About professional standards legislation

What is professional standards legislation (PSL)?

PSL is state-based legislation designed to:

• improve the occupational standards of professionals
• protect the consumers of the services provided by professionals
• enable the creation of schemes to limit the civil liability of professionals to whom the schemes apply
• ensure that PII coverage held by professionals meets required standards

What is a PSL occupational scheme?

PSL allows the registration of occupational schemes.

Occupational schemes are professional standard schemes established by professional associations.

Occupational schemes are approved and monitored by the Professional Standards Council (PSC) in each state and territory, in consultation with the relevant professional association. The PSC calls for public submissions before approving an occupational scheme. Consumers and other parties are able to object to schemes prior to approval.

These schemes limit the liability of members of professional associations, with regard to economic loss for damages arising from occupational and civil liabilities.

The schemes do not limit liability for death, personal injury, a breach of trust, fraud or dishonesty.

PSL across Australia

PSL is now in place in all states and territories and Professional Standards Councils exist for each state and territory. There are also mutual recognition amendment acts proposed for states and territories to provide a process whereby a scheme in one state or territory is recognised in another state or territory.

New South Wales

A new New South Wales CPA Australia PSC scheme was approved in September 2007 and formally gazetted by the New South Wales Government on 5 October 2007.

The scheme is administered by the New South Wales Professional Standards Council.

Tasmania

CPA Australia is working with the profession via the Liability Reform Steering Group (LRSG) to lobby for the alignment of the Tasmanian legislation (Tasmanian Professional Standards Act) with the rest of Australia. This would enable the application for a scheme in Tasmania to be finalised. CPA Australia expects that scheme to be operational in coming months.

Other States and Territories

The new New South Wales scheme was used as a template for schemes throughout Australia.

Applications for schemes in all other states and territories were lodged in late September 2007.

Applications for schemes in Western Australia, South Australia, ACT, Northern Territory, Queensland and Victoria were approved for advertising on 19 October 2007. The schemes' applications were formally published in major daily papers on 31 October 2007.

The public notification period ended in December 2007 and these schemes were referred to the relevant state or territory Attorney General for gazettal on 12 December.

These schemes did not become operational until they were gazetted.

Trade Practices Act reforms

The Commonwealth introduced changes to the Trade Practices Act (TPA) in 2006 that allows the Commonwealth to recognise ('prescribe') a Professional Standards Council (PSC) scheme under commonwealth legislation.

On 17 October 2007, the New South Wales CPA Australia PSC scheme was recognised by the Commonwealth, providing immediate capping of liability under commonwealth legislation for New South Wales members. Schemes in Queensland, the ACT, Western Australia, South Australia, Victoria and the Northern Territory were prescribed by the Australian Commonwealth on 16 June 2008

Why is CPA Australia supporting the implementation of PSL?

Over the past few years, CPA Australia has been extensively involved in lobbying for proportionate liability and professional standards reform across the nation, following the insurance market crisis after 11 September and the HIH collapses.

CPA Australia believes that the implementation of PSL by the state governments, together with the Federal Government's amendments to the TPA will benefit you in the long term.

What are the benefits of PSL?

You benefit by having your occupational liability capped under relevant state and commonwealth legislation.

The overarching aims of a national regime are to:

1. Improve professional standards
   Compliance with high standards of quality assurance, risk management practices and disciplinary procedures, as well as required levels of professional development, ensure greater transparency and public accountability applies.
   The risks associated with members supplying services becomes more predictable, leading to the containment of the scale of risk to insurable levels.
2. Improve consumer protection
   PSL will protect consumers by making insurance compulsory for professionals who are members of occupational schemes. This ensures that, in the event that claims do arise, insurance cover exists to compensate plaintiffs and consumers can be more confident that they will be able to recover damages.
   In addition, risk management practices have been designed to minimise the risk of claims arising in the first place.
3. Maintain affordable levels of PII
   CPA Australia believes that the implementation of PSL and capped liability on claims may lead to the lowering of PII premiums in the long term through a reduction in the number of, and amount paid, to settle claims.

The schemes:

• formalise risk management practices
• provide transparent and detailed complaint procedures, leading to improved service delivery for consumers

Further information

• view detailed versions of the schemes on the Professional Standards Councils website  
• view relevant legislation for Australia and each state

Page last updated: Wednesday, 1 November 2009