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Legislative Assembly for the ACT: 2004 Week 10 Hansard (Thursday, 26 August 2004) . . Page.. 4395 ..

may be reducing the rights of some ACT citizens for zero return. It is irresponsible legislation, and I urge the Assembly to not support the particular clauses in this bill that would make that a reality.

The government has not given sufficient weight to the effect that this legislation may have on the community and business sectors in the territory. The compensation cut-off may be as little as half a million dollars. This means that, even if unsound professional advice leads to millions of dollars of losses for an ACT business, that business will not be able to claim for those losses, which would potentially bankrupt it in the process.

Equally, if a person receives unsound financial advice in investing their superannuation, for example, they will not be able to retrieve the lost funds in their entirety and will have their future financial security threatened as a result. These changes to professional indemnity are unnecessary, they erode the rights of Canberra citizens and businesses and they are based on conjecture. This is not a stable basis for legislating in the territory, and that is why the Democrats will be opposing these sections in the detail stage.

MS TUCKER (8.30): This ongoing international tort law reform insurance support project is a strange game. It is all about making ourselves attractive to underwriters, as a territory and as a nation, so that insurance will be easier to get. As I understand it, the insurance industry in Australia, having got over the HIH disaster caused by incompetent management, is now doing extremely well. So, while insurance may still be hard to get, and expensive, the insurance businesses themselves are doing very well.

It is interesting that the whole underwriting business is so global and its caution in underwriting insurance has been so strongly accentuated by the losses inflicted on the global insurance business by the September 11 attacks on Washington and New York. While, on the one hand, Australia is projecting an image of deputy sheriff to the US on the world stage, we are also, through cutting back on both costs and entitlements, trying to project ourselves as an attractive, low-risk market to insurance actuaries.

It is time that we took a national look at no-fault insurance, which is predicated on providing protection for all. This bill is in fact two different schemes aimed at making insurance in the ACT more attractive. They reflect a national commitment to tort law reform, which is a project with uncertain benefits and has not been entirely uniform in its outcomes to date.

The ACT has been quite lucky, in that it has had a government fairly keen to protect the benefits and entitlements of individuals, as opposed to New South Wales and the Commonwealth, which have both appeared quite keen to head in the other direction. Also, the ACT is very small in the national setting, which has probably made it easier to take such a relatively liberal line. In that context, it does not appear that insurance is cheaper in Sydney than it is in Canberra.

Until now, the usual form to allocate liability when we are looking at an insurance issue has been on the principle of joint and several. Every party responsible can be held liable for all or some of it. In terms of the claimant, it means that the insured entity—and hence their insurance company—with the deepest pocket will pay the compensation. Then that entity or their insurance company could sue the other parties, or their insurance companies, to get back the correct proportion of payout.

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