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<a href = "APSUT.html">Australia's Professional Services under threat 1997</a><br>
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<a href = "VICletter.html">Victorian market failure in Professional Indemnity insurance</a><br>
<a href = "CVSTP.html">Coonan's view a shock to professionals</a><br>
<a href = "PBULC.html">Peak body urges liability cap</a><br>
<a href = "LDRA.html">Liability decision rouses anger</a><br>
<a href = "PLNHG.html">Proportionate liability is not Holy Grail</a><br>
<a href = "GPAS.html">Government position appears to be shifting</a><br>
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<a href = "Treasurer.html">Paul Meiklejohn</a><br>
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<a href = "profcomppublic.html">Professionalism, competition policy and the public interest: Issues paper (2003)</a><br>
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<br><BLOCKQUOTE>
<P align=center>(AUSTRALIAN COUNCIL OF PROFESSIONS - JULY 1998) </P><BR>The Public are at risk of </BLOCKQUOTE>
<UL>
<UL><B>
<BLOCKQUOTE>
<LI>losing access to some professional services </LI></BLOCKQUOTE>
<BLOCKQUOTE>
<LI>receiving limited, defensive and more costly professional services that are more concerned with protecting the professional's interests than meeting the needs of the consumer </LI></BLOCKQUOTE>
<BLOCKQUOTE>
<LI>not having access to adequate resources for compensation for negligent services. </LI></BLOCKQUOTE></UL></UL></B><B>THE NATURE OF THE THREAT </B>
<BLOCKQUOTE>Australia's professional services - ranging from those provided by veterinarians, physiotherapists and engineers to those provided by doctors, lawyers, accountants and surveyors - are under threat. </BLOCKQUOTE>
<BLOCKQUOTE>The threat stems from the fact that the providers of these services have become targets for litigation when something goes wrong and the client or patient looks for someone to blame and seeks compensation. </BLOCKQUOTE>
<BLOCKQUOTE>In our increasingly litigious society, professionals are seen as "easy" targets because they have reputations to protect, are often covered by professional indemnity insurance and are regarded as being wealthy. </BLOCKQUOTE>
<BLOCKQUOTE>Professionals are being sued more frequently today than at any other time in our history - and there is an alarming escalation in the size of the judgments being awarded against them. </BLOCKQUOTE>
<BLOCKQUOTE>Claims for alleged negligence by professionals have outstripped the capacity of those professionals - and the insurance market - to cover them. </BLOCKQUOTE><B>THE CONSEQUENCES TO THE COMMUNITY </B>
<BLOCKQUOTE>The enormous cost of defending and settling claims, as well as the cost of insurance for them are borne by the consumer and the community as a whole. This is because in the professions, as in all sections of commerce and industry, these business costs have to be passed on to customers and clients. </BLOCKQUOTE>
<BLOCKQUOTE>However, there is another down-side. As more professionals realise the nature of the threat they face, they must respond by: </BLOCKQUOTE>
<BLOCKQUOTE>becoming more defensive in their work and giving their clients more cautious advice or recommending more costly procedures that help avoid the possibility of legal action; or </BLOCKQUOTE>
<BLOCKQUOTE>in some instances, obstetricians being a case in point, withdrawing from the very type of work which the community needs them to do. </BLOCKQUOTE>
<BLOCKQUOTE>This leads to difficulties in attracting high calibre individuals into professions due to the risk of liability. Overall, the consequences for the community, in terms of both service provision and cost, will inevitably be adverse. </BLOCKQUOTE><B>WHAT CAN BE DONE? </B>
<BLOCKQUOTE>Australia has been in a position before where claims have outstripped the capacity of the community, defendants and insurers to pay for them and where those who suffer damages have been left in difficulties. This has happened with motor vehicle accidents, workers' compensation and aviation accidents. In each of these areas, legislation has been introduced to limit the amounts which can be claimed and to ensure that whatever is awarded to the victim is fair and available through insurance. </BLOCKQUOTE>
<BLOCKQUOTE>It is now time for governments to come to grips with the three measures which are required to address the difficulties facing professional services. </BLOCKQUOTE><B>
<BLOCKQUOTE>Professional Standards Legislation</B> </BLOCKQUOTE>
<BLOCKQUOTE>Extra protection should be provided to the community in the form of compulsory professional indemnity insurance and requirements for risk management, complaints handling and disciplinary procedures. </BLOCKQUOTE>
<BLOCKQUOTE>In return, in order to keep damages within a range that can be expected to be paid to the plaintiff, the amount of damages that can be awarded must be capped. </BLOCKQUOTE>
<BLOCKQUOTE>The New South Wales and Western Australian Parliaments have already enacted Professional Standards Acts. </BLOCKQUOTE>
<BLOCKQUOTE>The health professions and their patients are, however, currently excluded from this legislation. </BLOCKQUOTE><B>
<BLOCKQUOTE>Proportionate Liability Legislation</B> </BLOCKQUOTE>
<BLOCKQUOTE>At present, joint and several liability of defendants can lead to the unjust situation where a professional, who may be only 10% responsible for a plaintiff's loss, pays 100% of the damages. </BLOCKQUOTE>
<BLOCKQUOTE>Professionals are frequently the main target in legal actions even where their involvement is minimal because their professional indemnity insurance is the most obvious source of funds while more blameworthy defendants (such as directors of collapsed companies ) are either outside of Australia or bankrupt. </BLOCKQUOTE>
<BLOCKQUOTE>Legislation is needed to replace joint and several liability with proportionate liability, where the liability of defendants is apportioned according to their respective degrees of responsibility. </BLOCKQUOTE>
<BLOCKQUOTE>This approach already exists in the USA and a joint Federal/NSW Government study has recommended that it should also apply in Australia. Model legislation to introduce proportionate liability has been prepared and should be implemented by governments as a matter of high priority. </BLOCKQUOTE><B>
<BLOCKQUOTE>Clear Time Limits</B> </BLOCKQUOTE>
<BLOCKQUOTE>Because of the different State statutes of limitation, it is often unclear when the professional liability for a particular act or omission ceases. </BLOCKQUOTE>
<BLOCKQUOTE>In some instances the liability remains indefinitely. In the interests of the community and of professionals, time limitations should be reasonable, uniform between jurisdictions and based on clearly ascertainable dates. </BLOCKQUOTE>
<BLOCKQUOTE>Australia's professional practitioners accept that they must be accountable for their actions. They also acknowledge that the community should have the right to recover reasonable damages where professionals are negligent. However, professional practitioners should not be asked - as they are now - to bear unlimited or disproportionate liability - and for an indefinite period. </BLOCKQUOTE><B>HOW CAN REFORM BE ACHIEVED? </B>
<BLOCKQUOTE>Achieving these reforms will require the co-operation of the State and Federal Governments. Australia needs a national approach to this problem whereby the States and the Federal Governments adopt uniform legislation. </BLOCKQUOTE>
<BLOCKQUOTE>You can help bring about change by supporting current moves seeking legislation for nation-wide schemes to establish a regime which ensures that: </BLOCKQUOTE>
<OL>
<OL>
<BLOCKQUOTE>
<LI>high professional standards are promoted; </LI></BLOCKQUOTE>
<BLOCKQUOTE>
<LI>professional indemnity insurance is always available to satisfy claims against professionals to a reasonable ceiling; </LI></BLOCKQUOTE>
<BLOCKQUOTE>
<LI>professional liability is limited both as to amount and time; and </LI></BLOCKQUOTE>
<BLOCKQUOTE>
<LI>joint and several liability is modified to allocate liability among multiple defendants in accordance with responsibility for loss</LI></BLOCKQUOTE></OL></OL>
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