Policy Agenda

Professional Indemnity Insurance

Nationally consistent draft provisions for that part of the Model Bill that covers professional indemnity insurance were not developed in time for inclusion in the 2006 Legal Profession Model Bill. However, since the release of the Model Bill, the Professional Indemnity Insurance Joint Working Group (PIIJWG) has worked to develop a framework capable of accommodating professional indemnity insurance arrangements that provide a consistent, prudentially responsible, minimum level of consumer protection across Australia.

The Minimum National Standards were endorsed by the Law Council Board of Directors in June 2008. However, in response to a High Court decision handed down in July 2008 and concerns raised by a constituent body, the standards have been reassessed by the PIIJWG. Proposed amendments involve Standards 8 and 10, as well as an additional new standard. The draft additional Standard 11 was developed to address the High Court's findings concerning exclusion clauses for non disclosures in the context of a market based policy.

Refinement continues to the formulation of a uniform, simplified mutual recognition mechanism. The object is to have legal practitioners covered by indemnity insurance taken out by their law practice (to cover the whole of the law practice and its practitioners) exempted from being required to obtain professional indemnity cover in another jurisdiction, notwithstanding the practitioners may seek and be granted a practising certificates in that other jurisdiction.

Together with the Standards, mutual recognition will provide law practices that engage in the provision of legal services on a multi jurisdictional basis, relief from the existing administrative burden of complying with the arrangements of multiple jurisdictions.

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