<![CDATA[<body bgcolor="#FFFFFF" text="#000000">
<br><a href = "thecouncil.html">About Professions Australia</a><br>
<a href = "branches.html">Branches & NSWCOP</a><br>
<a href = "policymaterial.html">Policy Material</a><br>
<a href = "knowledgenetwork.html">Knowledge Network</a><br>
<a href = "alertsandnews.html">Alerts and Newsletters</a><br>
<a href = "membership.html">Membership Information</a><br>
<a href = "office.html">Office & Contacts</a><br>
<a href = "sitesearch.html">Search</a><br>
<a href = "Memberlogin.html">Member Login</a><br>
<a href = "memberlogout.html">Logout</a><br>
<a href = "Homepage.html">Home</a><br>
<a href = "Constitution.html">Constitution</a><br>
<a href = "YoungProf.html">Young Professionals</a><br>
<a href = "ethicsresource.html">Ethics Resource Centre</a><br>
<a href = "history.html">History</a><br>
<a href = "visionrole.html">Vision and Role</a><br>
<a href = "Board.html">Board</a><br>
<a href = "committees.html">Committees</a><br>
<a href = "mediaspeeches.html">Media, Speeches</a><br>
<a href = "award.html">Professional of the Year Award</a><br>
<a href = "archives.html">Archives</a><br>
<a href = "NSWCOP.html">NSWCOP</a><br>
<a href = "victoria.html">Victoria</a><br>
<a href = "Queensland.html">Queensland</a><br>
<a href = "wa.html">Western Australia</a><br>
<a href = "sa.html">South Australia</a><br>
<a href = "tasmania.html">Tasmania</a><br>
<a href = "act.html">ACT</a><br>
<a href = "competitionpolicy.html">Competition Policy</a><br>
<a href = "insurance.html">Insurance</a><br>
<a href = "highereducation.html">Higher Education</a><br>
<a href = "other.html">Other</a><br>
<a href = "knetsample.html">Knowledge Base Sample</a><br>
<a href = "kbase.html">Knowledge Base</a><br>
<a href = "kpeople.html">Knowledge People</a><br>
<a href = "ktalk.html">Knowledge Talk</a><br>
<a href = "submitkbase.html">Submit to Knowledge Base</a><br>
<a href = "submitkpeople.html">Submit to Knowledge People</a><br>
<a href = "alertssample.html">Alerts and News Sample</a><br>
<a href = "alerts.html">Alerts</a><br>
<a href = "newsletters.html">Newsletters</a><br>
<a href = "subscription.html">Alerts and News Subscription</a><br>
<a href = "criteria.html">Criteria</a><br>
<a href = "Rates.html">Membership Rates</a><br>
<a href = "member.html">Member Associations</a><br>
<a href = "KBManual.html">Knowledge Base Manual</a><br>
<a href = "defineprofession.html">Definition of a Profession</a><br>
<a href = "KBWP.html">Knowledge Base White Papers</a><br>
<a href = "ValueStatement.html">Value Statement</a><br>
<a href = "Apply.html">Apply to join</a><br>
<a href = "Constitutioncontinue.html">Constitution continued</a><br>
<a href = "ParticReportsNov2003.html">Participant reports Roundtable Nov 2003</a><br>
<a href = "latestnewsletter.html">Latest Newsletter</a><br>
<a href = "bankruptcy.html">Bankruptcy legislation</a><br>
<a href = "whatsnew.html">What's New</a><br>
<a href = "ethicsplan.html">Ethics Action Plan</a><br>
<a href = "definitionprofession.html">Definition of a Profession</a><br>
<a href = "ethicscodes.html">Codes of Ethics</a><br>
<a href = "ethicseducation.html">Ethics Education</a><br>
<a href = "ethicsforum.html">Ethics Forum</a><br>
<a href = "relatedsites.html">Related Sites</a><br>
<a href = "ethicsreading.html">Reading</a><br>
<a href = "ethicscasestudies.html">Ethics Case Studies</a><br>
<a href = "ethicsresearch.html">Ethics Research</a><br>
<a href = "CPSS.html">Competition Policy Submission (1998)</a><br>
<a href = "SERC.html">Submission to Economics References Committee (May 2002)</a><br>
<a href = "SSWSTTTR.html">Structured Settlements - Why support them through tax reform (May 2001)</a><br>
<a href = "STTRLN.html">Submission to the Review of the Law of Negligence (August 2002)</a><br>
<a href = "MRPWBI.html">Media Release: Professions want broader indemnity agenda (June 2002)</a><br>
<a href = "PORM.html">Policy on Risk Management (November 1997)</a><br>
<a href = "PR2001.html">AGM 2001 Presidents Address</a><br>
<a href = "AFGFA.html">Professional Liability - A fair go for all - 1998</a><br>
<a href = "TPPIAC.html">The Professions, Public Interest and Competition Policy (2000)</a><br>
<a href = "APSUT.html">Australia's Professional Services under threat 1997</a><br>
<a href = "NCPP.html">National Competition policy & the professions 1997</a><br>
<a href = "DWRME.html">Dealing with risk. Managing expectations 1996</a><br>
<a href = "GM2002.html">GM 2002 Presidents Speech</a><br>
<a href = "AGM2002.html">AGM 2002 Presidents Address</a><br>
<a href = "MediaRelease25Nov.html">Ipp Media Release</a><br>
<a href = "MediaReleaseNov02.html">Professional Indemnity Insurance Crisis - media Release</a><br>
<a href = "AGM1999.html">AGM President Address 1999</a><br>
<a href = "SCAGMINCO.html">Submission to SCAG-MINCO 9 Dec 2002</a><br>
<a href = "JCCV.html">John Castles CV</a><br>
<a href = "BGCV.html">Barry Grear CV</a><br>
<a href = "DTCV.html">David Thomson CV</a><br>
<a href = "VICletter.html">Victorian market failure in Professional Indemnity insurance</a><br>
<a href = "CVSTP.html">Coonan's view a shock to professionals</a><br>
<a href = "PBULC.html">Peak body urges liability cap</a><br>
<a href = "LDRA.html">Liability decision rouses anger</a><br>
<a href = "PLNHG.html">Proportionate liability is not Holy Grail</a><br>
<a href = "GPAS.html">Government position appears to be shifting</a><br>
<a href = "pumta.html">Professions urge ministers to act now</a><br>
<a href = "tpauc.html">TPA 'undermines capping'</a><br>
<a href = "mtstmt.html">Market 'too small and too much trouble'</a><br>
<a href = "pimfnps.html">PI market failure needs a package solution</a><br>
<a href = "cfncoll.html">Call for national cap on lawyers' liability</a><br>
<a href = "POPSR.html">Policy on Professional Self-Regulation (1990)</a><br>
<a href = "RDEWL.html">Role and Duties of an Expert Witness in Litigation (1998)</a><br>
<a href = "107.html">Alert No 107 (29 May 03)</a><br>
<a href = "1071.html">Alert No 107 Attach 0ne</a><br>
<a href = "1072.html">Alert No 107 Attach Two</a><br>
<a href = "1073.html">Alert No 107 Attach three- Implementation paper</a><br>
<a href = "1074.html">Alert No 107 Attach Four</a><br>
<a href = "Treasurer.html">Paul Meiklejohn</a><br>
<a href = "Boardmemberone.html">Monica Persson</a><br>
<a href = "nswcopcontacts.html">Contacts</a><br>
<a href = "nswcopobjectives.html">Objectives</a><br>
<a href = "nswcoppsl.html">Professional Standards Legislation</a><br>
<a href = "nswcopevents.html">Events</a><br>
<a href = "nswcopnletters.html">NSWCOP Newsletters</a><br>
<a href = "SeptHigherEd.html">Nelson reforms miss the main point, say professions</a><br>
<a href = "PSCJune03Seminar.html">NSW PSC June Seminar</a><br>
<a href = "VicCPAJuly03Seminar.html">Vic CPA professional indemnity seminar, 28 July 2003</a><br>
<a href = "BrisbaneHandPI.html">John Hand Brisbane PI Paper, 30 July 2003</a><br>
<a href = "ICAABrisbanePaper.html">Brisbane ICAA PI paper</a><br>
<a href = "PolCampaignsArticle.html">Professions Australia learns lessons on political campaigns</a><br>
<a href = "AnaGovan.html">Ana Govan (information technology)</a><br>
<a href = "BrigetteHall.html">Brigette Hall (minerals)</a><br>
<a href = "NikkiBrennan.html">Nikki Brennan (architecture)</a><br>
<a href = "NinaQuinn.html">Nina Quinn (audiology)</a><br>
<a href = "LukeFraser.html">Luke Fraser (construction)</a><br>
<a href = "PhilippaThomson.html">Philippa Thomson (dentistry)</a><br>
<a href = "KateWest.html">Kate West (engineering)</a><br>
<a href = "profcomppublic.html">Professionalism, competition policy and the public interest: Issues paper (2003)</a><br>
<a href = "SenateTPAbriefing.html">Senate TPA inquiry briefing notes March 2004</a><br>
<a href = "ICActReview.html">Insurance Contracts Act review key documents</a><br>
<a href = "ACCCinsurancereviews.html">ACCC insurance market pricing reviews</a><br>
<a href = "SenatorCoonanwebsite.html">Senator Coonan website</a><br>
<a href = "InsuranceCouncil.html">Insurance Council website</a><br>
<a href = "CoonanJuly2003letter.html">Letter to Coonan on timing July 2003</a><br>
<a href = "MinletterMar2004.html">Letter to Ministers on timing March 2004</a><br>
<a href = "MinContOutMar2004ltr.html">Letter to Ministers against contracting out (March 2004)</a><br>
<a href = "12March2004update.html">Update 12 March 2004</a><br>
<a href = "TPAPSLinquiry.html">Senate Committee inquiry into Trade Practices Act amendments</a><br>
<a href = "AGM2003Pres.html">AGM 2003 Presidents Address</a><br>
<a href = "OMNov2003Pres.html">Ordinary Meeting November 2003 Presidents Address</a><br>
<a href = "HobartMediaFeb2004.html">Comments on Hobart Insurance Ministers meeting Feb 2004</a><br>
<a href = "Feb2004PISurveys.html">February 2004 professional indemnity surveys</a><br>
<a href = "HigherEdltrs25Sep03.html">Higher Education letters 25 Sep 2003</a><br>
<a href = "HigherEdmed8Oct2003.html">Higher Ed media 8 October 2003</a><br>
<a href = "HigherEdltr6Nov03.html">Higher Ed letter 6 Nov 2003</a><br>
<a href = "HigherEdltrs26Nov03.html">Higher Ed letters 26 Nov 2003</a><br>
<a href = "HigherEdltr30Sep03.html">Higher Ed letter 30 September 03</a><br>
<a href = "HigherEdAFR13Oct03.html">Higher Education AFR Op Ed piece 13 October 03</a><br>
<a href = "pasub.html">National Competition Policy Review - PA Submission (2004)</a><br>
<a href = "profoftheyear.html">Announcement of 2004 Professional of the Year</a><br>
<a href = "membercodes.html">Examples of Member Codes</a><br>
<a href = "codeprinciples.html">Code Principles</a><br>
<br>
<P style="MARGIN: 6pt 0cm 3pt"><I><SPAN style="FONT-SIZE: 18pt; FONT-FAMILY: Verdana">Professions </SPAN></I><I><SPAN style="FONT-SIZE: 18pt; FONT-FAMILY: Verdana">Australia</SPAN></I><I><SPAN style="FONT-SIZE: 18pt; FONT-FAMILY: Verdana"> Alert No. 167: Professional indemnity in the news</SPAN></I></P>
<P style="MARGIN: 6pt 0cm 3pt"><SPAN style="FONT-FAMILY: Verdana">(Professions </SPAN><SPAN style="FONT-FAMILY: Verdana">Australia</SPAN><SPAN style="FONT-FAMILY: Verdana"> is a national organisation of professional associations)</SPAN></P>
<P style="MARGIN: 6pt 0cm 3pt; FONT-FAMILY: Verdana">Today’s <I>Australian Financial Review</I> has good coverage of professional indemnity insurance issues, with PA member spokespersons quoted extensively. </P>
<P style="MARGIN: 6pt 0cm 3pt"><SPAN style="FONT-FAMILY: Verdana">The coverage coincides with today’s meeting in </SPAN><SPAN style="FONT-FAMILY: Verdana">Hobart</SPAN><SPAN style="FONT-FAMILY: Verdana"> of insurance ministers.</SPAN></P>
<P style="MARGIN: 6pt 0cm 3pt; FONT-FAMILY: Verdana">Key points noted in the articles are the effects on professionals in small business and the danger of certain services not being provided because insurance cover cannot be obtained. </P>
<P style="MARGIN: 6pt 0cm 3pt"><SPAN style="FONT-FAMILY: Verdana">There is also an article about </SPAN><SPAN style="FONT-FAMILY: Verdana">Queensland</SPAN><SPAN style="FONT-FAMILY: Verdana">’s approach to proportionate liability but without any details of the proposed ‘consumer carve-out solution’. </SPAN></P>
<P style="MARGIN: 6pt 0cm 3pt; FONT-FAMILY: Verdana">Text of these articles is below, courtesy of the Liability Reform Steering Group’s media watch service.</P>
<P style="MARGIN: 6pt 0cm 3pt; FONT-FAMILY: Verdana">Note also yesterday’s coverage in the <I>Financial Review</I> of the good profit performance of insurers. One would have thought the pressure to increase premiums would moderate accordingly, insurance profits having caught up a bit after years of underpricing. But, not so, according to the insurers. Nice work, if you can get it.</P>
<P style="MARGIN: 6pt 0cm 3pt; FONT-FAMILY: Verdana"></P>
<P style="MARGIN: 6pt 0cm 3pt"><B><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">Professions' Insurance Crisis </SPAN></B></P>
<P style="MARGIN: 6pt 0cm 3pt"><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">Chris Merritt, Legal Editor <BR>AFR, </SPAN><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">27 February 2004</SPAN><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana"><BR>Page 14<BR><BR></SPAN></P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">Thousands of small professional practices are under pressure to merge or close because they are unable to find full insurance cover. </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">Engineers and architects say insurance companies are excluding a growing proportion of their businesses from their professional <SPAN>indemnity</SPAN> policies. </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">And if the trend continues, the peak organisation representing the major professions warned yesterday that it would drive many small practices out of business. </P>
<P style="MARGIN: 6pt 0cm 3pt"><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">According to Professions Australia, the only way of avoiding the coming shake-out is if the summit of insurance ministers in </SPAN><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">Hobart</SPAN><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana"> today adopts a more vigorous approach and moves fast on its unfinished reform agenda. </SPAN></P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">These fears have emerged after the Australian Consumer and Competition Commission warned on Monday that insurance companies expected claims against professionals to grow. </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">The Association of Consulting Engineers Australia released a survey of its members yesterday showing that 78 per cent of respondents had been unable to insure all of their services, compared with 30 per cent the year before. </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">ACEA's chief executive, Therese Charles, said this was triggering a wave of mergers. </P>
<P style="MARGIN: 6pt 0cm 3pt"><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">Engineers </SPAN><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">Australia</SPAN><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana"> and the Royal Australian Institute of Architects said their members had experienced the same problem and warned that unless governments moved quickly, their reforms would be too late to save many small practices. </SPAN></P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">David Stephens of Professions Australia said engineers were not alone. </P>
<P style="MARGIN: 6pt 0cm 3pt"><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">"While we appreciate the progress made to date by the insurance ministers, small professional practices across </SPAN><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">Australia</SPAN><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana"> cannot go on paying more premiums for less cover," he said. </SPAN></P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">A survey by JP Morgan Deloitte said this week that insurance companies expected PI premiums to rise overall by 18 per cent. But ACEA's survey indicates that engineers have been among the worst hit. </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">In the past six months, their PI premiums rose by an average of 36 per cent, which followed last year's average rise of 114 per cent. </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">And while some engineers have been hit with increases of 400 per cent, ACEA was still more concerned about the fact that 78 per cent of those who responded to the survey were unable to insure all of their business. </P>
<P style="MARGIN: 6pt 0cm 3pt"><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">Ms Charles said the exclusions were forcing many engineering firms to reduce the size of their business and withdraw their services in areas that the insurance industry considers to be high risk, including services that could be affected by terrorism, pollution control and asbestos removal. Some engineers had also been denied coverage for providing cost estimates, working in the </SPAN><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">US</SPAN><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">, working on building slabs and footings, doing geotechnical work, underpinning or working for government utilities. </SPAN></P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">"Unless something changes, small firms that offer those services will go out of business," Ms Charles said. </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">The director of public policy at Engineers Australia, Leanne Hardwicke, said one of the main reasons engineers in sole practice had been closing their doors was their inability to obtain insurance cover. </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">The chief executive of the Royal Australian Institute of Architects, Christine Harvey, said the ACCC's standing reference to monitor the insurance industry could be expanded to ensure that insurance companies were not unreasonably discriminating against small professional practices. </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">"It seems that big firms are perceived to be a good risk, while sole practitioners don't have the same buying power," she said. </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">Ms Harvey said the summit of insurance ministers needed to move urgently to implement professional standards schemes in all states along with the other reforms that are needed to solve the professional <SPAN>indemnity</SPAN> crisis. </P>
<P style="MARGIN: 6pt 0cm 3pt"><B><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana"></SPAN></B></P>
<P style="MARGIN: 6pt 0cm 3pt"><B><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">Some Jobs Just Won't Get Done </SPAN></B></P>
<P style="MARGIN: 6pt 0cm 3pt"><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">Annabel Hepworth. <BR>AFR, </SPAN><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">27 February 2004</SPAN><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana"></SPAN></P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">Page 15<BR><SPAN> </SPAN></P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">A range of services could vanish for want of PI cover, writes Annabel Hepworth. </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">Mike Bozier has surveyed big commercial craft, chartered and recreational vessels, and cargoes since 1968, but he's worried that other marine surveyors, old salts that have done the job for just as many years, are leaving the craft because of the difficulties and expense of getting professional <SPAN>indemnity</SPAN> insurance. "They are saying, `it's just not worth the hassle'," he says. "They are being lost to the profession . . . none of us makes a fortune." </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">Bozier, who first took out PI insurance more than 30 years ago to protect himself from lawsuits over professional mistakes, says it's the worst it's ever been and calls the situation "a bloody disaster". </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">David Stephens , policy consultant at Professions Australia, says a range of services are under threat because of the difficulties in obtaining PI insurance. He warns that key services could disappear, including cooling tower safety, asbestos removal, prepurchase home inspections, pollution control and slab construction. </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">Already there is anecdotal evidence of areas where these services are not available. Stephens says the problem could worsen until professional standards legislation is enacted in each state. It's a problem that's worsening, especially as governments force contractors to take out PI cover. </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">"Professionals are grimly aware of litigation trends and the need for PI cover," says John Davaine , manager of corporate and professional risks at insurance broker Chegwyn Craig Australia. "The range of occupations that are required to purchase cover is continuing to broaden." </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">State and federal government departments may have started the trend by requiring contractors have a minimum of $10 million in PI cover, but the private sector is joining the fray, often requiring contractors to have cover worth about $5 million. </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">Many industry associations also require their members to have PI insurance. "The reason it's an issue now is that in the last couple of years it's been more and more difficult to buy [PI insurance]," says Ray Armstrong, director of global insurance broker Marsh. </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">Financial planners say insurers have been unwilling to provide any sort of cover for some in their profession; others have had to pay exponential increases in premiums. Con Hristodoulidis , national manager for public policy at the Financial Planning Association, says insurance difficulties could drive some smaller financial planning operations out of business. Others may have to pass on the extra cost to consumers. </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">The list of so-called product exclusions is growing, with many policies not covering planners when they recommend particular so-called high-risk strategies such as margin lending. </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">Aquatic biology consultants, who among other things inspect cooling towers, are reeling from steep premium increases. </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">Real estate agents, property valuers, software developers and even insurance brokers are all struggling to get affordable cover. Chegwyn Craig Australia's Davaine says: "On a typical client account, we would now expect four out of six insurers to decline to provide any terms. Of the remaining two, it would be usual for one to be unacceptable due to the restrictions placed on the policy." </P>
<P style="MARGIN: 6pt 0cm 3pt"><B><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana"></SPAN></B></P>
<P style="MARGIN: 6pt 0cm 3pt"><B><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">Put Professions On The Agenda </SPAN></B></P>
<P style="MARGIN: 6pt 0cm 3pt"><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">27 February 2004</SPAN><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana"><BR>Editorial, </SPAN><SPAN lang=EN-US style="FONT-FAMILY: Verdana"><A title="Australian Financial Review" href="javascript:NewWindow(%20'FIISrcDetails','?from=article&ids=afnr');void(0);"><SPAN style="COLOR: windowtext; TEXT-DECORATION: none; text-underline: none">Australian Financial Review</SPAN></A><SPAN style="COLOR: black"><BR>Page 82<BR><SPAN> </SPAN></SPAN></SPAN></P>
<P style="MARGIN: 6pt 0cm 3pt"><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">When the nation's insurance ministers gather in </SPAN><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">Hobart</SPAN><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana"> today they can justifiably point to their strong record on dealing with the crisis in the insurance market. Reforms have been made around the country aimed at encouraging the international insurance companies to make insurance more affordable and available. But they need to do more. </SPAN></P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">Most of the changes that have been put in place are designed to ease pressure on those companies that provide public liability insurance. Governments have changed the balance in the law so that claims for personal injuries are declining rapidly. </P>
<P style="MARGIN: 6pt 0cm 3pt"><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">While that favours insurers, </SPAN><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">Australia</SPAN><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana"> has no alternative if it wants to persuade international insurance companies to put their capital to work in this country. </SPAN></P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">One of the few hold-ups on that side of the reform agenda has been in the Senate, where both sides of politics have been unable to agree on how to close a potential loophole in the Trade Practices Act. </P>
<P style="MARGIN: 6pt 0cm 3pt"><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">But, apart from that, most changes on the public liability side of the tort reform agenda are in place. The insurance ministers can credibly tell the world's insurance companies that </SPAN><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">Australia</SPAN><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana"> is now a much more friendly environment in which to write that kind of insurance. </SPAN></P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">However, there is another problem the professional <SPAN>indemnity</SPAN> crisis, which is not just making professional services more expensive but now threatens to eliminate many small firms. </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">The insurance ministers were relatively slow to take up the reform agenda that has long been pushed by the professions and, because of that, the benefits of tort reform that seem to be apparent in public liability insurance are not having the same impact on professional <SPAN>indemnity</SPAN>. </P>
<P style="MARGIN: 6pt 0cm 3pt"><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">For the professions, a successful outcome from the summit in </SPAN><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">Hobart</SPAN><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana"> will include a commitment that the full reform agenda will be in place by the end of this financial year. If the ministers take much longer, they risk doing permanent damage to the market for professional services. </SPAN></P>
<P style="MARGIN: 6pt 0cm 3pt"><B><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana"></SPAN></B></P>
<P style="MARGIN: 6pt 0cm 3pt"><B><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">Queensland</SPAN></B><B><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana"> Acts To Protect Consumers</SPAN></B></P>
<P style="MARGIN: 6pt 0cm 3pt"><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">Fiona Buffini <BR>AFR, </SPAN><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">27 February 2004</SPAN><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana"><BR>Page 60<BR><BR></SPAN></P>
<P style="MARGIN: 6pt 0cm 3pt"><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">When </SPAN><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">Queensland</SPAN><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana"> architect Steve Gleeson and his wife Maree , a nurse, paid $165,000 for a Gold Coast unit they were told it would increase in value by at least 8 per cent a year and was a good investment for their retirement. </SPAN></P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">What they weren't told was that their bank valued the unit at $100,000 or that $35,000 of their money would end up in the pockets of marketers and "financial advisers" who arranged the deal. </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">The solicitor they were introduced to also knew a substantial fee was payable but did not inform his clients. </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">The involvement of lawyers and financial advisers in such property marketeering schemes have contributed to Queensland's insistence on consumer protections in landmark changes to reduce professional liability, which are being discussed by insurance ministers today. </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">"We've always had a position that any model of proportionate liability must provide appropriate consumer protection measures," a spokesperson for Queensland Attorney-General Rod Welford said yesterday. </P>
<P style="MARGIN: 6pt 0cm 3pt"><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana">Queensland</SPAN><SPAN lang=EN-US style="COLOR: black; FONT-FAMILY: Verdana"> plans to carve out all consumer claims from its proportionate liability laws, which are expected to be introduced mid-year, citing superannuation and property schemes as evidence of the need for the protections. </SPAN></P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">Proportionate liability makes it harder for victims of bad advice from the nation's 300,000 professionals to sue for economic damages. </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">Under the current system of "joint and several liability", <SPAN>consumers</SPAN> can try to recover the full amount of their loss from "deep-pocket" defendants such as insured professionals, even when they are just a part of a complex chain of negligence or deceit. That is crucial when the most obvious target for a suit is an insolvent company or a director who has disappeared. </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">As in many property schemes, the Gleesons were phoned at home by a telemarketer, invited to a seminar, interviewed as part of the process to identify "prospects" with incomes of $40,000 and then flown to the Gold Coast. There they were met by a limousine for the final hard sell, a process the Federal Court later said "involved creating an impression of urgency in relation to securing a unit and substantial pressure then being applied to `close' the sale". </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">The Australian Competition and Consumer Commission sued various companies involved in the scheme for breaching the Trade Practices Act. In December, judge Susan Kiefel of the Federal Court found that marketeers Dudley Quinlivan and Christopher Bilborough and their associated companies had engaged in misleading conduct in representations about capital growth. </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">However, she said the ACCC had not proved that the price paid by the Gleesons was substantially more than market value. </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">Justice Kiefel also found the Gleesons' bank was under no obligation to tell the Gleesons that it had valued the property at $100,000. </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">She found that the Gleesons' solicitor, Gregory Pointon , of Perrin Pointon, "knew sufficient to have required him to make disclosures to his clients". No orders could, however, be made against Mr Pointon because, the judge said, the ACCC could not seek orders against him under the Queensland Fair Trading Act, as it had sought to do. </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">Mr Welford's office said any allegations of misconduct by solicitors would be brought to the attention of the Law Society. Last year, the society unsuccessfully prosecuted two solicitors alleged to have played leading roles in the marketing of Gold Coast property schemes. They were cleared and are reportedly considering action for compensation. </P>
<P style="MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana">The ACCC's appeals in the case will be heard in May. </P>
<P style="FONT-SIZE: 9pt; MARGIN: 6pt 0cm 3pt; FONT-FAMILY: Verdana"></P>
<P style="FONT-SIZE: 10pt; MARGIN: 6pt 0cm 3pt; FONT-FAMILY: Verdana"></P>
<P style="FONT-SIZE: 9pt; MARGIN: 6pt 0cm 3pt; COLOR: black; FONT-FAMILY: Verdana"></P>
<P style="FONT-SIZE: 9pt; MARGIN: 6pt 0cm 3pt; FONT-FAMILY: Verdana"></P>
<P style="MARGIN: 6pt 0cm 3pt; FONT-FAMILY: Verdana"></P>
</body>]]>