Before you commit to a volunteer opportunity, ensure you have considered the legal aspects.
The provision of professional advice attracts liabilities even when given on a pro bono basis. It is essential that you consider the following before taking on any position:
- Where an individual purports to hold certain qualifications and experience in respect to professional services and a third party relies upon those representations, then should a negligent act of the provider result in a loss occurring, the individual suffering the loss may recover against the professional even though no fee or remuneration of any kind was received.
- It is important that members contemplating the provision of pro bono advice carefully consider the nature of the services that it is proposed they give and determine whether they have the correct expertise to undertake the work envisaged. They should look at the potential for loss occurring to the body they service and any third party who may incur so called consequential loss as a result of a negligent act.
- Members should hold adequate professional indemnity insurance to help ensure that they are suitably covered for potential losses. Likewise if the body is incorporated, they may have a directors and officers liability even if they are not appointed as directors or officers. The liability can arise from the provision of advice and their involvement or interaction with the actual board. If a board is used to accepting the advice or allowing the member to take such a part in the decision making of the body then they can be deemed directors or officers of the body with liabilities equal to those of actual appointed persons. Always ensure that such bodies have a directors and officers policy and adequate professional indemnity insurance to cover your contribution to the body.
- Members should be aware of the legislation, if any, which may govern the provision of services by them and which may require them to hold minimum registrations such as registered company auditor or tax agent. Certain pieces of state legislation sometimes also set such qualifications and experience in respect to the provision of professional services, so a careful consideration of such legislation is required prior to the service being given. A regulator will not excuse a breach of an Act simply because a member acted in a pro bono capacity.
- Members should be aware of the potential liabilities associated with accepting appointments as honorary directors or officers of organisations. These positions can attract a range of liabilities arising from the decision-making processes of a board or committee of management or the like. You should ascertain if the body has current directors and officers insurance in place to cover the contingency of claims arising from the appointment. A number of potential claims can be differentiated from a claim, which can be commenced under professional indemnity insurance, and if there is no insurance in place, then you may become personally liable for the losses, if any, alleged to arise from the decision in which you participated.
- Members may be requested to undertake a security clearance or police check due to the nature of the position held – such as director at an aged care facility.