PROFESSIONAL STANDARDS (MUTUAL RECOGNITION) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 21 July 2010.)

Ms CHAPMAN (Bragg) (16:48): I rise to speak on the Professional Standards (Mutual Recognition) Amendment Bill 2010. As members would be aware, I am sure, having read carefully the Attorney-General's contribution on this matter when he introduced it on 21 July this year, this bill essentially comes before us as a result of a Standing Committee of Attorneys-General (commonly known as a SCAG committee), when attorneys-general from the federal, state and territory parliaments meet and decide in their wisdom when it is important for there to be some level of agreement on usually introducing some model legislation for which there can be mutual recognition and/or an easier scheme to either facilitate problems or advance issues.

In this instance, the history of the bill emanates from the HIH-induced insurance crisis in Australia, subsequent to which South Australia implemented the Professional Standards Act 2004 in 2006. State and territory parliaments around the country met, having received the report of a major inquiry undertaken by the former justice Ipp. Our act, along with other similar jurisdictions, provided for the approval of schemes under which the occupational liability of the members of a particular occupational association would be limited; that is, they would be able to cap the liability. The tenor of this legislation was that, in consideration for being allowed to do that, the members of that occupational association had to do a couple of things: one was that they had to hold compulsory insurance or a minimum business asset up to a prescribed level and, secondly, they had to adopt some kind of approved risk management and dispute resolution procedures in exchange for this entitlement to be able to participate in such a scheme.

To facilitate the national scheme of professional standards legislation and schemes, uniform regulations had been promulgated and a national Professional Standards Council and a common secretariat for the state councils were then established. Everything was going well until it emerged that mutual recognition became a problem. At present the professional liability is capped only for acts and omissions occurring in the jurisdictions where the professional has the benefit of the scheme. Although a professional can obtain a benefit of a cap of liability in a jurisdiction other than in their home jurisdiction, it is claimed that—and it is probably correct—that would be a cumbersome, expensive and time-consuming process. Essentially they would need to make that application in each of the jurisdictions. There is merit that, if you are going to have a national scheme and you are going to enable it to be a registration in each of the jurisdictions, there needs to be some way of remedying that.

So to address that issue, SCAG put it on its agenda and agreed to a model of mutual recognition in all the jurisdictions of schemes approved in one jurisdiction and that meant that the professionals, as a consequence, could enjoy the capped provisions—a cap on their liability outside of their home jurisdiction. We are informed by the Attorney-General that this bill reflects the nationally agreed model to enable the South Australian-based associations, including any national associations, to have their head office in South Australia. I am not quite sure whether there are any, sadly, these days. Nevertheless, that is to apply to the South Australian council for approval of a scheme.

In applying, if they indicate that they want the scheme to operate beyond South Australia, the scheme will be advertised in newspapers in all relevant jurisdictions and is to be gazetted in each. We are further informed that the scheme may be challenged in any state or territory. An approved scheme and that scheme's cap will apply to a member of the occupational association covered by the scheme in every jurisdiction in which the scheme has been gazetted. On the other hand, the national occupational associations would be able to register a scheme in one state or territory that covers its members in all jurisdictions.

Members of a state or territory-based association—for example, the Law Society of South Australia—will be able to have the benefit of their association's scheme for occupational liability arising in another state or territory, unlike the poor Law Society of South Australia or in particular its members, the legal profession, who do not enjoy some of the other national benefits. However, that was a matter on which we had discussions with the previous attorney-general, left unremedied I am sad to see, but nevertheless he decided he was not going to introduce it, so hopefully we will have some more encouraging news from the new Attorney-General.

The opposition spokesperson on legal and justice matters in another place, the Hon. Stephen Wade, specifically sought advice from the Law Society of South Australia and a number of other stakeholders. The Law Society responded by indicating that it considered that it may also be appropriate to repeal section 5(2)(b) of the act.

This is a clause that excludes the act from providing cover on 'anything done or omitted to be done by a legal practitioner in acting for a client in a personal injury claim.' I am informed by the Hon. Stephen Wade that similar clauses have been repealed in New South Wales and Western Australia and that, consistent with the SCAG approach, all states and territories act consistently on this matter. I would ask the Attorney-General to at least consider between the houses the repeal of that section, which would, as I say, keep some consistency. It appears that it is no longer required.

If the Attorney-General indicates in response that he will give favourable consideration to that between the houses, I will not ask that the house be delayed any further and I will not be seeking that the matter go into committee.

The Hon. J.R. RAU (Enfield—Attorney-General, Minister for Justice, Minister for Tourism) (16:56): I thank the honourable member for Bragg for her contribution on the matter. As the honourable member has indicated, I think this is a sensible step to be taking given the history of the matter going back to the Ipp report, and I note her remarks in relation to section 5(2)(b).

As I understand that particular issue, which has been raised by the Law Society, the situation in which that would occur is fairly unlikely or at least uncommon. That would be where a lawyer acting for a party acts in a negligent way. The party then sues the lawyer in relation to their professional negligence, is successful in suing them in relation to their professional negligence and is awarded a sum in excess of the cap.

Obviously, that is going to be rare, one would think or one would hope, depending on the level of the cap. However, one situation that does strike me as a matter of concern is circumstances in which, for example, the negligence of the practitioner is not as to the detailed conduct of a matter but rather something as elementary as failure to issue proceedings.

The only matter I would ask the honourable member for Bragg to consider and perhaps discuss with the Hon. Mr Wade in the other place is a catastrophically injured plaintiff whose matter was placed in the hands of a solicitor who then failed to lodge proceedings in time and therefore those proceedings were barred. The injustice to that individual of being unable to recover above, for example, even half a million dollars would be terrible.

I am happy to take on board the remarks the honourable member has made. I do think it is important we have a think about it and, indeed, I would be happy to speak to the honourable member for Bragg and/or the Hon. Mr Wade about these matters at greater length if that would be of any assistance to anybody. However, I appreciate the member raising that matter explicitly at this point in the progress of the bill, and for that reason I put on the record, too, my concern. If it turns out that the only people who would be disadvantaged by such a change are catastrophically injured individuals, I think that would be a matter of some concern. I think that is something we need to talk about, and I very much appreciate the honourable member's remarks.

Bill read a second time and taken through its remaining stages.