A section 38 diversion is one of the most important tools available to defendants in the NSW Local Court when mental health is a factor in their offending. Under section 38 of the Mental Health and Cognitive Impairment Forensic Provisions Act 2020 (NSW), a magistrate can adjourn criminal proceedings and discharge a defendant into the care of a responsible person or a mental health facility. No conviction is recorded. No sentence is imposed. The proceedings are simply diverted away from the ordinary criminal pathway.
This is different from a finding of not guilty and it's different from a dismissal on the merits. The court isn't saying the conduct didn't happen. It's saying the most appropriate response is treatment rather than punishment.
Who qualifies for a section 38 diversion?
To access a section 38 diversion, several conditions must be met. The defendant must be charged with a summary or minor indictable offence that can be finalised in the Local Court. Section 38 does not apply to indictable offences that must be dealt with on indictment in the District or Supreme Court.
The court must also be satisfied that the defendant has, or had at the time of the alleged offence, a mental health impairment or a cognitive impairment. This assessment draws on psychiatric or psychological reports, which the defence ordinarily obtains before the hearing. The magistrate isn't conducting a clinical assessment. The magistrate is making a legal decision based on the evidence placed before the court.
Beyond those thresholds, the court must be satisfied that it is more appropriate to deal with the defendant under section 38 than to proceed with the matter in the ordinary way. That's a discretionary judgment. It takes into account the nature of the offence, the defendant's background, the availability of treatment, and the likelihood that diversion will address the underlying conduct.
What happens during the adjournment?
When a magistrate grants a section 38 diversion, the court adjourns the proceedings for up to 12 months. The defendant is released into the care of a responsible person, admitted to a mental health facility, or both. The responsible person might be a family member, a carer, or a mental health support worker. They take on an obligation to ensure the defendant complies with any conditions the court sets.
During the adjournment, the defendant is expected to engage with treatment. That might include medication management, counselling, community mental health services, or a residential rehabilitation program. The nature of the treatment depends on the defendant's specific diagnosis and needs.
At the end of the adjournment, the matter returns to court. If the magistrate is satisfied that it's inappropriate to proceed with the charge, the charge is dismissed. That outcome does not result in a criminal conviction on the defendant's record.
How section 38 differs from a section 32 order
Section 38 is often confused with a section 32 mental health order, but the two mechanisms operate differently. A section 32 order is made at the point of the hearing, before a defended hearing takes place. The magistrate effectively diverts the matter without it proceeding to a contested hearing. Section 38, by contrast, applies when the proceedings are already underway and the court decides partway through that diversion is the right path.
In practical terms, the distinction matters because the stage at which legal advice is obtained can affect which pathway is available. Section 32 applications are typically prepared before the hearing date with supporting psychiatric material ready to go. Section 38 arises more often when the mental health picture becomes clearer during proceedings.
Preparing the application
A section 38 diversion doesn't happen automatically. The defence prepares the application, gathers the clinical evidence, identifies a responsible person willing to take on that role, and presents the case to the magistrate. The prosecutor can oppose the application. The magistrate weighs both positions.
The psychiatric report is the most critical piece of evidence. It needs to address the diagnosis, the link between the mental health condition and the alleged conduct, and the defendant's capacity to engage with treatment. A report that simply confirms a diagnosis without addressing the specific statutory criteria is unlikely to carry the hearing.
Defendants who are also considering the sentencing consequences of their matter may want to understand how a sentencing hearing works, because section 38 sits as an alternative to that pathway rather than a step within it.
What happens if the defendant doesn't comply?
Non-compliance is a real risk the court considers when granting a diversion. If the defendant fails to engage with treatment or breaches the conditions of the adjournment, the responsible person or health service can notify the court. The matter is then relisted. The magistrate can revoke the section 38 order and proceed with the original charge.
That outcome means the defendant is back before the court facing the same charge, now with a record of having failed to engage with the diversion process. It's not a position anyone wants to be in. Defendants who are granted a section 38 order need to treat the treatment obligation seriously.
Why legal advice matters early
Section 38 applications are procedurally specific and clinically complex. The window for preparing the necessary evidence is narrow, the responsible person must be identified and willing before the hearing, and the application must address the statutory criteria in enough depth to satisfy the magistrate. Ann Valos Criminal Law has over 15 years of experience representing clients in criminal matters where mental health is a central issue. Getting advice early gives the best chance of preparing an application that succeeds.