Explanatory Statement

Issued by authority of the Minister for Revenue and Financial Services

Treasury Laws Amendment (Professional Standards Schemes) Regulations 2017

Australian Securities and Investments Commission Act 2001

Competition and Consumer Act 2010

Corporations Act 2001

Section 251 of the Australian Securities and Investments Commission Act 2001

(the ASIC Act), section 172 of the Competition and Consumer Act 2010 (the CCA) and section 1364 of the Corporations Act 2001 (the Corporations Act) each provide that the Governor-General may make regulations prescribing matters required or permitted by the Acts to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Acts.

The intergovernmental Professional Standards Agreement 2011 provides for a national framework of professional standards legislation that provides professionals and members of occupational associations with capped civil liability. As part of this national framework, all states and territories have adopted legislation to establish a Professional Standards Council that can approve professional standards schemes in their respective jurisdictions. Members of professional groups that are part of these schemes are entitled to capped civil liability in return for raising industry service standards and having professional indemnity insurance up to the level of the prescribed liability cap. The legislation in the states and territories provides for capped civil liability but this would not effectively apply in relation to misleading and deceptive conduct under Commonwealth law.

To address this, sections 12GNA(2) of the Australian Securities and Investments Commission Act 2001, 137(2)(a) of the Competition and Consumer Act 2010 and 1044B(2) of the Corporations Act 2001 provide for capped civil liability for misleading and deceptive conduct for professional standards schemes that are prescribed in the relevant regulations.

Accordingly, regulation 3A of the Australian Securities and Investments Commission Regulations 2001, regulation 8A of the Competition and Consumer Regulations 2010 and regulation 7.10.02 of the Corporations Regulations 2001 prescribe a list of professional standards schemes that have capped civil liability for misleading and deceptive conduct under their respective principal acts.

The Regulations prescribe the Law Institute of Victoria Limited Scheme and Queensland Law Society Professional Standards Scheme as new professional standards schemes that have capped civil liability for misleading or deceptive conduct under the ASIC Act, CCA and Corporations Act. The Regulations also prescribe the Australian Property Institute Valuers Limited Scheme as a professional standards scheme that has capped civil liability for misleading or deceptive conduct under the CCA only.

In addition, the Regulations prescribe extensions to include recently published modifications of the CPA Australia Limited Professional Standards Scheme, the Law Society of South Australia Professional Standards Scheme, and the South Australian Bar Association Inc. Scheme.

The regulations also update commencement details for some prescribed professional standards schemes to refer to the actual dates those schemes commenced rather that referring to the commencement of the regulations that first prescribed them. Lastly, outdated schemes which are no longer active have been removed from the Competition and Consumer Regulations 2010.

The Regulations are a legislative instrument for the purposes of the Legislation Act 2003.

The Commonwealth has not consulted on this measure. The Professional Standards Council seeks the opinion of independent actuarial consultants and calls for public comment on professional standards schemes via public notification in major newspapers circulating throughout the relevant jurisdictions prior to approving schemes. Further consultation was not considered necessary.

The Office of Best Practice Regulation has certified that the amendments do not require a Regulatory Impact Statement.

The Regulations commence on the day after they are registered on the Federal Register of Legislation.

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Treasury Laws Amendment (Professional Standards Schemes) Regulations 2017

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The regulations update the list of prescribed professional schemes that have capped civil liability for misleading and deceptive conduct under the ASIC Act, CCA and Corporations Act.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.