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National professional standards agreement

Briefs

Cite as: (2003) 77(9) LIJ, p.16

Federal and state insurance ministers have agreed to introduce nationally consistent professional standards legislation to improve the availability and affordability of liability insurance.

The Ministerial Meeting on Insurance Issues on 6 August agreed that reform of professional indemnity insurance required a range of measures, including professional standards legislation, proportionate liability, and amendments to the Trade Practices Act 1974 and s54 of the Insurance Contracts Act 1984.

The cornerstone would be professional standards legislation, which would establish a Professional Standards Council (PSC).

Professional associations would then apply to the PSC to have approved a scheme establishing standards of conduct, continuing education, complaints and discipline procedures, and risk management structures.

Once the scheme was approved, the members of that professional association would have access to limited liability.

A similar scheme has been running in New South Wales since 1994.

Federal Assistant Treasurer Helen Coonan said professional standards legislation that was consistent across Australia would be a significant step towards greater certainty in the professional indemnity market.

This, together with the introduction of proportionate liability, would “improve the affordability and availability of professional indemnity insurance”.

Law Institute CEO John Cain said professional standards legislation was good news for consumers. Because of the state of the insurance market, he said there were some members of professions such as engineering, accounting and architecture practising uninsured – “a very undesirable situation for consumers”.

In a joint communique issued after the August meeting, the ministers agreed also to:

  • endorse a national model for proportionate liability in which a court should have regard to the responsibility of any potential defendant who is not a party to the proceedings;
  • amend the Trade Practices Act to support professional standards legislation consistent with the existing New South Wales and Western Australian legislation; and
  • proceed to the second stage of analysis of a national scheme for the long-term care of the catastrophically injured.

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