EXPLANATORY STATEMENT
BANKRUPTCY ACT 1966
BANKRUPTCY RULES (AMENDMENT)
1986 No. 323
The purpose of the amendments to sub-rule 162(2) and Schedule 3 of the Bankruptcy Rules is to adopt the recommendation by the Federal Costs Advisory Committee that the scale of solicitors’ costs in the Bankruptcy jurisdiction be increased by 3.4 per centum.
The scale was last increased on 1 May 1986 by Statutory Rules 1986 No. 84 after consideration of an earlier report by the Federal Costs Advisory Committee.
The Committee advises the Attorney-General at regular intervals on variations in the quantum of costs for solicitors under the Bankruptcy Rules, having regard, among other factors, to government policy in relation to prices and incomes and in particular to paragraph 28 of the National Economic Summit Communique.
That paragraph states -
“If restraint is to be exercised then such restraint should be exercised universally. As such, it is important that non-wage incomes are not increased faster than movements in wages.”
The increases are consistent with paragraph 28 of the Communique. They are based on movements in various indices during the second half of 1985 and the proportion representing partners’ salaries and profit costs has been discounted to the same extent as wage increases in the last National Wage Case.
Authorised by the Attorney-General
Overview
The Bankruptcy Rules (Amendment) 1986 No. 323, enacted by the Parliament of Australia, is an amendment to the Bankruptcy Act 1966. This amendment was introduced to address the need to update the scale of solicitors' costs in the Bankruptcy jurisdiction, as recommended by the Federal Costs Advisory Committee. The primary objective of these amendments is to align the costs with economic movements, particularly in relation to non-wage incomes and wage increases, as stipulated in the National Economic Summit Communique. The Committee's advice, which considers government policy on prices and incomes, suggests that the restraint on non-wage incomes should mirror the restraint on wage increases, a principle reflected in the 3.4 percentum increase adopted in these amendments. This approach ensures that the changes are consistent with broader economic strategies and helps maintain the integrity of the legal cost framework within the bankruptcy system.
Scope and Application
The Bankruptcy Rules (Amendment) 1986 No. 323 amends sub-rule 162(2) and Schedule 3 of the Bankruptcy Rules 1966, primarily to adjust the scale of solicitors’ costs within the Bankruptcy jurisdiction. This adjustment follows a recommendation by the Federal Costs Advisory Committee, which advises the Attorney-General on variations in solicitor costs under the Bankruptcy Rules, taking into account government policy on prices and incomes. The increase in the scale of costs by 3.4 per centum, consistent with paragraph 28 of the National Economic Summit Communique, reflects movements in various indices during the second half of 1985, with adjustments made to ensure that partners' salaries and profit costs are not increased faster than wage movements. This amendment applies to all solicitors involved in bankruptcy proceedings in Australia and is authorised by the Attorney-General. The amendment does not introduce any exclusions or exemptions and extends the application of the revised scale of costs to all relevant proceedings and practitioners within the scope of the Bankruptcy Act 1966.
Key Provisions
The amendments to sub-rule 162(2) and Schedule 3 of the Bankruptcy Rules, as outlined in the Bankruptcy Rules (Amendment) 1986 No. 323, primarily aim to adjust the scale of solicitors' costs in the Bankruptcy jurisdiction (sub-rule 162(2)). These changes respond to a recommendation by the Federal Costs Advisory Committee, which has advised on the appropriate percentage increase based on various economic indices and considerations (sub-rule 162(2)). The Federal Costs Advisory Committee plays a crucial role in advising the Attorney-General on the quantum of costs for solicitors under the Bankruptcy Rules, ensuring that adjustments are in line with government policy and economic conditions (Schedule 3).
The obligations imposed by these amendments require that the scale of solicitors' costs in the Bankruptcy jurisdiction be increased by 3.4 per centum, reflecting the advice of the Federal Costs Advisory Committee (sub-rule 162(2)). This adjustment must be implemented in accordance with the provisions set out in the Bankruptcy Rules and should consider the economic factors and indices that influenced the Committee's recommendation (Schedule 3). The amendments also require adherence to the principle of universal restraint on non-wage incomes, as stated in paragraph 28 of the National Economic Summit Communique, ensuring that increases in costs for solicitors are proportionate to wage movements (Schedule 3).
Failure to comply with the provisions set out in the amendments may result in various civil or administrative consequences. While the specific penalties or consequences are not detailed in the explanatory statement, non-compliance with the Bankruptcy Rules could lead to enforcement actions, fines, or other sanctions as prescribed by the relevant legal framework. The Federal Costs Advisory Committee's recommendations and the principles outlined in the National Economic Summit Communique provide the basis for these amendments, ensuring that the adjustments to solicitors' costs are reasonable and consistent with broader economic policies (Schedule 3). The maximum penalties for breaches of the Bankruptcy Rules are determined by the relevant sections of the Bankruptcy Act 1966 and associated regulations, which may include fines and other penalties as prescribed by law.