25/02/2026
The Legal Services Directions 2025 (LSDs) apply to Commonwealth legal work and are issued by the Attorney-General under the Judiciary Act 1903 (Cth). The LSDs are binding on those undertaking Commonwealth legal work and serve as a critical framework to manage legal, financial, and reputational risks to the Commonwealth.
On 2 March 2026, the new LSDs will officially commence, repealing and replacing the 2017 LSDs.
For all non-corporate Commonwealth entities, and certain named corporate Commonwealth entities, the changes introduce updated expectations around information sharing, litigation management, and the briefing of counsel.
Why were the 2017 LSDs changed?
The motivation for these changes derives from the impact of public inquiries on Government administration. The 2025 LSDs directly implement Recommendation 19.7 from the Royal Commission into the Robodebt Scheme (the Royal Commission), which called for the 2017 Directions to be reviewed and simplified.
Key changes
The 2025 LSDs introduce several practical changes to how entities must manage their legal affairs. Some of the key changes are discussed further below.
Sharing legal advice
Part 3 of the 2025 LSD promote greater “consultation, collaboration and information-sharing across government on the interpretation of legislation” and set out a proactive process to ensure consistency in statutory interpretation.
Where an entity seeks legal advice on legislation administered by another Agency, it must provide that Agency a reasonable opportunity to consult before the advice is requested, subject to certain limitations. The purpose of this is to ensure the administering entity can be involved in the discussions around the draft advice, identify any pre-existing advice obtained, and review the finalised advice.
After the initial consultation on the proposal to request advice, the entity that requested the advice must provide a copy of the request for advice, any draft advice and the final advice to the administering entity.
Some exceptions to the consultation requirement include:
- where urgent advice is required;
- where disclosure would breach a law;
- where disclosure is about a routine matter; or
- where there is a written agreement between entities about how consultation and sharing will operate, and this has been notified to OLSC.
Despite the exceptions, there may be continuing obligations to involve the administering entity at another stage of seeking the advice.
Reporting on significant issues
The reporting framework for significant issues arising in the performance of Commonwealth legal work has been broadened, clarifying that reporting extends beyond only claims. Entities must report to the Office of Legal Services Coordination (OLSC) if there is a reasonable prospect of liability for misfeasance in public office, malicious prosecution, fraud, bad faith, or unlawful conduct.
The settlement of a claim or litigation involving a reportable significant issue requires the Attorney-General’s approval.
Criteria for settling monetary claims
An update to Part 6 allows entities to accept a ‘walkaway offer’ – where the claim is discontinued with no financial commitments besides bearing own costs – where the parties agree to the claim being dismissed, discontinued or otherwise resolved.
A discretion has been added for an entity to settle a monetary claim without a suitable release and indemnity if satisfied that exceptional circumstances apply that justify settling in the absence of a release and indemnity.
Engagement of counsel
The Commonwealth is leveraging its purchasing power to drive cultural change at the bar. Entities are now explicitly encouraged to consider briefing counsel from diverse backgrounds, including engaging counsel who identify as First Nations, LGBTIQA+, culturally and linguistically diverse, and with a disability. There is a new target to brief women counsel for at least 40% of all briefs and 40% of the total value of an entity’s brief. This is increased from a previous target for women counsel of 25%.
The daily rate thresholds for engaging counsel before requiring Attorney-General approval have increased to $5,000 (inclusive of GST) for Senior Counsel and $3,300 (inclusive of GST) for Junior Counsel. The previous rates were $3,500 for Senior Counsel and $2,300 for Junior Counsel.
Key takeaways
Agencies are encouraged to ensure their internal practices align with the changes to the LSDs, including reviewing standard operating procedures and processes.
Griffin Legal can assist in aligning internal practices to the 2025 LSDs, as well as in advising agencies on the application of the LSDs through any claims or litigious matters.
Please contact our team for assistance at government@griffinlegal.com.au