Annual Report 2011-12 - Parliament of Western Australia

Australian Capital Territory | New South Wales | Northern Territory | Queensland | South Australia | Tasmania | Victoria | Western Australia
The balance between limited
liability and consumer
protection
The Councils are responsible for determining
the limitation of liability for each occupational
association participating in Cover of
Excellence ® schemes.
To do so, the Councils consider the nature
of the work being done by members of the
association, the risks inherent in such work,
and the positions of persons likely to be
affected by a cap on liability. The Councils
consider the 10-year retrospective history
of claims made against members of the
association, together with the prospective risk
management plans of the association. They
also obtain independent actuarial advice as to
the likelihood of future claims exceeding the
proposed cap. The intention is to find a cap
on liability that provides an appropriate level
of consumer protection, relative to the risks
associated with the service being provided.
Implementation of
associations’ risk
management plans
Associations applying for a Cover of
Excellence ® scheme must demonstrate that
they have the organisational capacity to
implement risk management strategies, and
also to administer the association’s scheme
for the benefit of consumer protection.
Once a scheme is approved, associations
must report against their risk management
plans annually to Councils, for the duration of
the scheme, consistent with ongoing statutory
compliance requirements. These reports
provide information about the mechanisms
used by the associations to improve
the professional standards of individual
practitioners, including the monitoring of
compliance by members, through methods
such as member surveys and audits.
How do Cover of Excellence ®
schemes help protect
consumers?
The work of the Councils helps protect
consumers by assisting and encouraging
occupational associations to improve and
promote professional standards. Additionally,
members of associations who participate
in Cover of Excellence ® schemes must hold
sufficient PII (and/or other assets) to meet any
civil claims at the level of their limit of liability
under the scheme. Therefore, consumers
have recourse to reasonable compensation for
economic loss in the event of a claim.
Members of an association can use the Cover
of Excellence ® trademark once the Councils
have approved the association’s scheme and
gazetted it in the relevant State or Territory.
Each scheme has a maximum duration of five
years. If the association wishes its members
to continue to be covered by a scheme, they
must submit a new application. The five-year
limit allows associations to review the most
current economic landscape, to understand
any environmental shift within which
professionals are now working, and to use the
latest developments in risk management plans
for professional services.
26 Professional Standards Councils Annual Report 2011-12