Professions Australia - A national organisation of professional associations

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PA Submission (2004)</a><br> <a href = "profoftheyear.html">Announcement of 2004 Professional of the Year</a><br> <a href = "membercodes.html">Examples of Member Codes</a><br> <a href = "codeprinciples.html">Code Principles</a><br> <br><P>Review of the Law of Negligence<FONT face=Arial size=7></P> <P> </P> <P>Submission from the </P> <P>Australian Council of Professions Ltd</FONT><SPAN></P><FONT face=Arial> <P>(ABN 20 059 999 914 ACN 059 999 914)</FONT><FONT face=Arial size=5></P> <P> </P> <P> </P> <P>1 August 2002</P></FONT><FONT face=Arial> <P> </P></FONT> <P> </P> <P>The Secretary</P> <P>Review of the Law of Negligence</P> <P>C/- Department of the Treasury</P> <P>Langton Crescent</P> <P>Parkes ACT 2600</P> <P> </P> <P> </P> <P>Dear Sir/Madam</P> <P>Following is a submission to your review from the Australian Council of Professions Ltd.</P> <P>The contact person in relation to the submission is Dr David Stephens, Policy Consultant, who may be reached on 02 6257 6100, 0413 867 972 or davids@intellcap.com.au.</P> <P>Yours sincerely</P> <P> </P> <P> </P> <P> </P> <P>John Castles AM</P> <P>President</P> <P>1 August 2002</P><B><FONT face=Arial size=4> <P align=center> </P> <P align=center><A name=_Toc15792828></P> <P align=center> </P> <P align=center> </P> <P align=center> </P> <P align=center> </P> <P align=center>Table of contents</A></P></B></FONT><FONT face=Arial> <P> </P> <P></FONT><FONT face=Arial size=4> <P>Summary </FONT><A href="#_Toc15792829">*</A></P><FONT face=Arial size=4> <P>Introduction </FONT><A href="#_Toc15792830">*</A></P><FONT face=Arial size=4> <P>Comment on term of reference 3(d) </FONT><A href="#_Toc15792831">*</A></P><FONT face=Arial size=4> <P>Comment on term of reference 3(e) </FONT><A href="#_Toc15792832">*</A></P><FONT face=Arial size=4> <P>Comment on term of reference 4 </FONT><A href="#_Toc15792833">*</A></P><FONT face=Arial size=4> <P>Comment on term of reference 5 </FONT><A href="#_Toc15792834">*</A></P><FONT face=Arial size=4> <P>General </FONT><A href="#_Toc15792835">*</A></P> <P></P><B><I><FONT face=Arial> <P align=center> </P> <P align=center> </P> <P align=center> </P> <P align=center> </P> <P align=center> </P> <P align=center> </P> <P align=center><A name=_Toc15792829>Summary</A></P></B></I></FONT> <P>The Council strongly supports the concept that the standard of care in professional negligence matters should accord with the generally accepted practice of the relevant profession at the time of the negligent act or omission. This should apply to all professions, not just the health professions.</P> <P>The Council strongly supports the introduction, through statute, if necessary, of proportionate liability instead of joint and several liability and believes this should apply in all negligence actions, not just those involving injury or death.</P> <P>The Council strongly supports the introduction of Professional Standards Acts in all jurisdictions and the harmonisation of the Commonwealth Trade Practices Act to prevent actions under that legislation that are not possible under Professional Standards Acts. It believes these changes should apply to all causes of negligence actions, not just those involving personal injury or death.</P> <P>The Council welcomes any move towards sensible limitation periods for actions in negligence and believes these should apply to all such actions, not just those involving injury and death. It has no view on whether three years is the appropriate period. The Council believes the time should commence from when the work is completed rather than when the cause for action emerges. Standardisation across jurisdictions is also important.</P> <P>The Council is aware of the argument that negligence law reform will benefit insurance companies by reducing payouts, without necessarily leading to reduced premiums for consumers, including professionals. The Council strongly supports the continuing and, if necessary, extended role of the Australian Competition and Consumer Commission in monitoring insurance industry pricing, particularly to ensure that savings are passed on to consumers.</P> <P> </P><B><I><FONT face=Arial> <P> </P> <P><A name=_Toc15792830>Introduction</A></P></B></I></FONT> <P>The Australian Council of Professions Ltd (ACP) welcomes the opportunity to make a submission to this review. Our submission addresses terms of reference 3(d), 3(e), 4 and 5. </P> <P>The submission draws upon many years of work by the ACP in this area, especially by our professional liability committee. The submission also repeats some points made in the ACP's recent submission to the Senate Economics References Committee's inquiry into public liability and professional indemnity insurance. </P> <P>The Council has existed in essentially its present form since 1971. It currently has 13 constituent organisations which, between them, represent over 200 000 professionals throughout Australia. The Council’s constituent organisations (as at 1 August) are:</P> <TABLE cellSpacing=0 cellPadding=7 width=568 border=0> <TR> <TD vAlign=top width="50%"> <P> </P> <P>The Institution of Engineers, Australia</P></TD> <TD vAlign=top width="50%"> <P align=right> </P> <P align=right>The Australian Institute of Quantity Surveyors</P></TD></TR> <TR> <TD vAlign=top width="50%"> <P>The Royal Australian Institute of Architects</P></TD> <TD vAlign=top width="50%"> <P align=right>Australian Physiotherapy Association</P></TD></TR> <TR> <TD vAlign=top width="50%"> <P>Australian Dental Association, Inc.</P></TD> <TD vAlign=top width="50%"> <P align=right>The Australasian Institute of Mining and Metallurgy</P></TD></TR> <TR> <TD vAlign=top width="50%"> <P>CPA Australia</P></TD> <TD vAlign=top width="50%"> <P align=right>Audiological Society of Australia, Inc.</P></TD></TR> <TR> <TD vAlign=top width="50%"> <P>The Institute of Chartered Accountants in Australia</P></TD> <TD vAlign=top width="50%"> <P align=right>Australian Computer Society</P></TD></TR> <TR> <TD vAlign=top width="50%"> <P>The Institution of Surveyors, Australia Inc.</P></TD> <TD vAlign=top width="50%"> <P align=right>The New South Wales Council of Professions.</P></TD></TR> <TR> <TD vAlign=top width="50%"> <P>Pharmaceutical Society of Australia</P></TD> <TD vAlign=top width="50%"> </TD></TR></TABLE> <P> </P> <P>There is a branch of the ACP in each State and Territory, except New South Wales and the Northern Territory. (The Victorian Branch is dormant at present.) In New South Wales, the New South Wales Council of Professions (NSWCOP), an independent body, performs the function of a branch. NSWCOP’s members include the local branches of most of the above organisations, as well as the state branches of the Australian Medical Association, the Bar Association and the Law Society. </P> <P>The Council is in the process of registering the business name Professions Australia in each jurisdiction. It is also building its links with professional organisations that are not at present members of the ACP.</P><B><I><FONT face=Arial> <P><A name=_Toc15792831>Comment on term of reference 3(d)</A></P></B></I></FONT> <P>The Council strongly supports the concept that the standard of care in professional negligence matters should accord with the generally accepted practice of the relevant profession at the time of the negligent act or omission. This should apply to all professions, not just the health professions.</P> <P>In 1996 the Council's professional liability committee issued a discussion paper noting the tendency for courts to determine standards of care in the health professions, rather than them being determined by the prevailing standards of the profession itself. The proposed solution then was to introduce legislation to mandate the principle that the standards of health professionals be judged against their peers in matters of diagnosis and treatment, assessment and implementation.</P> <P>This remains the view of the Council and we believe the approach should apply to all professions. Such an approach would complement, at the level of individual litigation, the systemic approach taken through Professional Standards Acts (see below).</P><B><I><FONT face=Arial> <P><A name=_Toc15792832>Comment on term of reference 3(e)</A></P></B></I></FONT> <P>The Council strongly supports the introduction, through statute, if necessary, of proportionate liability instead of joint and several liability and believes this should apply in all negligence actions, not just those involving injury or death. The Council's submission to the Senate inquiry said (paras 43-45, 47):</P><FONT size=3> <P>A suite of solutions also needs to ensure that professional liability is limited both as to amount and time and that joint and several liability is modified to allocate liability among multiple defendants in accordance with responsibility for loss. At present, joint and several liability of defendants can lead to the unjust situation where a professional, who may be only 10 per cent responsible for a plaintiff’s loss, pays 100 per cent of the damages. </P> <P>Professionals are frequently the main target in legal actions, even where their involvement in the cause of action 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. </P> <P>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. This approach already exists in the USA and a joint study by the Commonwealth and New South Wales Governments in 1996 recommended that it should also apply in Australia. Model legislation to introduce proportionate liability has been prepared since 1996 and should be implemented by governments as a matter of high priority….</P> <P>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. </P></FONT><B><I><FONT face=Arial> <P><A name=_Toc15792833>Comment on term of reference 4</A></P></B></I></FONT> <P>The Council strongly supports the introduction of Professional Standards Acts in all jurisdictions and the harmonisation of the Commonwealth Trade Practices Act to prevent actions under that legislation that are not possible under Professional Standards Acts. It believes these changes should apply to all causes of negligence actions, not just those involving personal injury or death. The Council's submission to the Senate inquiry said (paras 34-36, 41-42):</P><FONT size=3> <P>The solutions offered need to ensure that high professional standards are promoted but that professional indemnity insurance is always available to satisfy claims against professionals up to a reasonable ceiling. New South Wales and Western Australia have found a well-balanced legislative solution in the form of Professional Standards Acts. </P> <P>Under this legislation professional associations commit to compulsory indemnity insurance, risk management programs and complaints and discipline procedures, in return for limitations on the liability of the service provider. Liability is limited to amounts which cover virtually all consumer compensation claims but avoid catastrophic payouts by the provider. </P> <P>To be fully effective such legislation needs to be enacted in every State and Territory and the Commonwealth trade practices and corporations legislation needs to be amended to ensure complementarity, particularly to ensure that matters of error in professional judgement, arrived at in good faith, are not treated as misleading and deceptive conduct under the Trade Practices Act….</P> <P>[P]rofessional standards legislation, developed and applied consistently across the nation, holds the promise of reinforcing appropriate professional behaviour and professionals’ accountability to the communities they serve, while reducing the costs of dealing with damages arising from professionals’ work.</P> <P>The community benefits of professional standards legislation can be summarised as follows:</P> <UL> <UL> <LI>Liability limitations would be set at a figure which will completely cover most claims from members of the community.</LI> <LI>Liability limitations would be linked to compulsory professional indemnity insurance, ensuring certainty for the community.</LI> <LI>Professional bodies would have proper complaints and disciplinary procedures to deal with community concerns.</LI> <LI>Professional bodies would bring in programs of risk management, which will help to prevent problems arising.</LI></UL></UL></FONT><B><I><FONT face=Arial> <P><A name=_Toc15792834>Comment on term of reference 5</A></P></B></I></FONT> <P>The Council welcomes any move towards sensible limitation periods for actions in negligence and believes these should apply to all such actions, not just those involving injury and death. It has no view on whether three years is the appropriate period. The Council believes the time should commence from when the work is completed rather than when the cause for action emerges. </P> <P>Standardisation across jurisdictions is also important. Because of the different state laws under which professionals operate, it is often unclear to them when the professional liability for a particular act or omission commences or ceases. In some instances the liability can commence years after the professional’s involvement but remain indefinitely. In the interests of the community and of professionals, time limitations should be reasonable, uniform between jurisdictions and based on clearly ascertainable dates. </P><B><I><FONT face=Arial> <P><A name=_Toc15792835>General</A></P></B></I></FONT> <P>The Council is aware of the argument that negligence law reform will benefit insurance companies by reducing payouts, without necessarily leading to reduced premiums for consumers, including professionals. It has noted recent discussions on this issue in the Standing Committee of Attorneys-General, particularly in relation to public liability coverage. </P> <P>The Council strongly supports the continuing and, if necessary, extended role of the Australian Competition and Consumer Commission in monitoring insurance industry pricing, particularly to ensure that savings are passed on to consumers.</P><FONT face=Arial></FONT></SPAN> </body>