Professional Liability Guide

CHAPTER 1 – DUTIES

CHAPTER 1 – DUTIES

Precisely what constitutes a profession and, by extension, a professional is a vexed question.

More than 20 years ago, the Queensland Court of Appeal considered the question in FAI General Insurance Co Ltd v Gold Coast City Council 1 in (relevantly) the context of a professional indemnity policy issued to a local council. It stated that the term ‘professional’ means ‘pertaining or appropriate to a profession’ or ‘engaged in one of the learned professions’. 2 In modern usage, the term is no longer confined to the traditional professions of medicine or the law. There would be little contention in applying the definition to any number of recognised professionals, including solicitors and barristers, doctors and other healthcare providers, architects, engineers and surveyors, accountants and financial advisors, and IT experts. The duties owed by those professionals in the pursuit of their calling, and to whom they are owed, are becoming increasingly varied. It is now commonplace for professionals to be subject to separate duties under contract, in tort and pursuant to statute, owed not only to clients but non-client parties as well. Contract The obvious place to start any consideration of the obligations of a professional is the law of contract, as it is invariably the case that a professional will be retained by a client for a particular purpose, be it the provision of advice or other services. The retainer could range from an informal or oral engagement all the way to a comprehensively documented and executed agreement. In any case, the scope of the professional’s obligations (and liability) will depend very much on the terms of the retainer. Express terms Where the retainer is written, its express terms will be of primary importance in determining the scope of the professional’s obligations. It is axiomatic to observe that the retainer document will set out the nature and scope of the duties to be discharged by the professional in their dealings with the client. Then there is the separate body of fiduciary duties and professional conduct or ethical rules that govern the conduct of some professions.

It has long been said that there is no such thing as a general retainer. In Midland Bank Trust Co Ltd v Hett Stubbs & Kemp, Oliver J said that:

‘There is no such thing as a general retainer in that sense. The expression “my solicitor” is as meaningless as the expression “my tailor” or “my bookmaker” in establishing any general duty apart from that arising out of a particular matter in which his services are retained. The extent of [a solicitor’s] duty depends on the terms, and limits of that retainer and any duty of care to be implied must be related to what he is instructed to do.’ 3

1 [1992] 2 Qd R 341. 2 Ibid 344. 3 [1979] Ch 384, 402.

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