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National Competition Policy Review of the Professional Standards Act 1994 7.1.1 Chapter 7 of the Issues Paper discusses whether there have been any developments in the law that affect the review of the Professional Standards Act. 7.1.2 A recent development in tort law is the extension of liability for pure economic loss suffered by third parties. The most recent High Court decision is Perre v. Apand Pty Ltd, [1999] 73 ALJR 1190 in which it was held that damages for economic loss can be awarded, even if there is no relationship between the plaintiff who has suffered economic loss and the person who has suffered physical damage caused by the defendant. Previously, the law required the existence of a relationship between the person suffering economic loss and the person suffering physical damage. See Caltex Oil (Australia) Pty Ltd v. Dredge “Willemstad” (1976) 136 CLR 529 7.1.3 It would appear that liability for pure economic loss falls within the definition of “occupational liability”. This has a number of implications for arrangements under the Act. For example, it increases the number of people who may be able to take action against members of schemes, and may put the current insurance arrangements at risk. It raises questions about the efficacy of the requirement for members of schemes to disclose that they have limited liability, as third parties are potentially affected in addition to the client. It raises questions about the rationale of having schemes based on a multiple of the fee charged, given that no fee is involved for third parties and the fee charged to the client may bear no relationship to the economic damage inflicted on the third party. Issues 7(a) Does the development in tort law relating to liability for pure economic loss, or any other developments in the law, suggest a need to alter the approach of the Professional Standards Act?
12. [1999] 73 ALJR 1190 13. See Caltex Oil (Australia) Pty Ltd v. Dredge “Willemstad” (1976) 136 CLR 529 |
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