What's happening at Consult Australia
Productivity Inquiry Submission Every five years the Productivity Commission conducts the Productivity Inquiry, to seek feedback on how Australia’s productivity could be improved – a topic Consult Australia has a few views on! In our submission we signposted three core areas for reform (as shown below), being legislative reform, funding reform, and policy reform. We also drew on case studies to demonstrate the issues. If you would like to read our full submission it is available on our website.
LEGISLATIVE REFORM
1. Amend civil liability laws in all jurisdictions to match Queensland, by explicitly prohibiting contracting out of proportionate liability for professional services contracts.
2. All governments to endorse our Model Client Policy to drive improvements in contracting with the private sector.
4. Amend the Automatic Mutual Recognition legislation to move away from ‘home state’ and implement a digital solution to successfully implement the automatic mutual recognition/automatic deemed registration regime throughout Australia.
Deep dive case study 1
3. Amend the Australian Consumer Law, to stop sophisticated commercial entities from using protections designed to protect consumers and small businesses, not big business. 5. Amend labour hire laws in Victoria, Queensland and ACT to remove unnecessary burdens on business.
Claims against consultants
Government clients rarely understand the impact that they have in the market because of the way they procure and contract with consultants and contractors. To drill down on this, Consult Australia has collected claims data from members.
Design and construct projects Consult Australia has collected claims data on 124 disputed design and construct projects. The data shows that 57% of consultant revenue is at risk when entering these contracts. This is a devastating impact on consultancy businesses but is hidden from government clients because it represents only a very small percentage of the overall construction cost of a project (0.9%). These claims are typically settled before adjudication in the courtroom. These claims are tactical rather than reflective of loss or damage that requires rectification, pushing the consulting business towards settlement to avoid the substantial costs of defending the claim in court.
Misleading or deceptive conduct claims Consult Australia separately conducted a sample survey of members to get an idea of the problem facing consultants from misleading or deceptive conduct claims. While initially raised by large businesses as an issue, over the past 12 months increasing numbers of small businesses have reported being faced with the same claim. The sample survey reveals: • most claims were by private businesses • the issues raised in claims rarely involves marketing or promotional activities (e.g. bait advertising) but is based on the same facts as claims for contractual breaches or breaches of the professional standard of care (negligence) • the claims infrequently make it to court • the damages sought significantly outweighs the consultant’s fees for the work – from between approximately 400% to over 4,000% of the consultant’s fee • the damages sought are not commensurate with the project fees (that is, the highest claim amounts did not attach to the project with the highest fee). Urgent reform to the Consumer and Competition Act is needed to protect consultants from large private sector clients distorting the intentions of the Act.
16 Consulting Matters
