Professional Standards Act 2004

Scheme: A scheme is the central legal instrument under the Act. It is a statutory instrument prepared by an occupational association or the Council, or approved by the Council, which operates to limit the occupational liability of members of an occupational association (definition, s 4; ss 7-13). A scheme must specify its scope, method of limitation, monetary ceilings or multiples, classes of persons covered and period of operation (ss 18, 22-26, 33). Schemes operate prospectively in relation to acts or omissions occurring during the scheme period (s 29(1), s 32).

Occupational association and occupational liability: An occupational association is a body corporate representing persons of the same occupational group (s 4). Occupational liability is civil liability arising directly or vicariously from acts or omissions done in the performance of an occupation, whether in tort, contract or otherwise (s 4). The scheme mechanism depends on occupational associations preparing schemes and implementing risk management and insurance prerequisites (ss 7, 37-39, 35).

Methods of limiting liability: The Act contemplates three principal mechanisms:

• Insurance ceiling: where a person proves to a court they have insurance covering the liability and the insured amount is at least the monetary ceiling specified in the scheme, liability above that ceiling is displaced (s 22).
• Business assets: where a person proves their business assets have net current market value at least the monetary ceiling, liability above that ceiling is displaced (s 23(a)).
• Multiple of charges: where liability is limited to a specified multiple of the reasonable charge for the services provided (or a minimum cap), with rules for determining reasonable charge and recognition of insurance and assets in combination (s 24).

Monetary ceiling and threshold: Although schemes cap damages, s 27 constrains their effect: a scheme can only affect liability to the extent that it results in damages exceeding an amount determined by the Council, not less than $500 000. The Council must consider claims frequency and consumer protection when setting that amount (s 27(1)-(3)). The Act also provides that a scheme’s cap on liability is not reduced by the amount actually paid under a defence costs inclusive policy (s 27A).

Client notification and enforceability: A limitation in a scheme does not bind a client if, before the act or omission, the professional did not inform the client or give documents carrying the prescribed statement that liability is limited (s 29(2); s 34). That is, client awareness is a precondition to limit the professional‑client relationship exposure.

Council and Ministerial role: The Professional Standards Council is a statutory body (s 41) with functions that include approving schemes, advising the Minister and associations, monitoring standards and instituting proceedings for offences under the Act (s 45). The Council is appointed by the Minister (s 42), is subject to Ministerial direction and must comply with those directions (s 51). The Minister notifies schemes in the Gazette and may receive schemes from other jurisdictions and manage tabling and disallowance processes (ss 12-14, 17A).

Cross‑jurisdictional operation: The Act contemplates interstate schemes and mutual recognition by enabling a scheme prepared in another jurisdiction to operate here as an interstate scheme, and it provides processes for terminating an interstate scheme’s operation in this jurisdiction (definitions, ss 8(2), 10(2), 17A, 17B, 33(1B)).

Complaints and disciplinary scheme: A scheme may adopt the Model Code (Schedule 1) or variants approved by the Council to govern complaint handling and disciplinary measures (s 40; Schedule 1). The Code sets out investigation, hearing, remedies and notice requirements (Schedule 1 clauses 3-9).

Regulatory overlay: Regulations and rules of court are available to prescribe forms, fees, annual levies and procedural matters, including determination of net current market value for asset tests (ss 58-59; Schedule 4). The Act binds the Crown (s 6) and contains non‑contracting out provisions (s 56).

Occupational associations: The Act places primary procedural and substantive responsibilities on occupational associations. An association may prepare a scheme (s 7), may require members to hold insurance and set standards (s 35), must provide risk management strategies when seeking approval (s 37), must respond to Council information notices (s 46), and must provide annual reporting on risk management implementation and monitoring (s 38). Associations may establish claims monitoring committees (s 36). Where an association’s members are subject to a scheme, the association may also be required to collect and remit annual fees to the Council (Schedule 4 cl 3).

Members of occupational associations: Members who wish to rely on a scheme’s limitation must ensure they meet the scheme’s preconditions. A scheme can apply to all members or classes of members (s 18). For the limitation to bind a client, the member must meet the notification requirement (s 29(2), s 34) and, where the limitation is by insurance, demonstrate the requisite insurance (s 22). Members may be required by their association to hold insurance (s 35). Officers and partners of covered entities are generally included (s 19), and employees are included where the scheme applies to their employer unless they are eligible for membership but are not members (s 20).

Consumers and claimants: The Act directly affects claimants by enabling limitations on recoverable damages where a scheme applies and preconditions are met (ss 29-31). The Act preserves certain categories of liability outside its operation: personal injury and death claims, claims arising from legal practitioners’ negligence in personal injury claims, breaches of trust and fraud or dishonesty are excluded from limitation (s 5(1)). The Council must take consumer protection into account when approving schemes and when setting the monetary threshold for limits (s 10(1)(b), s 27(2)(b)). Claimants also gain specific procedural protections: the cap applies only where the client was informed (s 29(2)), and two or more claimants with joint interests are treated as a single claim (s 30(2)).

Insurers: Insurers are implicated because insurance arrangements are a primary mechanism for limiting liability (s 22). The Act permits associations to prescribe insurance standards and to require membership insurance (s 35). Committees monitoring claims may request information from insurers (s 36(4)). Insurers face potential reporting and disclosure demands from associations and the Council, and insurance policies must be of the standard the association determines for scheme purposes (s 28).

Courts and regulators: The Supreme Court retains a supervisory function to test compliance and can declare a scheme void where statutory procedures are not followed and may stay commencement of a scheme pending review (s 15). Rules of court may prescribe procedures, including how net current market value is calculated for asset tests (s 59). The Council is empowered to institute prosecutions and seek injunctive relief for offences under the Act (s 45(1)(j)).

Minister and Government: The Minister is the administrative gatekeeper: notified schemes are published in the Gazette through the Minister (s 13), the Minister can direct the Council to prepare, amend or revoke schemes (s 17(3); s 51), and the Minister supervises the Council through directions (s 51). The Act binds the Crown (s 6), potentially exposing public legal entities and officers to the scheme architecture where applicable.

Other jurisdictions and their authorities: Another jurisdiction’s occupational standards authority interacts with the Council on interstate schemes. Where a scheme indicates an intention to operate in multiple jurisdictions, public notices and consideration must be coordinated in accordance with the corresponding law of the other jurisdiction and the respective appropriate Council (s 8(2), s 10(2), s 45A). The Act allows the Council to act jointly with the appropriate Council for the other jurisdiction (s 45A).

Duties of occupational associations

• Prepare and submit schemes and amendments for Council approval, and, if directed, prepare instruments revoking or terminating schemes (ss 7, 17, 17B).
• Provide detailed risk management strategies and implementation plans when seeking approval (s 37).
• Provide information and annual reports on the implementation and effect of risk management strategies; incorporate certain committee findings into the Council’s annual report (s 38).
• Comply with information notices from the Council and supply documents or information reasonably required for audits and reviews (s 46; s 39(1)-(3)).
• Where schemes adopt complaint/disciplinary provisions, implement the Model Code or variants approved by the Council and follow natural justice when hearings are conducted (s 40; Schedule 1 cl 6).
• If the association enforces compulsory insurance, set and enforce standards of insurance and monitor compliance (s 35).

Duties of scheme participants (members, firms, professionals)

• If a person’s liability is to be limited, they must ensure documents that promote or advertise the person’s occupation, including official correspondence, carry the prescribed statement indicating the liability limitation (s 34(1); Schedule 4 cl 7). Failure attracts a maximum penalty of 50 penalty units.
• Provide a copy of the scheme to any client or prospective client who requests it (s 34(4); penalty 50 penalty units).
• Maintain the requisite insurance or business assets in accordance with the scheme if relying on those mechanisms to limit liability (ss 22-24).
• Comply with any risk management conditions imposed by the association or by the Council as a prerequisite to the operation of the scheme (s 37(2)).

Rights of consumers/claimants

• A scheme does not limit a professional’s liability to a client unless the client was informed in accordance with s 29(2) and s 34(1). Clients not so informed retain full entitlements.
• The Act preserves certain liabilities from limitation (s 5): death and personal injury, legal practitioner negligence in personal injury claims, breach of trust and fraud or dishonesty.
• A claimant may challenge the validity of a scheme in the Supreme Court if they are or are reasonably likely to be affected (s 15(1)). The Court may declare a scheme void for want of compliance (s 15(3)(a)) and stay commencement pending determination (s 15(2)).
• Two or more claimants with joint interests are treated as a single claim for limit calculations (s 30(2)).

Powers and duties of the Council and Minister

• The Council approves, prepares, reviews and may revoke schemes; it must consider statutory factors including comments, consumer positions, claims histories, risk management and insurance matters (ss 7-11, 16).
• The Council must approve any proposed change by an association to insurance standards before the change takes effect (s 28(2)-(4)).
• The Council may require information, conduct compliance audits, receive reports and publish advice; it may institute proceedings for offences under the Act (ss 39, 46, 45(1)(j)).
• The Minister notifies schemes in the Gazette and may table or have them disallowed; the Minister may direct the Council and extend scheme periods in specified circumstances (ss 13-14, 16, 33(2)).

Court roles and rules

• The Supreme Court can adjudicate challenges on compliance grounds under s 15, stay a scheme before commencement, and make orders including declaring schemes void or giving directions to remedy defects (s 15).
• Rules of court may be made for matters arising under Part 2, including procedures relating to s 15 and methods for determining net current market value for asset assessments under ss 23 and 24 (s 59).

Other legal limitations and priorities

• The Act binds the Crown (s 6) and operates despite contrary law except where Parts 3-5 conflict with another Act, in which case the other Act prevails to the extent of the inconsistency (s 55(1)-(2)).
• The Act cannot be contracted out of; contracts entered into after commencement cannot negate the Act’s operation, with the exception of contracts predating the Act (s 56).

Criminal and civil enforcement architecture

• The Act includes criminal offences with monetary penalties. Failure to display the prescribed notification of limitation of liability or to give a copy of the scheme on request attracts a maximum penalty of 50 penalty units (s 34(1), (4)). Non‑compliance with a written information notice from the Council is an offence with a maximum penalty of 20 penalty units (s 46(2)). The Regulations may create offences with maximum penalties up to 50 penalty units (s 58(3)). The Act ties enforcement to both the Council’s powers and to court processes (ss 45, 15).

Council enforcement powers

• The Council has a specific function to “institute proceedings in its own name for the prosecution of an offence against this Act or the Regulations” and for injunctive relief in respect of such offences (s 45(1)(j)). That provision confers standing on the Council to enforce the Act through prosecutorial and equitable remedies. The Council also has powers to monitor compliance, request information, and require audits (ss 36, 39, 46).

Court remedies and supervisory jurisdiction

• The Supreme Court is the primary forum to challenge the validity of schemes for want of compliance with the Act (s 15). On application, the Court may: declare a scheme void, decline to declare it void, give directions to enable a stayed scheme to commence, or make any other order it deems fit (s 15(3)). The Court may stay a scheme’s commencement pending determination (s 15(2)). For interstate schemes, the Court’s capacity to declare a scheme void is limited to non‑compliance with the corresponding law of the jurisdiction in which it was prepared (s 15(4)).

Disciplinary measures under schemes

• Schemes may adopt the Model Code for complaints and discipline (Schedule 1) or modified versions approved by the Council (s 40). The Model Code authorises associations to impose sanctions including caution, reprimand, conditions on practice, mandated training, reporting requirements, orders to seek advice and expulsion (Schedule 1 cl 7). The association’s processes are subject to natural justice where hearings are held (Schedule 1 cl 6(3)). The association cannot order awards of compensation in disciplinary proceedings (Schedule 1 cl 7(3)).

Audit and administrative sanctions

• Compliance audits may be conducted by the Council or the association; the association must provide information and ensure members cooperate with Council audits (s 39). Non‑cooperation with a Council information notice is an offence (s 46(2)). The Council may publicise non‑compliance, require report inclusion in the Council’s annual report (s 51(3)), and seek injunctive relief (s 45(1)(j)).

Financial and administrative penalties

• Fees are prescribed in Schedule 4: an application for Council approval of a scheme or an amendment generally attracts an application fee ($5 000, Schedule 4 cl 2(1)), and an annual fee of $35 per member applies while a scheme is in force (Schedule 4 cl 3). The Council may remit fees in special cases (Schedule 4 cl 6). Interest on late annual fees is charged at 0.05% per day (Schedule 4 cl 5).

Limitations on limiting liability and consumer protections

• The Act itself constrains the extent of permitted limitation: certain liabilities are excluded from limitation (s 5), and the Council must set a monetary threshold for the minimum amount of damages to which a scheme may apply, not less than $500 000 (s 27). These are substantive limits intended to protect consumers.

Priority rules and inconsistencies

• The Act contains a built‑in hierarchy for inconsistency. Parts 3, 4 and 5 (compulsory insurance, risk management, complaints and disciplinary matters) are subordinate to other legislation where inconsistent; the other Act prevails to the extent of the inconsistency (s 55(1)). Conversely, except where that carve‑out applies, the Act operates despite any other law to the contrary (s 55(2)). This creates a specific limitation to favour other legislative requirements over the risk management and disciplinary provisions when conflicts arise.

No contracting out and retrospective contracts

• Parties cannot contract out of the Act in relation to persons to whom a scheme applies; the Act prevails over contracting arrangements entered into after commencement (s 56). Contracts entered into before commencement are preserved from the Act’s overriding effect to the extent specified (s 5(3), s 56(2)).

Interaction with other jurisdictions and mutual recognition

• The Act contemplates corresponding laws in other States and Territories and recognises interstate schemes (definitions, s 4; ss 8(2), 10(2), 17A, 17B, 33(1B)). Where a scheme is prepared in another jurisdiction and indicates an intention to operate in this jurisdiction, the Council must coordinate consultation and approval processes in the context of both jurisdictions (s 10(2)). For interstate schemes prepared under a corresponding law, the Supreme Court’s capacity to declare such a scheme void is confined to non‑compliance with the corresponding law of the preparing jurisdiction (s 15(4)).

Regulatory and court rule‑making

• The Administrator may make regulations to prescribe matters required or permitted by the Act, including fees and annual levies, and may create offences with penalties (s 58). Rules of court may be made with respect to any matter arising under Part 2, including procedures relating to s 15 and how to determine net current market value for asset tests under ss 23 and 24 (s 59). That supports judicial processes for applying scheme mechanics in litigation.

Insurance and other insurance regimes

• The Act does not limit other insurance arrangements that a person may make besides those required for scheme purposes (s 57). For scheme purposes, insurance must meet standards set by the occupational association and approved by the Council (s 28). The Act also contemplates defence costs inclusive policies and clarifies that a defence costs inclusive policy that reduces amounts available to claimants does not reduce the cap on the professional’s liability under the scheme (s 27A).

Disciplinary regimes under other Acts

• The Council is expressly not empowered to give advice concerning occupational standards contained in any other Act or instrument of a legislative or administrative character (s 45(2)). At the same time, schemes may adopt disciplinary mechanisms and the Model Code, but those operate in addition to other statutory requirements and must not be inconsistent with them (s 37(3)).

Transitional and validation provisions

• The Act validates schemes, acts and insurance policies that would have complied had certain amendments been in force at the time they were made (s 62). This interacts with any pending proceedings where a validated scheme or compliant policy is in issue (s 62(4)).

Binding the Crown and administrative cooperation

• The Act binds the Crown in right of the Territory and in other capacities to the extent the Legislative Assembly’s power permits (s 6). The Chief Executive Officer may enter into agreements with officers or authorities of other jurisdictions for the exercise of the Council’s powers and functions (s 53A), providing a mechanism for administrative cooperation and delegation.

Statutory amendments identified in the Act’s endnotes and the reprint show the legislative evolution since assent. Key amending instruments and dates in the endnotes are:

• Justice Legislation Amendment Act 2006 (Act No. 13, 2006), assent 18 May 2006, commenced 1 July 2006 (listed at endnotes).
• Professional Standards Amendment Act 2007 (Act No. 2, 2007), assent 8 March 2007, commenced 4 April 2007. This Act inserted provisions such as s 27A (note indicates s 27A was inserted by No. 2, 2007, s 8) and made amendments to ss 22-24 and s 29 (see list of amendments).
• Professional Standards Amendment (Mutual Recognition) Act 2008 (Act No. 5, 2008), assent 11 March 2008, commenced 1 April 2008. This amending Act added provisions to facilitate interstate schemes, including ss 17A and 17B and amendments to the notification/commencement regime (see s 14 and s 33 amendments).
• Justice Legislation Amendment (No. 2) 2008 (Act No. 27, 2008), assent 17 October 2008; assorted amendments (see list).
• Justice Legislation Amendment (Penalties) Act 2010 (Act No. 12, 2010), assent 20 May 2010, commenced 1 July 2010; this amended penalties including s 34 (s 34 amended No. 12, 2010, s 3).
• Oaths, Affidavits and Declarations (Consequential Amendments) Act 2010 (Act No. 40, 2010), assent 18 November 2010, commenced 1 March 2011; this amended s 40 (s 40 amended No. 40, 2010, s 118).
• Local Government Amendment Act 2014 (Act No. 19, 2014), assented 2 June 2014, various commencements relevant to s 49.
• Interpretation Amendment Act 2021 (Act No. 28, 2021), assent 15 December 2021, commenced 1 January 2022; it made formal amendments to sections including s 14 and the definition regime.

The reprint’s list of amendments provides clause‑level detail: for example, s 4 was amended by No. 2, 2007 and No. 5, 2008; s 22 was substituted by No. 2, 2007; s 23 was amended by No. 2, 2007; s 24 was amended by No. 2, 2007; s 27A was inserted by No. 2, 2007; s 29 was amended by No. 2, 2007; s 33 was amended by No. 5, 2008 and the Interpretation Amendment No. 28, 2021; and so on (see the List of Amendments in the endnotes).

Schedule 4, which prescribes fees and the form of the notification statement, operates until regulations under the Act are made (s 58(4)). That indicates a delegated legislative intention to phase in regulatory detail by instrument rather than permanent schedule alone.

The Act requires a statutory review to assess whether policy objectives remain valid and the terms appropriate; that review was to occur as soon as possible after five years from assent, with a report to be tabled within 12 months after that period (s 60). The endnotes record various formal and consequential amendments handled through the Interpretation Legislation Amendment Act 2018 and others.

For practitioners dealing with legacy schemes and policies, s 62 validates schemes approved before the 2007 amendments where they would have been valid had the amendments been in force, which can have retrospective litigation consequences (s 62(1)-(4)).

The Act itself does not record judicial decisions. The source provided contains no court judgments or cases. Where litigation can arise under the Act, the text specifies the available judicial remedies and procedures:

• Judicial review/challenge to a scheme’s validity: Any person who is or is reasonably likely to be affected by a Gazette‑notified scheme may apply to the Supreme Court for an order that the scheme is void for want of compliance with the Act (s 15(1)). The Court may stay commencement pending determination (s 15(2)) and may make orders declaring a scheme void, giving directions to remedy defects, or making other orders it thinks fit (s 15(3)). For interstate schemes prepared elsewhere, the Court cannot declare the scheme void on the ground that it fails to comply with Division 2 of Part 2 (content requirements), but may do so if it fails to comply with the corresponding law of the jurisdiction in which it was prepared (s 15(4)).

• Enforcement and prosecutions: The Council has locus to institute proceedings in its own name for prosecutions of offences under the Act and for injunctive relief (s 45(1)(j)). The Act contemplates offences (for example s 34 and s 46) and enables regulations to create offences (s 58(3)). Courts will therefore be the enforcement forum for criminal penalties and for injunctive and other equitable relief.

• Determination of asset values and procedural rules: The Act authorises rules of court to determine procedures arising under Part 2, and to specify methods by which net current market value of assets may be determined for the purposes of ss 23 and 24 (s 59). Litigation is the vehicle to apply scheme mechanics in individual proceedings where participants seek to prove the requisite insurance or asset thresholds.

• Validation litigation: The transitional validation in s 62 saves certain schemes, acts and insurance policies as if amendments had been in force at the time they were done. The provision expressly extends validation even where proceedings are pending in court on the commencement of the amending Act (s 62(4)). That creates a specific litigation posture for pre‑amendment matters.

Absent case law in the source, practitioners must look to Supreme Court decisions in the Territory and other jurisdictions for precedent on how s 15 challenges and the application of scheme caps are handled in practice. The Act’s procedural provisions give litigants clear loci: challenge during the pre‑commencement window, contestation within proceedings where a defendant invokes a limit under a scheme, and contesting the calculation of net current market value and reasonable charge (the latter subject to court rules under s 59(2)).

Notification and client awareness are dispositive

• A scheme’s limitation does not bind a client unless the professional gave, before the relevant act or omission, a document bearing the prescribed statement or otherwise informed the client that the professional’s liability was limited (s 29(2) and s 34). Failure to meet the exact phrasing, font size and placement requirements (Schedule 4 cl 7 prescribes wording and minimum type size) may nullify the intended protection for the professional. The prescribed statement is a criminal offence to omit, carrying a maximum penalty of 50 penalty units (s 34(1)).

Exclusions are substantive and specific

• Certain liabilities cannot be limited by a scheme: death or personal injury, negligence of a legal practitioner acting for a client in a personal injury claim, breach of trust and fraud or dishonesty (s 5(1)(a)-(d)). Reliance on a scheme to cap these liabilities is legally unavailable; practitioners must ensure risk transfer and indemnity arrangements do not rely on the scheme to limit such exposures.

Minimum monetary threshold and Council discretion

• A scheme can only affect liability to the extent it reduces damages exceeding an amount determined by the Council under s 27, and that amount cannot be less than $500 000. The Council must have regard to claims history and consumer protection when fixing the amount (s 27(2)). Associations and members cannot assume low thresholds; Council discretion and its evaluative criteria will materially affect the practical reach of caps.

Insurance payout mismatch

• Section 27A expressly provides that the professional’s liability is not reduced below the scheme limit merely because the amount available under the insurance policy is less than the limit. In practice, this creates a gap where the professional remains liable to the client for the difference between the insurance payment and the scheme cap. That gap has real balance sheet implications for firms relying on the cap (s 27A and s 4(2) note on defence costs).

Interplay with multiple claims and events

• The limitation applies to a single claim, not to all claims arising from a single event (s 30(1)). However, multiple claims by the same person arising out of a single event against associated persons are treated as a single claim (s 30(3)). Associations and defendants must carefully classify claim relationships and associations (s 30(4)) because aggregation rules can enlarge a claimant’s recoverable quantum relative to naive expectations.

Scheme duration and extensions

• Schemes are time‑limited to a maximum of five years (s 33(1)). The Minister may grant a single extension of up to 12 months but extensions are limited to one per scheme and must be published before expiry (s 33(2)-(4)). Failure to manage renewal timings will create coverage gaps.

Interstate complexity and legal limits on challenges

• Interstate schemes introduce procedural complexity: notices, tabling and disallowance follow the corresponding law of the preparing jurisdiction (ss 8(2), 10(2), 13). The Supreme Court cannot declare an interstate scheme void for failure to comply with Division 2 of Part 2; it can only do so for failure to comply with the corresponding law of the preparing jurisdiction (s 15(4)). Parties challenging interstate schemes must therefore analyse foreign corresponding law and cross‑jurisdictional procedures.

Regulatory precedence in Parts 3-5

• Parts 3-5 are subordinate to other Acts where inconsistent (s 55(1)). If an occupational association implements risk management or compulsory insurance requirements that conflict with other statutory regimes, the other Act prevails. Associations must map the regulatory ecosystem and not assume these Parts override other statutory obligations.

Council and Ministerial discretion

• The Council has wide evaluative duties (s 10) and is subject to Ministerial directions (s 51). The Minister may direct the Council to prepare or revoke schemes (s 17(3)). That creates political and administrative risk: associations must engage the Council and the Minister proactively, and participants cannot rely on purely technical compliance to guarantee approval.

Fees, reporting and audits

• Application and annual fees are prescribed in Schedule 4 and interest applies to overdue annual fees (Schedule 4 cl 2-5); failing to pay attracts interest and could trigger remedial action. Associations must also be prepared for audits and to provide documents on request; non‑compliance with a Council information notice is an offence (s 46). Administrative burdens are therefore ongoing, not merely front‑loaded at scheme approval.

Disciplinary remedies do not provide compensation

• Under the Model Code, associations may take disciplinary measures, but they are not entitled to award compensation to complainants (Schedule 1 cl 7(3)). Consumers seeking compensation must therefore pursue civil remedies, not disciplinary outcomes.

Validation and retrospective effect

• The transitional validation in s 62 can validate schemes and policies as if amendments had been in force at the relevant time, and this validation applies even when proceedings are pending (s 62(4)). This can produce unexpected litigation outcomes and requires practitioners to scrutinise both pre‑amendment instruments and how s 62 validation might affect ongoing claims.

For occupational associations seeking to establish a scheme

1. Preparatory documentation and governance

   • Draft a scheme addressing scope, classes of persons, method of limitation (insurance, assets, multiple of charges), monetary ceilings and duration (s 18; ss 22-26; s 33(1)).
   • Prepare detailed risk management strategies and implementation mechanisms to satisfy s 37(1), including how strategies will be imposed (as membership conditions or otherwise) (s 37(2)).
   • Adopt or adapt a complaints and discipline framework, either the Model Code in Schedule 1 or a modified version approved by the Council, and ensure the association’s rules permit the necessary committees and procedures (s 40; Schedule 1).

2. Insurance standards and approval

   • If the scheme relies on insurance, set the requisite insurance standards and ensure they are robust. Any proposed alteration to previously determined standards must be submitted to the Council for approval before taking effect (s 28(2)-(4)). The association may also compel members to insure and may set differential standards by class of member (s 35).

3. Consultation and public notice

   • Publish notices in the Territory’s daily newspaper explaining the scheme, where to inspect a copy and invite comments for at least 21 days (s 8(1)). Where the scheme intends to operate interstate, conduct coordinated notices in the other jurisdiction in accordance with its corresponding law (s 8(2)).

4. Consideration of submissions and Council engagement

   • Submit the scheme to the Council and be prepared to demonstrate how the scheme takes into account the matters listed in s 10: submissions, positions of affected persons, nature and level of claims, risk management strategies and implementation, insurance cost and availability, and complaints and disciplinary provisions.

5. Fees and schedule compliance

   • Pay the relevant application fee (Schedule 4 cl 2) and plan for the annual fee of $35 per member per year while the scheme is in force (Schedule 4 cl 3). Arrange accounting systems to collect and remit these fees and manage interest on late payments (Schedule 4 cl 5).

6. Ensure enforceability and client notification templates

   • Adopt the prescribed statement wording and size for documents as set out in Schedule 4 cl 7 and ensure all promotional and ordinary client documents carry the statement before members rely on scheme limits (s 34(1); Schedule 4 cl 7). Create standard operational templates and compliance checks.

7. Reporting and audits

   • Implement recordkeeping to provide annual reports on risk management implementation and monitoring (s 38). Establish internal or joint claim‑monitoring committees and set protocols to respond to Council audit requests and compliance audits (ss 36-39). Prepare to supply information or copies of documents requested by the Council (s 46).

For individual members and firms

1. Membership and scope awareness

   • Confirm whether the scheme applies to you as a member, partner, officer or employee (s 18-21). For body corporates, check whether officers are members and whether the scheme applies to them (s 19). If you are entitled to be a member but are not, be aware the scheme may not apply to you (s 19(3), s 20(2)).

2. Insurance and asset tests

   • Where the scheme limits liability by insurance or assets, ensure you can demonstrate the requisite insurance cover or asset values in court at the time a proceeding is brought (ss 22-24). Maintain contemporaneous documentation of insurance policies, assets valuations, and policy schedules.

3. Client notification and process

   • Prior to the act or omission that gives rise to a claim, provide clients with the prescribed statement indicating liability is limited, in the form prescribed (s 29(2); s 34(1) and Schedule 4 cl 7). Keep records proving that the client was informed. Provide a copy of the scheme on request to any client or prospective client (s 34(4)).

4. Professional practice compliance

   • Abide by the association’s risk management strategies and any conditions imposed as membership requirements (s 37(2)). Participate in required training, audits, and reporting. If subject to disciplinary processes, be prepared to comply with the Model Code procedures or the association’s approved variant (s 40; Schedule 1).

5. Litigation readiness

   • If a proceeding is commenced, be prepared to prove to the court that you satisfy the scheme’s preconditions for limitation (ss 22-24). Be aware that if the insurance policy is defence costs inclusive and leaves less available to a claimant than the cap, s 27A preserves the cap against the claimant but leaves the professional potentially liable for the difference between the insurance payout and the cap.

For claimants and advisers acting for claimants

1. Scrutinise notifications and evidentiary record

   • Determine whether the defendant informed the claimant and whether the prescribed statement was provided before the act or omission (s 29(2); s 34). If not, the limitation will not apply as between that professional and the client.

2. Understand the scope of the limitation

   • Confirm whether the cause of action falls within the Act’s exclusions (s 5). For claims that are not excluded, assess whether the scheme applies and whether the defendant can satisfy the court on insurance or asset tests (ss 22-24). Evaluate aggregation rules for joint claims and associated persons (s 30).

3. Consider challenging scheme validity

   • If you are or are likely to be affected by a scheme notified in the Gazette, you may apply to the Supreme Court to have the scheme declared void for want of compliance (s 15). Prepare to litigate factual and procedural compliance issues and, for interstate schemes, to consider the corresponding law of the jurisdiction where the scheme was prepared (s 15(4)).

Administrative and Ministerial interaction

• Agencies and associations should factor in Ministerial directions (s 51), the Council’s review obligations (s 16), and the Minister’s power to extend scheme duration or to publish revocation notices for interstate schemes (ss 17A, 33). Maintain a compliance calendar for scheme lifecycle events, reporting deadlines and fee remittances.

Recordkeeping and governance

• Maintain contemporaneous records of client notifications, insurance certificates and policy wordings, business asset valuations, risk management procedures, audit outcomes and committee minutes. These will be decisive in litigation and in Council audits (ss 34, 22-24, 39, 46).

This compliance checklist aligns with the Act’s procedural and substantive preconditions and will materially reduce implementation risk when applying for scheme approval or relying on a scheme in litigation.