Explaining the liability capping scheme to clients

Key Points

• Professional Standards Legislation only requires disclosure on business stationery
• The PSC has issued a brochure explaining the limitation of liability schemes to consumers
• A sample letter to clients is available if you wish to provide further information for clients

Disclosure required under Professional Standards Legislation

Professional Standards Legislation requires that consumers by notified of the limitation of liability of a participating member of a scheme. The form of this disclosure is prescribed in Professional Standards Legislation as follows:

Liability limited by a scheme approved under Professional Standards Legislation

Under Victorian, Queensland and Northern Territory legislation, a scheme does not limit the liability of a member if this disclosure is not provided. 

Fines apply in all states and territories for non-disclosure. 

Where further information is to be provided

While not required under the PSL, there may be circumstances where you wish to provide further information regarding the limitation of liability scheme to your clients.

The Institute has prepared a sample letter which could be tailored for a particular engagement or client enquiry. This letter provides details of the operation of the Institute limitation of liability scheme.

The PSC has also issued a brochure which does not provide details of the Institute scheme but does explain the framework and operation of the Professional Standards Legislation and limitation of liability schemes generally.

Article last updated 21 July 2011