(Image: Private Media)

This is the latest instalment in Crikey’s investigative series Kidnapped by the State. For previous instalments, go here.

Following the publication of Crikey’s investigative series Kidnapped by the State, more and more light is being shone on the issue of public guardians (state representatives who step in to make decisions for people once a tribunal decides they’re no longer able to do so for themselves) and public trustees (who manage people’s finances and assets).

Another two reviews have been announced into Queensland’s Office of the Public Trustee — that’s three in less than a year, following a long line of reviews and inquiries into state-sanctioned control.

Nor is Queensland the first state to make such an announcement. Inquiries are launched periodically across the country. Yet there has been little change.

Each state and territory has legislation regulating when government bodies step in to make decisions on people’s lives through a public guardian and on their finances through a public trustee. But as Crikey’s coverage revealed, state public trustees often charge astronomically high fees — higher than that which solicitors can legally charge — for services in the profit-driven system.

There are strict gag orders on the media to prevent journalists identifying those under financial administration and guardianship, and legislation preventing those under the orders from discussing their experiences in the tribunals publicly. Those familiar with the system say less formal reprisals are in place for lawyers and public servants who criticise it, preventing many from speaking out. 

Reviews have much to work with 

Queensland Attorney-General Shannon Fentiman has ordered two investigations — an internal review of the public trustee’s practices and policies by the new Customer Advocate Office, and an independent external review into three people mistreated by the system. 

But the state already has a lot to work with: in January 2021 then-Queensland public advocate Mary Burgess released a damning report into the state public trustee, finding the office — which is not funded by the state government — had a profit-driven motive, breached its fiduciary duty to clients, and was accused of double-charging “fees for no service” and charging for routine advice not given by people with appropriate training or qualifications. The public trustee denies it has a profit-driven motive. 

A year on, the public trustee has implemented only 10 of the report’s 32 recommendations; another 12 are scheduled to be completed this year. Much of the response was around fees and charges. 

The public trustee said a recent Four Corners report brought attention to issues “not previously raised”, despite Crikey’s extensive coverage and Burgess’ report. 

Crikey’s coverage revealed one woman was charged $100,000 in administration and legal fees over 27 months in NSW, a man was charged $1 million in management and other fees in Queensland, and another man had $2000 taken from his National Disability Insurance Scheme funds for services he says never happened.

Queensland charges some of the highest fees in the country; those on the disability support pension pay 37% of their pension income to the public trustee.

Reduced fees are not the answer

Inquiries have also been conducted in NSW, Victoria and Tasmania. (Last week the chairman of the public trustee of Tasmania, Mark Scanlon, stepped down unexpectedly.) 

According to Attwood-Marshall senior associate in estate litigation Lucy McPherson, although states reduced fees, their responses have never gone far enough. 

“These reviews tend to happen every five to 10 years with minor tweaks to the fee arrangements,” she said. “Some fees and charges are taken off the schedule and some are added. That’s not the change the system needs.

“It’s more than just the fee structures that are the issue here. It’s accountability. It’s the level of services that are provided, and it’s the mismanagement of funds — to name a few.”

Concerns have also been raised by anonymous sources that Queensland’s external reviewers — one of whom will be former corruption watchdog chief executive Forbes Smith — won’t shine a light on complex legislation around estates, wills and fiduciary duty.

The public trustee told Crikey the reviewers would be “experienced in high-level review of complex complaint matters and will have access to relevant services while undertaking the independent review, such as relevant experts in succession or equity law, health professionals or any other specialised knowledge experts”.

Queensland’s public trustee CEO Samay Zhouand has said he plans to stay in the role despite questions about his suitably, saying the organisation has undertaken significant reforms to increase transparency, has set up a tender and procurement process to limit conflicts of interest, and will focus on improving customer outcomes. 

But Queensland solicitor Flora Wellington tells Crikey the revelations reinforced the views of many lawyers in the state that the public trustee needed an overhaul.

“The Queensland public trustee is not in an ethics-based profession,” she said. “There is no accountability, no personal liability; officers are not appropriately trained to give legal advice, and they have insufficient continuing training.”

There are no requirements for those managing deceased estates to have legal qualifications. Staff who draw up wills or enduring powers of attorney “undertake specific and comprehensive training” but are often not solicitors. 

Effectively silenced

Lawyers Crikey spoke to said they believed they’d been passed over for promotions due to their public criticism of state trustees. Others said their legal firms were concerned about losing government contracts.

Burgess wasn’t reappointed after her report was published.

McPherson is based in NSW and is one of the few lawyers from a major firm speaking publicly about problems with financial administration legislation. 

“It’s taboo in the industry to speak out about these matters because [the public trustee] is a government body that’s often sanctioned by the judiciary … and that’s a consistent theme throughout the system, with gag orders and legislation that prevents clients or individuals speaking about their experience,” she said. 

“That theme works its way down through the legal profession and to other individuals who are involved in the system — there’s a fear about speaking out.”

But she stressed media coverage was changing. Her law firm had received an increasing number of inquiries and people seeking to change things. But the coverage was just the tip of the iceberg.

“The individuals impacted by this system are the most vulnerable in our society,” she said. “I have seen many families experience absolute devastation at the hands of these government bodies. It’s appalling that these situations occur here in Australia. Something really needs to be done about it.”

Queensland’s public trustee’s office says there are laws to protect whistleblowers throughout the review process.

“The customer advocate has advised that any individual who provides information will be afforded whistleblower protection under the Public Interest Disclosure Act 2010.

“This provides a way for people to disclose information in relation to the public sector while ensuring they are appropriately protected when they do.”

For legal reasons, please don’t identify yourself or others under guardianship or financial administration in the comments.