Professional Standards Scheme Legislation Amendment Regulation 2013 (No. 1)

Overview

The Professional Standards Scheme Legislation Amendment Regulation 2013 (No. 1) was enacted by the Parliamentary Secretary to the Treasurer to address the need for a unified approach to the regulation of professional standards across different jurisdictions in Australia. The Regulation amends the Australian Securities and Investments Commission Regulations 2001 and the Corporations Regulations 2001 by prescribing certain professional standards schemes, including those of the New South Wales Bar Association, the South Australian Bar Association Incorporated, the Law Society of New South Wales, the Queensland Law Society, and the Law Society of South Australia. The primary objective of this legislation is to ensure consistency in the limitation of occupational liability for professionals across federal and state jurisdictions, aligning the protection offered by these schemes with that provided under various state Professional Standards Acts and the Civil Law (Wrongs) Act 2002 (ACT). This alignment helps maintain consumer protection while reducing the potential for conflicting legal standards. The regulation took effect on 1 March 2013, and it was deemed compatible with human rights, as it does not engage any of the rights or freedoms recognised in the international instruments listed under the Human Rights (Parliamentary Scrutiny) Act 2011.

Scope and Application

The Professional Standards Scheme Legislation Amendment Regulation 2013 (No. 1) amends the Australian Securities and Investments Commission Regulations 2001 and the Corporations Regulations 2001 to prescribe certain professional standards schemes in the context of the Australian Securities and Investments Commission Act 2001 and the Corporations Act 2001. This regulation applies to the professional standards schemes of the New South Wales Bar Association, the South Australian Bar Association, the Law Society of New South Wales, the Queensland Law Society, and the Law Society of South Australia. The intent behind this regulation is to limit the occupational liability of members of these schemes concerning actions for misleading or deceptive conduct under the ASIC Act and market misconduct under the Corporations Act, in alignment with how such liabilities are managed under the respective state and territory laws. The regulation is effective from 1 March 2013, and the Commonwealth has deemed further consultation unnecessary given the prior engagement with the Professional Standards Council and public notification in major newspapers.

Key Provisions

The main operative sections of the Professional Standards Scheme Legislation Amendment Regulation 2013 (No. 1) are sections 3 and 4, which prescribe certain professional standards schemes under the Australian Securities and Investments Commission Regulations 2001 and Corporations Regulations 2001 (sections 2 and 3). Section 2 prescribes the New South Wales Bar Association Scheme, the South Australian Bar Association Incorporated Scheme, the Law Society of New South Wales Scheme, the Law Society of Queensland Scheme, and the Law Society of South Australia Professional Standards Scheme. Section 3 specifies that the prescription of these schemes will commence on 1 March 2013. The Act imposes obligations on these prescribed professional standards schemes to limit the occupational liability of their members. Specifically, it aims to ensure that the liability of members is limited in cases where they are sued for actions that contravene section 12DA of the Australian Securities and Investments Commission Act 2001 (ASIC Act) or section 1041H of the Corporations Act 2001 (Corps Act). These sections relate to misleading or deceptive conduct concerning financial services and market misconduct or other misconduct relating to financial products and services, respectively. By prescribing these schemes, the Act aligns the limitation of occupational liability under federal legislation with how it is limited under relevant state and territory laws. The Regulation also includes provisions regarding the potential consequences for non-compliance. While the Act itself does not explicitly outline offences or penalties for breach, it is implicit that failure to adhere to the prescribed professional standards schemes could result in unlimited liability for the members of these schemes in actions for contravention of the ASIC Act or Corps Act. This limitation on liability is intended to protect professionals while maintaining adequate consumer protection through measures such as compulsory insurance cover and complaints procedures. The schemes must therefore ensure that they meet the criteria set out in the Act to effectively limit liability and provide the necessary protections.