Full Federal Court puts spotlight on Professional Services Review Scheme

Key Points:

The Full Federal Court has handed down two important administrative law decisions relating to the Professional Services Review scheme.

The Full Federal Court has handed down two important administrative law decisions relating to the Professional Services Review (or PSR) scheme.

The invalid appointment: Kutlu v Director of PSR

In Kutlu v Director of PSR [2011] FCAFC 94, the Full Federal Court considered whether a failure to follow a legislated consultation step prior to making a statutory appointment invalidated the appointment. The Court found that it did, and that the actions of the purported appointee were also invalid.

Section 84 of the Health Insurance Act 1973 required the Minister for Health and Ageing to consult with the Australian Medical Association (or AMA) before making appointments to the PSR Panel. The members of the PSR Panel are drawn upon to constitute to PSR committees to investigate inappropriate practice by medical practitioners. Kutlu concerned five separate PSR committees, each of which was constituted by members of the PSR Panel who were appointed by two successive Ministers without consulting the AMA.

The Court considered whether the requirement in the Health Insurance Act to consult was a mandatory requirement, or merely direction which would not result in invalidity if not followed. The Court found that it was a mandatory requirement – the requirements to consult

"are essential preliminaries to the Minister's exercise of the power of appointment. They have a rule-like quality that is easily...