Tasmania finally adopts consistent professional standards legislation

On 24 November 2016, the Professional Standards Amendment Bill 2016 was given the royal assent and the Tasmanian legislation, the Professional Standards Amendment Act 2016 (the Act), is now consistent with the rest of Australia in relation to professional standards legislative framework. Members of professional associations in Tasmania, such as accountants, lawyers, engineers, surveyors, valuers and IT professionals, will at last be on a level playing field with colleagues working interstate.

The Act was the culmination of a long consultation process the Tasmanian Government engaged in regarding section 27(c) of the Professional Standards Act 2005. Essentially, section 27(c) in the Professional Standards Act 2005 meant that the Tasmanian legislation about liability schemes differed from its mainland counterparts as it required that the scheme must provide that the professional association is to agree to increase the cap on liability for a scheme member on application by that member in a particular case. This contrasted with the legislation in other States which provides that the professional association that developed a scheme has the discretion whether or not to approve a higher limit of liability on application by a scheme member.

The result was that many professional associations had chosen to not submit a scheme to apply in Tasmania because section 27(c) made it unworkable. This was evident by the fact that there has only ever been one scheme in force in Tasmania, the Engineers Australia Scheme. The rationale of professional standards legislation (introduced following rising cost and availability of professional indemnity insurance following the collapse of HIH in 2001) was that by limiting the liability of professionals that belong to a professional association, the maximum level of insurance required is reduced, leading to lower professional indemnity premiums. In return, the association is required to implement risk management strategies which will improve professional standards of its members thereby protecting consumers.

It is anticipated that the removal of section 27(c) will lead to a professional standards scheme being introduced in Tasmania and ensuring that there is wider national coverage for professional liability schemes and protecting the consumer, whichever State they happen to be in. It may also lead to reduced premiums for professionals having to take out professional indemnity insurance. However, only time will tell whether there has always really existed an appetite for professional standards schemes to apply in Tasmania now that the unworkable section 27(c) has been done away with.

If you have any queries or would like further information regarding this article, please contact:

Mat Wilkins
M: 0419 106 417
E: mwilkins@pageseager.com.au

Published: 14 February 2017

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