NSW Government Bulletin summer edition: Navigating public sector risks and threats

Welcome to the annual summer edition of NSW Government Bulletin. 

The past 12 months has left many of us thinking “what next?” amid the pandemic, its associated labour and material shortages, extreme weather, supply and price shocks associated with the war in Ukraine, cyber-attacks and even pestilence. 

To help those in government prepare for the new year, we highlight some of the key risks and threats facing the public sector and explore ways to tackle these, including:

• how to ensure your legal advice is heard and understood
• a checklist to improve your approach to subpoenas
• summary of key trends and reforms to help you master intellectual property and online brand risks
• ways to manage psychosocial hazards at work.

Our legal teams will deep dive into each of these topics and more at our upcoming NSW Government lawyers annual CLE seminar series, which will run from 20 February to 10 March 2023. See the full program and register here.

Last month, I ran a LinkedIn poll on the question:

“Is it unthinkable that crucial legal advice would not be passed on by a government agency to its Minister? What’s your experience?”

The poll was prompted by the previous day’s news from the Robodebt Royal Commission. As reported by the Sydney Morning Herald, the former Prime Minister, Scott Morrison, had testified that he was never advised that the robo-debt scheme was unlawful before he signed off on it. He also stated it was “unthinkable” that his department did not pass on crucial legal advice. 

It ‘should’ be unthinkable that crucial legal advice would not be passed on, particularly when it goes to the legality or otherwise of a key decision. 

However, 39 per cent of respondents to my poll said they had “seen it happen” (42 per cent if you count my vote). That is, they had experienced situations where crucial legal advice was not passed on. 

The respondent pool was small (19 in total, including me) but pleasingly, those who responded had strong public sector leadership experience, either at a project or enterprise level. 

What the poll result tells us

The poll result, while in no way making a claim for scientific validity, highlights the challenge for government counsel and decision-makers. It is clear that legal advice does not always get through as it should.

There may be many reasons for this.

The pathways from legal adviser to ultimate decision-maker within government can be very protracted, with the consequent risk that legal advice loses its context or timeliness, is not well understood or its meaning is simply ‘lost in translation’. The need to protect legal professional privilege can also mean the advice is separated from the briefing (either physically or conceptually). 

At the other end of the spectrum, it may be the case that the Minister doesn’t want or need to receive or know about the advice. Depending on the nature of the advice and the context, that can be perfectly legitimate. Not so in the case where the Minister is required to make a decision informed by that advice. 

What is it about legal advice? 

Legal advice is a very special category of advice and needs careful handling. It informs so many actions, and determines their lawfulness or otherwise. Legal advice needs to be out there and well understood by those whose quality of decision-making relies on the efficacy and correctness of the advice. Yet, at the same time, it needs to be protected from disclosure to safeguard the special privilege it has within our legal system.

Legal advice is heavily dependent on the facts. A change in the facts can radically change the legal answer.

Legal advice is often carefully worded and nuanced. An unravelling of that nuance may change the meaning completely.

What can legal managers and individual lawyers do to maximise the chances their advice is heard and understood?

Well, I don’t have all the answers, but here is my list:

1.  make sure the lawyers are empowered to give the most effective legal advice they can. This means they need permission to:

• ask “why” and insist on being provided with the context and purpose of the advice
• query whether the question they are being asked is the right question; query whether advice is needed at all or whether there are more sensible and practical ways of solving the problem
• insist that no one rewrites legal advice (or, if changes must be made for clarity or otherwise, those changes are approved by the original author or a more senior lawyer)
• insist on having more time to write the advice where they need it
• insist that a request for advice comes from a senior manager or executive
• go over the head of the person giving instructions where there is a concern about the issue, the question or the risk
• challenge any briefing protocols or systems that compromise the efficacy and effective transmission of legal advice to those who need to know (particularly challenge any process that allows for legal advice to be rewritten, summarised or “translated” without senior legal sign-off)
• give a verbal briefing to accompany any advice if it is particularly complex or sensitive or relies on facts and assumptions that may not be apparent. 

2.  train your lawyers to write effectively and clearly. Be blunt and state the issue clearly in a way the person relying on the advice can understand

3.  ask for support from the senior leadership of the agency. They can lend support by:

• implementing a compliance framework and encouraging a healthy respect for legal compliance and legal advice
• encouraging early engagement with, and full disclosure to, the legal team – this includes sharing problems and issues with the lawyers, not asking hypothetical questions. Hypothetical questions can result in pointless or even misleading answers. The facts and context are critical
• ensuring managers have oversight of requests for legal advice
• enforcing compliance with protocols for the protection of legal professional privilege.

What are your tips and tricks for managing this issue? We’d love to hear your thoughts.

Receipt of a subpoena to produce documents can be the government agency’s first formal exposure to the wider dispute or controversy in progress and may signal, at worst, an imminent claim or cross-claim, or, at least, heightened stakeholder interest.

Early consideration of the issues and the response can help manage risk, including by the agency re-familiarising itself with the facts (and location of documents), particularly where events occurred some time ago and relevant staff may not be available.

Frequently, however, subpoenas languish in an obscure inbox or in-tray until they become a problem shared, just before the return date.

The preferable approach is to work through the issues well beforehand, to maximise the benefit of the time available for reviewing, investigating, negotiating, recording and reporting.

Below is a convenient checklist of the suggested steps on receipt of a subpoena for production, which we will develop in our forthcoming session, ‘Subpoenas – tips and traps, a checklist for infrequent players to manage risk’, in our NSW Government lawyers annual CLE seminar series in March.

The checklist

The checklist issues are broadly divided into three areas – form, substance and production.

Form

• Was leave required?
• Is your agency a party?
• Was the agency properly served?
• Have the regulations regarding service of subpoenas on your agency been complied with?
• Is the correct agency named as the recipient?
• Is it addressed to more than one person?
• Is the addressee identified by name or description of office?
• Does it identify a document or thing to be produced?
• Does it specify the date, time and place for production?
• If the address for production is other than the court, is the person permitted to take evidence in the proceeding?
• Is the last day for service specified?
• Has it been served before the last day of service?
• If the last day for service is less than five days before the compliance date, have orders for short service been served with the subpoena?
• Have those orders otherwise been complied with?

Substance

• Does the subpoena adequately identify the things to be produced?
• Are the documents apparently relevant to the proceedings?
• Is the subpoena "fishing"?
• Are the documents sought solely because of their capacity to impugn the general credit of a witness?
• Does the subpoena amount to an abuse of process?
• Is there a statutory prohibition against disclosure?
• Do the documents sought contain confidential information?
• Would compliance with the subpoena be burdensome and oppressive?

Production

• Should the proposed access order be disturbed?
• How are you dealing with privilege?
• How are you dealing with confidentiality?
• Do you need to appear?
• Keep a copy of what was produced.
• Consider making a list (the Registrar may call for one).

You have considered the issues, now what?

A subpoena may arrive devoid of context, which makes it difficult to assess issues of substance. Contacting the issuing party to obtain this context (and raise any issues of form) is key. It may also be helpful to contact the non-issuing party or parties for a different perspective.

These matters can be confirmed in writing when the undertaking is sought for the payment of reasonable costs of compliance.

Open to negotiation are the return date, the scope of production, the extent of searches to be carried out and the arrangements for access (particularly if documents are to be produced, which the parties are contractually obliged to keep confidential).

Capturing the value

Having been through the exercise (based on another party’s agenda), it is useful to consider what the agency may gain from it.

Documenting the enquiries made, which resulted in the production of the documents, is not only good risk management, but can help steer the agency in case of future subpoenas concerning the same or similar subject matter.

That can be developed further for subpoenas which cover events which occurred some time ago or where relevant staff are no longer available, by mapping in detail the document holding.

Moderating the wish list

Subpoenas are drafted by a party and issued administratively by the Registry and yet have the force of an order of the court. Rather than the issuing party satisfying the court that a subpoena is necessary, the receiving party must move the court for orders setting the subpoena aside. 

What will moderate the issuing party’s behaviour is price – the exposure to an order for costs if a set-aside application is successful, or to compliance costs if the burden of compliance is significant.

Working through the above checklist can expose key issues for the agency, provide a framework for articulating them to the issuing party and for negotiating the issues. To learn more, register for our CLE session here.

Author: Christine Jones

Intellectual Property (IP) is a crucial driver of creativity and innovation. Various forms of IP, including trade marks, copyright, designs, and patents, are valuable business tools that create significant commercial value for government agencies that use or manage these IP every day. Our upcoming NSW Government lawyers CLE seminar series will focus on the business of innovation, exploring the implications for IP and looking ahead to the future.

Recently, the High Court judgment of Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2022] HCA 29 looked at whether a claimed invention that utilises computer software or hardware will be patentable under the Australian Patents Act. The Australian High Court rarely decides IP disputes. The judgement was split 3:3. Patentees of inventions involving the use of computer software or hardware should review their patent rights, which could now be vulnerable to a registrability attack.

Recent discussions have also led to the debate on whether AI can form original works or be registered as the true inventor. Blockchain technology, NFTs, and the ‘Metaverse™’ have significantly changed the digital landscape and raised issues around authorship, originality, and ownership in IP. Intellectual property is constantly evolving, and government agencies should be aware of the risks in dealing with these assets.

The latest IP trends illustrate how Australians have adapted to the change in our social and work environment during COVID-19. Demand has surged in pharmaceuticals patent filings, given the need for novel vaccines and treatments, and computer and audio-visual technology as the economy has moved to a virtual model.

The financial services markets are increasingly looking to digitise money and currency flows, and deep questions remain on how this will affect the lives and society as a whole. Trade mark and design filings have grown for products that households invest in when upgrading their homes to create comfortable living and work spaces.

For Australia to sustain its positive economic momentum, Australians need to realise their innovation potential. Evidence shows that IP activity is a significant indicator of employment growth for small and medium enterprises (SMEs). In 2022, the IP system underwent significant reform to make the IP ecosystem more accessible for different users, increase recognition of indigenous IP rights, and further encourage SMEs to participate in the IP system.

While there appears to be a downward trend in copyright infringement disputes and infringement of copyright content online, there continues to be infringements of trade marks, designs, and patents. The use of IP online continues to attract legal and reputational risk and it is vitally important for government agencies to be vigilant in monitoring the online space for IP infringement.

Our March 2023 CLE session, ‘Mastering intellectual property and online brand risks’, will highlight online IP risks, discuss IP cases and decisions, summarise recent IP system reforms, and examine some trends in IP creation, innovation pathways and their benefits. Join our in-depth discussion by registering here.

All government agencies in 2023 will need to have a greater focus on managing the risks from psychosocial hazards in the workplace. 

Psychosocial hazards are hazards that may cause psychological or physical harm arising from or in relation to:

• the design or management of work
• the working environment and equipment
• workplace interactions or behaviours.

Psychosocial hazards can then generate a psychosocial risk, being a risk to a person’s health or safety arising from a psychosocial hazard.

Unsurprisingly, many facets of work could qualify as a psychosocial hazard. This may include job demands (involving sustained high or low levels of physical, mental or emotional effort), low job control, remote or isolated work, and exposure to traumatic events. 

Perhaps more unpredictable for agencies is the possibility of psychosocial hazards arising from the management of a person’s employment. This may include poor support, lack of role clarity, poorly managed organisational change, inadequate reward and recognition (where there is an imbalance against a worker’s effort), and poor organisational justice.

Codes of practice outlining the responsibility of agencies to manage these risks are in operation in jurisdictions such as NSW, Queensland and Western Australia, with others to follow shortly. The codes of practice have been developed following recommendations from the Boland Review of the work health and safety laws in 2018, which included the recommendation to focus on psychosocial hazards.

In 2022, Safe Work Australia also published its model code of practice, Managing Psychosocial Hazards at Work. The code, if approved in a state or territory, offers a practical guide to compliance with the laws requiring employers to maintain a safe workplace for their staff and others impacted by their business or undertaking. The code will also be evidence that a court may have regard to in determining whether your agency has taken all reasonably practicable steps to manage psychosocial hazards in the circumstances outlined in the code.

The code points out that, on average, work-related psychological injuries have longer recovery times, higher costs, and require more time away from work. The code notes that complying with the code not only protects workers, but also decreases the disruption associated with staff turnover and absenteeism, and may improve performance and productivity.

It is important for agencies to review the relevant code and determine whether steps have been taken to implement reasonably practicable controls as set out in the code. If your agency still needs to undertake a risk assessment for psychosocial hazards, you should follow the steps outlined in the code.

We will continue to examine these legal obligations and how government agencies can assess and control psychosocial hazards at work in our upcoming CLE program. Register for our ‘Managing psychosocial hazards in the workplace’ session here.

Author: Michael Selinger

NSW Government lawyers annual CLE seminar series

Our annual program returns as a virtual event from 20 February to 10 March 2023, offering a range of topics and CPD core units tailored to those in government. This year's series will focus on navigating public sector risk and threat and our legal teams will be exploring different skills to help you prepare for what lies ahead for government in 2023. See the full program and register here.

If you have any questions about this bulletin or program, please contact our editor, partner Christine Jones.

Published by:

Christine Jones

Michael Selinger

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