For a number of years, the NSW Building Commission’s commitment to restore confidence in the quality of residential construction in the state has seen the introduction of various initiatives. The latest being the NSW Practice Standard which includes mandatory obligations for professional engineers registered under the Design and Building Practitioners Act 2020 (NSW).
The latest version of the Standard was released by the government in March 2024, and is set become a mandatory condition of Professional Engineer registration in NSW from September 2024.
Last year, Consult Australia ramped up advocacy efforts in response to the draft proposal, seeking to reduce complexity and the burden of the regulatory web that has been introduced over the past few years.
The latest version has implemented several of Consult Australia’s suggested changes, giving some reassurance to the insurance industry about the availability of professional indemnity insurance for engineers working in the NSW building sector. One key change is the clear listing of criteria that makes up the Standard’s ‘fit for purpose’ obligation.
“While I appreciate there are still outstanding concerns about some of these criteria – including what practical steps engineers will need to take to show compliance – I understand from my discussions with the insurance industry that the changes we have secured provide greater confidence for insurers,” says Kristy Eulenstein, Consult Australia’s Head of Policy and Government Relations.
The key concern Consult Australia had with the draft version of the Standard was the introduction of a statutory fit for purpose obligation on engineers, counter to the explicit exemption in the Australian Consumer Law. Such an obligation would lead to significant issues for businesses securing professional indemnity insurance.
The NSW Government responded to Consult Australia’s concerns about about the breadth and undefined nature of the Standard’s obligation, by provided a much narrower definition and criteria set out in table form.
The criteria are: