The Tasmanian Chamber of Commerce and Industry (TCCI) has called on the State Government to amend the Professional Standards Act 2005 to ensure the interests of consumers and businesses are properly protected when seeking professional services.

TCCI CEO Michael Bailey said as it stands in Tasmania, businesses and consumers were at risk of losing hundreds and thousands of dollars if the professional or trades-person assisting them does not have an appropriate level and type of professional indemnity insurance or work to an appropriate standard.

“The Government needs to remove Section 27 (c) of the Professional Standards Act 2005 to allow for the protection of business and consumers to ensure the highest levels of professional standards are maintained as well as creating a system that forces professionals and tradespeople to have appropriate professional indemnity insurance,” Mr Bailey said.

“This is an accident waiting to happen and while I am confident the broad majority of professionals in tax, accounting, computing, engineering, law and surveying work to the highest standard and have appropriate professional indemnity insurance, the Act was created to ensure all consumers and businesses are protected in Tasmania.”

Mr Bailey said in 2005, the former state government introduced the Act to ensure professionals and tradespeople were able to secure affordable professional indemnity insurance to ensure consumers and businesses were appropriately compensated in the event of a negligence claim.

“However in the decade since the Bill was passed, it is absurd to think not one consumer or business has been protected in Tasmania, as there are no professionals operating under the schemes which were set up under the Act,” Mr Bailey said.

“By not having such schemes in operation in Tasmania it also means those professionals wishing to expand and sell their services interstate face additional red tape because Tasmania is out of step with the rest of the nation.

“Worse still, consumers have no idea whether or not the professional or trades-person they are seeking the services of have any professional indemnity insurance or to what level of service it may cover.

“This is an accident waiting to happen and should the insurance market harden up, it will have dire consequences on the Tasmanian economy.”

The Professional Standards Act 2005 was introduced in the wake of the HIH collapse which saw professional indemnity insurance underwriters abandon the Australian market, causing premiums to not only dramatically increase in cost, but also become increasingly restrictive in terms of the services professionals were able to provide.

As part of a national agreement, professional standards legislation was introduced in all states and territories to improve the availability and affordability of professional indemnity insurance by providing greater certainty to underwriters in relation to the size of damages to be awarded in a negligence claim through a capping system.

In addition, consumers were to benefit by ensuring professional indemnity insurance compulsory for professionals at dollar levels to cover consumer claims as well as forcing professional associations to improve the standard of services provided by their members.

In Tasmania a section of the Act – 27 (c) meant professionals and clients could agree to higher limits than those prescribed by the scheme, without any ceiling to the level of which limits may be negotiated.

“Concerns over the decision to allow professionals and clients to agree to higher limits in their professional indemnity cap without oversight or approval by professional associations were raised by the Law Society of Tasmania at the time of the legislation being debated,” Mr Bailey said.

“The insurance industry and other professional associations also expressed similar concerns.

“Since then, these concerns have been proven with the vast majority of professional associations choosing not to operate a scheme in Tasmania, whereas elsewhere their popularity has grown significantly, with 20 schemes operating interstate, covering some 65,000 professionals in areas such as tax, accounting, computing, engineering, law and surveying.

“After a decade of the Act doing nothing in Tasmania, I welcome a move by the Attorney General Vanessa Goodwin to review the operations of Section 27 (c) and would encourage individuals, consumer groups, insurance companies, professional and trade associations to have their say on this review.

“This is a perfect example of red tape gone mad, by holding back business in Tasmania and not protecting consumers as it was designed to do.”

Submissions on the review are due by Friday, 13th of February and more details can found by contacting the Department of Justice via email at colleen.johnstone@justice.tas.gov.au.