Engagement fee – under PSL, the court will determine what constitutes the engagement fee, or “reasonable charge for the services provided by the person or which the person failed to provide and to which the cause of action relates”. The PSL provides that the court is to have regard to “the amount that a competent person of the same qualifications and experience as the person would be likely to charge in the same circumstances” 
 
Limitation amount - Where the cap is calculated using a multiple, as it is for Category 1 and 3 services in the Institute scheme, the limitation amount is the amount of the cap calculated by applying the multiple of 10 to the engagement fee up to the monetary ceiling. 
 
Monetary ceiling - The monetary ceiling is the maximum cap on liability for each category of services as set out in the Institute scheme. 
 
National framework of schemes – schemes approved under legislation of all states & territories, also prescribed by the Commonwealth under the Federal Treasury Legislation Amendment (Professional Standards) Act 2004 in relation to the ‘misleading and deceptive conduct’ prohibitions of Trade Practices Act - restricts the opportunity for ‘jurisdiction shopping’.  
 
Occupational liability - Defined in the legislation as: “civil liability arising in tort, contract or otherwise) directly or vicariously from anything done or omitted by a member of an occupational association acting in the performance of his or her occupation.” 
 
Participating member - The Institute scheme specifies a participating member as all members holding a Certificate of Public Practice, affiliate members and practice entity members but excluding any AFS licensees. 
 
Professional Standards Legislation (PSL) – state based legislation intended to protect consumers by facilitating the improvement of professional standards of members of professional associations in exchange for providing limited liability for members of those associations. The legislation enables the Professional Standards Council to approve schemes which will limit the liability of members in exchange for a commitment that the members will hold adequate PI cover and that the Institute will work to improve professional standards of our members thereby protecting consumers.  
 
Professional Standards Council (PSC) – established under professional standards legislation, the Professional Standards Council approves and monitors limitation of liability schemes. 
 
Return to "Schemes limiting liability of members" 
 
Last updated: 24 December 2007