal offence. In general terms, however, foreign lawyers--that is to say, non-Australian lawyers--are permitted to practise "foreign" law in Australia if they fulfill certain conditions.

   Essentially, they must be admitted and entitled to practise in their home jurisdictions, must have acceptable professional indemnity insurance, and reciprocal rights of admission must be granted by their home jurisdictions to Australian lawyers. If these conditions are satisfied, foreign lawyers are permitted to practise foreign law in Australia as a "recognized foreign lawyer." But the right is not automatic. Application must be made to the relevant professional body in the state or territory in which the lawyer wishes to practise foreign law.

   The procedure is infinitely more cumbersome and difficult should foreign lawyers wish to practise "Australian" law in Australia. Before doing so, they must be admitted to practise in the relevant state or territory of Australia, and the admission criteria differ from state to state to territory. In most cases, applicants must supply evidence of their academic qualifications and information relating to their work experience in their home jurisdictions. Although this requirement varies, foreign lawyers also must sit for a number of mandatory examinations, which usually include Australian constitutional law, administrative law, and legal ethics. To pass these exams will require some considerable study.

   In some states, foreign lawyers, after passing the relevant examinations, must work as law clerks under the supervision of an Australian lawyer for between six and 12 months before being entitled to practise as a lawyer on their own account.

2. No Right of Appearance

   It follows that it is impossible for an American lawyer, who is not admitted to practise in one of the states or territories of Australia, to appear before an Australian court. Unlike the United States, there is no procedure available whereby a lawyer from outside the jurisdiction can move the court for admission for the limited purpose of appearing in a particular case.

   Indeed, until comparatively recently, an Australian lawyer wishing to appear before the courts of another state or territory faced a number of bureaucratic obstacles. One state, Queensland, actively frustrated the attempts of lawyers from other states to appear before its courts. While these barriers were justified in terms of protecting the public from unqualified carpetbaggers, the real reasons lay in a fear of competition. Happily, these artificial barriers have now been swept aside as part of the drive to develop a truly competitive national market for legal services. Once admitted to practise in one state or territory, an Australian lawyer effectively can practise anywhere in Australia. Similarly, Australian lawyers can now practise readily in New Zealand without difficulty.

   From time to time, some of the more colorful Australian plaintiffs' lawyers have threatened to make an application to the supreme court of one of the Australian states to have a U.S. plaintiffs' attorney admitted pursuant to the so-called inherent jurisdiction of the court for the purpose of trying a particular case. In the cases where this has been threatened, the proceedings have involved product liability claims that have been the subject of extensive litigation in the United States.

   ...