Professional Men, They Have No Cares
Whatever happens, they get their's
Nineteenth Annual Workshop of the Competition Law and Policy Institute of New Zealand
'Competition law issues for the professions'
Justice John Mansfield
3 August 2008
The word "profession" is relevantly defined in the Oxford Dictionary as "A vocation, a calling, esp. one requiring advanced knowledge or training in some branch of learning or science, spec. law, theology or medicine", or more widely "any occupation as a means of earning a living".
For present purposes, those definitions are too generic. What is it about the occupation of a lawyer or a doctor (or a theologian – although I do not propose to further refer to theologians) that distinguishes it from that of a plumber or an electrician? Or, for that matter, a butcher, a baker or a candlestick maker?
To many of us, the answer is intuitive, like the answer to the question of when does day become night: it is hard to explain but I know when it is day and I know when it is night. I know the difference. Behind the intuition lies a complex understanding of the existence of a set of conditions. Some describe the difference in terms of the way the particular occupation is controlled, perceiving a clear difference between the degree of regulation imposed either by statute or by the professional body (controlling such things as competition between professionals, fee regulation, advertising or association restrictions and the like), and the degree of regulation imposed on other businesses. For reasons which are apparent, that is not for New Zealand and Australia a currently applicable distinction. In an interesting article entitled "Theory and the Professions", Professor Friedson, a sociologist, endeavours to identify the essence, or the essentials, of a profession. He specifies two "key ideas" commonly used:
(1) the members of a profession are dedicated to public service, rather than only to their own economic interest like other occupations; and
(2) the members of a profession have a special kind of education, knowledge and skill.
But he looks behind those ideas to seek a systematic elaboration of the conditions in which those key ideas can exist. The common feature of the professions, he opined, is firstly that they are occupations whose members control recruitment, training and the work they do. And secondly it is work different from the crafts because it requires formal organisation, and theoretical or abstract knowledge for its adequate performance, and generally the exercise of discretionary judgment.
As in a number of sources to which I had regard in preparing this paper, the thesis may reflect more the American experience than the current New Zealand and Australian reality, because Professor Friedson postulates the need for "some consequential form of labour market control by the occupation", before then considering whether the cessions of that control to the profession is in the public interest having regard to the quality of the work done and the degree of altruism demonstrated by the members of the professions. That analysis may be reflected in, and refined by, Professor Hatfield, as her paper reveals that the American Bar Association has had, and continues to have, a pervasive influence over regulation of the market for the provision of legal services in the United States.
I shall later refer to certain other features of Professor Hartfield's paper.
I should briefly refer to some economists' analysis. Apparently economics has no theory of the professions as distinct or relevantly different economic entities, although there is much literature discussing individual professions such as law or medicine. It has been said that economists tend to model each profession differently. Professions operate in markets and market forces determine outcomes although professional markets are said to have a high level of regulation or restriction which affects competition.
The economic focus in literature is on behaviours within professional markets. Generally, economists are said to make the implicit assumption that professions are ordinary neoclassical firms assessed by applicable standards. This may be referred to as "neo-classical production theory", where "factors of production" are basic units of analysis and professions are "knowledge-reliant production organisations" operating in networks. Professionals are said to operate autonomously (and competitively) but are dependant on their professional network for maintenance and development, including to develop their core competencies, which earns them "rents". Reputation of professionals can operate as a quality indicator for consumers and as a mechanism for peer-review within the network.
According to Savage, the major shortcoming of conventional economic approaches to understanding professions is they analyse "demand-side questions" or the impact on the consumer, with the implication that the existence of professions is prima facie evidence of market failure.
There is no need for too theoretical an analysis of what constitutes a profession for the purposes of this paper. I shall take the definition, also adopted by the Australian Competition and Consumer Commission (ACCC) from the Australian Council of Professions. It states that a profession is:
… a disciplined group of individuals who adhere to high ethical standards and uphold themselves out as, and are accepted by, the public as possessing special knowledge and skills in a widely recognised, organised body of learning derived from education and training at a high level, and who are prepared to exercise this knowledge and these skills in the interests of others.
Some would stress that element of the definition which conveys responsibility for the welfare, health and safety of the community as taking precedence over other considerations.
The medical profession has emphasised that ethical commitment in support of its argument that it should not be subject to competition regulation. The courts in Australia and New Zealand have not been persuaded that the ethical commitment represents a point of distinction so significant as to justify exempting the professions from the laws promoting competition, in line with Lord Denning's early statement that:
[if professionals] make a rule which is in restraint of trade, they are as much subject to the law of the land as anyone else… The professions have no exemption….
Professor Fels alluded to the penumbra between night and day, or between professionals and other occupations when he said that "…perhaps estate agents and other categories which shade into skilled occupations…." are to be embraced in our accepted definition of a profession.
A consequence of being a profession is the economic rationale for regulation of professions as including the limitations on information on professional services available to consumers, the possibility that transactions may be open to misrepresentation and abuse of trust ('non-voluntary'), and the existence of important distributional concerns.
For present purposes, it is sufficient to use the term "professions" to encompass a range of occupations including accounting, architecture, law, medicine, engineering and perhaps other occupations such as paramedical groups, alternative medicine groups and (as Professor Fels said) real estate agents. That should not be regarded as comprehensive.
The point of the discussion thus far is to identify the characteristics of those occupations which qualify as professions. Broadly speaking, that is because they have the two or three key features of service, discretionary judgment applied to special learning, and (to some) independence of structure (and interdependence within that structure) which might make the application of competition law regulation to them other than routine.
Should the professions be subject to competition law regulation?
Recent European and American literature suggests that their debate is still as to the extent to which competition law regulation should extend to the professions; rather than about how its application has affected the professions and their regulation, and might affect the professions in the future.
In New Zealand and Australia, the simple fact is that the Commerce Act 1986 (NZ) and the Trade Practices Act 1975 (Cth) (TP Act) apply to the professions equally as to any other occupational group. That issue has long been resolved in each of our jurisdictions. Indeed, the facility with which New Zealand was able to bring about that circumstance, compared to Australia, reminds me of the remarks of Professor Brunt, who once humorously described the Australia-New Zealand relationship in this context as follows:
[p]icture the lumbering elephantine Australia accompanied by its mobile little companion animal New Zealand, skipping along, sometimes ahead, sometimes dropping behind, sometimes circling in dazzling fashion.
Part IV of the TPA principally regulates competition issues. It is largely, but not entirely, the mirror of Pt II of the Commerce Act. Part V of the TPA deals with consumer protection, along with the Fair Trading Acts of the States, again largely mirroring the Fair Trading Act 1986 (NZ). There are historical and constitutional reasons why Australia has a confetti of Fair Trading Acts. As in Australia, New Zealand has also implemented sector-specific legislation in relation to certain regulated industries.
This paper will focus on Part II of the Commerce Act and Part IV of the TPA. Although both Acts apply equally to individuals, corporations and businesses in the conduct of professional practices, it was not always so. The Commonwealth of Australia, having power over only identified arenas, could only legislate to cover trading corporations and services operating in interstate trade or commerce or when utilising particular facilities such as telephones. Hence, the professions in 1975 and for many years thereafter, being conducted through sole practices or partnerships rather than incorporated entities were beyond its reach. Some State and Territory legislation even exempted certain conduct from the reach of the TPA by specifically approving or authorising it.
The Trade Practices Commission (the TPC) (now the ACCC) in December 1990 released a discussion paper on "Regulation of professional markets in Australia: issues for review". At the time, as it found, the professions were subject to a diversity of government and self-regulation arrangements which varied considerably between individual professions, and between individual States and Territories.
That discussion paper commented:
The traditional justification for regulation of the professions has been the protection of consumers through measures to maintain the quality of services and the competence and integrity of their providers. It is being recognised increasingly, however, that such regulation is not without cost to consumers and the community. To the extent that it restricts competition, the service choices available to consumers may be limited, the incentive to innovate and contain costs may be reduced and prices may be inflated as a result.
From the community's perspective, as well as that of the professions themselves, it is therefore important to be able to identify both the benefits and the costs of existing regulatory measures and to assess, as far as possible, for individual professions whether those regulations provide net benefits for consumers after taking account of any costs resulting from restrictions on competition.
Subsequently, the TPC issued separate final reports on the accounting profession in July 1992, on architects in September 1992; and on the legal profession in March 1994. At the time, the final report on the legal profession was seen as quite challenging. It recommended the application of the TPA to the legal profession, mutual recognition of legal professionals throughout Australia, opening to non-lawyers the opportunity to supply legal services in a range of areas (to be further identified), the structural separation of barristers and solicitors within the legal profession to be abolished; caution in the use of specialist accreditation schemes; relaxing of rules regarding ownership of legal practices; and other matters. The medical profession escaped the particular attention of the TPC at that time.
During that process, the committee chaired by Professor Hillmer was inquiring into national competition policy at the behest of all Australian governments. The Hillmer report said that the professions comprised an "important sector of the economy", and that it was difficult to justify the non-application of the TPA to the professions.
The Hillmer report, together with the several reports of the TPC into the professions, led to the TPA from November 1995 applying in full to the professions.
That objective was achieved in 1995 and 1996 by the enactment of Competition Policy Reform Acts, by each of the State and Territory parliaments. Those Acts contained Competition Codes which mirror the provisions of Part IV of the TPA, but extending their application to individuals rather than corporations only. By that lumbering elephantine process, the reach of Part IV of the TPA was extended to the professions.
New Zealand had no such constitutional contortions to go through. The Commerce Act was able to, and did apply to the professions and to professional associations, including the health sector.
Both the TPA and the Commerce Act have been amended from time to time. Over time, the content of Part II of the Commerce Act and Pt IV of the TPA has become closer, although it is not identical. It has been said that the Commerce Act was amended in 2001 to update the key tests and thresholds in line with international trends, particularly that of Australia.
Figure 1 which follows illustrates the closeness of those Parts of the Acts, and the differences:
Figure 1 Comparison of anti-competitive practices
Trade Practices Act 1974 (Cth)
Commerce Act 1986 (NZ)
Other relevant information
Agreements substantially lessening competition
Sections 45 and 4D
Covenants lessening competition
Covenants in relation to prices affecting competition
Misuse of market power/taking advantage of market power
Re-sale price maintenance
Mergers and acquisitions lessening competition
More fundamentally, and as one would expect, similar key concepts appear in both Acts such as the concept of a "market". It should also be noted that both the TPA and the Commerce Act also have exceptions to the anti-competitive provisions. It appears that the only provision of the TPA not substantially mirrored in the Commerce Act is s 49 which deals with dual listed company arrangements that affect competition.
Essentially, Australia and New Zealand have competition laws that are considered "fairly well harmonised" with the "differences not all significant". The major difference is considered to be that the TPA has a high number of per se offences. Even though New Zealand and Australian case law is freely cited in judgments of each jurisdiction, it has been noted that there is still slight potential for there to be interpretive differences by the respective courts and regulators in both countries. An example of this is in the application of the substantial lessening of competition test relevant to provisions dealing with exclusionary agreements and mergers and acquisitions.
One final observation, with particular importance to the professions, is that in Australia the National Competition Council deals with issues relating to restrictions on professions imposed by legislation which may affect competition and which are outside the scope of the TPA; whereas privately imposed restrictions (via self-regulation arrangements) fall within the scope of the TPA. It is not clear whether there is a similar arrangement in New Zealand.
How competition law has been applied to the professions
The professions since at least 1995 have not been under the radar of either the ACCC or the Commerce Commission, although Pengilley has said that in both Australia and New Zealand, enforcement authorities have traditionally enforced competition laws against "business" before "getting around to applying it to the professions". The professions, and their institutional bodies, have no reason to relax their awareness of the applicability of the Commerce Act and the TPA to their activities.
The ACCC has a clear commitment to securing compliance with and enforcement of Part IV of the TPA relating to the professions. It has identified several broad issues of concern for the professions. These include monopoly in certain areas of the professions; entry restrictions; anti-competitive behaviour and price regulation. That is not an exhaustive list. In 2001, the ACCC established a dedicated Professions Unit with resources specifically directed towards promoting compliance and awareness, although its functions are now spread across Commission staff and among Commissioners. Nonetheless, clear promotion of regulation affecting professions appears on its website and with numerous publications also available to the public. At present, it appears to have a particular focus on the health sector. Many reviews and reports have also been conducted on the health sector and competition.
Focus of the regulator upon the professions is not nearly as obvious in New Zealand. The Commerce Commission's website does not refer to the interests of professions as prominently as that of the ACCC. However, references may be found in documents such as a 2005 briefing which identified the professional health sector as an area of concern. The Commerce Commission's news releases on prominent cases also indicate an interest in the professions. As with Australia, the apparent focus is upon the health profession.
Interestingly, there has been global interest in the application of competition law to the professions, with studies conducted in the United States on the health care market; and in the UK and Europe in relation to the legal profession. Several studies have also been conducted in Europe on professions generally and similarly in Canada on self regulated professions. Australia's Productivity Commission has also prepared a discussion paper on professions.
It is unclear why the regulator's focus is predominantly on the professional health/medical sector. One might speculate that there is a perception that the health sector, including the health professional groups may have less awareness of competition regulation than other professions. There may be a perception that the other professions have been more responsive to the need to restructure to avoid anti-competition conduct. It has also been suggested that heavy regulation of a profession, such as the medical profession, can contribute to a higher number of complaints which then attracts the attention of regulators.
How then has this focus – on price fixing or boycott conduct between professionals, institutional restrictions such as on advertising or forms of professional conduct disapproved by disciplinary bodies, entry restrictions, or on misleading conduct – been reflected in experience over the last 10 or 15 years?
In the case of the medical profession, as discussed by Janes, the application of competition law has been utilised in quite a vigorous way.
Under the Commerce Act, the medical services market (using a generic description – there are obviously more refined markets, both by the nature of the services provided and by geography) is covered in the same way as markets for most other services. The s 2 definition of services covers the services provided by medical practitioners, whether individually, or under a corporate or association structure, unless the work is undertaken under a contract of service (employment contract). Practitioners acting as part of any body corporate or association are also subject to liability, as well as the entity itself. The situation is similar under the TPA.
It is clear that both countries identified the medical profession as having poor awareness of competition regulation. In 1997-1998 financial year, the Commerce Commission's Annual Report identified the health sector as a special area of focus due to its poor awareness of the Commerce Act. This was again raised in 2005. Similarly, in Australia the Wilkinson Review in 2002 comprised a major analysis of the medical profession. It examined the impact of the competition provisions of the TPA on the recruitment and retention of medical practitioners in rural and regional Australia, and found that there was a degree of uncertainty and misconception amongst the medical profession regarding the application of the TPA to doctors, particularly in the areas of medical rosters, collective negotiations and fee setting.
Many areas of market failure in the medical profession have also been described by commentators and are said to result from the unique characteristics of the professional medical market. Competition law principles are still applied regardless of the responses of the medical professional based on the "unique characteristics inherent in the delivery of medical services".
The recent case of Shahid v Australasian College of Dermatologists ("Shahid") demonstrates that medical professionals and their professional associations may be engaged in trade and commerce no less than any other profession, corporation or individual under the TPA.
Dr Shahid was a general practitioner who developed an interest in being recognised as a specialist dermatologist. That required status as a Fellow of The Australian College of Dermatologists (the College). The College required, for fellowship, a period of supervised training in an accredited post for a period of 4-5 years. The accredited positions were only obtainable on the recommendation of the College, that is in effect were granted on selection by the College. In Western Australia, where Dr Shahid lived, there was only one accredited post available in each year. She was unsuccessful in each of the several years she applied to be accepted to one of those posts.
Dr Shahid did not complain that the selection process, and the general role of the College, was anti-competitive. She complained that the College had engaged in misleading and deceptive conduct about the attributes that she should have and promote in her selection applications, and about its selection processes and appeal rights. Consequently, for present purposes, the outcome of the case is not especially significant. What is significant is that the College, which principally promoted dermatological research and training, and conducted examinations leading to the award of diplomas, was a trading entity. It was engaged in trade and commerce, including by its conduct of meetings, conferences and courses (per Branson, Stone and Jessup JJ) and by the publication of its training program handbook (per Branson and Stone JJ, Jessup J dissenting). The training program handbook contained certain of the misrepresentations found to have been made.
That outcome reflected an energetic understanding of the nature of the College's activities, notwithstanding its professed and – it may be accepted – genuinely intended benevolent purposes. The emphasis, dictated by the High Court of Australia's decision in Concrete Constructions (NSW) Pty Ltd v Nelson, was upon whether in fact its activities or transactions had a trading or commercial character.
In Concrete Constructions, a construction worker, who was injured when he fell to the bottom of a shaft because a grate was not secured, claimed damages for misleading conduct contrary to s 52 of the TPA by his employer through the foreman telling him that the grate was secured. The Court held that the foreman's conduct was not in trade or commerce because it did not have a trading or commercial character.
The medical profession appears to have been at the forefront of regulators concerns about the professions in both Australia and New Zealand. For regulators, it seems that exclusionary arrangements (although by no means the only issues) have been a major anti-competitive concern. Typically these arrangements can relate to concerns over price negotiations and recommended fee structures. Much has already been written on this issue. 
In the recent case of ACCC v Knight  FCA 1011 contraventions of s 45 of the TPA and the mirror provisions of the South Australian Competition Code were admitted by the defendants ("Messrs Knight and Ross"). Messrs Knight and Ross were cardiothoracic surgeons practising in Adelaide at certain private and public hospitals. They had been involved in the supervision of a Mr Jurisevic, who had been in training as a cardiothoracic surgeon. In 2001, Mr Jurisevic had been admitted as a Fellow of the Royal Australasian College of Surgeons, and had completed all the statutory requirements for eligibility to be registered as a cardiothoracic surgeon (in all some 14 years training). He needed hospital accreditation as the final step. It was usual, but not mandatory, that such accreditation was given after an applicant for accreditation had about two years of overseas experience as well, but Mr Jurisevic did not want to do that. In 2001, Mr Jurisevic sought his accreditation. Messrs Knight and Ross (who were influential members of a small group of cardiothoracic surgeons) made an arrangement to hinder this process. They did so by speaking to the relevant accreditation body, expressing their reservations about Mr Jurisevic being suitably experienced for accreditation and so to conduct private practice. They supported this with written advice. Mr Knight had previously supported Mr Jurisevic's application for Fellowship. In an unrelated claim, also contravening s 45 of the Act, Messrs Knight and Ross invited a Mr Edwards, another cardiothoracic surgeon, to become party to an existing arrangement between certain accredited surgeons which was in essence an arrangement whereby certain cardiothoracic surgeons would not fully compete against one another so they shared the market, by working in one of either public hospitals and one of either of the major private hospitals.
Their conduct in both respects clearly contravened s 45 of the TPA.
The Court proceeded on the basis (as the ACCC had accepted) that Messrs Knight and Ross held genuine beliefs about what was considered appropriate in the context of Mr Jurisevic and Mr Edwards; and that their actions were only deliberate in the sense of not being involuntary or accidental. A pecuniary penalty of $55,000 was imposed on Messrs Knight and Ross respectively, who were also ordered to attend a trade practices compliance seminar. Their conduct clearly created barriers to entry and a substantial lessening of competition in a small but clearly definable market. It is also illustrative of the lack of awareness in the medical profession of competition regulation.
As for New Zealand, the Commerce Commission v The Ophthalmological Society of New Zealand Inc (2004) 10 TCLR 994 is a well known case. It concerned an arrangement entered into by several ophthalmologists and the Ophthalmological Society of New Zealand which hindered a hospital in Invercargill from hiring an Australian ophthalmologist, Dr Silva, in order to ameliorate the effects of Invercargill's high waiting lists for cataract surgery. There had also been a prior arrangement or understanding to a lesser extent relating to another Australian ophthalmologist, but the main conduct in question related to Dr Silva. The effect of the arrangement was that the Australian doctor was unable to obtain the supervision required to enable him to practice in New Zealand. Some of the parties to the arrangement then carried out the surgery which the Australian doctor would have performed. The Commerce Commission successfully proved that the agreement breached s 27 of the Commerce Act.
In deciding appropriate penalties, Gendall J gave a separate judgment:  3 NZLR 689. The Court accepted that all of the parties to the arrangement were clearly unaware of the potential to contravene the Commerce Act though this did not mean they had acted "innocently". His Honour imposed pecuniary penalties of $NZ100,000 on the Ophthalmological Society of New Zealand; $NZ25,000 on Dr Rogers and $NZ5,000 on Dr Elder, as doctors involved in the contravention. Some doctors escaped liability. The Society's penalty equalled the total sum of its entire assets. It has been labelled a "stern" penalty in comparison to the "lighter" penalties imposed on the individual doctors. The case was not a test case but the first case involving professional persons and their society. A planned appeal by the Society and doctors was discontinued.
Price-fixing in the medical profession has also in the past been a concern for regulators in both jurisdictions, as a few select examples illustrate. In 1997, the ACCC settled an action against the Australian Society of Anaesthetists. The action alleged price fixing and boycotts in the form of an agreement to set recommended on-call fees to be paid by private hospitals to anaesthetists. In the same year the Commerce Commission issued warnings to midwives and doctors for their attempt to form collective agreements covering payments for maternity care in two unrelated incidents, because it risked breaching the price-fixing prohibitions of the Commerce Act.
In 2001, the issue again came to the fore with the ACCC's action against the Australian Medical Association (Western Australian Branch) ("the AMA") and Mayne Nickless Ltd, the controller of the Joodalup Medical Campus. It was alleged that the AMA, by negotiating on behalf of doctors at Joodalup Hospital, arrived at and gave effect to an understanding to fix prices for medical services to be provided at the Hospital. The AMA admitted the contravention and penalties were imposed. Curiously, Mayne Nickless defended the action and was found not to have contravened the TPA. Similarly, in 2005, the Commerce Commission issued warnings regarding potential price-fixing behaviour to individual GPs who collectively decided to set a maximum fee level for a specific group of patients.
Professor Pengilley has said that price-fixing and exclusionary conduct in the context of pricing arrangements by medical practitioners can give rise to the same anti-competitive result though it may be effected by different means.
The North American experience has been not dissimilar.
Under American anti-trust laws, medical professionals are subject to the restrictions imposed by the Sherman Act, especially section 1 which governs collective action in restraint of trade. Similarly, all professions, including the medical profession, are clearly not exempt from anti-trust regulation. Specifically, section 1 prohibits conspiracies and agreements that unreasonably restrain trade. It requires an agreement and/or conspiracy between parties that is intended to harm or unreasonably restrain competition. It must also have actually caused injury to competition beyond the claimant, and within a field of commerce in which the claimant is engaged. Either a per se or a rule of reason analysis is used. Section 2 of the Sherman Act relates to illegal monopolization and similarly requires proof of an anti-trust injury.
The US Federal Trade Commission and US Department of Justice work to enforce anti-trust laws, with the former entity having a history of "vigorously" pursuing violations of the prohibitions on price-fixing in the context of professional medical associations adopting fee schedules, and recommending or negotiating fees on their members' behalf. This conduct has been considered per se unlawful in the US. Some conduct has even been criminally prosecuted by the Department of Justice.
There is also a significant degree of interest in exclusionary arrangements other than those relating to price-fixing. For example, in Hilton v. Children's Hospital San Diego, 2007 U.S. Dist. LEXIS 16517 (S.D. Cal., Mar. 7, 2007) the plaintiff alleged that an agreement between the defendants, who were part of a diagnostic radiology group providing radiology services at Children's Hospital San Diego, was (amongst other allegations) a violation of sections 1 and 2 of the Sherman Act. The agreement prevented radiologists from the University of California San Diego Medical Center practising at the Children's Hospital San Diego by requiring proof of competency in order to be entitled to certain practicing 'privileges'. The Ninth Circuit concluded that "… [the conduct was] not undertaken in good faith and in the interest of good health care, but as a ruse or cover to obscure a decision already made unlawfully to exclude her from an aspect of her practice…". However, the Court found that the plaintiff had failed to establish a critical part of her case under both sections of the Sherman Act – that of the existence of an anti-trust injury. Accordingly summary judgment was entered for the defendants.
It is clear that section 1 of the Sherman Act encompasses conduct including price-fixing, illegal monopolies (akin to misuse of market power) and group boycotts. It is also important to note that specific types of anti-competitive arrangements may also have other legislation in place to effectively deal with them. Such includes the "anti-kickback" statutes brought into play to prosecute medical device manufacturing companies involved in illegal kick-back arrangements with doctors and hospitals in the US recently.
A study commissioned by the Federal Trade Commission and the Department of Justice in the US also indicates similar problems of heavy regulation, information asymmetry and collective bargaining for the medical profession, much like the situation in Australia.
Canada does not appear to have had a similar focus on the medical profession. Section 45 of the Competition Act, ( R.S, 1985, C-34 ) prohibits conspiracy by way of agreement or arrangement which unduly restrains or injures competition; and there are also several other circumstances which are sufficient to satisfy the section. Clearly, market power and market share are relevant to cases under s 45. Section 45 of the Competition Act was considered in Janelle Pharmacy Ltd v Blue Cross of Atlantic Canada, in which pharmacists unsuccessfully sued their health benefits insurance provider.
Attention to the health professions extends beyond general or specialist medical practitioners and their associations.
Occupations within various industries are pushing for recognition as discrete and emerging professions. Apart from medical related professions, such as physiotherapy and psychology, one is the natural medicine industry, commonly called the complementary and alternative medicine industry ("CAM industry").
In Australia, there has been suggestion of self-regulation of the CAM industry as a profession, as an alternative to subjecting it to the statutory regulation akin to the medical profession. Notably, the 2003 report of the Expert Committee on Complementary Medicines in the Health System, commissioned by the Federal Government at the time, recommended self-regulation as well as government statutory regulation where necessary for the CAM industry, amongst other suggestions. Despite this, there has only been some degree of success in the push for professional recognition in the CAM industry. The regulation of Chinese Medicine professionals in Victoria has been established by statute. Under the regime, practitioners must have relevant qualifications as required by the established Chinese Medicine Registration Board, amongst several other regulatory measures imposed.
In New Zealand, the issue has also been pushed by certain CAM organisations with similar suggestions of statutory regulation for some CAM occupations. The issue was raised generally in 2006 with the Ministry of Health releasing a proposal put forward by the New Zealand Association of Medical Herbalists that herbal medicine become a regulated profession under the Health Practitioners Competence Assurance Act 2003 (NZ) ("HPCA Act"), thus joining another 21 professions including medical practitioners and dentists regulated under the legislation. The proposal was approved. The HPCA Act is similar to the Victorian enactment in that registration bodies are set up via statute for professions under the Act for monitoring of qualifications and competence.
In Australia, the ACCC's concern in this area, as it continues to develop, is to ensure that industries such as the CAM industry are not implementing services in ways that breach the TPA, particularly regarding their arrangements for registration or recognition of practitioners. This issue is in its nascent stages, but no doubt regulators will keep a watchful eye over any progress that is made in the recognition of CAM industry as a profession as they do with other professions. It too has potential for complaints of anti-competitive conduct just like any other regulated profession.
By way of comparison, the US has extensively examined the CAM industry and its practitioners. In 1995, there was a suggestion that licensure laws and regulations were limiting the CAM industry so that they fostered a medical monopoly of the market for 'traditional' medical practitioners by restricting the scope of alternative practices and access to them by consumers. This in turn was said to increase costs for consumers. Despite such concerns, access to a range of CAM practitioners by consumers has increased. It appears to be an incremental ongoing increase. It is really a question for economists as to whether regulation of the medical profession leads to the same effect, namely increased costs to consumers. As the medical profession is regulated in a similar way to the CAMs professions in the US (including by government statutory schemes or "statutory self regulation" as its known in the US), and there has been a continuous rise in the use of CAM professionals even though very few are recognised as regulated medical professionals, it may be hypothesised that the same conclusion should be reached. Australia still apparently intends to maintain some level of government regulation of the CAM providers.
It is desirable to refer briefly to cartels in the context of the professions.
Cartels are not a legally defined term in either of the Acts. In both Australia and New Zealand, they are typically used to describe arrangements that result in price-fixing, bid rigging and market sharing. Clearly, professions may engage in unlawful cartel behaviour, if they are unwise enough to do so.
Regulators in both Australia and New Zealand have taken a tough stance on cartel behaviour. The Commerce Commission has publicly declared that "price-fixing cartels will not be tolerated" and "New Zealand is a country where the cartel participants should never feel safe…[w]herever cartels may be, the commission will use all the tools at its disposal to discover, pursue and attack them". The epitome of the ACCC's stance is demonstrated in the media fanfare surrounding the case ACCC v Visy Industries Holdings Pty Ltd (No 3), and in its support for the proposed criminalisation of cartel conduct. 
A notable difference between Australia and New Zealand is that New Zealand apparently has no plans to criminalise cartel conduct. New Zealand's stance is also out of step with the US and the UK where imprisonment terms may be imposed for cartel behaviour.
New Zealand's reasoning for not following the trend towards criminalisation of cartel conduct was stated in a 2001 review. This inquiry found that imposing a higher criminal standard, with imprisonment terms for offenders, was likely to lead to fewer prosecutions and a reduction in the number of successful cases, particularly given the higher onus of proof in criminal cases and the right against self-incrimination. Optimists, however, have not ruled out a change of perspective for New Zealand on the criminalisation issue. There are obviously contrary views. As summarised in an OECD paper, Canada is of the view that corporate fines alone are not sufficient to deter cartel offenders but that it is the dual threats of effective investigation and class action for compensation, coupled with the risk of imprisonment, that is most effective to deter in.. The US holds similar views, accepting however that the continued existence of some cartels is not evidence of imprisonment failing as a deterrent.
Australia is clearly adopting the mainstream approach. The recently proposed legislation aims to amend the Act and introduce cartels as a legally defined term. It is proposed that there be criminal sanctions for cartel conduct introduced, conduct which is described in the media "hardcore cartel conduct". The Bill aims to introduce two criminal offences for cartels under Part IV of the Act - namely the making of, as well as the giving effect to, a cartel arrangement. Several other changes proposed related to the way cartel investigations are conducted and also to civil offences.
However, the draft Bill has been criticised for being extremely complicated. One of the most critical observations concerns the "dishonesty test" or the concept of "intention to dishonestly obtain a benefit". Beaton-Wells and Fisse have argued the test is not sufficient to enable the distinguishing of criminal from civil offences. This is because dishonesty is likely to be present in many civil penalty cases and is not a "hallmark" of criminal cartel behaviour. Heerey J has argued that the dishonesty element contained within the Bill "opens up an infinite field of subjective and value laden factors". His Honour has said that the concept should be removed from the proposed reforms and that the US experience (which does not contain any such concept) ought to be adopted.
Obviously, criminalisation of cartels should ring strident alarm bells for the professions. Unlike civil penalties or other civil remedies, which do not necessarily constitute conduct warranting professional disciplinary conduct, a criminal conviction related to the practice of a profession should do so. And, as Beaton-Wells and Fisse pointed out, the investigative resources of the ACCC are very extensive, potentially very intrusive, and obviously when exercised will be very disruptive to a professional's practice. They include powers to obtain a warrant to use surveillance devices (including listening, optical and tracking devices) under the Surveillance Devices Act 2004 (Cth) ("the SD Act"). That power would be available because the proposed offences, with maximum 5 year imprisonment terms, would fall within the scope of the SD Act. Surveillance devices under the SD Act can be used in respect of conversations, activities or locations of certain persons. Various warrants under other Commonwealth Acts may also potentially be utilised for similar purposes by the ACCC for similar reasons. This is comparable to interception powers possessed by regulators in other jurisdictions. It is reasonable also to question whether professions with their claimed focus on public service (with obligations of trust and confidence) ought to be more concerned about this consequence of the proposed reforms. A number of the "non-traditional professions" are generally aware of the potential impact of the proposed reforms in Australia. Submissions have been made by professional associations or representative bodies during public consultation period for the proposed Bill. On the issue of the interception powers, the Fair Trading Coalition raised general concerns and the Australian Banker's Association was more explicit in its opposition to it, specifically referring to privacy issues. There has been an apparent lack of response by some of the "traditional professions", such as the medical profession.
There are at least two questions which that review of competition law and the professions in New Zealand and Australia throws up. There may be many more. But the two which provoke my interest are:
(1) whether there is anything inherent in the professions which has any particular significance to the application of competition law regulation to them;
(2) whether the application of competition law regulation to the professions has changed the nature (I hesitate to use the word "integrity" of the professions) in any significant way.
Among the other questions which might be asked is whether the application of competition law regulation to the professions has been in the public interest: that is the "net public benefit" of its application. In many respects, that is a multi-faceted question more for economists or other particular specialities. The intuitive answer is affirmative.
Let me list a few of the facets:
- price fixing (to the extent the professions engaged in it) is clearly against the public interest;
- barriers to entry may have been lowered, but is there any evidence that the lowered barriers to entry have reduced the quality of any professional services, or have so reduced them that acceptable outcomes to the community are not being met or are at issue?
- have work performance restrictions been lifted to an extent that has exposed the community to unacceptable outcomes?
- has the information to consumers been improved, so that more informed consumer choices can be made?
Whilst my intuitive answer to those questions is an affirmative one, I can at least add my experience in proffering a more positive answer to such questions in the case of the legal profession.
In Australia, the legal profession, either institutionally or as individuals, has not been the target of any proceedings under Pt IV of the TP Act. Nor has it sought authorisation in the public interest for any of its structures at an organisational level. The latter part may in fact be because it is regulated by separate State and Territory legislation. Following the Hillmer Report, each State agreed to implement the National Competition Principles. They have progressively implemented those principles through amendment to, or the enactment of fresh, Legal Practitioners Acts. Consequently, and not surprisingly, the organisational structure of the legal profession should not be, in competition terms, of serious concern to the regulator.
One feature of the legal profession is that it has supported the entitlement of any qualified secondary student to study and obtain a law degree. I suspect the same is true in New Zealand. The number of those with law degrees is limited only by the capacity of Universities to accept and teach the elements of such degrees. There are apparently reasons why Universities have been prepared to expand the intakes of their law schools, or to establish new law schools, but still the matriculation cut-off marks are high. Admission to University Law Schools is based on objective criteria.
A law degree, to be acceptable to an admitting authority, must have certain content. That is prescribed by the Law Admissions Consultative Committee. It is a body established by the Chief Justices of the High Court and of the State Supreme Courts (as they ultimately are the admitting authorities). Its views are then imposed by the State admitting authorities (SAA), constituted under the respective State enactments. In the case of overseas lawyers (putting aside New Zealand), their degrees and experience are assessed to determine if they meet the LACC conditions. Most often, in Australia, they do not satisfy the requirement of adequate knowledge of Australian Constitutional Law – part of our "elephantine" attributes.
The other requirement for admission is a satisfactory level of practical legal training. Those courses of PLT are accredited by the local SAA, on an objective assessment, and there are several competitive providers of PLT throughout Australia. To date, those providers have been able to accommodate all with appropriate law degrees who wish to undertake a PLT course.
So, to that point, despite the special skills and knowledge required (I mention that legal ethics is a mandatory LACC unit of a law degree), there are no possible contrived barriers to entry.
Generally, there are conditions upon practise of the law for a period of two years after admission. The admitted lawyer may not practice as a principal for that period. Such conditions are imposed by the SAAs under Rules made by delegated powers from the relevant State legislation. They have the support of the legal profession.
Upon admission, by prescription of the SAAs under delegated power, there is in most States a requirement for post-admission continuing legal education (CLE). It is not onerous. There are a range of providers of CLE.
If I were to "nitpick", I would inquire further whether the requirements for PLT, and the short post-admission restrictions on practice, and mandatory CLE are each in the public interest. They have a clear purpose, and an obvious attractiveness. I am not aware of any qualitative assessment of the balancing between their benefit and any impact upon competition in a relevant market which they have. Importantly, from the point of view of the legal profession, those requirements are not self-generated or self-imposed. They are imposed through State legislation. And the legal profession, broadly speaking, regards itself as over-regulated rather than the reverse.
Lawyers admitted in any State of Australia may now practise in any other State of Australia – again, an observation which you no doubt find anachronistic.
The reservation of work to lawyers is perhaps more contentious. It is, as you would be aware, expressed in a traditional way. There is a range of traditional "legal work" which may be performed by others: licensed conveyancers is an obvious example, but so too (I am very quaint) is the tax advice provided by accountants. The intersection of the work of accountants and lawyers is increasing, apparently without the concern – other than in the competition for work – of either profession. Nevertheless, there are two questions which have been raised:
(1) Is it "necessary" (a compendious word to describe the balancing of interests to determine the public interest) for all lawyers to satisfy the LACC units for a law degree before admission, a matter of increasing significance in a time of more and more specialisation? That is a question which, in the future, I am sure will continue to be debated.
(2) Is there a shared characteristic of the legal profession to continue to justify the existence of rules which apply across the board? This is not simply a product of specialisation, but also – as both New Zealand and Australia have developed – because there may be two (or at least two) legal professions with different characteristics, and so different elements which might justify regulation in the public interest. The legal profession largely comprises "the big firms" and "the small firms" (or individual practitioners). (I shall refer to the barristers shortly.) They really now service different markets, because the larger firms are so structured that they cannot afford to, or cannot compete, in the "traditional" client market. They compete for work, both nationally and internationally (where the particular jurisdiction permits it), from government and large corporate or individual clients. Their competition for work is fierce – both on price and quality and service – and they deal with clients who are well-informed and well able to assess the value of the services rendered (often, partly, through in-house lawyers). They jointly tender for work with other professions on some occasions, and they work co-operatively with other professions because the market demands no less. The other part of the legal profession – servicing the "traditional" client (individuals and smaller businesses) is quite different. Clients are generally unable to be much informed about relative quality, comparative charging, expertise of the legal supplier or such matters. In such instances, however, there is little or no professional institutional structure which impedes the flow of information – it is inherent in the nature of the work, and so there are professional expectations imposed by professional bodies (and by regulation) to better inform consumers: fee disclosure, pre-engagement letters with cost estimates and the like. Advertising generally, including as to fees, is not prohibited (except in New South Wales, by statute). Different methods of charging are not generally prohibited (except that it may be unprofessional conduct to overcharge).
So, in that area, the legal profession also does not appear to be structured, or to impose rules, which might be of particular concern to regulators.
Longer term, the extent of exclusive reservation of work to lawyers may come under further scrutiny: it will only be able to be maintained to the extent to which it can be shown that there is no other group of providers of that service who can do so with equal skill (i.e. properly trained) and with equal quality in service and service assurance (i.e. insurance against error in performance). The legal profession has a mandatory level of insurance against claims, and to date has persuaded government that competitive providers should be equally insured. Maybe the question of compulsory insurance is one which might merit revisiting as an appropriate requirement of practice?
Within the legal profession, there was considerable debate in the 1990s about the institutional reservation of work for barristers in some of the States. That is no longer so. In my State (South Australia), and in Western Australia, that was never so: it was a "fused" profession. In reality market forces have produced the same outcome – the ratio of those choosing to practise solely as barristers to those practising as solicitors was (and remains) much the same in the "fused" and "non-fused" professions and despite the right of any solicitor in the "non-fused" States to appear as counsel, they rarely do. I do not think it is a competition issue.
Nor, now, is there a competition issue about the structure of legal practices, except in one regard. Legal practices may incorporate. They may be listed on the Stock Exchange (with some requirements that those making legal decisions are properly qualified and professionally accountable), at least in some of the States. If those structures are not widespread, it is because the State governments – rather than the profession – do not want them. The remaining issue is multi-disciplinary partnerships. There are issues in such circumstances about how client legal privilege should be preserved, and how the duty to the Court above the duty to the client, is to be preserved. That is an ongoing work in progress, both for commercial reasons and for competition reasons.
The legal professional associations act as lobby groups for collective legal interests, but not in areas that (so far as I am aware) are seen as sensitive by the ACCC. They provide educational services. They provide the opportunity for knowledge and experience sharing. They facilitate informed professional responses to proposed legislative reforms. And, to a diminishing extent they perform disciplinary investigative and prosecutorial functions.
All that indicates, in my view, is that the legal profession is not structured, or behaving, in such a way as to attract the interest of the competition regulator. Indeed, as the legal profession is in the vanguard of awareness of the provisions of the TPA – and its relevant practitioners deeply immersed in it – it would be surprising if it were otherwise. It is also, as a matter of practical reality, a highly competitive profession in the markets in which legal services are provided.
Those comments direct my focus back to the two questions I posed at the commencement of my observations. In the case of the legal profession, I think the answer to both those questions is "no". If I am correct in my view that the legal profession is not only vigorously competitive among its members, but in the areas of overlap between legal services and other professional services, then it can be seen to have adapted effectively to the environment in which it has been exposed – the world of competition. There is nothing inherent in its nature tending to dictate that competition law regulation should not apply to it. Moreover, so far as I am aware, there is nothing in its "key ideas" of service and independence which the application of competition law regulation has altered. The "key ideas" remain. They may not necessarily be as vibrant as they once were. But we live in different times, with different or greater pressures. One needs only to look at the nature of the work the larger firms perform and how they are structured to perform it to make that point. The large firms, by and large, have preserved their legal integrity, some very deliberately so, and they engage in a range of community and other pro bono work reflective of their awareness of their obligation of service to the community. Individuals and smaller firms continue to work for their clients, again by and large, with integrity and the deep commitment which comes from the awareness of trust and responsibility they shoulder by reasons of the "information imbalance" their profession carries. And lawyers do legal aid work, duty solicitor work, and a host of other pro bono legal services.
Although I do not have anywhere near the same depth of knowledge of other professions, it seems clear enough that professions such as architecture, engineering, accounting and – if they are to be included – real estate agents have absorbed the impact of the application of competition law regulation. And they have done so without apparent difficulty, or without apparently impairing their status as professions. Indeed, the TPA reports on the accounting and architectural professions did not even in 1992 identify matters of significant concern.
So what is it about the medical profession, and related disciplines. The earlier discussion in this paper did not focus on the interest of the competition regulators in the medical profession as my choice from available professions to discuss. It was a result of a fairly thorough review of the material available in New Zealand and Australia generally addressing the professions and competition law.
Why does the medical profession feature so prominently in the available material? Does it have special characteristics? What are they?
It is not apparently different because of information asymmetry. Its consumers are certainly disadvantaged in assessing the price for, or quality of, services to be provided. That is true of all professions. Indeed, of all, the legal profession is probably the one where the consumer is at most disadvantage in this respect because flawed outcomes are generally less obvious; the prospects of success in litigation is inherently difficult to assess as there are so many uncontrollable variables. Nor is medicine different because the element of trust and reliance by the consumer is exclusive to it. Perhaps there is a greater awareness of service than in other professions, because of the nature of the medical profession. It relates immediately and often critically to the health and personal integrity of the user/patient. But "service" is an individual response to a professional expectation. Some professionals (whether doctors or lawyers or others) are very conscious of that professional responsibility; their dedication and commitment is greatly to be admired. Some are less so, or indeed not so at all. A medical practitioner, like any other professional, seeks to provide services to the utmost of that professional's ability, whether for altruistic or financial or reputational or personal reasons, and (I suspect) most often a combination of those things. And, like any profession, there are those who will lapse over the wrong side of the competition line to preserve their personal interests.
So, upon reflection, what I perceive to be the fundamentals of a profession are not peculiar in any relevant way to the medical profession and like disciplines. I do not place self-regulation in the basket of features necessary for the existence of a profession, for the reasons given, or at least not as a feature occupying much space in that basket.
The medical profession, perhaps unlike other professions, has a process of qualification – whether for a primary degree or for specialist qualifications – which restricts the supply of services. It is notorious how difficult it is to secure admission to a medical course in a University. There are probably a few reasons why the intakes are so low, relative to other professions. One may be the relative cost of education of a medical student. Another, and probably more importantly, is the limit upon the number of students who can be given the necessary practical training. That feature, at least anecdotally, applies also to the dental profession. The restricted number of training places is also a justification for the restricted number of specialist training positions available, although obviously that varies within each specialist discipline and the size of the community which it serves. It may be an entirely coincidental benefit that, the smaller the number of specialist practitioners, the greater the potential for increasing the returns to the practitioners.
A focus of regulators has been, and no doubt will continue to be, upon those structures to ensure that they are not used as a means of limiting competition in a market.
That observation is reinforced when it is appreciated that, unlike most professions in New Zealand and Australia, entry to the medical profession and to each of its specialities is by registration – controlled by the profession or the relevant sector of it (even if authorised to perform that role by statute) – based upon qualifications, training and experience (and assessment by a peer group). Generally, other professions have entry by licensing once specified training requirements are met. And there is no real issue about places being available for those seeking that training. The accounting profession has "entry" by certification, but that only operates as an assurance to consumers about the competency of the provider; it does not stop non-certified persons from providing accountancy services. And, finally, the medical profession clearly has a much more refined and elaborate system for specialisation. For obvious reasons, unlike any other profession, specialist services may only be provided by recognised specialists in the particular discipline. As I have observed, at least anecdotally, the opportunities to qualify for registration as a specialist provider are apparently limited for practical reasons. Other disciplines variously recognise specialists, but not so that they only can provide particular services. The demand for specialist accreditation by other professions is also more readily capable of being met, because the required training is more readily available.
I do not ascribe to the medical profession any base motives. Quite the contrary. But the reasons why it has been the focus of attention are clear enough: within its existing structures, it is the clash of the practically achievable (or perceived practically achievable) with the ideals of competition policy. I do not think there is any inherent quality of the medical profession which, in theory, renders it any less vulnerable to exposure to competition law regulation than any other profession. The regulators may be expected to continue to review the propriety of the structures of that profession, and if they are accepted, the balance now struck by those structures, with some care in the future.
A concluding remark: The theme of my remarks about competition law and the legal profession does not lie easily with the views of Professor Hatfield. There are important differences in our views. I hope they are explained by understanding the different structure of the profession in New Zealand and Australia, including the relatively limited roles of the New Zealand Law Society and the Law Council of Australia compared to the American Bar Association. I have referred to that earlier in this paper. Apart from referring to certain "scathing" critiques of the organisation structure and rules of the legal profession in the US, she identifies a straw man the "lawyer-statesman" as the justification for the professional rules in the US and then says that they are no longer justified because the "lawyer-statesman" is now a mythological being. There is no such person used by the legal profession in New Zealand or Australia to uphold the current structures and rules. Indeed, as I have identified above, there remain some areas of real interest to determine the extent to which competition law might further impact upon the practice of the law.
More importantly, and more directly relevantly, Hatfield rails against the "enormous complexity and quantity of legal effort" to achieve the "transactional and dispute resolution goals of business entities". Rightly so. However, I do not agree that that is the consequence of the profession's regulatory structure in New Zealand or Australia. I have not seen it suggested in our literature. I do not understand why it should be so here. There are alternative dispute resolution models already available in our jurisdiction. It is unclear whether other models provide cheaper or better dispute resolution processes or transactions. Personally, I hope the State-provided system continues to be used by the community. But we must be resourceful in revisiting our dispute resolution processes to ensure they are as efficient and as economic as can be consistent with the interests of justice. That is not the topic of this paper.
Finally, I note that Hatfield regards the "legal products market" not simply as what lawyers supply, but also as what judges do. To a degree, that is correct because Courts make the Rules of Court and produce judgments construing contracts, determining facts and applying the law. This paper is not a critique of Professor Hatfield's paper, although there is much of it with which I disagree or which I think is based upon structures not applicable in New Zealand or Australia. But, the suggestion that judges should be regarded as part of the legal professional market and so be "restructured" in some way is a little alarming.
Perhaps the concluding section of her paper gives me (and all of us) some comfort. She refers with explicit approval to the "sweeping reforms" adopted in the UK in 2007. Those reforms reflect very largely the reforms to the Australian (and I assume the New Zealand) legal profession since 1995. The fact of the earlier reforms in our jurisdictions has gone unremarked.
Other materials touching upon matters addressed in this paper which provided useful background include:
1. The Legal Profession
- Barton B, "An Institutional Analysis of Lawyer Regulation: who should control lawyer regulation – courts, legislatures or the market?" (2003) 37 Georgia Law Review 1167
- Burton M, Lawyers and Conveyancers Bill (Third Reading Speech, 14 March 2006) available at http://www.beehive.govt.nz/speech/lawyers+and+conveyancers+bill+third+reading
- Competition Bureau, Self-regulated professions - Balancing competition and regulation (Competition Bureau Study, Canada, 2007) at 61-79, available from http://www.competitionbureau.gc.ca/epic/site/cb-bc.nsf/en/02523e.html
- Council of Australian Governments Legal Profession Reform Working Group, Reform of the legal profession in Australia : report to the Council of Australian Governments (1996)
- Fels A, Regulation, Competition and the Professions (Industry Economics Conference, Melbourne, 13 July 2001) at 15-19, available from www.accc.gov.au
- JS Douglas QC, Economic Reform of the Legal Profession (speech to the University of Queensland Economics Alumni and Law Graduates Association, 12 October 2000) available from http://archive.sclqld.org.au/judgepub/2007/douglas121000.pdf
- Law Council of Australia, 2010: Discussion Paper - Challenges for the Legal Profession (LCA, Canberra, September 2001) at ch 7, available from http://www.lawcouncil.asn.au/publications.html
- Nguyen-Hong D, Restrictions in Trade on Professional Services (staff research paper, Productivity Commission, Melbourne, 2000) at 34-43 available from http://www.pc.gov.au/__data/assets/pdf_file/0016/8080/rotips.pdf
- Parker C, Competing Images of the Legal Profession: Competing Regulatory Strategies (1997) 25 (4) International Journal of the Sociology of Law 385
- Rhode D, In the Interests of Justice: Reforming the Legal Profession (Oxford University Press, New York, 2000) at ch 6.
- Australian Construction Law Newsletter, "TPC Study of the Professions – architects" (1993) 28 Australian Construction Law Newsletter 54.
- Fels A, Regulation, Competition and the Professions (Industry Economics Conference, Melbourne, 13 July 2001) at 15, available from www.accc.gov.au
- Nguyen-Hong D, Restrictions in Trade on Professional Services (staff research paper, Productivity Commission, Melbourne, 2000) available from http://www.pc.gov.au/__data/assets/pdf_file/0016/8080/rotips.pdf
- Peck M, "Competition Policy and the Regulation of the Professions" (1999) 68 Australian Construction Law Newsletter 30
- Productivity Commission, Review of Legislation Regulating the Architectural Profession (Productivity Commission Inquiry Report, Melbourne, 4 August 2000) available from http://www.pc.gov.au/inquiry/architects/docs/finalreport
- Ragel K, National Approach Towards Uniform Regulation of Architects (Allens Arthur Robinson, 2004) available from http://www.aar.com.au/pubs/pdf/const/foconmar04.pdf
- Regulation Review Unit, Review of Architects Regulation (Department of Industry, Technology and Resources (Victoria), Melbourne, 1989)
- Spence M, Entry, Conduct and Regulation in Professional Markets: a working paper (Professional Organisations Committee, Toronto, 1978)
- Trade Practices Commission, Architects: a study of the professions (TPC draft report, Canberra, 1992)
- Cseres K et al, Criminalisation of Competition Law Enforcement: Economic and Legal Implications for the EU member states (Edward Elgar Publishing, 2006)
- Levenstein M and Salant S (eds) Cartels: Vols I and II (Edward Elgar Publishing, 2007)
- Vazquez Albert D, "Competition Law and Professional Practice" (2005) 11 ILSA J Int'l & Comp L 555
 Ogden Nash, "I Yield to My Learned Brother" (1935).
 The New Shorter Oxford English Dictionary (Clarendon Press, Oxford, 1993, p 2368).
 Albert, Competition Law and Professional Practice (2004-2005) 11 ILSA J. Int'l & Comp. L. 555 at 556.
 Friedson "Theory and the Professions" (1998) 64 Ind L J 423 (Friedson).
 Friedson at 426.
 Hatfield, Legal Barristers to Innovation: The Growing Economic Cost of Professional Control over Corporate Legal Markets (2008), The Berkeley Electronic Press.
 Savage DA, "The Professions in Theory and History: The Case of Pharmacy" (1994) 23(2) Business and Economic History 129 ("Savage").
 Savage at 129. Interestingly see Savage's alternative definition at 131, stating that "a profession is a network of strategic alliances across ownership boundaries among practitioners who share a core competence".
 Fels at 530. For details of these restrictions identified by the ACCC, see Part 2.2 of this research.
 Savage at 129.
 Savage at 129. For criticisms on neo-classical economic models generally and a suggestion that behavioural economics is a better alternative, see Gittins R, Dinner Address (Behavioural Economics and Public Policy: Roundtable Proceedings, Melbourne, 8-9 August 2007) available from http://www.pc.gov.au/__data/assets/pdf_file/0005/79250/behavioural-economics.pdf .
 Savage at 132-136.
 Savage at 136-137.
 Savage at 130.
 Constitution of Australian Council of Professions Inc., cl 1.
 Dr John Southwick, Can the professions survive under a national competition policy? (proceedings of a joint conference on competition law and the professions, Perth, April 1997), as cited at www.accc.gov.au.
 Janes H, "Competition Policy: "Consequence of Restrictive Trade Practices and Price-Fixing Provisions for Medical Practitioners in Australia and New Zealand" (2006) 13(4) JLM 439 at 440-442 ("Janes").
 Janes at 443-444.
 Pharmaceutical Society of Great Britain v Dickson  2 All ER 558 at 567, as cited in Janes at 441.
 Fels A, "The Australian Experience Concerning Law and the Professions" in Atanasiu I and Ehlermann CD (eds), European Competition Law Annual 2004: the Relationship Between Competition Law and the (Liberal) Professions (Oxford, 2006) at 530 ("Fels").
 Brunt M, Economic Essays on Australian and New Zealand Competition Law (Kluwer Law International, Netherlands, 2003) at 24.
 In essence this has the same idea behind it as, for example, Part XIB of the TPA which regulates the telecommunications industry. It is not directly relevant here. See Rebstock at 90.
 Commerce Commission, The Commerce Act: Anti-Competitive Practices under Part II of the Commerce Act (Commerce Commission, New Zealand, 2002) at 5 ("Commerce Commission Publication"); Australian Competition and Consumer Commission, Summary of the Trade Practices Act 1974 (ACCC, Canberra, 2007) at 2-3.
 Trade Practices Commission "Regulation of professional markets in Australia: issues for review", December 1990, p 6.
 Trade Practices Commission "Study of the Professions – Final Report – July 1992: Accountancy".
 Trade Practices Commission, "Study of the Professions – Final Report – September 1992: Architects".
 Trade Practices Commission, "Study of the Professions – Final Report – March 1994: Legal".
 National Competition Policy – Report by the Independent Committee of Inquiry, August 1993, AGPS.
 Ibid, at p 135.
 Ibid, at p 135.
 Incidentally, the Hillmer report also urged the rapid progress towards mutual recognition of qualifications gained in any part of Australia, or in New Zealand, by all other parts of Australia and New Zealand.
 Commerce Commission "The Commerce Act and the Health Sector", January 1998.
 See Dalziel.
 Cf Commerce Act 1986 (NZ) s 3(1A) with Trade Practices Act 1974 (Cth) s 4E. See also Productivity Commission Report at 33.
 See ss 44-45 of the Commerce Act and s 51 of the TPA. See also the exception, for joint ventures, to the deeming provisions for price-fixing in both Acts (s 31 of Commerce Act and s 45A of TPA). Both also have other price-fixing exceptions for joint buying and advertising (s 45A TPA and s 33 Commerce Act) and recommended prices s 46A of TPA and s 32 of Commerce Act). Note that the Commerce Act also has an exception for partnership arrangements (s 44). See Productivity Commission Report at 125.
 Productivity Commission Report at 29.
 Productivity Commission Report at 29.
 See eg Commerce Commission v Ophthalmological Society of NZ (2004) 10 TCLR 994.
 Productivity Commission Report at 37.
 Productivity Commission Report at 37-38.
 Pengilley at 2.
 Note that other concerns include consumer protection issues; certain advertising and promotions, to name but a few. For the full list see Australian Competition and Consumer Commission, Competition Issues in the Professions (ACCC, Canberra, 2008) at www.accc.gov.au.
 Martin J, Trade Practices and The Professions: the ACCC's view on the future (Address to the Western Australian Branch of Professions Australia, Perth, 25 October 2005) at 6 ("Martin").
 Martin at 6.
 Australian Competition and Consumer Commission, Competition Issues in the Professions (ACCC, Canberra, 2008) at www.accc.gov.au . See also publications such as Australian Competition and Consumer Commission, Info Kit for the Medical Profession (ACCC, Canberra, 2004) and Australian Competition and Consumer Commission, Fair treatment? Summary of the guide to the Trade Practices Act 1974 for the Advertising or Promotion of Medical and Health Services (ACCC, Canberra, 2000).
 See eg Australian Competition and Consumer Commission, Review of Australian Specialist Medical Colleges (ACCC, Canberra, 2005) and Australian Competition and Consumer Commission, Report to Australian Senate on anti-competitive and other practices by health funds and providers in relation to private health funds (ACCC, Canberra, 2004-2005). All available at www.accc.gov.au.
 See Commerce Commission, Briefing for Incoming Ministers (Commerce Commission, New Zealand, 2005) at 18-19 ("Commerce Commission Briefing").
 See eg Commerce Commission, Ophthalmological Society of New Zealand to pay $100,000 for breaching Commerce Act (media release, Commerce Commission, New Zealand, 30 June 2004).
 US Federal Trade Commission and the US Department of Justice, Improving Health Care: a dose of competition (joint report, Washington, 2004) available from http://www.usdoj.gov/atr/public/health_care/204694.htm ("Health Sector Competition Study").
 Legal Services Consultative Panel, The Legal Profession: entry, retention and competition (advice to the secretary of state, London, 2005) available at http://www.dca.gov.uk/atoj/lscp/lscp_advice18.htm#2; Centre of European Law and Politics, Conveyancing Services Market (CELP, University of Bremen, December 2007) available from http://ec.europa.eu/comm/competition/sectors/professional_services/studies/studies.html.
 See eg Commission of the European Communities, Report on Competition in Professional Services (Commission of the European Communities, Brussels, 2004) available from http://ec.europa.eu/comm/competition/sectors/professional_services/reports/reports.html.
 Competition Bureau, Self-regulated professions - Balancing competition and regulation (Competition Bureau, Canada, 2007) available from http://www.competitionbureau.gc.ca/epic/site/cbbc.nsf/en/02523e.html.
 Samuel G, Competition Law and Australia's Construction and Infrastructure Industries (Speech to Engineers Australia Fellows Luncheon, Melbourne, 12 March 2004) at 3 ("Samuel").
 Janes, generally.
 Van Roy Y, Avoiding Liability under the Commerce Act – what can be learned from the Ophthalmologists' case? (New Zealand Medical Association - New Zealand Medical Journal (Online), Christchurch, 2005) available at www.nzma.org.nz/journal/118-1211/1353 ("Van Roy").
 See Van Roy at 2. The contract of service exception appears in s 44(1)(f) of the Commerce Act.
 See the definition of person in s 2 of the Commerce Act which includes an association; and s 90 which details liability of associations themselves. See Van Roy at 3.
 See s 4 of the TPA, which defines "services" in almost identical terms to the Commerce Act and which also defines a "corporation" so as to include incorporated associations. See also s 84 of the TPA which states that a corporation (including an association as defined by s 2) can be liable for the actions of its directors, servants or agents. Individuals are also covered by the Competition Codes of the states and territories.
 Janes at 440.
 Commerce Commission Briefing at 18-19.
 These areas include disempowerment of consumers due to a lack of information; over-consumption of medical services by consumers leading to market distortion, regulatory measures and barriers to entry. For more see Janes at 442-443.
 Janes at 440-441.
 65  FCAFC 72.
  FCAFC 72 at .
  FCAFC 72 at -.
 ]2008] FCAFC 72 at .
 (1990) 169 CLR 594.
 Rebstock P, "Competition and the Role of the Commerce Commission" (Speech to the Aon Lunch, Chamber of Commerce, Wellington, 9 October 207) at . Available at www.comcom.govt.nz, Australian Competition and Consumer Commission, Competition Issues in the Professions (ACCC, Canberra, 2008) at www.accc.gov.au.
 See Martin at 3-5; Janes at 454-461; Pengilley at 14-35.
 For the background facts see  FCA 1011 at -. For Mansfield J's explanation of the relevant conduct see  FCA 1011 at -.
 For full discussion of orders imposed see  FCA 1011 at -.
 Griggs L, "Negotiated Penalties and applying the TPA to the Professions: ACCC v Knight" (2007) 23(5) TPLB 73 at 75.
 The conduct relating to Dr Versace is still mentioned in judgment, see (2004) 10 TCLR 994 at - and . For background and all relevant facts see (2004) 10 TCLR 994 at -.
  3 NZLR 689 at .
 For full discussion of penalties imposed see  3 NZLR 689 at -.
  3 NZLR 689 at  and .
 Pengilley at 12-13.
  3 NZLR 689 at .
 The Commerce Commission, Ophthalmologists Withdraw Appeals Against High Court Ruling of Anti-Competitive Behaviour (media release, Commerce Commission, New Zealand, 15 December 2004).
 See Janes at 449.
 See Janes at 449.
 See Janes at 451.
 See The Commerce Commission, Commission Warns GP's About Price-Fixing (media release, Commerce Commission, New Zealand, 18 May 2005).
 Pengilley at 19.
 Sherman Act 15 U.S.C. § 1. See Blumenthal W, "Background Materials: A Primer on the Application of Antitrust Law to the Professions in the United States" (Canadian Bar Association Annual Conference on Competition Law, Ottawa, 29 October 2006) at 2 ("Blumenthal").
 Goldfarb v Virginia State Bar 421 U.S. 773 (1975); National Society of Professional Engineers v United States 435 U.S. 679 (1978). See Blumenthal at 3-4.
 Thurman Industries Inc v Pay N Pak Stores Inc 875 F.2d 1369, 1373 (9th Circuit, 1989), as cited in Hilton v. Children's Hospital San Diego, 2007 U.S. Dist. LEXIS 16517 (S.D. Cal., Mar. 7, 2007) at 10.
 McGlinchy v Shell Chemical Co, 845 F.2d 802, 811 (9th Circuit 1988) as cited in Hilton v. Children's Hospital San Diego, 2007 U.S. Dist. LEXIS 16517 (S.D. Cal., Mar. 7, 2007) at 11.
 McGlinchy v Shell Chemical Co, 845 F.2d 802, 811 (9th Circuit 1988) as cited in Hilton v. Children's Hospital San Diego, 2007 U.S. Dist. LEXIS 16517 (S.D. Cal., Mar. 7, 2007) at 11.
 A useful discussion appears in Hilton v. Children's Hospital San Diego, 2007 U.S. Dist. LEXIS 16517 (S.D. Cal., Mar. 7, 2007) at 10-14.
 A useful discussion appears in Hilton v. Children's Hospital San Diego, 2007 U.S. Dist. LEXIS 16517 (S.D. Cal., Mar. 7, 2007) at 17-20.
 Federal Trade Commission, Submission of the United States ( OECD Roundtable on Competition in the Health Professions, October 2004) at 7, available from www.ftc.gov.au ("OECD Submission"); Blumenthal at 10.
 Blumenthal at 10.
 OECD Submission at 7.
 For full discussion of facts see 2007 U.S. Dist. LEXIS 16517 (S.D. Cal., Mar. 7, 2007) at 1-8.
 See 2007 U.S. Dist. LEXIS 16517 (S.D. Cal., Mar. 7, 2007) at 5.
 See 2007 U.S. Dist. LEXIS 16517 (S.D. Cal., Mar. 7, 2007) at 16-19.
 For a similar case see Nilavar v Mercy Health System-Western Ohio 244 Fed. Appx 690.
 See Abraham v Intermountain Health Care Inc 461 F.3d 1249 which considered price-fixing and monopoly cases (namely Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 588, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986) and Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752 (1984)) as equally useful in group boycott cases under s 1 of the Sherman Act. Abraham was a case concerning group boycotts in relation to ophthalmologists and optometrists. As cited in Richmond C and Anderson J, Richman and Anderson on the Tenth Circuit Affirming Summary Judgment for Managed-Care Company Accused of Conspiring with Ophthalmologists to Boycott Optometrists in Intermountain Health Care (LexisNexis Expert Commentaries, November 2007).
 These statutes include the Anti-Kickback Statute and the Stark Law, as referred to in Patel A and Miller A, "Physician-Vendor Arrangements: Legal Compliance Challenges" Metropolitan Corporate Counsel (2007) 15(12) Metropolitan Corporate Counsel 48. The kick-backs in this case have been acknowledged as anti-competitive, see Washington Business Information Inc, "Class Action Suit Accuses Zimmer of Kickbacks" Devices and Diagnostics Letter (19 May 2008). For a general report on the case see Feder B, "Focus Shifts to Doctors in Medical Device Case" International Herald Tribune (25 March 2008) p 10.
 See Health Sector Competition Study.
 See Competition Act, ( R.S, 1985, C-34 ) s 45 (1)(a)-(c).
 See eg Janelle Pharmacy Ltd v Blue Cross of Atlantic Canada  N.S.J. No.307; 203 NSSC 179 at - citing R. v Abitibi Power and Paper Co (1960) 131 C.C.C. 201 at 249-252.
 Carlton AL and Bensoussan A, "Regulation of Complementary Medicine Practitioners in Australia: Chinese Medicine as a case example" (2002) 10(1) Complementary Therapies in Medicine 20 at 21 ("Carlton and Bensoussan").
 Expert Committee on Complementary Medicines in the Health System, Complementary Medicines in the Australian Health System (Department of Health and Aging, Canberra, September 2003) available at http://www.tga.gov.au/docs/html/cmreport1.htm ("Expert Committee Report").
 Expert Committee on Complementary Medicines in the Health System, Complementary Medicines in the Australian Health System (Department of Health and Aging, Canberra, September 2003) available at http://www.tga.gov.au/docs/html/cmreport1.htm ("Expert Committee Report").
 Carlton and Bensoussan at 23-25.
 New Zealand Association of Medical Herbalists, Proposal that Herbal Medicine become a regulated profession under the Health Practitioners Competence Assurance Act 2003: Invitation to submit comment on proposal (Ministry of Health, Wellington, New Zealand, 2006) available at http://www.moh.govt.nz at 1, 4 ("Herbalists Proposal").
 See New Zealand Association of Medical Herbalists, Health Minister approves Medical Herbalists for Registration (media release, New Zealand Association of Medical Herbalists, New Zealand, 20 July 2007).
 Herbalists Proposal at 3.
 Herbalists Proposal at 19-20.
 Blevins S, The Medical Monopoly: Protecting Consumers or Limiting Competition? (Cato Institute Policy Analysis, Boston, December 15, 1995) available at http://www.cato.org/pub_display.php?pub_id=1105 ("Blevins").
 See Blevins. Note also that this article also contains an interesting history of licensing regulation in the US in the context of the medical and CAM industry.
 See Blevins. See also Moynihan R, "Physician, Herb Thyself" Sydney Morning Herald (12 April 2003) p 18 ("Moynihan").
 See Lunstroth J, "Voluntary Self-Regulation of Complementary and Alternative Medicine" (2006) 70 Alb. L. Rev. 209 ("Lunstroth").
 For an indication of Australian regulation see Carlton and Bensoussan at 20-21.Lunstroth at 289 describes "statutory self regulation" in the US.
 See Carlton and Bensoussan at 20. See also Moynihan, p 18.
 In 2006, Council of Australian Governments accepted that a national scheme should be in place. See Therapeutic Goods Administration, Implementation of the Government Response to the Recommendations of the Expert Committee on Complementary Medicine in the Health System Progress Report (Department of Health and Aging, Canberra, October 2006) at 10 available at http://www.tga.gov.au/cm/cmreport3.pdf . See also Expert Committee Report, stating that some government regulation is necessary and cf with Carlton and Bensoussan at 21, stating governments have pushed for self–regulation as an alternative to government statutory regulation.
 Allen S, "Caning the Cartels" The Press (6 May 2005) p 14 ("Caning the Cartels article").
 See Caning the Cartels article.
 Allen S, "No hiding place for price-fixers Commerce Commission warns" The Dominion Post (2 March 2006) p 1.
 (2007) ATPR 42-185;  FCA 1617.
 See eg Sexton E, "To Catch a Cartel" Sydney Morning Herald (21 March 2008) p 35; Gray J, "Regulator to Tap Phones in Cartels Biltz" Australian Financial Review (24 October 2007) p 1; Speedy B, "ACCC boxed in by lack of prison options" Weekend Australian (17 November 2007) p 12.
 See Caning the Cartels article.
 See Caning the Cartels article.
 As described in Organisation for Economic Co-operation and Development Competition Committee, Cartels: Sanctions Against Individuals (OCED, 2003) available from http://www.oecd.org/dataoecd/61/46/34306028.pdf ("OCED paper"). The actual report is entitled New Zealand, Optimal Sanctions in Cartel Cases: report submitted to the OCED Competition Committee on the Review of Penalties, Remedies and Court Processes under the Commerce Act 1986 (OCED, 2001).
 As described in OCED Paper at 21-22.
 How J et al, Doing Time Under the Trade Practices Act: the criminalisation of cartel conduct (Russell McVeagh, Auckland, 2008) available at http://www.russellmcveagh.com/_docs/CompLawFeb08_61.pdf.
 OCED paper at 49. This paper also explains the potential imprisonment terms and fines offenders may be subjected to under the Canadian Competition Act, see OCED paper at 52.
 OCED paper at 105.
 The proposed legislation is Trade Practices Amendment (Cartel Conduct and Other Measures) Bill 2008.
 There have been criticisms of such a description, see Shirrefs D, "No Simple Legal Fix for Cartels" Australian Financial Review (22 October 2007) p 63.
 See Department of Treasury, Discussion Paper: Criminal penalties for serious cartel conduct (Department of Treasury, Canberra, 2008) at 1-2. Available from http://www.treasury.gov.au/contentitem.asp?NavId=037&ContentID=1330 ("Cartel Discussion Paper").
 Cartel Discussion Paper, at 2-3.
 The Honourable Justice Peter Heerey, "Commentary on the Paper of Brent Fisse and Caron Beaton-Wells" Seminar on Criminalising Cartel Conduct: Centre for Corporate Law and Securities Regulation (University of Melbourne, Melbourne, 25 February 2008) at 4 ("Heerey J").
 The new cartel offences (containing the dishonesty element/test) appear in the draft Trade Practices Amendment (Cartel Conduct and Other Measures) Bill 2008 s 44ZZRF and s 44ZZRRZG. Further sections define dishonest (s 44ZZRB) and deal with other matters (ss 44ZZRH(1)-(3)).
 Beaton Wells C and Fisse B, "Criminalising Serious Cartel Conduct: Issues of Law and Policy" Seminar on Criminalising Cartel Conduct: Centre for Corporate Law and Securities Regulation (University of Melbourne, Melbourne, 26 February 2008) at 8 ("Beaton-Wells and Fisse").
 Beaton-Wells and Fisse at 8. See 27-36 of this source for more detailed discussion.
 Heerey J at 1.
 Heerey J at 2-3. See also Drummond M, "Judge Joins call for Cartel Jail Option" Australian Financial Review (27 November 2007) p 5, which mentions Weinberg J's comments on the "dishonesty element" to similar effect during the period when then-treasurer Peter Costello announced cartel reforms.
 Beaton-Wells and Fisse at 70-71.
 Beaton-Wells and Fisse at 70-71.
 Beaton-Wells and Fisse at 70-71.
 Beaton-Wells and Fisse at 71-74.
 Beaton-Wells and Fisse at 75-76.
 This is alluded to in a very general way (not specific to professions) in Beaton-Wells and Fisse at 76.
 See eg the submissions put forward by the Chartered Secretaries Association (secretarial profession), the Australian Constructors Association and Leighton Holdings (the construction industry) and the Fair Trading Coalition (whose members include motor trade associations and pharmacy associations). Several law firms and a trade practices association (constituted in part by lawyers) also submitted responses though not from the perspective of the impact upon the legal profession. In comparison, the American Bar Association made a submission though again not from a 'legal profession' perspective. All submissions provided as a response to the public consultation are available at http://www.treasury.gov.au/contentitem.asp?NavId=037&ContentID=1330.
 See the Fair Trading Coalition, Submission on Exposure Draft of the Trade Practices Amendment (Cartel Conduct and Other Measures) Bill 2008 (Commonwealth Department of Treasury, 29 February 2008) at 6-7; Australian Banker's Association, Submission of the Australian Bankers' Association to the Discussion Paper: Criminal Penalties for Serious Cartel Conduct (Commonwealth Department of Treasury, 4 March 2008). Both available at http://www.treasury.gov.au/contentitem.asp?NavId=037&ContentID=1330.
 See references to Fn 27 and 28 above.
 It may also be that there is a greater ethos supporting independence of structure and regulation because the training processes are apparently necessarily largely provided by practising doctors rather than dedicated academic teachers. There may be other cultural reasons for the medical profession being so resistant to external regulation. I have seen no material proposing those possibilities, and I am not qualified to assess whether they exist.
 Hatfield, at p 102-103.
 Hatfield, at p 104.
 Hatfield, at p 107.
 Mansfield, "Opportunities and Challenges: Evidence in Cases under the Trade Practices Act 1974", a paper delivered to the Competition Law Conference on 24 May 2008.
 Hatfield, at p 120.
 Hatfield, at p 144.