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Legal chiefs dismiss tax scandal claim

WA legal chiefs have dismissed any suggestion that the State’s barristers could be embroiled in a widespread tax avoidance scandal which has engulfed as many as 500 practioners in NSW.

Reports from Sydney reveal barristers owe the tax man a staggering combined debt estimated at $50 million. Newspaper investigations have revealed a number of high-profile barristers have been prepared to go bankrupt on a number of occasions to avoid their creditors, primarily the ATO.

The news has prompted Federal Attorney-General Daryl Williams to raise the issue for the next meeting with his State counterparts in Adelaide this month.

“I intend to discuss with State and Territory Ministers options for dealing with barristers who flout the tax system, such as by making it compulsory for barristers to report bankruptcy or suspending or withdrawing the right of those barristers to practise law in Australia,” Mr Williams said.

WA Law Society president Ken Martin QC said the scale of the allegations was of great concern but he confirmed that the WA profession was clear of any such scandal.

When lawyers are admitted to practice, they promise to behave honourably and obey the rule of law.

Mr Martin said that if the allegations were true, it demonstrated that NSW barristers were prepared to embrace a naked rejection of the system of law.

“You expect leading professionals to set community standards,” he said.

“Example setters should not undermine our rule of law.”

Being able to practice while being bankrupt is the key difference between NSW and WA. Since 1992, if a WA lawyer becomes bankrupt, they then require the consent of the WA Legal Practice Board to continue practising. WA Legal Practice Board’s Jane Thompson said that since 1994, 12 lawyers had been bankrupted or entered into part 10 arrangements, but only two were struck off. Mrs Thompson said the majority had suffered genuine financial hardship.

WA has had one celebrated case.

Just prior to this legislation being introduced, the WA Supreme Court found high-profile barrister Stephen Archer guilty of unprofessional conduct for failing to file tax returns, and fined him $10,000.

However, Mr Archer was not struck off the practitioners’ role because he resolved the tax issues troubling him at the time.

Following this ruling, Mr Archer, originally from Sydney, returned to the Sydney bar where he has become embroiled in the scandal sweeping that State’s legal system.

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