National Competition Policy Review of the Professional Standards Act 1994


Appendix C - Consolidated List of Issues



Chapter 2: Background and operation of the Act
2(a) Are the types of occupational liability covered by the Act appropriate? Should the Act be extended to cover other types of occupational liability?
2(b) Do the procedures for approving schemes provide for adequate consultation and accountability?
2(c) Is it in the public interest to allow occupational associations to exempt members from schemes?
2(d) Should schemes cover all members of an occupational group, or would such a requirement restrict consumer choice and competition?
2(e) Is the scope and content of existing schemes appropriate?

Chapter 3: The objectives of the Act
3(a) Are the policy objectives of the Act still valid?
3(b) Are the terms of the Act appropriate for securing those objectives?
3(c) Should the objectives be prioritised and if so, what should the ordering be?
3(d) Is there a need for legislative clarification or modification of the objectives?
3(e) Are the problems outlined in section 3.4 significant or severe enough to warrant legislative intervention?
3(f) In practice, has the Act adequately addressed the various problems it was introduced to address?
3(g) Are the functions assigned to the Professional Standards Council under the Act appropriate? Are there other areas where the Council should be acting?
3(h) Is the Professional Standards Council working effectively?
3(i) Have there been any difficulties with the administration of the Act in practice?

Chapter 4: The “market” and regulatory options
4(a) What is the “market” affected by the Act? If there is more than one market, how may they be identified and what are their characteristics?
4(b) What market failure is the Act attempting to address? Is the Act successful in addressing the failure?
4(c) What effect do schemes under the Act have on the competition in, and the operation of, markets for occupational services?
4(d) Are there any features of the market(s) for professional services in New South Wales that warrant the existence of professional standards legislation, compared to jurisdictions that do not have similar legislation?
4(e) What has been the experience of jurisdictions that do not have similar legislation, particularly in relation to:
· negligence claims against professionals and other occupational groups?
· insurance premiums for professional indemnity insurance?
· professional standards generally? For example, is the implementation of risk management practices less widespread?
· processes for resolving consumer complaint and disciplining members of occupational groups? For example, do these processes exist in other jurisdictions?
· competition, consumer choice and the price and quality of services in markets for services provided by occupational groups?
4(f) Would some alternative to the Professional Standards Act be preferable? If so, what is the alternative and why is it to be preferred?
4(g) If the Act is retained, are there ways in which it could be improved?
4(h) Do schemes under the Act duplicate to some extent, occupational licensing regimes?
4(i) If the cap on liability is justified from the public interest perspective, should it be incorporated into the occupational licensing regime?
4(j) Should schemes under the Act apply to members of occupational groups that are already subject to licensing schemes established by other legislation?
4(k) Do other arrangements or pieces of legislation duplicate some of the same areas as the Act (eg. industry self-regulation schemes, licensing schemes, consumer protection and trade practices legislation)?

Chapter 5: Capping
5(a) In practise, has the cap on liability affected the level of insurance premiums and the level of compensation awarded against professionals who are members of approved schemes under the Act?
5(b) In practise, have there been savings in insurance costs as a result of the cap? If so, have these savings been passed on to consumers?
5(c) What are the costs and benefits associated with capping? Do the benefits of outweigh the costs?
5(d) Are the arrangements for capping under the Act, together with the requirements for complaints handling processes and risk management training, in the public interest?
5(e) Would complaints handling processes and risk management programs have been implemented by the occupational associations covered by schemes in the absence of the Act?
5(f) Is there evidence of “forum shopping”?
5(g) Does the cap of $500,000 set by the Act provide adequate protection for consumers? Should the figure be reviewed?
5(h) Are the requirements for a member of a scheme to disclose that his/her liability is capped adequate?

Chapter 6: Impact on competition
6(a) Does the Act restrict competition by restricting who can provide services in markets for occupational services? Are the requirements relating to compulsory membership and compulsory insurance cover unnecessary restrictions on competition?
6(b) Does the Act have restrictive effects on competition in markets for occupational services by affecting or distorting prices?
6(c) Does the Act restrict competition in markets for occupational services by restricting the conduct of members of schemes under the Act? Is the system of complaints and disciplinary procedures associated with the Act a restriction on competition?
6(d) Does the Act restrict competition in markets for occupational services by restricting the provision of information?
6(e) What guidelines should be used in setting fees?
6(f) Do members of approved schemes have a competitive advantage or an unfair advantage over non-members? Does the Act unfairly discriminate against those occupational groups that are unable to organise into an incorporated association? Are service standards and quality for scheme members higher than that for non-members?
6(g) How does the existence of schemes affect the market for occupational services, and occupational groups and service providers who choose not to belong to schemes?
6(h) Is there any evidence that consumers choose to deal with scheme members over non-scheme members? Does the cap on liability for scheme members affect consumer choices?
6(i) Does the Act impose any other restrictions on competition?
6(j) Do the benefits of the restrictions on competition outweigh the costs, and can they be justified in terms of a net benefit to the community as a whole?
6(k) Does the effect of the Act contravene the competitive conduct rules in Part IV of the Trade Practices Act and the New South Wales Competition Code?

Chapter 7: Legal developments
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?