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annual report


Academic year: 2022

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annual report

twenty sixteen

twenty seventeen


Letter to Ministers 1

Letter to Ministers

Dear Ministers,

i am pleased to submit the 2016–17 Annual report of the Professional standards Councils of the Australian Capital territory, new south Wales, the northern territory, Queensland, south Australia, tasmania, Victoria and Western Australia to the relevant Ministers in each state and territory.

this is a consolidated volume on the Councils’

operations and performance, and includes financial statements for the period 1 July 2016 to 30 June 2017. This report has been prepared in accordance with the relevant Professional standards Legislation in each Australian state and territory, for Ministerial presentation in your respective parliaments.

During the period covered by this report, the Professional standards Councils have worked with occupational associations to improve professional standards for the professional communities covered by Professional standards Legislation.

occupational associations continue to commit to the high expectations of professional regulation captured in their Professional standards scheme, as evidenced by the number of applications for a new scheme once the previous one has expired.

the role performed by these schemes is also reflected in the Commonwealth continuing to prescribe schemes so that they operate in relation to relevant federal legislation.

this report is a formal record of the compliance and achievements of the Professional standards Councils over the past year.

of particular note to our Ministers, the 2016–17 financial year has seen great change in the make-up and continuity of the Professional standards Councils with the expiry of the statutory appointments of a number of fellow Councils members, esther Alter (Vic), robert Beaton (nsW), tom Karp (Cth), and of course the departure of the past Chair, Brian rayment QC (nsW).

it also sees the departure of our highly respected Chief Executive Officer, Dr Deen Sanders OAM who has moved to another regulatory environment that calls on his skills and experience in the field of professional standards.

As the incoming Chair, i and my fellow new Council members, along with the remaining experienced Councillors, are looking forward to continuing great work as your Professional standards Councils.

i commend this report to you.

Steven Finch SC incoming Chair (2017)

Professional standards Councils


In this report




our Mission 8

our Vision 8

our Core Purpose 8


Protect consumers 9

improve professional standards 9

Help associations 9



Formation of the Councils and legislation 10

Legislation 10

role of the Councils 11

improving professional standards 11

Uniquely Australian 11

Highlights 12

REVIEW OF OPERATIONS AND ACTIVITIES 14 Professional standards schemes 14

The life of schemes 14

Amendments to the Professional Standards

Act (2005) (Tasmania) 14

Professional Standards Schemes oversight 14

Scheme applications 15

Scheme extensions of expiry date 17

Commonwealth prescription 17

Compliance monitoring and reporting 21 Professional Standards Improvement Program

Reports for calendar year 2016 21 Improved annual reporting format uptake 22 Common areas for improvement identified 23 Industry sector comparison on compliance elements 24

Regulatory assurance action 25

Association support programs 26

ORGANISATIONAL STRUCTURE 28 structure of the Professional

standards Councils 28

national framework of legislation 29

Council members 30

Corporate governance 35

Committees 37

Finance, Audit and Risk Management Committee 37 Governance and Policy Advisory Group 37

Grants Committee 37

Law Review Working Group 37

Association Development Advisory Group 37 Professional standards Authority 38 Intergovernmental agreements and the PSA 38 structure of the Professional

standards Authority 39


Financial performance of the Professional

standards Councils 40



Legislated reporting 42

Acronyms, abbreviations and definitions 57


Letter to Ministers 3




As outgoing Chair, I am pleased to submit my 12th and final Annual report on behalf of the Professional standards Councils. it has been an honour to serve and be part of an important and uniquely Australian statutory framework for consumer protection.

Despite changes in the risk management environment for associations and professionals in practice, this year represented another year of steady growth in regulatory coverage. the Councils monitored and oversaw Professional standards schemes nationally for 20 associations, with 28 schemes covering a total of 68,537 members.

this year saw the expiry of the statutory appointments of a number of my fellow Council members, esther Alter who was Deputy Chair (Vic), robert Beaton (nsW) and tom Karp (Cth). each of them devoted much time and energy to the service of the public interest and we acknowledge a debt of gratitude to each of them.

We say farewell to Dr Deen sanders oAM who has contributed so much in this field. We wish him well and thank him for his dedicated performance as our Chief Executive Officer.

the success of our statutory environment is largely due to a robust body of experts who consider matters deeply and seek to provide certainty in decision making, thinking carefully through the opportunities for improved professional standards and greater consumer protection. each of these members has made an invaluable and unique contribution to that process, giving their time, dedication and service to the Councils.

the future of the Councils is in very good hands with the appointment of steven Finch sC as the incoming replacement Chair. i have total confidence in him. This organisation is of real public importance and I wish it well.

i commend this report to you.

Brian Rayment QC Chair (2005–2017)

Professional standards Councils


CHAirs’ Letter 5

i am honoured to take up the role of incoming Chair for the Professional standards Councils and would like to add my acknowledgement of the dedicated work of the Councils and its members. i am privileged to follow the service of Brian rayment QC, who has been an exemplary leader for the Councils in his 12 years, and who leaves an indelible mark on the history of Professional standards Legislation.

Despite continuing change in the community and regulatory environment for professions, as well as for the Council members themselves, I am confident the strength and integrity of this regime will continue to grow and play an increasingly important role on professions in Australia.

in addition to my new appointment i have already met with a number of the new Council members who begin their terms with me. i welcome Andrew Lumsden (nsW), Dr Pam Montgomery (Vic) and Will Hamilton (Cth). We are, together with the remaining experienced Councillors, honoured to continue the great work of the Professional standards Councils.

I look forward to making a significant contribution in the next reporting year.

Steven Finch SC incoming Chair (2017)

Professional standards Councils


Chief Executive Officer’s Report

it is with pleasure that i present our contribution to the Annual report from the perspective of the Professional standards Authority (PsA), as the regulatory support agency for the Professional standards Councils.

2016–17 has been a year of noticeable change in the environment for Professional Associations.

A number of key highlights include:

Disruption – rapid changes in technology and business models continue to challenge traditional ways of providing professional services and mean that member expectations for support and direction from their professional association are also changing.

Value of expertise – on a global stage 2016 saw an increase in populism as a voice for the community, and while some have interpreted that as a challenge to the value of expertise, i take the view that it only increases the need for trusted, professional and expert voices to assist the community in navigating any future complex problems. Professional associations play a vital role in channelling and developing that expertise for public good.

Governance, transparency and trust – A number of high profile organisations have undergone public and member tests of confidence in their governance and transparency arrangements.

The effect has rippled out to many associations with members from all groups asking questions about executive remuneration and board decision making. the professional integrity systems that the Councils and PsA look for in organisations has the issue of public trust and professional integrity at the heart of their governance engines and I am confident that the challenges of the recent past are a catalyst for change in positive

professional association governance and member focus.


CHieF exeCUtiVe oFFiCer’s rePort 7

A number of these topics were researched in-depth in the three year Australian research Council project supported by the Councils. now at the end of its second year, the research team has written a series of articles featured in the UNSW Law Journal – issue 40 (1) Contemporary Professionalism and regulation. these articles explore some of the challenges faced by the professions and professionals in the 21st century, and evaluate different mechanisms for professional regulation.

no doubt these trends will play out over the medium- to long-term future in all professions and shape the regulatory and community expectations of what we want from our professional community.

in addition to changes at the strategic and society level of professions, we also saw changes in the direct statutory environment for Professional standards Legislation, with long awaited changes to the tasmanian Professional Standards Act 2005 that now allows for mutual recognition and association level determination of limitation of liability. this is a positive change for all professionals and will lead to improved consumer protection and wider national coverage.

Lastly, this is my last annual report for the PsA as i leave to head up the Financial Adviser standards and ethics Authority, which is a new regulatory agency in the area of education, standards and ethics in the Financial services sector.

it has been an extraordinary privilege to work in this agency and the important and positive field of professional regulation. The PSA has an extraordinary team of expert, dedicated staff and is part of a wider community of public sector professionals who give their unwavering commitment and service to the Professional standards Council, the community, government and business. i thank them for their hard work and know that 2017–18 will be just as exciting.

Dr Deen Sanders OAM Chief Executive Officer

Professional standards Authority


Our Core Purpose

To protect consumers by improving professional standards

Our Vision

To lead the way in advancing the highest standards of professionalism

Our Mission

To promote professional standards and consumer

protection through thought leadership and education,

and by granting, monitoring and enforcing approved

Professional Standards Schemes


WHy We’re Here 9

we’re Why here

Protect consumers

the Professional standards Councils’ goal is to protect consumers by demanding high levels of professional standards and practices from those who participate in Professional standards schemes.

Associations and members who participate in Professional standards schemes are recognised as pursuing improvement in professional standards and acting ethically.

Improve professional standards

in Australia, a growing number of associations and their members are making significant efforts to improve their professional standards.

the Professional standards Councils take a collaborative approach when working with associations to help them develop self-regulatory initiatives and to improve their professional standards by implementing risk management strategies and professional integrity systems.

the Councils conduct research, develop policies and guidelines, and organise events to promote debate and change in the areas of professional standards, codes of ethics and conduct, and risk management, in order to protect consumers.

Help associations

the role of the Professional standards Councils is to strengthen and improve professionalism within occupational associations and promote self-regulation while protecting consumers.

the Councils decide whether to approve applications for Professional standards schemes under

Professional standards Legislation, and monitor and enforce associations’ administration of schemes.

schemes allow limits to be placed on the civil liability of professionals who are members of an association covered by a scheme.


About the

Professional Standards


Formation of the Councils and legislation

Following economic unrest towards the end of the last century, the nsW Government recognised a need to raise the standards in professions within the community and as a result, protect the consumer. this resulted in a statutory regime intended to promote self-regulation by occupational associations, with a Professional standards Council established to assist and encourage the associations, and to oversee the operation of Professional standards schemes.

in 1995, following the passing of the Professional Standards Act 1994 (nsW), the Professional standards Council of nsW was formed. over the next 10 years, Professional standards Councils were established in each Australian state and territory.

the Councils are independent statutory bodies with powers to assess and approve applications from occupational associations for a Professional standards scheme.

One way in which a scheme is significant is in placing a ceiling on the amount of civil liability that a member of an association participating in a scheme may be exposed to. this is in recognition of a range of factors, including professional

indemnity insurance policy standards, and effective risk management strategies that associations must evidence in applying for a scheme, and that the Councils consider in deciding whether to approve it.


Following the collapse of insurance giant HiH over a decade ago, the reach of the Professional standards Legislation was extended. this significant event, which affected thousands of people, highlighted the importance of maintaining stringent corporate governance and liability practices to protect consumers.

subsequently, the Commonwealth Government passed legislation that permitted the civil liability of occupational associations to be limited under the Trade Practices Act 1974 (now the Competition and Consumer Act 2010), the Corporations Act 2001, and the Australian Securities and Investments Commission Act 2001.

Professional standards Legislation seeks to strike a balance between:

Ensuring sufficient compensation is available to consumers for the vast majority of claims where liability results in an award of damages.

requiring rigorous standards of professional conduct, so that claims for negligence are reduced.


ABoUt tHe ProFessionAL stAnDArDs CoUnCiL 11

in Australia, a growing number of associations and their members are making significant

efforts to improve their professional standards.

Role of the Councils

the Councils play a key role in promoting the objectives of the Professional standards Legislation. these objectives are to:

Facilitate the improvement of professional standards.

Protect consumers who use the services provided by professionals.

enable the creation of schemes that limit the civil liability of professionals.

Improving professional standards

in Australia, a growing number of associations and their members are making significant efforts to improve their professional standards. Under Professional standards Legislation, associations can apply to the Professional standards

Councils to be covered by a Professional standards scheme.

A Professional standards scheme requires an occupational association to improve the professional standards of their members by implementing robust professional integrity systems and risk management strategies.

A scheme also requires those who are covered to hold sufficient professional indemnity insurance cover and/or business assets to protect consumers.

Uniquely Australian

Unique to the Australian professional community, Professional standards schemes limit the civil liability of association members who have an insurance policy and business assets commensurate with the liability amount. each association has a minimum insurance standard to which its members must comply.

Each scheme has a maximum duration of five years. the relevant Minister may choose to extend a scheme once for up to 12 months on submission of an application by the association. Before the scheme expires, the association must submit an application for an entirely new scheme. this facilitates regular consideration and scrutiny of schemes and liability limits by the Councils and the public, and what is needed to meet advancing professional standards and protect consumers.

As members of occupational associations may work across multiple states and territories, the Professional standards Legislation includes mechanisms for Professional standards schemes to be recognised across multiple Australian state and territory jurisdictions.




Academic research Forums on professional standards were held on 4 August 2016 and 12 April 2017. these events were attended by senior representatives of associations and industry, as well as regulators and academics. A first ever dedicated

law journal publishing the research outcomes of that work has been released:

UNSW Law Journal – Issue 40 (1) Contemporary Professionalism and Regulation.

Associations’ commitment and focus on compliance

All occupational associations within the Professional standards Legislation regulated community submitted a Professional standards improvement Plan (PsiP) in a timely manner in 2017, demonstrating the work they are doing towards improving

professional standards and protecting consumers.

PSC website

our website had 47,949 users throughout the year with 104,936 pageviews. overall we had a 74.78% increase in users and a 53% increase in pageviews when compared

to last year.

Legislation changes

Addressing two long-term barriers, the Professional

Raising awareness

As part of a long-term program of promotion and engagement, the Professional standards Authority has supported the Professional standards Councils to encourage new groups

and the sector to take on professionalisation as a co-regulatory mechanism for improved

consumer protection.

in 2016–17, we spoke at more than 60 conferences, workshops, seminars and meetings, raising awareness of Professional


ABoUt tHe ProFessionAL stAnDArDs CoUnCiL 13

New schemes

LIV, QLS, APIV and RICSV were awarded new Professional Standards Schemes and a certificate ceremony was held to acknowledge the approval of this important legislative recognition.

robert Hecek (Chair, APiV Board), Brian rayment QC (Chair, PsC) and Anna shin (Acting national Manager, Compliance & risk, APiV)

Brian rayment QC (Chair, PsC) and Craig smiley (General Manager Professional Leadership, QLs)



Brian rayment QC (Chair, PsC) and stephen Albin (Managing Director for oceania, riCsV)

Dr Deen sanders oAM (Ceo, PsA), elissa Watson (General Manager, Compliance, LiV) and nerida Wallace (Ceo, LiV)


Review of operations

and activities

Professional Standards Schemes

The life of schemes

the Professional standards Authority (PsA) works with associations that have a Professional standards scheme to help them:

Achieve their self-regulatory goals.

Understand their legislative obligations.

Monitor and enforce the professional standards of their members.

increase consumer protection by improving professional standards.

Amendments to the Professional Standards Act (2005) (Tasmania)

in December 2016, amendments to the Professional Standards Act (2005) (tas) commenced. the amendments addressed two long-term barriers to national harmonisation by repealing subsection 27(c) and inserting mutual recognition provisions. these long awaited amendments removed the final impediments to the approval of Professional standards schemes by mutual recognition in tasmania.

the Professional standards Legislation now provides great uniformity through mutual recognition across all states and territories in Australia. soon after the amendments came into force, the Councils approved an amendment to the Chartered Accountants Australia and new Zealand Professional standard scheme (Vic) for mutual recognition in tasmania.

Along with the new scheme for the south

Australian Bar Association, these are the first two Professional standards schemes approved by the Councils and gazetted for operation in tasmania during the reporting period.

Professional Standards Schemes oversight

During the 2016–17 reporting period, the Professional standards Councils monitored and regulated Professional standards schemes for 20 occupational associations. Most schemes operate in multiple jurisdictions under mutual recognition.

As at 30 June 2017, there were 28 schemes with 68,537 members.


reVieW oF oPerAtions AnD ACtiVities 15

Figure 01 Professional Standards Schemes comparison: 1 July 2016 and 30 June 2017

26 schemes

20 occupational associations

68,173 members


19 occupational associations

68,537 members covered

28 schemes

1 July 2016 30 June 2017

Engineers Australia (EA)

scheme expired on 26 December 2016

Member growth rate of 0.5%

Law Society of South Australia (LSSA) new scheme commencing 1 July 2017 South Australian Bar Association (SA BA) new scheme commencing 1 July 2017

Scheme applications

in 2016–17, the Councils approved two Professional standards schemes for two associations as shown in table 1. this table includes associations that operate across multiple states and territories, and also schemes commencing in the 2016–17 financial year and due to commence in 2017–18. the Councils approved an amendment to the operating Chartered Accountants Australia and new Zealand Professional standard scheme (Vic) for mutual recognition in tasmania.

The Councils received a further five applications for new schemes during the year and analyses are still being undertaken and no decisions have been made. An application for a new scheme by engineers Australia, with primary jurisdiction in new south Wales and mutually recognised in other jurisdictions, was not approved after consideration by the Councils.

Table 01 Professional Standards Schemes approved by Councils 1 July 2016 – 30 June 2017

Date Professional Standards Scheme

16 December 2016 Law Society of South Australia (LSSA)

new scheme approved in sA, where it commenced on 1 July 2017. It applies under mutual recognition in all other mainland jurisdictions.

24 February 2017 Chartered Accountants Australia and

New Zealand (CA ANZ)

Victorian scheme amended to commence operation in tasmania under mutual recognition.

7 April 2017 South Australian Bar Association (SA BA)

new scheme approved in sA, commencing in all states and territories, under mutual recognition, on 1 July 2017.


A key


of operating

a Professional

standards scheme is

that it distinguishes your

association and its members

as a recognised profession.


reVieW oF oPerAtions AnD ACtiVities 17

Scheme extensions of expiry date

each Professional standards scheme approved by the Professional standards Councils has a lifespan of up to five years. The relevant Minister has the discretion to extend the expiry date of a scheme once for up to 12 months, when an association applies for an extension. table 02 shows the schemes which have been extended over the current reporting period.

Table 02 Professional Standards Schemes extended between 1 July 2016 – 30 June 2017 Association New expiry date

CPA scheme to expire 7 october 2017

LsnsW scheme to expire 21 november 2018

iPA scheme to expire 31 December 2018

ACs scheme to expire 31 December 2018

Table 03 Professional Standards Schemes extended and amended between 1 July 2014 – 30 June 2017

Reporting year 2014–15 2015–16 2016–17

schemes extended 3 4 4

schemes amended 1 8 1

Commonwealth prescription

Unless the Professional standards scheme has been prescribed under the regulations to the relevant laws, limitation of liability does not apply where a provision of Commonwealth law creates a liability for damages.

Commonwealth prescription is currently limited to the misleading and deceptive conduct provisions of the Competition and Consumer Act 2010 (Cth), the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth).

Table 04 Professional Standards Schemes prescribed between 1 July 2016 – 30 June 2017 Scheme prescribed Date of prescription Scheme details

LssA 26 May 2017 scheme extension from 31/12/16 to 30/06/17

CPA 26 May 2017 scheme extension from 07/10/16 to 07/10/17

LiV 26 May 2017 new scheme commencing 01/07/16

QLs 26 May 2017 new scheme commencing 01/07/16

sA BA 26 May 2017 scheme extension from 31/12/16 to 30/06/17

APiV 26 May 2017 new scheme commencing 01/09/16

(under Competition and Consumer Act 2010 (Cth) only)


Figure 02 number of professionals and occupational associations operating under Professional standards schemes over the past 10 years

Number of occupational associations

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Number of professionals

33,953 38,160 39,709 48,919 52,967 55,614 60,820 64,451 68,173 68,537

Number of associations

9 12 13 13 15 18 17 19 20 19

0 5 10 15 20 25

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000

Number of professionals covered by Professional Standards Schemes

Figure 03 number of professionals per state and territory covered by Professional standards schemes over the past five years


0 10,000 15,000 20,000 25,000 30,000 35,000






reVieW oF oPerAtions AnD ACtiVities 19

Table 05 Professional standards schemes by home state

Association Profession Members Limitation liability Start date End date Australian Capital territory

CA AnZ Accountants 653 $2m to $75m 08/10/14 07/10/19

new south Wales

CA AnZ Accountants 10,920 $2m to $75m 08/10/14 07/10/19

CPA* Accountants 7,029 $2m to $75m 08/10/13 07/10/17

iPA Accountants 1,558 $1m to $20m 01/01/13 31/12/17

nsW Bar Barristers 2,248 $1.5m 01/07/15 30/06/20

CirCeA engineers 13 $1m, $5m or $10m 28/02/13 27/02/18

ACs it 8 $1.5m 01/01/16 31/12/18

LsnsW Lawyers 10,207 $1.5m to $10m 22/11/12 21/11/18

PsoA surveyors 34 $1.5m to $30m 11/11/13 10/11/18

APiV Valuers 4,507 $1.5m to $20m 01/09/16 31/08/21

riCsV Valuers 0 $1.5m to $20m 01/01/16 31/12/20

northern territory

CA AnZ Accountants 128 $2m to $75m 08/10/14 07/10/19


CA AnZ Accountants 4,370 $2m to $75m 08/10/14 07/10/19

BAQ Barristers 987 $1.5m to $50m 01/07/13 30/06/18

QLs Lawyers 5,181 $1.5m to $10m 01/07/16 30/06/21

south Australia

CA AnZ Accountants 1,932 $2m to $75m 08/10/14 07/10/19

sA BA Barristers 219 $1.5m to $50m 01/07/17 30/06/22

LssA Lawyers 1,276 $1.5m to $10m 01/07/17 30/06/22

tasmania niL Victoria

AtMA Accountants 226 $1m to $100m 01/01/13 31/12/17

CA AnZ Accountants 7,099 $2m to $75m 08/10/14 07/10/19

Vic Bar Barristers 1,125 $2m 01/07/14 30/06/19

LiV Lawyers 4,309 $1.5m to $10m 01/07/16 30/06/21

Western Australia

CA AnZ Accountants 2,866 $2m to $75m 08/10/14 07/10/19

LsWA Lawyers 1,430 $1.5m to $10m 01/07/14 30/06/19

WA BA Barristers 212 $2m 01/07/14 30/06/19

* total number under mutually recognised scheme represents 83 in ACt; 1,883 in nsW; 27 in nt; 1,352 in QLD; 314 in sA; 2,532 in ViC and 838 in WA.


Table 06 Professional standards schemes mutually recognised in other states and territories Jurisdiction Associations

Australian Capital territory

nsW ACs, CPA, nsW Bar, CirCeA, PsoA, APiV, riCsV


sA sA BA, LssA

ViC AtMA, LiV, Vic Bar


new south Wales


sA sA BA, LssA

ViC AtMA, LiV, Vic Bar


northern territory

nsW ACs, CPA, nsW Bar, CirCeA, PsoA, APiV, riCsV


sA sA BA, LssA

ViC AtMA, LiV, Vic Bar



nsW ACs, CPA, nsW Bar, CirCeA, PsoA, APiV, riCsV

sA sA BA, LssA

ViC AtMA, LiV, Vic Bar


south Australia

nsW ACs, CPA, nsW Bar, CirCeA, PsoA, APiV, riCsV


ViC AtMA, LiV, Vic Bar




sA sA BA2


nsW ACs, CPA, nsW Bar, CirCeA, PsoA, APiV, riCsV


sA sA BA, LssA


Western Australia

nsW ACs, CPA, nsW Bar, CirCeA, PsoA, APiV, riCsV



reVieW oF oPerAtions AnD ACtiVities 21

our compliance approach is one of partnership.

Compliance monitoring and reporting

Monitoring and ensuring compliance with Professional standards

Legislation is key to improving professional standards within the Australian professional community and is vital to protecting consumers.

Associations with an active Professional standards scheme must maintain an ongoing Professional standards improvement Program (PsiP), and submit detailed annual reports on this program to the Councils. this PsiP report is required under legislation.

the Councils review these annual reports to make sure associations are meeting their obligations under the legislation. if an association doesn’t meet its legislative requirements, the Councils can issue warnings, seek fines through the courts, or consider revoking the association’s Professional standards scheme.

The annual PSIP reports also reflect on the self- regulatory commitments that each association makes to improve professional standards in their community. these commitments are made when associations apply for a Professional

standards scheme. the statutory and professional obligations of individual scheme members, and the incorporation of various corporate governance and risk management principles, policies and Australian standards, enhance professional standards within the professions.

Professional Standards

Improvement Program Reports for calendar year 2016

All associations provided the necessary governance approvals with their PsiP annual report. Fifteen of the associations included both Ceo level and governing body level approvals which the Councils consider to be a strong indicator of board commitment and management awareness of the associations’ Professional standards Legislation obligations.

the PsA maintained the reporting template in 2016, to provide a basis for comparison with associations’ previous responses to PsiPs, and to provide further affirmation of the Councils’

regulatory assurance strategy and requirements from associations in the PsiP process.

Key elements of reporting include:

requesting additional data relating to associations’ governance and scheme administration, including:

Asking associations to identify and attach all documents that specify the relationship between the association and its members, to reflect that most associations do not have a comprehensive or single membership agreement.

reporting on the approval of discretionary caps and exemptions, which asks

associations to provide the number of

members applying for a discretionary increase in their liability cap or an exclusion from a scheme, and the criteria and process that was applied by the association.


enhanced data provided by associations on their monitoring of compliance with scheme elements through:

A table for each of the five core professional integrity system elements;

Detailing monitoring activities that have been carried out by the association;

the outcomes and results of this monitoring, and the audit activity of the association.

expanding claims data captured by associations, by advising notifications and claims data, and providing the analysis and use of that data to improve professional standards.

improved association complaints and discipline data collation and analysis through the inclusion of three proforma tables, including requesting information on complaints received and their resolution, the root causes of complaints, and the average time taken by the association to resolve complaints.

ensuring associations are aware that no modifications to their complaints and discipline system or insurance standards should be made without notification to the Professional standards Councils. this is done by asking associations to review data provided in their most recent scheme application, and advise of any changes.

Improved annual reporting format uptake

the PsiP reporting template was distributed in December 2016 with associations required to report on the calendar year 2016 on or before 31 March 2017. the PsA worked with associations on their uptake of the new PsiP template. in 2017, the PsiP reporting process generated an improved response in terms of the timeliness of the reporting with the introduction of a dedicated email address for submitting the reports. As a result, 19 of 20 association reports were received in electronic format of which 18 of 20 were received via email and one via UsB. As a general comment, the

including greater clarity on the required statutory elements of legal compliance, risk management strategies and results, and the other elements required by the Councils ensuring objectives of the legislation are met.

some general outcomes of the 2016 PsiP include:

nineteen of 20 scheme associations submitted their PsiP report in the 2016 template form.

the only incorrect template was a state law society which submitted their 2016 PsiP report in the 2015 PsiP report format, and as a result did not respond initially to the small number of new elements in the 2016 PsiP report, such as forecast member numbers. they were provided promptly following a request for further data from the PsA.

Associations’ 2016 reports are assessed across 10 elements: association and scheme governance data; scheme monitoring activities;

scheme monitoring improvements; risk analysis;

risk management system improvements;

complaints and discipline data; complaints handling system improvements; notifications and claims data; association insurance

standards; and oversight, member certification, and declaration.

PsiP report submission dates improved over previous years. this year 16 scheme associations (80%) submitted their PsiP reports by the 31 March 2017 deadline (compared with nine (45%) in 2016). two scheme associations were granted short extensions to meet governance requirements and provided their reports within 18 days of the deadline (compared with four in 2016 and six in 2015). there were two associations that provided their report late.

the Association of taxation and Management Accountants submitted their report five days late. the College of investigative and remedial Consulting engineers of Australia submitted their report on 9 May 2017, 38 days late. it is notable that both these associations are the subject of ongoing regulatory assurance oversight by the Councils (discussed later in this report).


reVieW oF oPerAtions AnD ACtiVities 23

Figure 04 PsiP submission times comparison 1 July 2015 – 30 June 2016 and 1 July 2016 – 30 June 2017

submitted by 31 March

submitted after 31 March (with extension) submitted late











100% 2014–15 2015–16 2016–17

this year’s reporting demonstrated a healthy cycle of work by associations in regards to scheme Monitoring reviews (60%) and risk Management reviews (35%) (see Figure 05).

Law societies were most active in undertaking a full or partial review of their scheme Monitoring Practices (100%), while 20% of Bar associations reviewed their risk Management strategies.

While this year’s absolute number of reviews are down, the annual reports indicate that the reviews are generally conducted on a 2–5 year regular cycle. in addition, the associations who undertook reviews reported that their reviews were more detailed and comprehensive, indicating an increasing commitment to the PsiP.

Figure 05 PsiP review by associations

% undertaken by associations 2014–15 2015–16 2016–17 0%









scheme Monitoring


risk Management

review 44%






Common areas for improvement identified

Although the general response was positive, the PsA continues to identify similar common areas where further development is required by scheme associations from the analysis of the 2016 PsiP reports. these form the targeted areas of improvement for the PsA to work with individual associations to improve throughout 2017 and 2018.

the opportunity for improvement in self-regulatory programs includes:

Analysis and/or discussion of trends identified by complaints and discipline, and notifications and claims data, and the proposal and implementation of risk management strategies in response. there is a general need for improvement in some associations’ analysis of complaints and discipline, or notifications and claims data.

A number of associations failed to identify trends or the root cause of complaints made.

Associations typically conduct superficial analysis of data, for example merely categorising


claims and complaints, rather than investigating their cause. the PsA will be working with associations to ensure the improved integration of data and associations’ risk management strategies, so that analysis of data feeds into the revision of the association’s risk management plan, and new risk management strategies that are proposed or have been implemented.

Reporting on the overall effectiveness of risk management strategies in relation to containing risks, complaints and claims, and any proposed or implemented changes to those strategies. there was a generalised inadequacy of associations’ assessment of the effectiveness of their risk management strategies, with a tendency to simply deem existing controls effective, and assert that no additional controls were needed. Associations

Improving associations’ membership agreement and/or renewal to include a positive undertaking to comply with the Professional Standards Legislation, and scheme requirements. Associations’

membership forms and renewals did not include a specific undertaking to comply with requirements of the scheme or Professional standards Legislation, such as provision of notifications and claims, complaints and discipline, professional indemnity insurance data, and responding to Professional standards Legislation based surveys. Many association’s membership forms and invoices made no specific mention of the existence of the

Professional standards scheme, or participation in the scheme. the PsA will be working with associations to ensure that all associations have in place a clear agreement between the scheme member and the association so that participation in a scheme, and the requirements of participation in a scheme, are fully disclosed and transparent.

Industry sector comparison on compliance elements

Analysis of the 2016 PsiP data, when compared to the previous year, indicates changes in trends


reVieW oF oPerAtions AnD ACtiVities 25

Figure 06 2016 PsiP indicator movements in comparison to the previous year

Decrease Large

decrease Increase Large

increase Slight

decrease Stable Slight increase

Accountants Solicitors Barristers Other

Professional indemnity insurance costs Amount of claims paid Number of claims/

notifications Complaints received

*Other includes valuers, surveyors, engineers and computer professionals.


Complaints received

number of complaints against members received by scheme associations and/or relevant regulators.

Number of claims/notifications

Number of claims and notifications made against association members.

Amount of claims paid

total known settlements paid against claims made against association members.

Professional indemnity insurance costs (average premiums)

Average cost of professional indemnity insurance as a proportion of gross fees/income.

Note: These indicators are sourced from a comparison of current 2016 PSIP data against previous five year 2011–15 annual risk management reports data for each scheme association (where available) and represent median values within the professional groups.

Regulatory assurance action

the Professional standards Councils have a number of regulatory assurance powers, including but not limited to, reviewing a scheme and initiating the revocation of a scheme.

During the year, two associations the Association of taxation & Management Accountants and the College of investigative and remedial Consulting engineers of Australia, were given ongoing regulatory assurance attention by the Councils.

these two regulatory assurance actions illustrate the Professional standards Councils’ obligations to take regulatory assurance actions when associations are non-compliant with Professional standards Legislation.


Association support programs

the Professional standards Councils have a long- term objective to raise the capacity of occupational associations to improve professional standards and to self-regulate effectively.

the Councils embarked on a new strategy in 2016 based on an integrated program of research, technical resources and association development.

the initial focus of this strategy is the development of an online resource Centre. the online

resource Centre is a long-term project to provide information, tools and reference materials on the professions, professional standards and regulation.

in adopting this new strategy, the Councils suspended the grants programs, putting a hold on further grant offers.

Prior to their suspension by the Councils in April 2016 there were two grants programs:

Research Grants

Funding evidence based studies into improving and advancing professional standards in Australia; and,

Professional Standards Grants

Funding projects that help associations and their members improve their professional standards frameworks. these grants were only open to those associations operating a Professional standards scheme and their members.

there were no research grants outstanding from previous grant rounds in the 2016–17 financial year.

one Professional standards Grant of $61,900 was awarded to the Law society of south Australia in 2015–16 and continued into 2016–17.

The finalisation of the project concludes the Professional standards Grants Program.

Table 07 Professional standards Grants projects continuing in 2016–17

Recipient Project Amount

awarded Funds distributed in

2016–17 Status

LssA Health and Wellbeing Package for the Legal Profession

$61,900 $15,475

Balance to be distributed in early Fy17/18

Completed on 28 June 2017

Research and thought leadership

the Councils support research that expands academic and community knowledge in professional standards and regulation. the research strategy is designed to deliver benefits to professions and their members. it aims to generate debate and interest in regulatory design, professional standards and Professional standards Legislation.

ARC Linkage Project

During 2016–17 substantial progress was made on the three year Australian research Council Linkage Grant project ‘Professions in the 21st Century:

year project commenced in March 2015, and the Councils reviewed the project’s progress against budget and schedule in February 2017.

the Australian research Council (ArC) is funding the project to the amount of $520,070 over three years. the Professional standards Councils contributed $50,000 during 2016–17 and have contributed a total of $250,000 to the project.

the University of nsW is the principal administering organisation for the grant. the other partner organisations for the project are the University of Technology Sydney, Griffith University, University of Melbourne, Harvard University, University College Dublin, University of Leeds, and industry partners Allens, Corrs Chambers Westgarth, and the


reVieW oF oPerAtions AnD ACtiVities 27

the project investigates the challenges faced by professionals in the 21st century, and evaluates different mechanisms for professional regulation.

The significance of the project is that it considers professional regulation from both a theoretical and practical perspective, and will utilise research to develop practical resources for professional associations and professionals.

During 2016–17, work on the project continued to progress. the annual project workshop with researchers and key stakeholders was held in August 2016. A public symposium presenting research findings was held in April 2017. Key stakeholders, including a range of professional associations were invited to attend and participate in the event. the symposium provided an

opportunity for engagement with professional communities, and was a forum for the discussion of significant issues facing professions.

the research team wrote a series of articles featured in the thematic edition of the UNSW Law Journal – issue 40 (1) Contemporary Professionalism and regulation, which was published in April 2017.

these articles explore some of the challenges faced by professions in the 21st century. the articles examine the structures, practices, beliefs and expectations of professions; the challenges that changes in technology and employment structures pose for established profession; the opportunities and complexities of professionalisation for emerging professions; and the shifting mechanisms for professional regulation.

the project is scheduled to continue until March 2018.


the role of a professional association as a

meta-regulatory participant in consumer protection continues to grow in importance as consumers need experts and professionals to navigate their way through increasingly complex needs for advice. these elements continue to encourage renewed commitment and engagement with professional associations’ obligations under Professional standards Legislation and it has been a notable year for growth in interest for Professional standards schemes.

the environment in the marketplace of professional associations is also changing as members demand improved transparency and recognition, and clients demand improved standards and flexibility in services.

this year we have seen a number of association based issues receive prominent attention, including a push for changes in the governance and structures of large associations (e.g. Ceo changeovers and increasing demand for transparency to members and the public on issues such as remuneration and appointment processes for boards).

Considering the impact of these changes along with the changing community and government attitudes about the social, financial and technological aspects of regulation and a recognition that ‘more regulation’ – does not automatically translate to improved consumer outcomes – there is a clear change in the expectations we have of professions and professional associations in which we want to place our trust.

it is reasonable to conclude that genuine self-regulation requires both community and government trust in institutions that has not emerged naturally.

With our strength as a national regime, and with each jurisdiction’s commitment, there’s an increasing move to national (mutually recognised) Professional standards schemes, although the differences in the national set of statutes continues to challenge efficient administration. As Australia’s expert regulatory agency in professional standards our future work program will consider the impact of these changes on professional associations. our legislation will act as a catalyst for improvements in regulatory design, to better align the resources of government with those of the professions, and deliver economic, community, personal and consumer protection benefits.


Organisational structure

Structure of the Professional

Standards Councils

there are eight Professional standards Councils – one in each Australian state and territory. the relevant Minister in each state or territory appoints members to the Councils under the relevant legislation in each jurisdiction.

Under the Professional standards Agreement 2011, nsW and Victoria can nominate two members each, while every other state and territory together with the Commonwealth are able to nominate one member each. the Councils include a total of 11 members.

All states and territories have agreed to appoint the same members to each Council. the eight Councils work with the PsA to review Professional standards scheme applications. once a Council approves an application, the PsA issues a public notification of the approved scheme. A public notification invites consultation from the general public and interested stakeholders. once the public notification ends, the PSA informs the relevant Minister, who then authorises the notice in the Government Gazette.

the Councils cooperate with the Commonwealth treasury during the assessment stage if an association is seeking to have its scheme prescribed under one of the following Commonwealth Acts:

Commonwealth Competition and Consumer Act 2010.

Corporations Act 2001.

Australian Securities and Investments Commission Act 2001.

each Council comprises a Chair, Deputy Chair and Councillors. the Councils may establish committees and advisory groups to meet as required over the year.

each of these committees and advisory groups may make recommendations to the Councils.

Committee members may include Council

members or external appointees, are appointed on an annual basis, and are eligible to be reappointed at the end of their term.

the Professional standards Legislation Working Group (PsLWG) was set up to ensure the

Professional standards Legislation is consistently applied across the country.

The PSLWG includes the Executive Officer from the PSA, a Policy Officer from within Treasury for the Commonwealth, and Policy Officers from the Department of Attorneys General in every other state and territory.

the PsLWG convenes when issues arise that require consideration at a national level, and communicates with relevant Ministers about professional standards reform and review, and


orGAnisAtionAL strUCtUre 29

Figure 07 Organisational structure and reporting lines as at June 2017













National framework of legislation

the success of Australia’s Professional standards Legislation regime

relies on the positive and effective partnership of Attorneys General, the Commonwealth treasury, the nsW Minister for innovation and Better regulation, and their respective departments.

The Councils thank the following contact officers from each state, territory and the Commonwealth during 2016–17:


Julie Beddoe

Kiri Joyce-Griggs


PsA team (page 38-39)


Jenni Daniel-Yee

Jonathan Avila


imelda Bradley

stephanie White


Claire Morgan


Matthew Fitzgerald


Warwick Mitchell

Chris Humphreys

Brittany Quayle


irene Kempa

Lara Douglas

Basil schutz


Jessie Coronakes Peads


Council members

the Councils’ members have

experience across a diverse range of industries and specialities, including law, accounting, insurance, dispute resolution, property management, auditing and company directorship.

Members are selected for their qualifications, experience and ability to contribute to the Councils’

work. the Chair and Deputy Chair are nominated on an alternating basis by nsW and Victoria under the Professional standards Agreement 2011.

Council members


orGAnisAtionAL strUCtUre 31


Chair | BA, LLB

Brian rayment was admitted to the nsW Bar in 1970 and took silk in 1982. He practised throughout Australia, specialising in banking insurance, shipping and general equity and commercial law. From 1972 to 1974, he was a part time law lecturer at the University of sydney in succession, and more recently taught constitutional law at the University of notre Dame.

Brian has also served as a member and Honorary treasurer of the nsW Bar Council, Chairman of the Legal Aid Commission of nsW as a member of the nsW Legal services tribunal. He has been chair of the Professional standards Councils since 2005. He is presently an adjunct professor of law, University of notre Dame, sydney campus.

Brian retired on 20 June 2017 after 12 years on the Councils.


Deputy Chair | Bec, LLB, MBA, MAiCD

esther Alter brings a wide range of experience in consumer law and dispute resolution to the Councils. As a member of the Victorian Civil and Administrative tribunal (VCAt), she was involved in conciliating and adjudicating on consumer law matters. esther has worked in consumer, legal and management roles in the Victorian and Commonwealth governments. Her professional interests are in the areas of governance, management, service evaluation and organisational development. esther is a board member of the Victorian Pharmacy Authority and a board member of the Chinese Medicine Board of Australia.

Esther retired from the Councils on 30 June 2017.


BArch (Hons), Bsc (Arch), LLB

robert Beaton has more than 40 years experience across all aspects of professional risk insurance. He was Chair of the Professional indemnity standing Committee of the insurance Council of Australia between 2003 and 2010, and a member of the Australian Prudential regulation Authority national Claims and Policies Database steering Group Committee. He was awarded the inaugural Frank earl award in 2011 by the Australian Professional indemnity Group.

Robert retired from the Councils on 30 June 2017.



BCom, LLB (Hons), LLM

Julie Cameron is a partner at Corrs Chambers Westgarth in Brisbane and practises predominantly in the areas of insurance, health law and medical malpractice defence, and public and general liability.

she also advises and represents clients in investigations by the Health Ombudsman and professional registration boards. Julie is an accredited personal injuries specialist, and a member of the specialist Accreditation Board of the Queensland Law society (QLs) and the QLs Accident Compensation Committee. she is a practitioner member of the Queensland Civil and Administrative tribunal and is Chair (Brisbane) of the Medicare Participation review Committee. she is also a member of the Human research ethics Committee for one of Queensland’s major metropolitan hospitals.



terry evans is engaged as special Counsel with Minter ellison in Adelaide. Prior to that he was the Deputy Chief executive of the south Australian Justice Department and Attorney General’s Department from 2004–06. He was the Chief Commercial Counsel for the Crown Solicitor’s Office from 1996–04. Before that Terry was a partner with Minter ellison. terry holds a number of board positions in the corporate, government, education and not-for-profit sectors.


BA (Actstud) (Hons)

tom Karp is an actuary with 18 years experience working with insurers and almost 20 years as a financial regulator, including considerable international regulatory work. He is also a member of the Professional standards Committee of the institute of Actuaries of Australia, a Co-Vice Chair of the Actuarial standards Committee of the international Actuarial Association, a board member of the Australian reinsurance Pool Corporation, and an independent expert member of the national Disability insurance Agency Board’s sustainability Committee.

Tom retired from the Councils on 30 June 2017.


orGAnisAtionAL strUCtUre 33


BLArch (Hons), MBA, GAiCD

Jo Metcalfe has worked in the professional services industry for 20 years, and for her current employer, GHD, for more than 10 years. Her role at GHD sees her manage one of Canberra’s largest consultancy firms of engineers, scientists, architects and project managers.

Jo has been a member of the Councils for more than 10 years, and also serves on its Finance, Audit and risk Management Committee and Governance & Policy Advisory Group. she has been involved in professional peak industry bodies including the Property Council of Australia, Australian institute of Architects and Association of Professional engineers, scientists and Managers, Australia (now Professionals Australia) for more than 20 years, and is a member of the University of Canberra Council.


BCom, FCA, FtiA, FAiCD

tiina-Liisa sexton is a chartered accountant with a background in risk and financial management, governance and ethics. She has worked in the private, public, academic and not-for-profit sectors, and was the national Professional standards Adviser in ethics and corporate governance at CPA Australia for 14 years until 2011. tiina-Liisa is Company secretary of Woodlands Wines Pty Ltd and Director of st Giles society. she is a former director of Housing Choices Australia, Aurora energy Pty Ltd, Hobart Water and Connect Credit Union.


BCom, LLB (Hons), Grad Dip Mgt Psych, FCA FCPA FAiCD FiML iain summers has been a Council member since 2006 and chairs the Finance, Audit and risk Management Committee. He is a chartered accountant and governance consultant, providing advice and assistance to community services and public sector entities. He is an accredited facilitator for Australian institute of Company Directors programs, and a board member of traditional Credit Union Limited and Health network northern territory Limited. iain also chairs a number of audit and risk committees for government and community services entities, and encourages the alignment of strategy with enterprise wide risk management systems.



Dip Civ eng, Bec, MBA, FAiCD

John Vines brings a wealth of experience in governance. He chairs the innovation and Business industry skills Council (iBsA) and the Austbrokers Countrywide Financial services Group.

He is a Director of Carroll and richardson and the Premium Plantations Project, and a Fellow of the Australian institute of Company Directors and engineers Australia. From 1984–08 he was Chief Executive Officer of the Association of Professional Engineers, scientists and Managers, Australia (now Professionals Australia). He has been a member of a number of government boards and inquiries.

John was awarded the Order of Australia Medal in 2001 and in 2003 he was also awarded a Centenary of Federation Medal.


BJuris, LLB

rachel Webber’s primary areas of expertise include corporate and commercial law, with an emphasis on Asx and Corporations Act compliance, financial services regulation, managed investments and credit regulation. she holds the roles of senior Legal Counsel, Banking and Regulatory with a major financial institution and Practical Legal training Manager with Curtin University.

rachel is an executive member of the Business Law section (BLs) of the Law Council of Australia, a peak industry body which advises governments, courts and federal agencies on the ways in which the law and the justice system can be improved for the benefit of the community. she also serves as a member of the BLs Corporations Committee and of the Commercial Law Committee of the Law society of Western Australia.


orGAnisAtionAL strUCtUre 35

each Professional standards Council is established under the respective

state or territory Professional standards Legislation.

Corporate governance

there are eight Councils — one in each state and territory.

each Council consists of 11 Council members (including the Chair and the Deputy Chair), who are concurrently appointed to each Council by the responsible Minister in the corresponding state or territory.

Council members are appointed for a term not exceeding three years, and are eligible to be reappointed when their term expires. to ensure transparency and probity in relation to the Councils’ decisions, Council members must declare any conflicts of interest at the start of each meeting.

internal risk management is overseen by the Councils’ Finance, Audit and risk Management Committee. this committee continues to monitor ongoing compliance with the internal risk management program.

table 08 shows the remuneration of the Council members for 2016–17. the average sitting time of the Council members during 2016–17 was up to four hours per meeting. the remuneration of committees and advisory groups is consistent with the Councils’ remuneration arrangements. the Chair was paid an annual retainer of $2,640, for out-of-session work and related activities.

the Chair was paid $608 per Council or Committee meeting attended. other Council members

(including the Deputy Chair) were paid $370 per meeting. these amounts were payable for a standard four-hour meeting.

For longer meetings, the Chair was paid $128 per extra hour or part thereof, and other Council members were paid $77 per extra hour or part thereof.

in compliance with Qld, sA, Vic and WA reporting requirements, the Chair and all Council members were concurrently appointed to these Professional Standards Councils for the entire 2016–17 financial year, receiving the remuneration shown in table 09.

As indicated above, the amounts were paid per meeting, except for the Chair’s retainer that was paid quarterly.

Table 08 Council members’ remuneration rate and total number of meetings

Role Standard


No. meetings held

Chair $608.00 6

Council member $370.00 6


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