The latest version of the NSW Practice Standard for Engineers includes improvements that “provide greater confidence for insurers,” says Consult Australia’s Kristy Eulenstein.

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:

• The Professional Engineer having a contract of engagement that incorporates a Design Brief.
• The professional engineering work carried out by the Professional Engineer must:
  • comply with all applicable legislative requirements.
  • be carried out by the Professional Engineer in accordance with applicable provisions of the NCC.
  • be within the engineer’s area of competency.

• The Professional Engineer must take all reasonable steps to coordinate with other designers working on a project to deliver the project.
• The Professional Engineer should take all reasonable steps to provide guidance to the building practitioner, as appropriate, on how to implement the professional engineering work.

A further consultation process will be held before the Practice Standard becomes a mandatory condition, to make any final changes required to support engineers to implement these new obligations. Consult Australia will be seeking consultation with members during this time, to ensure best possible outcomes for the industry. 

“While we will continue to push back against enduring regulatory burdens, the membership support has enabled this meaningful change to the Practice Standard,” says Kristy. 

“The conversations with members and letters to the Minister at the end of last year helped pave better results for small businesses across NSW. Our advocacy is fuelled by a strong membership base with members actively providing input and contributing to our campaigns, and we will continue our relentless pursuit of fair and reasonable standards for our members.”

“Consult Australia will continue to work on practical aspects of compliance with; the government, other industry associations including Engineers Australia and the Insurance Council of Australia as more detail comes to hand,” says Kristy. 

“As the obligations come into force, it will remain vital that any challenges your business faces with compliance are shared with us for escalation.”

To discuss these proposed changes, please contact Kristy Eulenstein, or Alison Kirk, our NSW & ACT Manager.