Queensland Law Society Limitation of Liability Scheme

The Professional Standards Act 2004 (Qld) (the Act) provides for the development by occupational associations of schemes to improve professional standards, protect consumers and limit the civil liability of members. The Queensland Law Society Scheme, which commenced on July 1 2010, provides for liability caps as follows:

• A cap of $1.5m for Participating Members who were at the Relevant Time in a Law Practice consisting of up to and including 20 Principals and where the Law Practice generates Total annual fee income for the financial year at the Relevant time of up to and including $10million.
• A cap of $10m for:
• • Participating Members who were at the Relevant Time in a Law Practice consisting of greater than 20 Principals; or
  • Participating Members who were at the Relevant Time in a Law Practice where the Law Practice generates Total annual fee income for the financial year at the Relevant Time greater than $10m.
• At a higher cap, either in all cases or in any specified class or case, subject to approval from QLS.

The limitation of liability scheme is not an insurance scheme but also acts to protect practitioners against negligence claims. It's a statutory scheme, enforced by the courts, that caps the amount of damages that can be awarded against a practice in court.

Most practitioners have insurance up to $2m through the QLS/ Lexon Insurance professional indemnity insurance scheme.   If, however, they were sued for more then $2m (a claim for $3m, $5m, $10m), they would not have enough insurance and would be at risk. This scheme would protect them by limiting the damages awarded against them in court to $1.5m – less than their insurance. (in such circumstances, there is an extra $500,000 in their insurance to cover defence costs).

You can opt to be part of the Scheme when renewing your Practising Certificate and membership of the Society. See the Guide to completing your renewal form

Who can participate in the Scheme?

• Full members of the Society who hold a current Queensland Practising Certificate.
• Practice employees provided all solicitors in that practice are members of both the Scheme and the Society.
• The Scheme operates on a 'one-in, all-in basis' – to gain the full benefit of a cap, all solicitors within a firm would have to be members of both the Society and the Scheme.

Important notice:

The Queensland Law Society Limitation of Liability Scheme does not apply to incorporated legal practices (as separate entities) or to personal injury work. Members are strongly encouraged to read the Guide to the Queensland Law Society Limitation of Liability Scheme and the Addition below in relation to these and other exemptions, claims aggregation, claims made insurance versus occurrence based scheme and other areas of concern.