The Professional Standards (Limitation of Liability) Scheme is not an insurance scheme but also acts to protect member practitioners against negligence claims.
8 September 2021: The Society has applied to the Professional Standards Council of Queensland for approval of a new Professional Standards Scheme to commence on 1 July 2022 and as part of the process of that approval the Scheme is now out for Public Consultation. Submissions close 6 October 2021.
The Professional Standards (Limitation of Liability) Scheme is a statutory scheme, enforced by the courts, that caps the amount of damages that can be awarded against your practice. Professional Indemnity Insurance pays the claim while the Scheme caps the amount of damages that can be awarded.
Members are strongly encouraged to download and read from below the Queensland Law Society Professional Standards (Limitation of Liability) Scheme Guidance for members to gain further understanding of the Scheme.
The Scheme provides a liability cap which is exclusive of defence costs, but aims to cap damages as follows:
- $1.5 million - for participating members are in a law practice consisting of up to and including 20 principals where the law practice generates an income for the financial year of up to and including $10 million
- $10 million - for
- participating members who are in a law practice consisting of greater than 20 principals; or
- participating members are in a law practice where the law practice generates an income for the financial year greater than $10 million
- higher cap - subject to approval from QLS for
- all cases; or
- in any specified class or case
Members of the Scheme are strongly encouraged to consider their need for top up insurance to ensure that defence costs are met.
To participate in the Scheme you must be a full member of QLS, hold a current Australian practising certificate, and have the benefit of the applicable insurance. Further, to gain the full benefit of the cap, all solicitors within a firm would have to be members of both the QLS and the Scheme.
There are a few exclusions to which the Scheme does not apply, being:
- ILP’s as corporate entities
- Personal injury claims
- Fraud, dishonesty, breach of trust
- Part 9, division 2, subdivision C of the Land Title Act 1994 (claims under the Queensland State Government Fidelity Fund for title fraud)
Members are strongly encouraged to read the Queensland Law Society Professional Standards (Limitation of Liability) Scheme Guidance for members to gain further understanding of the Scheme.