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Legislative Council - Fifty-Second Parliament, First Session (52-1)
2010-09-28 Daily Xml
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PROFESSIONAL STANDARDS (MUTUAL RECOGNITION) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 14 September 2010.)

The Hon. S.G. WADE (16:52): I rise on behalf of the opposition to address the Professional Standards (Mutual Recognition) Amendment Bill 2010. On 21 July 2010, the Attorney-General introduced this bill as part of the response to the HIH-induced insurance crisis. South Australia implemented the Professional Standards Act 2004 in 2006. Common with similar legislation in all states and territories, the act provides for the approval of schemes under which the occupational liability of members of occupational associations is limited in return for their members, firstly, holding compulsory insurance or minimum business assets up to a prescribed level and, secondly, adopting risk management and dispute resolution procedures.

To facilitate a national system of professional standards legislation and schemes, uniform regulations have been promulgated and a national Professional Standards Council and a common secretariat for state councils has been established. Mutual recognition has emerged as a problem in relation to the national operation of the schemes. That is not to suggest that these schemes do not currently operate beyond the boundaries of their own jurisdiction, but problems have been identified in terms of the clarity of the obligations and responsibilities.

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's jurisdiction, this is cumbersome, expensive and time-consuming, involving duplication and inefficiency. Either the professional's occupational association has to apply for schemes in all jurisdictions, or occupational associations need to permit interstate schemes.

To address this issue and to promote the national operation of the scheme, the Standing Committee of Attorneys-General has agreed to a model for mutual recognition in all jurisdictions approved in one jurisdiction to enable professionals to have capped liability outside their home jurisdiction. This bill reflects the nationally agreed model. In the process of consultation on this bill, the Law Society did raise the fact that two jurisdictions—Western Australia and New South Wales—have repealed sections which are analogous to section 5(2)(b) of the South Australian act.

That provision limits the capacity for schemes to cover occupational liability for acting in a personal injury matter in relation to legal professional costs. The Law Society is of the view that, for any scheme to be attractive to a large cross-section of the South Australian legal community, the embargo created by this section needs to be lifted. As well as the two jurisdictions that have already repealed those sections, I understand that Victoria is currently looking at the relevance of section 5 (2)(b) going forward. The government's response to the society which has been made available to the opposition (and I thank the government for doing that) responds to the suggestion in the following terms:

As you would be aware, the effect of the removal of s.5(2)(b) would be that occupational liability for acting in a personal injury matter would be included in the operation of the Professional Standards Act 2004, and thus would be able to be limited under a scheme. The government is not prepared to support this amendment. The main concern with the amendment is the potential detriment to those with large personal injury claims. Personal injury claims are viewed as a special category of claim, and such claims have been treated differently to commercial claims due to the vulnerability of the claimants.

For a catastrophically injured claimant, should their lawyer negligently cause the claim to fail, their only option for compensation is to then sue their lawyer for the resultant loss. The claimant would then be significantly financially disadvantaged should their lawyer's liability be capped and would have no avenue to pursue any further compensation. Such claimants rely on compensation to cover potentially life-long loss of earnings for medical treatment, house/transport modifications and other costs associated with permanent disability. The claims figures obtained from Lawguard indicate that the number of claims against lawyers for negligence in personal injury matters is fairly small, and it would be rare to have a claim that would be above the typical liability cap.

Therefore, the benefit of capped liability would be rarely utilised and, when compared to the impact on a claimant, the protection of vulnerable claimants takes priority. Additionally, at this stage just two other jurisdictions have excluded this liability from their equivalent acts and we understand that the Victoria is currently conducting a review of their act. Should more jurisdictions exclude this liability from their acts, the issue could be re-examined.

In conclusion, the opposition supports this bill as a sensible evolution to the professional standards regime put in place by this parliament some six years ago now. We will be supporting the second reading of this bill.

Debate adjourned on motion of Hon. I.K. Hunter.

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