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LIV President's Blog 2012

LIV President's Blog 2013

Reynah Tang, LIV President 2013 on the latest issues and topics. Read and comment.

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Knowing your limits

Knowing your limits

As part of my role as President, I have been making my way around various suburban and country law association meetings. I often give a speech following Phil Nolan, chair of the LIV’s property law section, and a lawyer at the Legal Practitioners’ Liability Committee (LPLC).

Apart from the fact that he doles out chocolates as part of his LPLC spiel, what stands out from his talks is how easy it is to make a mistake when trying to run a busy legal practice.

While LPLC cover helps give some peace of mind, it does not address the potential for that one-off catastrophic claim that may destroy your practice. That’s where the LIV’s Limitation of Liability Scheme fits in. The way it works is to cap the damages that a court will award against LIV members participating in, and satisfying the requirements of, the scheme.

Improving the scheme

The LIV launched the scheme three years ago. As of July, there will be significant changes to enhance the scheme for members. The basic monetary ceiling has been lowered from $2 million to $1.5 million, to reduce the potential for a “defence costs gap”.

For the first time, the scheme will apply to incorporated legal practices (ILPs) that are members of the LIV. This is in recognition of the significant increase of practices being conducted via an ILP structure.

Also, the scheme will now provide protection in other states and territories, as long as those jurisdictions have mutual recognition provisions in their professional standards legislation. The only state that currently doesn’t have these provisions in its legislation is Tasmania.

The scheme still allows firms to apply to the LIV for a higher monetary ceiling generally or for particular clients (or classes of clients).

How do you get covered under the scheme?

First, you and each member of your firm need to be members of the LIV or renew your membership. Also, if your practice is an ILP, it should become a member in its own right.

Second, you should apply to join the scheme and consider if you need to increase the monetary ceiling.

Third, you must have insurance up to the monetary ceiling. Obviously, the LPLC provides cover up to the basic monetary ceiling. If you increase the ceiling, then you will need to separately arrange your top-up cover.

Finally, anyone participating in the scheme has a duty to tell clients. Non-disclosure is an offence and will lead to loss of the benefits of the scheme.

The enhanced scheme is just another example of why the LIV is your external professional partner. More detailed information about the scheme – including application forms, details of how to participate, obligations and exclusions – is available on the LIV website.

Disclaimer

This information is a general guide, and not intended to constitute professional or legal advice. The Law Institute of Victoria expressly disclaims any and all liability or damage arising from reliance upon any information provided here.

 
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Comments

Comments

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Geoff Bowyer
Good practical advice Reynah another reason why belonging to LIV is worthwhile
21/06/2013 2:15:25 PM

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