When regulators come calling: Protecting your professional career

When I say I’m a professional liability lawyer people assume I defend professionals in civil claims — and I do. But a significant part of my work involves regulatory inquiries and investigations.

These are high-risk, high-impact matters. But they don’t always have to be.

Whether you’re a lawyer, engineer, architect, surveyor, insurance broker, or financial adviser or other professional, if you hold a license, practising certificate or registration, you’re at risk of regulatory scrutiny.

In Victoria and across Australia, I see oversight by bodies increasing including the Victorian Building Authority (VBA), the ASIC, the Legal Services Board and Commissioner and Consumer Affairs Victoria amongst others.

Why does this matter?

I can remember a renowned lecturer at law school saying “Nothing slows or ends your career faster than a reputational or ethical issue” and this is even if just alleged.

Regulatory investigations can go to the heart of your reputation and more - your right to operate and continue in your career.

If your registration, certificate or license is suspended or terminated, your career is on the line.

And yet, many professionals don’t realise just how simply an investigation can start.

In my experience, these matters can often begin quietly - a complaint from a client, a dispute over costs, or even an email, phone call or meeting with a regulator.

These early contacts may seem minor, but they can quickly escalate. Sometimes investigations are based on limited or questionable evidence. But if not handled properly from the outset, they can grow into significant legal proceedings — even criminal ones or back to civil liability.

Here’s the big problem

Many professionals wait for their professional indemnity insurance to protect them. But many policies are largely designed to respond to civil claims for compensation.

Even the better policies often only cover legal costs from the point a formal tribunal or court inquiry begins.

This leaves a critical gap. Early-stage advice — responding to initial contact, carefully considering responses, or attending interviews — is often not covered.

But this is where legal representation is most important.

So, what can professionals do?

Given my experience of dealing with insurance coverage and investigations related to high stakes director investigations, Royal Commissions and D&O insurance and professional indemnity insurance coverage both here in Australia and overseas I am going to share some further articles and my experiences for professionals, but in short:

• Professional indemnity insurance is limited in this area.
• Early legal advice is smart not overkill.
• Don’t underestimate complaints from clients.

As a lawyer who acts independently of insurer panels, I work directly for professionals — not insurers — from the inquiries I get and I see and my experience tells me is these claims are on the rise.

This article is a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Tagged as:

• professional liability
• regulatory compliance