EXPLANATORY STATEMENT

 

Select Legislative Instrument 2008 No. 96

 

 

 

Issued by authority of the Assistant Treasurer

 

Trade Practices Act 1974

 

Trade Practices Amendment Regulations 2008 (No. 2)

 

Section 172 of the Trade Practices Act 1974 (the TP Act) provides, in part, that the Governor-General may make regulations prescribing matters required or permitted by the TP Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the TP Act.

 

Section 87AB of the TP Act provides that the professional standards law of a state or territory applies to limit occupational liability relating to an action for contravention of section 52 of the TP Act. The relevant state and territory laws limit the civil liability of professionals and others while still maintaining appropriate protection for consumers of professional services through measures such as compulsory insurance cover, continual education and training and formalised complaint procedures.

 

Section 52 of the TP Act enables plaintiffs to take an action in certain circumstances where they have been the victim of misleading and deceptive conduct. This broad provision has been recognised as being a possible alternative cause of action to common law negligence.

 

Section 87AB also provides that a state or territory scheme only applies to professional schemes that have been prescribed.

 

The new Regulations prescribe for the purposes of section 87AB the following additional professional standards schemes:

 

•                Institute of Chartered Accountants in Australia (Vic);

•                Institute of Chartered Accountants in Australia (SA);

•                Institute of Chartered Accountants in Australia (NT);

•                Institute of Chartered Accountants in Australia (ACT);

•                Institute of Chartered Accountants in Australia (Qld);

•                CPA Australia (Vic);

•                CPA Australia (SA);

•                CPA Australia (WA);

•                CPA Australia (NT);

•                CPA Australia (ACT);

•                CPA Australia (Qld);

•                Professional Surveyors Occupational Association (NSW); and

•                Victorian Bar Incorporated.

 

This has the effect of limiting the occupational liability of members of the schemes relating to an action for contravention of section 52 of the TP Act in the same way as occupational liability is limited under the relevant state and territory laws: the Professional Standards Act 2003 (Vic), the Professional Standards Act 2004 (SA), the Professional Standards Act (NT), the Civil Law (Wrongs) Act 2002 (ACT), the Professional Standards Act 2004 (Qld), the Professional Standards Act 1997 (WA) and the Professional Standards Act 1994 (NSW).

 

The new Regulations add to the existing prescriptions of the New South Wales Bar Association Scheme, the Engineers Australia (NSW) Scheme, The Law Society of New South Wales Scheme, the Investigative and Remedial Engineers Scheme, the Australian Valuers Institute (NSW) Scheme, the CPA Australia (NSW) Scheme, the Institute of Chartered Accountants in Australia (NSW) Scheme and the Institute of Chartered Accountants in Australia (WA) Scheme.

 

The proposed Regulations have been requested by the applicable associations, following approval by the relevant Professional Standards Councils and gazettal in the relevant states and territories.

 

The TP Act specifies no conditions that need to be met before the power to make the new Regulations may be exercised.

 

The Professional Standards Council sought the opinion of an independent actuarial consultant and called for public comment on the schemes via public notification in major metropolitan newspapers in the relevant jurisdictions prior to approving the professional standards schemes.

 

The new Regulations commence on 12 June 2008. The new Regulations cease on 12 June 2009, as the relevant policy is currently under consideration.