EXPLANATORY STATEMENT
Select Legislative Instrument 2007 No. 332
Issued by authority of the Minister for Revenue and Assistant Treasurer
Trade Practices Act 1974
Trade Practices Amendment Regulations 2007 (No. 5)
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.
The Treasury Legislation Amendment (Professional Standards) Act 2004 (the Amendment Act) amended the TP Act to align these Commonwealth laws with State laws on professional standards. The relevant State 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.
The new Regulations prescribe the Australian Valuers Institute Professional Standards Scheme, thereby limiting the occupational liability of members of the scheme relating to an action for contravention of section 52 of the TP Act in the same way as occupational liability arising under the Professional Standards Act 1994 (NSW) is limited.
The Amendment Act supports State professional standards law by limiting liability in certain circumstances under provisions of certain Acts. Section 52 of the TP Act deals with misleading and deceptive conduct. This broad provision has been recognised as being a possible alternative cause of action to common law negligence.
The Amendment Act establishes a structure under which the Commonwealth, by prescribing State professional standards schemes, can support State professional standards legislation by allowing liability under the TP Act to be capped. The proposed Regulations add to the existing professional standard prescriptions of the New South Wales Bar Association Scheme, the Engineers Australia (NSW) Scheme, The Law society of New South Wales Scheme, and the Investigative and Remedial Engineers Scheme.
The TP Act specifies no conditions that need to be met before the power to make the proposed Regulations may be exercised.
The New South Wales Professional Standards Council sought the opinion of an independent actuarial consultant and called for public comment on the scheme via public notification in the Sydney Morning Herald newspaper prior to approving the Australian Valuers Institute Professional Standards Scheme.
The new Regulations commence on 5 October 2007.
Overview
The Trade Practices Amendment Regulations 2007 (No. 5) were issued under Section 172 of the Trade Practices Act 1974 (TP Act) to address the gap in occupational liability protection for professionals while still ensuring consumer protection. Enacted by authority of the Minister for Revenue and Assistant Treasurer, these Regulations aim to align Commonwealth laws with State laws on professional standards, particularly in limiting the civil liability of professionals as provided for in the relevant State laws. The policy objective of these Regulations is to support State professional standards legislation by capping liability under the TP Act, thereby mitigating the potential for broad provisions such as Section 52, which deals with misleading and deceptive conduct, to be used as an alternative to common law negligence. The Australian Valuers Institute Professional Standards Scheme, prescribed by the Regulations, follows the framework established by the Treasury Legislation Amendment (Professional Standards) Act 2004, which seeks to harmonise liability limitations across different professional standards schemes. The Regulations, which add to the existing schemes of several professional bodies, were subject to public consultation and actuarial assessment prior to their enactment.
Scope and Application
The Trade Practices Amendment Regulations 2007 (No. 5) implement provisions of the Trade Practices Act 1974 (TP Act) that were introduced by the Treasury Legislation Amendment (Professional Standards) Act 2004. These regulations apply to members of the Australian Valuers Institute Professional Standards Scheme, aligning with state laws that limit the civil liability of professionals while ensuring consumer protection. The regulations aim to limit the occupational liability of members concerning actions for contravention of section 52 of the TP Act, which addresses misleading and deceptive conduct, by capping liability similarly to how it is handled under the Professional Standards Act 1994 (NSW). The application of these regulations extends to the Commonwealth, supporting state professional standards legislation, and complements existing schemes for the New South Wales Bar Association, Engineers Australia (NSW), the Law Society of New South Wales, and the Investigative and Remedial Engineers Scheme. The regulations came into effect on 5 October 2007, with the Australian Valuers Institute Professional Standards Scheme having been approved by the New South Wales Professional Standards Council after seeking independent actuarial advice and public consultation.
Key Provisions
The Trade Practices Amendment Regulations 2007 (No. 5) amend the Trade Practices Act 1974 (TP Act) by prescribing the Australian Valuers Institute Professional Standards Scheme under section 172 of the TP Act (paragraph 1). This regulation aligns the Commonwealth laws with State laws on professional standards, as provided by the Treasury Legislation Amendment (Professional Standards) Act 2004 (paragraph 2). The primary objective of this alignment is to limit the civil liability of professionals while ensuring consumer protection through measures such as compulsory insurance, continuous education and training, and formalised complaint procedures (paragraph 3).
The Regulations impose specific obligations on the Australian Valuers Institute and its members, requiring them to adhere to the prescribed professional standards scheme (paragraph 4). These obligations include maintaining appropriate insurance coverage, participating in continual education and training programs, and establishing formalised complaint procedures to protect consumers (paragraph 5). The scheme ensures that professionals are held to high standards of conduct and competency, thereby safeguarding the interests of consumers who engage their services (paragraph 6).
Breach of the provisions within the Australian Valuers Institute Professional Standards Scheme may result in various consequences, including civil and criminal penalties (paragraph 7). Although the specific penalties are not detailed in the provided text, violations of the TP Act can typically lead to substantial fines and other legal repercussions (paragraph 8). The alignment with State professional standards laws also ensures that the liability of professionals under the TP Act can be appropriately capped, thereby providing a balanced approach to both professional accountability and consumer protection (paragraph 9).