Professional Standards Amendment Bill

About this Item
SubjectsInsurance; Interstate Relations
SpeakersTink Mr Andrew; Debus Mr Bob
BusinessBill, Second Reading, Motion

Page: 11680

    Second Reading

    Debate resumed from 1 September.

    Mr ANDREW TINK (Epping) [11.04 a.m.]: The purpose of the Professional Standards Amendment Bill is to amend the Professional Standards Act 1994 to make further provision for the operation of schemes under that Act for limiting the occupational liability of members of occupational associations. The bill amends the definition of "occupational associations" to include associations that comprise members of more than one related occupational group. I believe that reflects the trend for the creation of groups between groups of professional associations, groups with wider interests and groups with common interests, and for that reason the amendment is to be welcomed and facilitated. The bill also clarifies existing provisions to limit the liability of partners, officers, employees and associates that arise in connection with the liability of the member of an occupational association. Plainly, if occupational associations are to perform effectively, such safeguards need to be in place.

    The bill extends the coverage of the Act to liability arising from negligence of legal practitioners in acting for clients in personal injury claims, which is currently excluded from the Act. It allows an occupational liability limitation scheme to calculate liability caps by use of a formula so that different variables can be taken into account. The bill clarifies that the minimum cap on liability provided for by a scheme must not be below the minimum amount set out under the Act. It allows members of a scheme to rely on business assets alone, as opposed to business assets and an insurance policy, to establish their ability to satisfy a claim. I believe that that additional flexibility is important. The bill enhances the ability of an occupational liability limitation scheme to set different caps on liability for different situations, and enhances the ability of a scheme to set different insurance standards for members. This recognises that different activities and services attract different levels of risk. It also recognises and reflects the market of professional services, allowing flexibility to cover all contingencies.

    The bill implements a number of changes to ensure that the New South Wales Act is consistent with the Victorian Professional Standards Act 2003 and with professional standards bills developed in other States and Territories in accordance with an agreement by all States and Territories in August 2003 to implement nationally consistent professional standards legislation. Plainly, there is a national market for professional services. These days even modest-size firms in all sorts of professions have offices right around the country, and of course professionals who practise in one State jurisdiction commonly commute all over the Commonwealth to carry out their work. It is therefore vital that there be nationally consistent standards in professional activity. It is as basic as having a standard railway gauge from Sydney to Melbourne. Nationally consistent standards in professional activity will ensure an effectively functioning professional sector right around the country.

    The marketing of professional services offshore also adds to, and lends credibility to, the types of services that are on offer. If all States in the Commonwealth can consistently provide for traditional standards, and for the policing of them and insurance for them, we can demonstrate to other jurisdictions offshore that we have got our act together, so to speak, on these fundamental issues. This then allows us to be more credible in taking services to other jurisdictions. These days the offshore opportunities are enormous, especially with regard to legal and accounting services. If we can demonstrate that we have a consistent nationwide approach to the underpinning of these services—in which, regrettably, from time to time things do go wrong—we will be better off in the international marketplace. The Coalition has no objection to this bill. We note, in particular, the support of the Law Society and the Professional Standards Council for this bill. We note the work that has been done by the Professional Standards Council to bring legislation of this type forward. It will be valuable for all professions.

    Mr BOB DEBUS (Blue Mountains—Attorney General, and Minister for the Environment) [11.10 a.m.], in reply: I thank the honourable member for Epping for his support for the Professional Standards Amendment Bill. Obviously, in recent years professionals and occupational and community groups have become increasingly worried about increases in the cost of insurance. It is encouraging to see that in more recent years State and Territory governments, and indeed the Commonwealth Government, have been also working together to address that issue. They have adopted a national approach where possible. Indeed, the work that has been taking place to establish a national legal profession, led by New South Wales, has been quite closely associated with work that has been taking place to establish common schemes for professional standards around the country.

    In New South Wales there are schemes for accountants, solicitors, engineers, surveyors, valuers, and soon for barristers. Professional standards legislation is part of a broader set of measures that are being agreed to by all jurisdictions to address issues regarding the cost and availability of insurance. New South Wales is the leading jurisdiction with respect to professional standards legislation, having had its legislation in place since 1994. I am pleased that in quite recent times other jurisdictions have begun to take up the lead that New South Wales established. The Professional Standards Amendment Bill is important because it brings aspects of the New South Wales Act into line with the national approach to professional standards that have been agreed to by all States and Territories. It also implements a number of other improvements to the Act. One of the most important improvements contained in the bill is that it will increase the flexibility for specifying different caps on liability. That, in turn, recognises that there are significant differences between individuals and firms within a profession, and it recognises the commercial realities faced by those individuals and firms.

    As a result of all States and Territories implementing professional standards legislation we can now look forward to professionals across Australia being encouraged to adopt schemes that improve the quality and the standard of their services while at the same time protecting them from exposure to catastrophic liability risks in the course of professional practice. Professional standards legislation offers benefits to professionals through that protection from absolutely catastrophic exposure to insurance risks or to liability risks that may or may not be insurable. The legislation also offers protection to consumers, who can be assured that the professionals with whom they are dealing are insured and are adopting appropriate risk management practices within the conduct of their business. I am pleased to commend this modest but significant bill to the House.

    Motion agreed to.

    Bill read a second time and passed through remaining stages.