Legal Services Board
Professional indemnity insurance
Law practices and Australian-registered foreign lawyers that engage in legal practice in Victoria are required to hold professional indemnity insurance.
Law practices other than community legal centres
The Legal Profession Act 2004 (Vic) (“the Act”) requires law practices (other than community legal centres) to obtain professional indemnity insurance before commencing to engage in legal practice in Victoria, unless exempted by the Board. Law practices must maintain professional indemnity insurance at all times while engaged in legal practice in Victoria.
Professional indemnity insurance must be held with the Legal Practitioners Liability Committee (LPLC), unless an exemption from holding insurance with the LPLC is granted by the Board.
The insurance must cover civil liability of the law practice and each person who is or was a principal or an employee of the law practice, in connection with the practice’s legal practice and administration of trusts in Victoria.
The Board has approved the arrangements for professional indemnity insurance (including the terms of contracts) for law practices that insure with the LPLC for the practising certificate year 1 July 2009 – 30 June 2010. For further information, see exemptions from professional indemnity insurance.
Barristers
Barristers are law practices (sole practitioners) and must also obtain professional indemnity insurance before commencing to engage in legal practice in Victoria , and must maintain that insurance at all times whilst engaged in legal practice in Victoria.
The Victorian Bar Council resolved on 16 December 2004 that all barristers must insure with the LPLC. The Victorian Bar Council was empowered to make that resolution under the Act.
The Board may exempt a barrister from this requirement. For further information, see exemptions from professional indemnity insurance
Community legal centres
Under the Act, community legal centres are required to obtain professional indemnity insurance on terms and conditions approved by the Board before commencing to engage in legal practice in Victoria. Community legal centres are required to maintain that insurance at all times while engaged in legal practice in Victoria.
The Act requires that the insurance must cover the civil liability of the community legal centre and each person who is or was a director, employee or contractor of, or volunteer at, the community legal centre, in connection with the centre’s legal practice and administration of trusts.
The insurance is not required to be held with the LPLC.
The Board has approved terms and conditions of professional indemnity insurance for community legal centres under the Act for the practising year 1 July 2009 – 30 June 2010.
The National Association of Community Legal Centres Professional Indemnity Insurance Scheme terms and conditions and the Victorian Managed Insurance Authority Community Service Organisations Master Policy have been approved by the Board for the 2009 - 2010 practising year.
A centre that holds other professional indemnity insurance should provide a copy of their policy and product disclosure statement to the Board before 30 April each year, to confirm that it is on approved terms and conditions.
The Board may also exempt a community legal centre from compliance with the requirements of the Act. For further information, see exemptions from professional indemnity insurance.
Australian-registered foreign lawyers
An Australian-registered foreign lawyer who engages in legal practice in Victoria must also maintain professional indemnity insurance on terms and conditions approved by the Board. For these purposes, the Board has approved the foreign lawyer endorsement offered by the LPLC. Accordingly foreign lawyers seeking registration who provide evidence that they are covered by the pre-approved LPLC policy, are not required to go through the insurance approval process. This does not, however, prevent an Australian-registered foreign lawyer from seeking Board approval for a policy acquired through another insurer.
The Board does not have power to exempt foreign lawyers from professional indemnity insurance requirements.
Exemption from professional indemnity insurance requirements
The Board may grant an exemption to a law practice or community legal centre from the requirement to obtain or maintain professional indemnity insurance, or the requirement to obtain or maintain insurance with the LPLC, under section 3.5.7 of the Act.
Class exemption for interstate barristers
The Board has granted a class exemption from the requirement to hold professional indemnity insurance with the LPLC, for the 2009-2010 practising year, to any interstate legal practitioner who practises solely as barrister and
(a) has an office located in his or her home state or territory; and
(b) engages in legal practice at that office; and
(c) has professional indemnity insurance in accordance with the requirements of the
corresponding law in his or her home state or territory for the 2009-10 year; and
(d) the insurance referred to in paragraph (c) covers the civil liability of the barrister in connection with the legal practice of the barrister in Victoria.
The class exemption applies to barristers from the following states and territories:
- New South Wales
- Queensland
- South Australia
- Western Australia
- Australian Capital Territory
- Northern Territory
- Tasmania
Please note that to be covered by the class exemption, interstate barristers must meet all of the criteria listed in (a) –(d) above.
Barristers not covered by the class exemption, will need to apply to the Board for an individual exemption from professional indemnity insurance requirements under section 3.5.7 of the Act.
Other exemptions
The Act sets out circumstances in which the Board must grant an exemption in section 3.5.7(3). These are:
(a) the practice has an office located in another jurisdiction; and
(b) a principal of the practice whose home jurisdiction is that other jurisdiction engages in legal practice at that office; and
(c) the practice has professional indemnity insurance in accordance with the requirements of a corresponding law in that other jurisdiction; and
(d) the insurance referred to in paragraph (c) covers civil liability of the practice and each person who is or was a principal or an employee of the practice in connection with the legal practice of, and administration of trusts by, the practice in this jurisdiction.
Please note that “jurisdiction” refers to an Australian jurisdiction. If you wish to apply for exemption from professional indemnity insurance requirements on the basis that you hold insurance overseas that covers the law practice in Victoria, please contact the Board.
In circumstances other than those in section 3.5.7(3) (set out above), the Board will consider:
- whether the requirement to obtain or maintain professional indemnity insurance, or to obtain or maintain professional indemnity insurance with the LPLC, in accordance with the Act is oppressive; and
- whether the requirement to obtain or maintain professional indemnity insurance, or to obtain or maintain professional indemnity insurance with the LPLC, in accordance with the Act, is not necessary to give proper protection to the law practice’s clients.
If, on behalf of a law practice, you wish to apply for an exemption from insurance requirements, you should apply in writing to the Board, addressing the matters set out in section 3.5.7 of the Act and the Board’s relevant policy.
For further information download the Board’s Policy on applications for exemption from professional indemnity insurance (32KB PDF).