Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .

Legislative Assembly for the ACT: 2004 Week 10 Hansard (Thursday, 26 August 2004) . . Page.. 4397 ..

(Wrongs) Act 2002 to implement proportionate liability and professional standards in the Australian Capital Territory. The bill represents a further measure to deal with the problems experienced by the insurance industry since 2001. A combination of international, domestic and structural factors came together to produce a severe increase in premiums for liability classes of insurance in Australia. The bill is part of a national initiative agreed to by the Standing Committee of Attorneys General in August 2003.

It may be of value to repeat, again, the main features of the legislation. Both initiatives in the bill target the problem of economic loss as a result of professional negligence and do not relate to claims arising from personal injury.

The bill will replace the use of the concept of joint and several liability with the concept of proportionate liability as a means for compensating claimants in legal claims for economic loss or property damage. Proportionate liability means that, in an action for damages for economic loss or damage to property where more than one person has caused the loss or damage, each defendant in the action is liable only to the extent of his or her responsibility for the loss or damage caused. The interests of consumers of goods and services for personal use will be protected by retaining the concept of joint and several liability in relation to consumer claims.

The bill will also introduce professional standards for industry associations. Professionals who participate in the scheme will be required to take measures such as obtaining professional indemnity insurance, undertaking continuing education, complying with codes of conduct and being subject to disciplinary procedures and risk management strategies. In return, the professionals will benefit from financial limits on liability for damages in relation to an action under the law of negligence, contract or misleading conduct for economic loss.

A professional standards council, whose members will be appointed from the ranks of key Australian professionals, will be established with the responsibility for overseeing the implementation of risk management strategies by professional groups in the Australian Capital Territory. Peak bodies representing accountants, lawyers, financial planners, architects and engineers strongly support the introduction of this legislation.

The legislation will not affect the consumer’s ability to sue for personal injury or economic loss arising from personal injury. This bill will not compromise the rights of consumers. Consumers will still be able to be fully compensated for claims of professional negligence because professionals will not be able to cap their liability below $500,000. The majority, if not all, of consumer claims for economic loss suffered from negligent advice given by a professional person is unlikely to amount to more than the statutory cap of $500,000.

By definition, a consumer claim is a claim relating to the purchase of goods or services for personal, domestic or household use. It is unlikely that a consumer would purchase a service or a good for personal use valued at greater than $500,000. In the case of lawyers, for example, it is anticipated that the minimum cap will be $1.5 million. Liability caps are only expected to affect the interests of big business. Big businesses are the people who carry out transactions valued at $500,000 or greater.

Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .