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Practice management: Liability capping schemes underway
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Liability capping schemes have now commenced in all states and territories, except for Victoria (commences 3 March) and Tasmania (still under negotiation).  
 
Having been prescribed by the Commonwealth, the NSW and WA schemes are now effective in relation to any claim under the Trade Practices Act (1974). The Institute hopes to secure this for the other state schemes, but this may take some time.  
 
In February, the Institute is mailing essential information to all CPP holders, affiliates and practice entity members (participating members of the schemes) in every state and territory (except Tasmania).  

 
Participating members of the Institute scheme should get the benefit of the cap if the following conditions are met:
  • The claim is for occupational liability (ie. civil liability of a member acting in the performance of his/her occupation)
  • Professional indemnity insurance cover is held to the level of the limitation amount in the Institute scheme. More >
  • Disclosure has been made to clients and potential clients that liability is limited by the scheme.
Disclosure statement 
The Institute suggests you use the following disclosure statement: 
 
Liability limited by a scheme approved under Professional Standards Legislation 
 
Where the same business stationery is used by a participating member and a financial services licensee, this wording is recommended: 
 
Liability limited by a scheme approved under Professional Standards Legislation* 
*other than for the acts or omissions of financial services licensees. 
 
Many practices have opted to print the disclosure statement as a footnote on all business stationery. Other alternatives are also acceptable under the regulations, such as adding the wording using word processing, a stamp or a sticker. 
 
Consequences of non-disclosure 
In Victoria, Queensland and the Northern Territory failure to make this disclosure will result in the scheme not operating to limit your liability.  
In other states and territories, failure to make this disclosure constitutes an offence under the professional standards legislation, and carries a fine. 
 
Relevant links: 
 
Last updated: 14 February 2008