Most people choosing a solicitor focus on experience and price. Fewer think to ask whether the firm carries compulsory insurance, even though that insurance is one of the clearest protections a client has if something goes wrong. In Queensland, every law practice must hold professional indemnity insurance before it can operate.
Understanding what that insurance covers, and what it does not, helps a client know what to do if a matter is mishandled. It also explains why the sentence "Liability limited by a scheme approved under Professional Standards Legislation" appears on law firm websites and letters.
Our lawyers in Springfield help clients across Greater Springfield and Ipswich with conveyancing, family law, wills and estates, and business matters.
Here is how professional indemnity works for Queensland solicitors, and what it means in practice.
Key takeaways
- Every Queensland law practice must hold compulsory professional indemnity insurance.
- A separate Fidelity Guarantee Fund covers losses from a solicitor's dishonest default.
- The Legal Services Commission can make compensation orders for unsatisfactory professional conduct.
This article is general information only and is not legal advice. Every situation is different, and you should speak with a solicitor about your own circumstances.
Do Queensland solicitors have to hold professional indemnity insurance?
Yes. Every law practice in Queensland must hold professional indemnity insurance, according to the Queensland Law Society. A practising certificate must not be granted or renewed to a lawyer who is required to hold insurance unless the regulator is satisfied the lawyer will be covered, and practising without it is an offence under Queensland's Legal Profession Act.
The Queensland Law Society runs the compulsory scheme, which is underwritten by Lexon Insurance, wholly owned by the Society. The insurance protects a client in case the solicitor does something wrong, as the Queensland Government puts it on its advice page for buyers appointing a solicitor.
What does the insurance actually cover?
Professional indemnity insurance covers a client's loss where a solicitor failed to provide a legal service with at least reasonable care and skill, according to the Legal Services Commission. The Commission can help where that failure caused the client financial or other loss.
The insurance does not cover every complaint. It does not cover losses from a dishonest default by a solicitor or law practice employee, for example where trust money is misappropriated. A separate Queensland Law Society fund covers that situation.
"Queensland law requires every law practice to hold professional indemnity insurance. That requirement exists so that a client who suffers a genuine loss through a solicitor's error has a real avenue for redress, not just a promise."
Jade Kickbusch, Principal, Brookwater Legal
What is the Fidelity Guarantee Fund, and when does it apply?
The Queensland Law Society administers a Fidelity Guarantee Fund for a different category of loss: client losses caused by a law practice associate's dishonest default. Where a solicitor or employee misappropriates client money or trust property, the Fund can reimburse the affected client.
The Fund does not cover negligence; that is what professional indemnity insurance is for. A client who wants to make a claim must notify the Queensland Law Society within 6 months of becoming aware of the loss, or the claim may be disallowed. Interest is paid from the date the claim form is received, and reasonable legal costs of proving a claim are reimbursed, according to the Queensland Law Society.
What is the Professional Standards Scheme, and what does that sentence on a letter mean?
The Queensland Law Society runs a scheme under the Professional Standards Act that caps the liability of participating solicitors and their practices for damages arising from legal services, according to the Queensland Law Society. The scheme excludes some categories of loss, including death or personal injury and fraud or dishonesty.
When a law firm's website or letter carries the words "Liability limited by a scheme approved under Professional Standards Legislation", it signals that the practice participates in the scheme and holds the required professional indemnity insurance. Those two requirements go together: participants must hold compliant professional indemnity insurance to the value of their cap.
What can a client do when something goes wrong with a solicitor?
The correct first step is to raise the issue directly with the solicitor or firm. Most practices have a process for costs disagreements and complaints.
Where that does not resolve it, Queensland has two separate avenues depending on the type of problem:
- › Legal Services Commission: the Commission handles complaints about lawyers and can investigate conduct. Where it finds unsatisfactory professional conduct or professional misconduct, the Queensland Civil and Administrative Tribunal or the Legal Practice Committee may make a compensation order, which can repay fees already paid and compensate for financial loss, up to a limit set by Queensland's Legal Profession Act. The Commission cannot award damages for negligence and cannot help with significant financial loss arising from a negligence claim; for that a client may need to consult another lawyer.
- › Costs disputes: a client can request an independent costs assessment within 12 months of receiving the bill, being asked to pay, or paying. Only court-ordered assessments bind the lawyer. Where a bill is reduced by 15% or more, the matter may be referred to the Legal Services Commission.
- › Fidelity Guarantee Fund: for losses from a dishonest default, notify the Queensland Law Society within 6 months of becoming aware of the loss.
How does a client confirm a Queensland solicitor is properly registered?
The Queensland Law Society must keep a public register of the lawyers it grants practising certificates to, open to the public without charge on its website or at its office, under Queensland's Legal Profession Act and the Legal Profession Regulation. The register shows the practitioner's name, type of certificate, law practice and office contact details.
A search of the Queensland Law Society's Register of Solicitors by name or organisation confirms whether a solicitor holds a current certificate. A practising certificate lapses if not renewed by the end of the practising year, which is not the same as a cancellation. Barristers are searched through the Bar Association of Queensland, not through the Law Society register, according to the Legal Services Commission.
The Legal Services Commission also keeps a public Queensland Discipline Register of orders finding that a lawyer engaged in professional misconduct.
What do these protections not cover?
Understanding the limits of each protection matters as much as knowing what it covers.
- › No guarantee of a good outcome: professional indemnity covers a solicitor's error, not a result a client is unhappy with. Legal matters involve judgment calls and no insurance changes that.
- › No cover for dishonesty through the indemnity policy: that is the Fidelity Guarantee Fund's role, not the professional indemnity insurance.
- › Commission compensation orders have limits: for significant financial loss from negligence, the Commission says a person may need to consult another lawyer about their rights and remedies, which may include a negligence claim against the firm's indemnity insurer.
- › Professional Standards Scheme exclusions: the scheme does not cap liability for death or personal injury, fraud or dishonesty, or breach of trust, according to the Queensland Law Society.
How does a solicitor's process for communicating with clients relate to these protections?
A solicitor must deliver legal services competently, diligently and as promptly as reasonably possible, and must provide clear and timely advice to assist a client to understand relevant legal issues and to make informed choices, under the Australian Solicitors' Conduct Rules. On reasonable request a law practice must give a client a written report of the progress of the matter and of the legal costs incurred to date, under Queensland's Legal Profession Act.
A client agreement may also set out how a firm communicates and what it covers, according to the Legal Services Commission. If communication breaks down before a matter completes, the Legal Services Commission lists unreasonable delays among things it may be able to help with. Raising a concern directly and early is always the right first step.
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What questions can a client ask before engaging a solicitor in Queensland?
The Legal Services Commission says a client can ask: What are my options? What are my chances of getting the outcome I want? How much will you charge in total? Are there any extra costs and could these change? What is the process? How long will it take?
The Queensland Government adds: shop around for experience, services and costs; find a firm that practises in the relevant area; make sure the solicitor is not connected to any other party; and ask for a detailed quote. Some conveyancing solicitors may charge a set price, according to the Queensland Government.
Checking the Queensland Law Society's Register of Solicitors before or early in the engagement confirms the solicitor holds a current certificate and is practising under a valid registration.
Frequently Asked Questions
Is professional indemnity insurance compulsory for all Queensland solicitors?
Yes. Every law practice in Queensland must hold professional indemnity insurance, according to the Queensland Law Society, and practising without it is an offence under Queensland's Legal Profession Act.
What does the Queensland Law Society's Fidelity Guarantee Fund cover?
The Fidelity Guarantee Fund reimburses clients for losses caused by a law practice associate's dishonest default, such as misappropriation of trust money, according to the Queensland Law Society. It does not cover negligence, which is covered by professional indemnity insurance.
What can the Legal Services Commission do if a Queensland solicitor makes an error?
The Legal Services Commission can investigate a complaint and, where it finds unsatisfactory professional conduct or professional misconduct, a compensation order may be made by QCAT or the Legal Practice Committee, according to the Commission. For significant financial loss from negligence, the Commission says a person may need to consult another lawyer about their rights and remedies.
How do I check if a Queensland solicitor holds a current practising certificate?
Search the Queensland Law Society's Register of Solicitors by name or organisation. It is public and free to access, under Queensland's Legal Profession Act, and shows the certificate type, law practice and contact details.
What does "Liability limited by a scheme approved under Professional Standards Legislation" mean in Queensland?
It means the practice participates in a Queensland Law Society scheme that caps its liability for damages arising from legal services and requires it to hold professional indemnity insurance, according to the Queensland Law Society.
Do you need a solicitor in Springfield or Ipswich QLD who is registered and insured?
A solicitor can confirm their registration on the Queensland Law Society's Register of Solicitors and explain the protections that apply to the engagement. Our conveyancing team acts for clients across Greater Springfield and Ipswich in property, family law, wills and business matters.
Can a client dispute a solicitor's bill in Queensland?
Yes. A client can request an independent costs assessment within 12 months of receiving the bill, being asked to pay, or paying, according to the Legal Services Commission. Only court-ordered assessments bind the lawyer.
Your Next Steps
Knowing that professional indemnity insurance, the Fidelity Guarantee Fund and the Legal Services Commission all exist is useful, but the protections work best when a client understands them before a problem arises. For anyone in Springfield, Ipswich or across Greater Springfield who is about to engage a solicitor, or who already has a matter running and wants clarity on what to expect, asking the right questions early makes the whole process simpler.
If professional indemnity, solicitor costs or legal protections are on your mind, the next step is a straightforward one. Get in touch with the Brookwater Legal team or call (07) 3437 8555, and we'll talk you through how the process generally works.
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External Resources
- Queensland Law Society - Professional indemnity insurance
- Queensland Law Society - Fidelity Guarantee Fund
- Legal Services Commission - Compensation orders
- Legal Services Commission - Choosing a lawyer
- Queensland Law Society - Register of Solicitors
- Queensland Law Society - Professional Standards Scheme
Brookwater Legal · This article contains general information only and does not constitute legal advice. It does not take into account your individual circumstances. You should obtain legal advice about your own situation before acting on anything in this article. Liability limited by a scheme approved under Professional Standards Legislation.
