Overview

The Treasury Laws Amendment (Professional Standards Schemes) Regulations 2017 were enacted to update the list of prescribed professional standards schemes that have capped civil liability for misleading and deceptive conduct under the Australian Securities and Investments Commission Act 2001, the Competition and Consumer Act 2010, and the Corporations Act 2001. These regulations were made by the Australian Government in accordance with the authority provided by sections 251 of the ASIC Act, 172 of the CCA, and 1364 of the Corporations Act. The regulations aim to align with the national framework established by the Professional Standards Agreement 2011, ensuring that members of professional groups participating in approved schemes receive capped civil liability for misleading and deceptive conduct, while also mandating higher industry service standards and professional indemnity insurance. The regulations add the Law Institute of Victoria Limited Scheme and Queensland Law Society Professional Standards Scheme to the list of schemes with capped civil liability under the ASIC Act, CCA, and Corporations Act, and the Australian Property Institute Valuers Limited Scheme under the CCA only. Additionally, the regulations include modifications to existing schemes and update commencement dates to reflect the actual start dates of the schemes.

Scope and Application

The Treasury Laws Amendment (Professional Standards Schemes) Regulations 2017, issued under sections 251 of the Australian Securities and Investments Commission Act 2001, 172 of the Competition and Consumer Act 2010, and 1364 of the Corporations Act 2001, establish a list of professional standards schemes with capped civil liability for misleading or deceptive conduct under the respective principal acts. These regulations apply to entities and individuals participating in the listed professional standards schemes, which include the Law Institute of Victoria Limited Scheme, Queensland Law Society Professional Standards Scheme, and the Australian Property Institute Valuers Limited Scheme, among others. These schemes operate within the jurisdiction of the Commonwealth of Australia, ensuring compliance with the national framework established by the intergovernmental Professional Standards Agreement 2011. The Regulations also update the commencement details for certain schemes and remove outdated schemes from the Competition and Consumer Regulations 2010. The Regulations are considered compatible with human rights as they do not engage any of the applicable rights or freedoms.

Key Provisions

The Treasury Laws Amendment (Professional Standards Schemes) Regulations 2017 (the Regulations) provide updates to the list of professional standards schemes that have capped civil liability for misleading and deceptive conduct under the Australian Securities and Investments Commission Act 2001 (ASIC Act), the Competition and Consumer Act 2010 (CCA), and the Corporations Act 2001 (Corporations Act). Regulation 3A of the Australian Securities and Investments Commission Regulations 2001, regulation 8A of the Competition and Consumer Regulations 2010, and regulation 7.10.02 of the Corporations Regulations 2001 have been amended to reflect these updates. Specifically, the Law Institute of Victoria Limited Scheme and the Queensland Law Society Professional Standards Scheme are now recognised as having capped civil liability for misleading or deceptive conduct under the ASIC Act, CCA, and Corporations Act. Additionally, the Australian Property Institute Valuers Limited Scheme is recognised for the same under the CCA only. The Regulations also include modifications to the CPA Australia Limited Professional Standards Scheme, the Law Society of South Australia Professional Standards Scheme, and the South Australian Bar Association Inc. Scheme. Furthermore, the Regulations update commencement details for certain schemes and remove outdated schemes from the Competition and Consumer Regulations 2010. The Regulations impose several obligations on the parties involved. Firstly, professional standards schemes that are prescribed must comply with the conditions set out in the respective Acts and Regulations to be eligible for capped civil liability. This includes having professional indemnity insurance up to the level of the prescribed liability cap and ensuring that members meet certain professional standards. The Professional Standards Council, which approves these schemes, is required to seek the opinion of independent actuarial consultants and call for public comment on proposed schemes through public notification in major newspapers. These obligations are designed to ensure that the schemes effectively raise industry service standards and provide adequate protection for consumers. Under the ASIC Act, CCA, and Corporations Act, there are specific penalties and consequences for breaches of the legislation. For misleading and deceptive conduct, the maximum penalties can be substantial, including fines and imprisonment for individuals, as well as fines for corporations. For example, under the ASIC Act, individuals can face fines of up to $222,000 and imprisonment for up to five years, while corporations can be fined up to $1.1 million. Similar penalties apply under the CCA and Corporations Act. Additionally, professionals who are part of prescribed schemes and engage in misleading or deceptive conduct may face disciplinary action from their professional bodies, which can include suspension or expulsion from the profession. These penalties serve to deter breaches and enforce compliance with the standards set by the legislation. In summary, the Regulations update the list of professional standards schemes that have capped civil liability for misleading and deceptive conduct under the ASIC Act, CCA, and Corporations Act. These updates include the addition of new schemes and modifications to existing schemes. The Regulations impose obligations on professional standards schemes to meet certain criteria and for the Professional Standards Council to consult with independent experts and the public before approving schemes. Breaches of the legislation can result in significant penalties, including fines and imprisonment for individuals and substantial fines for corporations, as well as potential disciplinary action from professional bodies. The Regulations are designed to enhance consumer protection and ensure that professionals maintain high standards of conduct.