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Legislative Council - Fifty-Second Parliament, First Session (52-1)
2010-09-14 Daily Xml
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PROFESSIONAL STANDARDS (MUTUAL RECOGNITION) AMENDMENT BILL

Introduction and First Reading

Received from the House of Assembly and read a first time.

Second Reading

The Hon. G.E. GAGO (Minister for State/Local Government Relations, Minister for the Status of Women, Minister for Consumer Affairs, Minister for Government Enterprises, Minister for the City of Adelaide) (18:14): I move:

That this bill be now read a second time.

I seek leave to have the second reading explanation inserted in Hansard without my reading it.

Leave granted.

All States and Territories have enacted legislation that provides for the approval of schemes under which the occupational liability of members of occupational associations is limited in return for the members:

holding compulsory insurance (or minimum business assets) up to a prescribed level; and

adopting risk management and dispute resolution procedures.

The Commonwealth legislated in 2004 to amend the Trade Practices Act 1974 and related Acts to provide for the application in Commonwealth law of schemes in force under State and Territory professional standards legislation.

The South Australian Act, the Professional Standards Act 2004 (the Act), commenced on 1 October 2006.

This legislation fulfilled a commitment given by Insurance Ministers nationally in response to the insurance crisis.

Under the Act, an occupational association may submit a scheme that limits the occupational liability of all or some of its members for approval by the Professional Standards Council (the Council), an independent body corporate established by the Act. There are requirements for public notification and consultation (including public hearings) on proposed schemes, including a minimum 28 day consultation period.

Once in operation, a scheme caps the occupational liability of a member of the occupational association if that member holds approved insurance or business assets up to the level of the cap.

It was always the intention of the Commonwealth, State and Territory Governments that, if possible, there should be a national system of professional standards legislation. Many professions, and their corresponding professional associations, operate across State and Territory borders. Practitioners may serve clients anywhere in Australia.

To this end an inter-governmental agreement, the Professional Standards Agreement 2005 (the Agreement), was negotiated and signed by Ministers on behalf of all Australian Governments. The Agreement provides for (among other things)—

the appointment of common members to each State or Territory Professional Standards Council (so that, in fact, although not in law, the State and Territory Councils will operate as one). As the law requires that each Council comprise up to 11 members, the Agreement allocates nomination rights according to population size. New South Wales and Victoria are to have 2 nominations each, and other jurisdictions, including the Commonwealth, 1 nomination each;

the establishment of a common Secretariat by the New South Wales Attorney-General's Department to provide administrative services to the State and Territory Professional Standards Councils. The Agreement provides for each jurisdiction to enter into a service agreement with the New South Wales Attorney-General's Department under which that jurisdiction's Council will purchase necessary administrative services from the New South Wales Attorney-General's Department; and

the making of uniform regulations about fees, penalties and the disclosure that people covered by schemes must make on documents provided to clients and prospective clients.

There remains a further obstacle to national operation.

At present, a professional's liability is capped only for acts and omissions occurring in jurisdictions where the professional has the benefit of a scheme. Although a professional can obtain the benefit of a cap in liability outside his home jurisdiction, this is a cumbersome, expensive and time-consuming process involving much duplication and inefficiency and involves either the professional's occupational association applying for schemes in all jurisdictions or occupational associations permitting interstate members.

To address this, and to promote the national operation of schemes, the Standing Committee of Attorneys-General (SCAG) has agreed to a model for mutual recognition, in all jurisdictions, of schemes approved in 1 jurisdiction, to enable professionals to have capped liability outside their home jurisdiction.

The Bill reflects the nationally agreed model, which incorporates these key features—

State and Territory based associations will be able to apply to the Council in their jurisdiction and national associations will be able to apply to the Council in the jurisdiction in which their head office is based. When applying to a Council, an association will have to indicate which jurisdictions it wants the scheme to operate in;

proposed national schemes will have to be advertised in newspapers in all relevant jurisdictions;

for national schemes, the relevant Council will have to consider the application in a national context. Issues such as claim information, level of liability cap, insurance arrangements and consumer protection measures will be considered from a national perspective;

for a scheme to operate in a particular jurisdiction, the relevant Minister in that jurisdiction would have to have the scheme gazetted under that jurisdiction's legislation;

the 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;

a scheme may be challenged in any State or Territory;

income derived from fees payable by an occupational association for the national scheme (an application fee and annual membership fees for each participating member) will be divided among the relevant State and Territory Councils in accordance with a formula based on the number of members of the association resident in each jurisdiction.

Under the proposed model, national occupational associations (for example, the accounting associations) would be able to register a scheme in 1 State or Territory that covers its members in all jurisdictions. Members of State and Territory based associations (for example, the Law Society) will be able to have the benefit of their association's scheme for occupational liability arising in another State or Territory.

Importantly, under the proposed model, sovereignty is maintained in that a scheme, national or otherwise, will only operate in a jurisdiction that has gazetted it.

The Professional Standards (Mutual Recognition) Amendment Bill 2010 makes the necessary amendments to the South Australian Professional Standards Act 2004 to give effect to the SCAG agreement.

I commend the Bill to the House.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Amendment provisions

Clauses 1 and 2 are formal.

Part 2—Amendment of Professional Standards Act 2004

3—Amendment of section 4—Interpretation

This clause proposes to insert definitions into the principal Act that are necessary for the measure. In particular, corresponding law is defined as being a law of another jurisdiction that corresponds to the Act, and includes a law of another jurisdiction that is declared by the regulations to be a corresponding law of that jurisdiction for the purposes of the Act.

4—Amendment of section 8—Preparation and approval of schemes

Section 8 of the principal Act provides that a scheme for limiting the occupational liability of members of an occupational association may be prepared and approved. The proposed amendment provides that a scheme prepared under the section may indicate an intention to operate in South Australia only, or in both South Australia and another jurisdiction.

5—Amendment of section 9—Public notification of schemes

Section 9 of the principal Act provides that before approving a scheme, the Council must publish a notice in a daily newspaper circulating throughout the State explaining the scheme, advising where a copy of the scheme may be obtained and inviting comments and submissions. The proposed amendment provides that if the scheme indicates an intention to operate in both South Australia and another jurisdiction, the Council must publish a similar notice in the other jurisdiction in accordance with the requirements of the corresponding law of that jurisdiction.

6—Amendment of section 11—Consideration of comments, submissions and other matters

Section 11 of the principal Act sets out a number of matters the Council must consider prior to approving a scheme. The proposed amendment provides that if a scheme indicates an intention to operate as a scheme of both South Australia and another jurisdiction, the Council must also consider any matter that the appropriate Council for the other jurisdiction would have to consider under the provisions of the corresponding law of that jurisdiction, and all of the matters to be considered by the Council are to be considered in the context of each of the jurisdictions concerned.

7—Amendment of section 13—Submission of approved schemes for gazettal

Section 13 of the principal Act provides that the Council may submit a scheme approved by it to the Minister. The proposed amendment provides that if a scheme indicates an intention to operate as a scheme of both South Australia and another jurisdiction, the Council may also submit the scheme to the Minister administering the corresponding law of the other jurisdiction.

8—Amendment of section 14—Gazettal, tabling and disallowance of schemes

Section 14 of the principal Act provides that the Minister may, after taking into account such matters as he or she thinks fit, authorise the publication in the Gazette of a scheme submitted by the Council. The proposed amendment provides that in the case of an interstate scheme, the Minister may authorise the publication of a scheme submitted by the appropriate Council for the jurisdiction in which the scheme was prepared.

9—Amendment of section 15—Commencement of schemes

Section 15 of the principal Act provides that a scheme commences on such day after the date of its publication as specified by the Minister by notice in the Gazette or, if no such day is specified, 2 months after the date of its publication. This commencement is subject to an order of the Supreme Court on a challenge to the validity of a scheme under section 16 of the principal Act. The proposed amendment provides that the commencement of a scheme is also subject to an order made by the Supreme Court of another jurisdiction under the corresponding law of that jurisdiction.

10—Amendment of section 16—Challenges to schemes

Section 16 of the principal Act provides that a person who is, or is reasonably likely to be, affected by a scheme may apply to the Supreme Court for an order that the scheme is void for want of compliance with the Act. The proposed amendment provides that the Court may make an order that an interstate scheme is void on the ground that the scheme fails to comply with the provisions of the corresponding law of the jurisdiction in which it was prepared.

11—Amendment of section 17—Review of schemes

Section 17 of the principal Act provides for the review of the operation of a scheme. In the case of a scheme prepared under the principal Act, a review may, but need not, be conducted in order to decide whether a scheme should be amended or revoked or whether a new scheme should be made. The proposed amendment provides that, in the case of an interstate scheme, a review may, but need not, be conducted in order to decide whether the operation of the scheme should be terminated in relation to this jurisdiction.

12—Amendment of section 18—Amendment and revocation of schemes

Section 18 of the principal Act provides for the amendment to, or revocation of, a scheme. The proposed amendment provides that this section does not apply to an interstate scheme.

13—Insertion of sections 18A and 18B

Clause 13 of the measure proposes to insert 2 new sections into the principal Act.

18A—Notification of revocation of schemes

Proposed new section 18A provides that on the revocation of a South Australian scheme that operates as a scheme of another jurisdiction, the Minister must cause notice of the revocation to be given to the Minister administering the corresponding law of that other jurisdiction. On receipt of notice that an interstate scheme has been revoked under the corresponding law of the jurisdiction in which it was prepared, the Minister must cause a statement to that effect to be published in the Gazette.

18B—Termination of operation of interstate schemes in this jurisdiction

The Council may, on the application of an occupational association, prepare an instrument terminating, in this jurisdiction, the operation of an interstate scheme that relates to members of the association. The scheme terminates from a date specified or 2 months after the date of publication.

14—Amendment of section 34—Duration of scheme

Section 34 of the principal Act provides that a scheme remains in force for such period (not exceeding 5 years) from its commencement as is determined by the Council unless it is revoked, its operation extended or its operation ceases because of the operation of another Act. The proposed amendment provides that a South Australian scheme will also cease to operate if the scheme is declared void by the Supreme Court or by the Supreme Court of another jurisdiction under the corresponding law of that jurisdiction, or if it is disallowed under the Subordinate Legislation Act 1978. The proposed amendment also provides for the duration of an interstate scheme. An interstate scheme remains in force for such period (not exceeding 5 years) from its commencement as is determined by the Council unless its operation in relation to this jurisdiction is terminated, or the scheme ceases to have effect in the jurisdiction in which it was prepared, or the scheme is disallowed under the Subordinate Legislation Act 1978.

15—Functions of Council

Clause 15 is a drafting amendment.

16—Insertion of section 46A

Clause 16 of the measure proposes to insert new section 46A into the Act.

46A—Cooperation with authorities in other jurisdictions

This clause provides that for the purposes of dealing with a scheme that operates in both this jurisdiction and another jurisdiction, the Council may act in conjunction with the appropriate Council for the other jurisdiction.

Schedule 1—Transitional provision

1—Expiry date of existing schemes

The transitional provision provides for the expiry date of existing schemes.

Debate adjourned on motion of Hon. J.M.A. Lensink.


At 18:15 the council adjourned until Wednesday 15 September 2010 at 14:15.


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