Professional Standards Scheme

The Law Society of South Australia operates a Professional Standards Scheme with the Professional Standards Council (PSC) pursuant to the Professional Standards Act 2004 (SA).  Practitioner Members of the Society (including Barrister Members) who participate in the Scheme can benefit by having their occupational liability capped to an amount of $1.5M or $10M depending on the number of practitioners in the law practice and the annual fee income of the law practice (and to the extent that liability can be capped under the Act). 


PSS Participation/Exemption Form 

The Professional Standards Scheme has been approved by the Attorney-General and was gazetted in the SA Government Gazette on 5 April 2017. The new Scheme commenced on  1 July 2017 for a period of five years. The new Scheme was named Law Society of South Australia Professional Standards Scheme to reflect that the Scheme operates under the Professional Standards Act 2004 (SA) and the associated interstate Professional Standards legislation, and under the governance of the Professional Standards Councils.

The Professional Standards Scheme reflects the commitment by the Society and its Members to standards of professional excellence.

The Scheme operates on a “one-in, all-in basis”. For a law practice to gain the full benefit of the Scheme and the limitation of liability, all legal practitioners (i.e. any person who holds a current Practising Certificate) within the law practice, and any ILP, will need to be Members of the Law Society and choose to participate in the Professional Standards Scheme.

Members should note that the Scheme is an “opt out" Scheme. Any Practitioner Member of the Society who does not want to take advantage of the Scheme will need to seek exemption from the Scheme by completing the relevant part of the Participation / Exemption form and returning it to the Scheme Manager.

For further information about the Scheme, please download the Question & Answer booklet here

The fee for the period 1 July 2018 to 30 June 2019 is $297.50, inclusive of the registration fee payable to the Professional Standards Council.

Completed forms and relevant fees should be lodged with the Scheme Manager.

Society non-Members wishing to take advantage of the Scheme would need to first join the Society. If you would like further information about membership, please contact the Manager (Member Services), Michelle King via email: Michelle.King@lawsocietysa.asn.au.
Participants in the Scheme MUST disclose their limited liability status on all written correspondence and on their website using the wording “Liability limited by a scheme approved under professional standards legislation”.

Information about the Professional Standards Scheme disclosure obligations is available here. Further information is available from the Scheme Manager, or via the Professional Standards Council website.  Non-disclosure is an offence under the Act.  

From 1 July 2017, the Cover of Excellence logo will no longer be in use. Firms using the logo should phase out its use.

Frequently Asked Questions

The Professional Standards legislation enables the establishment of schemes to limit liability of members of occupational associations. The legislation is state based. The relevant Act in SA is the Professional Standards Act 2004 (SA):

  • View the Professional Standards Act 2004 (SA) (Act)

The relevant regulations in SA are the ProfessionalStandards Regulations 2007 (SA) (Regulations).


For a Professional Standards Scheme (“PSS”) to be approved under the Act, occupational associations are required to demonstrate a high commitment to professional standards and consumer protection and to implement comprehensive risk management strategies.
The Law Society’s original Scheme – called the Limitation of Liability Scheme (“LLS”) commenced on 1 January 2012, and operated until 30 June 2017. It was then replaced by the PSS commencing on 1 July 2017. The Schemes are not retrospective. They apply to practitioners at the date they join the LLS / PSS and ongoing protection applies only for the time a practitioner remains within the PSS by renewing annually.
The PSS applies to Admitted Members and Company Members of the Law Society who have not been exempted from participation in the PSS, who have paid the relevant fee and met their obligations under the PSS and the Professional Standards Act 2004 (SA).

Admitted and Company members of the Law Society can participate and will need to provide a completed Participation / Exemption form to the Law Society. The Participation form is available by clicking here.

The application form requires certain information to be provided to the Society for each Admitted and Company Participating Member in the LLS including:

(a) Name of Law Society member;
(b) Practising Certificate number;
(c) Name of law practice at which the Society member is working.


Additionally, the Law Society will require information from law practices to enable it to administer the PSS and report to the PSC regarding the PSS. This information includes:

(a) Number of practitioners in the law practice;
(b) Name of each practitioner in the law practice;
(c) Approximate total annual fee income for the relevant financial year.


A fee of $297.50 per annum is payable for each practising full member and each ILP Company Member to participate in the PSS, made up of:

(a) $50.00 registration fee which the Law Society will pay to the PSC; and
(b) $225.00 plus GST annual administration fee to enable the Law Society to administer the PSS.


Fees are pro rated every quarter. Please contact the Scheme Manager to obtain the current pro rated fee.

It is important to note that under the Professional Standards legislation, the PSS operates best on a ‘onein, all-in basis’. This means that for a law practice to gain the full benefit of the PSS and the limitation of liability, all solicitors (that is, any person who holds a current Australian practising certificate) within the law practice should be members of the Law Society and participate in the PSS.

For example, a firm might have ten principals, nine of whom are participating in the PSS, but the tenth principal is neither a member of the Law Society nor the PSS. If a successful claim is made against the tenth principal, he or she might be found liable for the full amount of the claim, but could possibly be entitled to bring a contribution claim against all other principals to contribute to the balance of the claim which exceeds the monetary limit of the insurance policy held by the firm. This undermines the effectiveness of the limitation of liability cap.

Issues may also arise if an employed solicitor is neither a member of the Law Society nor the PSS. If a claim is brought against the employed solicitor, the principal/s (as the employer) will likely be vicariously liable for the employee’s act or omission committed in the course of employment, and may not be able to rely on the limitation of liability cap.

Firms wishing to benefit from the limitation of liability provided by the PSS should therefore ensure that: 
  • All solicitors (both principals and solicitor employees) renew their membership of the Law Society and the PSS on an annual basis; and
  • All new solicitors (both principals and solicitor employees) retain or immediately gain membership of the Law Society and the PSS.
The PSS will limit the occupational liability of Participating Members for damages arising from a single cause of action to an amount of $1.5 million or $10 million depending on the insurance policies, total revenue and the number of practitioners of the law practice of the Participating Member, and to the extent that liability can be limited under the Act.

The monetary ceilings under the PSS are as follows:

1. $1.5 million cap

Where a law practice consists of up to and including 20 practitioners and where the law practice generated total annual fee income for the financial year prior to the relevant time (which refers to a cause of action founded on an act or omission, specifically to the time of that act or omission) up to and including $10 million; and

2. $10 million cap
Where a law practice consists of more than 20 practitioners or where the law practice generated a total annual fee income for the financial year prior to the relevant time (which refers to a cause of action founded on an act or omission, specifically to the time of that act or omission) greater than $10 million.
No, participation in the PSS is not mandatory. Under s19(2) and (3) of the Professional Standards Act 2004 (SA), the PSS will not apply to any person who or ILP which has applied to the Law Society to be exempted from participation in the PSS. A person or ILP exempted from participation in the PSS will not be able to rely on the PSS to limit his or her liability if a claim is brought against that person or ILP.
In principle, if proceedings are brought against a Law Society member participating in the PSS (“Participating Member”) relating to occupational liability for damages arising from a single cause of action, and the Participating Member is able to show that:

(a) the Participating Member has Professional Indemnity insurance that complies with the Legal Practitioners Act 1981 (SA) and to which the cause of action relates; and
(b) the amount payable under the insurance policy (or policies) is not less than the amount of the relevant monetary ceiling specified in the PSS; and
(c) the cause of action is not excluded under the Act,

the Court, in awarding damages, will limit those damages to the relevant monetary ceiling specified in the PSS.
Pursuant to the Professional Standards Act 2004 (SA), the PSS provides for limitation of occupational liability arising from a single cause of action.

“Occupational liability” is defined in the Act as follows:
“civil liability arising (in tort, contract or under statute) directly or vicariously from anything done or omitted to be done by a member of an occupational association acting in the performance of his or her occupation.”

The PSS can therefore apply to limit liability in damages arising:

  • under the law of torts; or
  • for breach of a contractual duty of care; or
  • under statute.

It is important to note that Professional Standards legislation is state-based and the definition of “occupational liability” differs from state to state.
The Act and, therefore the PSS does not apply to limit liability for damages arising from:

  • The death of, or personal injury to, a person;
  • Anything done or omitted to be done by a legal practitioner in acting for a client in a personal injury claim;
  • An intentional tort;
  • A breach of trust;
  • Fraud or dishonesty; or
  • Liability which may be the subject of proceedings under Part 18 of the Real Property Act 1886 (SA).
It is important to note that Professional Standards legislation is state-based and the exclusions differ from state to state.
Yes.

If the Participating Member is not able to satisfy the Court that he or she has the requisite insurance policy, or if the amount payable under his or her insurance policy is less than the amount of the relevant monetary ceiling specified in the PSS, he or she will not be entitled to rely on the PSS to limit his or her liability for damages.
The SA Professional Indemnity Insurance Scheme policy (“SA PII Scheme”) provides cover of $2 million inclusive of defence costs.

The PSS operates to cap damages only. Defence costs incurred are not included in the damages cap.

There is therefore some limited potential for there to be a shortfall in the amount of cover available under the SA PII Scheme depending on the combined amount of the damages awarded to a claimant and the defence costs incurred.

For example, if a claim arose that required a payment to the claimant of $1.5 million under the PSS (i.e. up to the cap), but fees of $750,000 were incurred in defending the claim, the total loss would be $2.25 million of which the SA PII Scheme would pay $2 million leaving a shortfall of $250,000 to be met by the law practice. 
Clause 6.5 of the PSS provides that the limitation of occupational liability of a Participating Member for damages will be that arising from a "Single Claim" to the relevant monetary ceiling specified in the PSS.

The SA PII Policy contains a broad aggregation provision which means that a series of related acts or omissions or a series of related matters or transactions with the same act or omission will be regarded as ‘one loss’ under the Policy. This means that the Policy limit of $2 million applies to ‘one loss’ which could include a number of different causes of action and be based on a number of different acts or omissions.

Participating Members should note that:
 Claims by a number of persons who have a joint interest in a cause of action are likely to be treated as a ‘single claim’ for the purposes of the PSS, despite the fact that they may also have several interests;
 Two or more claims by the same person arising out of a single event against persons to whom the PSS applies and who are associated persons (that is, partners or employees of the same employer or in the relationship of employer and employee) are likely to be treated as a single claim for the purposes of the PSS.
The SA PII Policy specifies a number of exclusions where insurers will not pay the insured any sum under the Policy.

Where an exclusion under the SA PII Policy applies, a practitioner will not be able to satisfy a Court that they have the benefit of an insurance policy insuring the practitioner against the relevant liability, and the PSS will also not apply.
The PSS is intended to limit liability arising from an act or omission where a person was a Participating Member at the ‘Relevant Time’ – that is, the time an act or omission occurred on which a cause of action is founded – rather than at the time the claim is made.
Yes.

The PSS will only limit liability in respect of an act or omission that occurs while the PSS is in operation. This means that a Participating Member cannot rely on the PSS to limit liability arising from an act or omission that occurred before the PSS commenced.

Law Practices should give careful consideration to whether or not, even if they become Participating Members of the PSS, they still require run-off and/or top-up insurance cover.
The Professional Standards Act 2004 (SA) was amended in 2010 to include mutual recognition of interstate limited liability schemes. The PSS includes a provision for mutual recognition.

According to the Scheme document, the PSS currently does not apply in Tasmania.

If your SA office is part of a national practice or if you do work interstate, specific consideration should be given to the effect of the mutual recognition portions of all relevant legislation to ensure that the PSS applies to all parts of your practice. We recommend you speak to the Scheme Manager or a PI Broker if you have any queries.
The PSS confers on the Law Society a discretion to specify a higher maximum amount of liability than would otherwise apply under the PSS to an amount not exceeding $50 million. A Participating Member who seeks a higher maximum must apply for the higher maximum.
No. The Professional Standards Act 2004 (SA) prohibits contracting out of the PSS (s54(1)). However the Law Society has a discretion to vary (increase) the monetary ceiling up to $50 million in all cases or any specified case or class of case, upon application by a Participating Member.
The Law Society only administers the PSS.

The PSS document and legislation are very complex instruments and particularly complex in their operation (if any) on work done interstate. Further, the PSS will not be applicable to limit liability for work done outside the Commonwealth of Australia.

Practitioners should not assume that work done pursuant to any particular retainer will be covered by the PSS and practitioners should satisfy themselves from time to time that work done is protected by the PSS or covered by adequate insurance.

Neither this webpage nor the Law Society’s acceptance of your participation fee should be construed as representing that any particular claim brought against you will be covered by the PSS.
Under the Professional Standards Act 2004 (SA) Participating Members need to disclose their limited liability status.

The Professional Standards Act 2004 (SA) and the Regulations prescribe the following form of statement: “Liability limited by a scheme approved under Professional Standards Legislation.”

The PSC has directed that disclosure should appear on all documents given to clients or prospective clients to promote or advertise the PSS member or their business, including websites.

The wording used for the disclosure statement must be exactly as prescribed by the Regulations.

The Cover of Excellence® logo previously in use under the LLS has been phased out and should no longer be used.

Documents on which disclosure should appear:

  • Documents (written advice, plans, drawings, specifications and other) produced for clients not accompanied by another document containing a disclosure statement;
  • Email;
  • Fax cover sheets;
  • Letterheads and letters signed by the company or on its behalf;
  • Memorandum of fees and invoices not accompanied by another document containing a disclosure statement;
  • Websites; and
  • Newsletters and other publications.

Documents not requiring disclosure:

  • Advertisements in print media, directory listings and similar forms of promotion or advertising;
  • Business cards; and
  • Social media networks, blogs, etc that are accessed voluntarily by consumers.

Failure to disclose may result in a financial penalty of up to $20,000 in South Australia

Further Information

Please contact the Scheme Manager, Ms Mia Bell, Tel: 8229 0225; Email: mia.bell@lawsocietysa.asn.au