New Commonwealth legal services directions commenced 2 March 2026

The Legal Services Directions 2025 (2025 Directions) came into effect on 2 March 2026, replacing the Legal Services Directions 2017 (2017 Directions).

The 2025 Directions were developed following recommendations made by the Royal Commission into the Robodebt Scheme (Robodebt Royal Commission) to review and simplify the 2017 Directions and to strengthen compliance and oversight of the 2017 Directions.

The 2025 Directions predominately clarify the rules about the performance of Commonwealth legal work. However, Commonwealth lawyers will need to update internal processes to ensure that they continue to act in a manner consistent with the 2025 Directions. Compliance obligations on General Counsel have also been increased.

While the 2025 Directions implement the specific recommendations of the Robodebt Royal Commission, some of the thematic/systemic recommendations have not yet been implemented, so watch this space for further changes.

This article identifies material changes in the 2025 Directions compared to the 2017 Directions.

Clarifying tied work

The 2025 Directions provides further clarification around types of 'tied work', including new definitions of Cabinet work, constitutional law work and national security legal work.

Notably, in the case of Cabinet work, the 2025 Directions address specific circumstances that commonly arise in the Commonwealth to clarify how legal advice should be managed. For example, the 2025 Directions permits:

• legal advice not prepared by the Australian Government Solicitor (AGS) or the Attorney-General's Department to be considered by Cabinet, if the entity formed the intention to provide the advice after it was obtained;
• an entity to obtain support or guidance from its in-house legal area in preparing Cabinet submissions; and
• an entity to obtain advice from in-house legal area as to whether legislation is required for a proposal to be considered by Cabinet.

If legal advice that has not been prepared by AGS or the Attorney-General’s Department is provided to Cabinet, Cabinet must be expressly informed of that fact, including the date of the advice and the identity of the legal adviser.

Key Take Away:

Tied work remains a key pillar of the 2025 Directions. However, in specific circumstances, advice not prepared by AGS or Attorney-General's advice can be provided to Cabinet.

Changes to sharing advice within Government

The 2025 Directions reinforces and promotes further collaboration and consistency across entities (including specified corporate Commonwealth entities). The 2025 Directions:

• expand the obligation for an entity seeking legislative interpretation advice to consult with the entity that administers the legislation by requiring that:
  • draft legal advice also be shared;
  • a reasonable opportunity is provided to the administering entity to consult on the draft advice.
• permits entities to enter into written agreements about sharing and consultation arrangements, which are not consistent with the consultation requirements in the 2025 Directions;
• clarifies that in the circumstances where legal advice is likely to be significant to another Commonwealth agency, the entity must notify the other Commonwealth agency of the request for advice, as well as provide the advice to the other Commonwealth agency.

Key Take Away:

Following the Robodebt Royal Commission, there has been an increased emphasis on collaboration across the Commonwealth, with Commonwealth lawyers expected to consult and share information across government to promote, as far as possible, consistent statutory interpretation.

Changes to reporting and settling significant issues

Under the 2025 Directions, further detail has been included about the threshold for reporting 'significant issues' to the Attorney-General via the Office of Legal Services Coordination, as well as clarifying that entities have ongoing reporting obligations as the issue progresses.

Additionally, the 2025 Directions have expanded the list of specified significant issues to include:

• matters where there is a reasonable prospect of liability for serious wrongdoing, including:
  • false imprisonment;
  • misfeasance in public office;
  • malicious prosecution or conspiracy; and
  • any other civil or criminal wrong based on malfeasance, fraud, bad faith or unlawful conduct. Although not specified in the 2025 Directions, this is generally understood to include unlawful sexual harassment, for example.
• disputes with a State or Territory itself, and bodies established for a public purpose by or under State or Territory law. This expands the position in the 2017 Directions which required reporting of disputes with a State or Territory agency.
• any formal dispute processes under public international law, which is a new addition.

Key Take Away:

Commonwealth lawyers should be aware of the expanded non-exhaustive list of significant issues that the Attorney-General is seeking oversight of so that the issues can be managed and a consistent approach taken within the Commonwealth.

Changes to settling monetary claims

While 2025 Direction have restructured the obligations in the 2017 Directions, the obligations in relation to settlements remain largely unchanged with a number of clarifications. The 2025 Directions:

• more accurately refer to 'settling' rather than 'handling' monetary claims;
• allows an entity to make, or accept, a 'walk away' offer without any financial commitments to allow for more expedient resolutions; or matters; and
• clarifies that, where a meaningful prospect of liability exists, entities must consider the same specified factors as in the 2017 Directions to ensure any settlement is in accordance with legal principle and practice.

Key Take Away:

Commonwealth lawyers are now expressly permitted to settle monetary claims without any financial concessions or commitments.

Jurisdiction of State and territory Tribunals

The 2025 Direction expanded the obligation to seek approval from the Attorney-General to either submit or object to the authority of a State or Territory tribunal, so that a Commonwealth agency must seek approval from the Attorney General to submit or object to any exercise of compulsory powers or decision-making by a State or Territory body, other than a court.

Key Take Away:

Approval must be sought from the Attorney-General to submit to or object to any non-court state or territory decision-making bodies.

Changes to engagement of counsel

The 2025 Directions clarify that counsel may be engaged without an initial Commonwealth rate, and also increase the maximum daily rates (incl GST) for counsel to:

• $3,300 for junior counsel; and
• $5,000 for senior counsel.

Maximum daily rates are indexed to allow for future increases. However, entities engaging counsel are directed not to treat the maximum rates as the standard or starting point for negotiations and should agree to rates having regard to the nature and complexity of the brief, and value for money.

The 2025 Directions place an increased emphasis on diversity with entities encouraged to consider counsel of diverse gender identity, sexual orientation, race, or religion, counsel with a disability and those who identify as First Nations people. The 2025 Directions also include a higher equitable briefing target of 40% of all briefs, and total value of briefs, to women.

Key Take Away:

Commonwealth lawyers should continue to seek diversity in engaging counsel and negotiate hourly rates for counsel based on the complexity and nature of the matter with a view to securing value for money for the Commonwealth.

Change to assistance to Commonwealth employees in legal proceedings

The 2025 Directions clarify that assistance may be provided to an accountable authority or member of an accountable authority of an entity in relation to a proceeding that arises out of, or in connection with, the individual’s performance of their official role for the Commonwealth. Assistance is not available in some circumstances, in particular the 2025 Directions clarify that assistance is not provided in the case of disciplinary proceeding against an eligible person that is initiated by, or on behalf of, the employing entity.

The 2025 Directions refine the rules for decision-making, approvals and conditions on legal support.

Key Take Away:

Commonwealth lawyers should clarify their understanding of who is eligible to receive assistance in the event of legal proceedings.

Procurement of legal services

The 2025 Directions clarify that, when determining whether to engage a particular legal services provider under coordinated panel arrangements, Commonwealth (other than government business enterprises) must consider a provider's involvement in pro bono work, to support access to justice for all.

Key Take Away:

Commonwealth lawyers should be across its legal services providers involvement in pro-bono work prior to engagement on a matter.