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2008-2009
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
Trade practices amendment (Australian Consumer Law) bill 2009
EXPLANATORY MEMORANDUM
(Circulated by the authority of the
Minister for Competition Policy and Consumer Affairs,
the Hon Dr Craig Emerson MP)
Table of contents
Glossary 1
General outline and financial impact 3
Chapter 1 The Australian Consumer Law 7
Chapter 2 Unfair contract terms 11
Chapter 3 Application of the Australian Consumer Law 39
Chapter 4 Civil pecuniary penalties 53
Chapter 5 Disqualification orders 63
Chapter 6 Substantiation notices 69
Chapter 7 Orders to redress loss or damage suffered by non-party
consumers etc 77
Chapter 8 Infringement notices 85
Chapter 9 Public warning notices 97
Chapter 10 Minor and technical amendments 101
Chapter 11 Regulation impact statement - An enhanced national consumer
policy framework 103
Index 179
Do not remove section break.
The following abbreviations and acronyms are used throughout this
explanatory memorandum.
|Abbreviation |Definition |
|ACCC |Australian Competition and |
| |Consumer Commission |
|Applied ACL |Applied Australian Consumer |
| |Law |
|ACL |Australian Consumer Law |
|ASIC |Australian Securities and |
| |Investments Commission |
|ASIC Act |Australian Securities and |
| |Investments Commission Act |
| |2001 |
|Bill |Trade Practices Amendment |
| |(Australian Consumer Law) |
| |Bill 2009 |
|COAG |Council of Australian |
| |Governments |
|Federal Court |Federal Court of Australia |
|FTAs |State and Territory Fair |
| |Trading Legislation |
|IGA |Intergovernmental Agreement |
|MCCA |Ministerial Council on |
| |Consumer Affairs |
|NPA |National Partnership |
| |Agreement to Deliver a |
| |Seamless National Economy |
|PC |Productivity Commission |
|TP Act |Trade Practices Act 1974 |
General outline and financial impact
Australian Consumer Law
The Trade Practices Amendment (Australian Consumer Law) Bill 2009
(the Bill) is a Bill for an Act to amend the Trade Practices Act
1974 (TP Act) to establish and apply the Australian Consumer Law
(ACL) and to introduce new penalties, enforcement powers and
consumer redress options. The Bill also amends the consumer
protection provisions of the Australian Securities and Investments
Act 2001 (ASIC Act) to make them consistent with the TP Act and the
ACL. [Section 1]
Date of effect: The Bill will commence on different dates for
different purposes.
The unfair contract terms provisions (set out in Schedule 1 of the
Bill in respect of the ACL and in Schedule 3, Part 1 of the Bill in
respect of the ASIC Act) will take effect on the date on which
Schedule 1 and Schedule 3, Part 1 commences. The Bill provides
that this date may be proclaimed by the Governor-General. If the
Governor-General has not proclaimed the commencement of the
provisions within six months of the date of the Royal Assent, then
the provisions will commence on the first day after a day six
months after the date of Royal Assent. The Government has
previously announced its intention that the provisions should
commence on 1 January 2010.
The new penalties, enforcement powers and consumer redress options
that relate to the unfair contract terms provisions (set out in
Schedule 2, Part 7 and Schedule 3, Part 8 of the Bill) will
commence on the same date to be proclaimed by the Governor-General.
The ACL (Schedule 1 of the Bill) will commence on the same date as
the unfair contract terms provisions.
The remaining provisions, concerning new penalties, enforcement
powers and consumer redress will commence on the day after Royal
Assent is given. Some minor miscellaneous and consequential
amendments will also commence on the day after the Bill receives
Royal Assent.
The States and Territories will be able to implement the ACL (which
currently includes provisions relating only to unfair contract
terms) from the date of its commencement as a law of the
Commonwealth, should they decide to do so. Further provisions will
be included in the ACL by means of a second Bill to be introduced
in early 2010.
All Australian jurisdictions will be required, in accordance with
the National Partnership Agreement to Deliver a Seamless National
Economy (NPA), to apply the full ACL by 1 January 2011.
Proposal announced: On 2 October 2008, the Council of Australian
Governments (COAG) agreed to a new consumer policy framework
comprising a single national consumer law, having agreed to develop
a national consumer law on 3 July 2008. In so doing, COAG based
its decision on the proposals of the Ministerial Council on
Consumer Affairs (MCCA), which were announced on 15 August 2008.
The ACL is to be based on the TPA, drawing on the recommendations
from the Productivity Commission (PC) and best practice in existing
state and territory consumer laws, and will specifically include a
national unfair contract terms provision, a new national product
safety legislative and regulatory framework and new penalties,
enforcement powers and consumer redress options.
Financial impact: This Bill has no significant financial impact on
Commonwealth expenditure or revenue.
Compliance cost impact: Low. The Bill establishes key elements of
a single, national consumer law framework and, in doing so,
promotes consistency and protections across all Australian
jurisdictions. This framework will reduce multi-jurisdictional
complexities and result in lower compliance costs for businesses
operating nationally. There will be a transitional cost for
businesses as they adjust to the operation of the new, national
regime and, particularly, to the new unfair contract terms
provisions.
Summary of regulation impact statement
Regulation impact on business
Impact: Low. This Bill establishes key elements of a single,
national consumer law framework and, in doing so, promotes
consistency and protections across all Australian jurisdictions.
This framework will reduce multi-jurisdictional complexities and
result in lower compliance costs for businesses operating
nationally. Once implemented, 13 existing jurisdictional laws
dealing with generic consumer protections will be reduced to one,
substantially reducing business compliance costs.
There will be a transitional cost for these businesses as they
adjust to the operation of the new, national regime and,
specifically, to the new unfair contract terms provisions.
The compliance cost in relation to the new penalties, enforcement
and consumer redress powers will be minimal, as these provisions
provide for additional powers to deal with existing breaches of, or
the investigation of suspected breaches of, the TP Act and the new
unfair contract terms provisions. Once the ACL takes effect, there
will be common national enforcement powers covering all of
Australia's consumer law agencies.
The publication of national guidance on unfair contract terms,
developed jointly by the Australian Competition and Consumer
Commission (ACCC), the Australian Securities and Investments
Commission (ASIC) and the State and Territory offices of fair
trading, will assist business in compliance with the unfair
contract terms provisions. In its 2008 Final Report, the PC noted
that, 'there was little evidence in Victoria or other countries
that have enacted laws against unfair contract terms, of
significant business compliance or other burdens'.
Once the initial period of implementation is completed, ongoing
compliance with the new unfair contract terms provisions will not
impose significantly greater costs to businesses, as they should
already review and update consumer contracts in response to
changing market conditions, changes to legislation and regulatory
practices and Court and tribunal decisions.
Main points:
. The PC estimated that the implementation of a national
consumer law could result in benefits to Australian
consumers of between $1.5 billion and $4.5 billion a year.
. Businesses will benefit from consistent national
regulation, which will reduce complexity and compliance
costs by eliminating significant jurisdictional variation.
This will provide:
- savings for businesses currently operating nationally;
- incentives for expansion and innovation for businesses
previously unwilling to deal with the complexity of
multi-jurisdictional regulation;
- greater incentives for new entrants to markets due to a
simpler regulatory framework;
- greater clarity and certainty in relation to consumer
law, allowing for more efficiency in the markets;
- easier understanding of consumer contracts and greater
opportunities for exercising choice when considering
consumption possibilities; and
- greater consistency in enforcement for businesses and a
realignment of resources as more emphasis can be placed
on effective enforcement by the most appropriate
consumer law agency.
. Consumers will also benefit from the changes through:
- greater confidence in dealing with businesses due to
more consistent laws;
- easier understanding of consumer contracts and greater
opportunities for exercising choice when considering
consumption possibilities;
- greater confidence in dealing with businesses due to
greater consistency in the enforcement of these laws;
and
- lower prices for goods and services to the extent that
businesses pass on the benefits of lower compliance
costs to their customers.
Chapter 1
The Australian Consumer Law
Outline of chapter
1. The Australian Consumer Law (ACL) will constitute a single national
consumer law which will apply as a law of the Commonwealth, and of
each State and Territory. The development and implementation of
the ACL has been undertaken through a cooperative process by the
Australian Government, the States and the Territories. The Trade
Practices Act 1974 (TP Act) will contain the ACL in a schedule and
will make provision for its application, administration and
amendment.
Background to the Australian Consumer Law
Productivity Commission Review of Australia's Consumer Policy Framework
2. On 11 December 2006 the Productivity Commission (PC) commenced an
inquiry into Australia's consumer policy framework. The PC
examined ways to improve the coordination of consumer policy
development, the harmonisation of consumer laws and their
administration across jurisdictions. The PC also considered the
removal of any duplication and inconsistency in jurisdictional
consumer laws and their enforcement.
3. On 30 April 2008 the PC presented the final report of its Review of
Australia's Consumer Policy Framework to the Government. The PC
recommended that all Australian governments 'should implement a new
national generic consumer law to apply in all jurisdictions'. The
PC recommended that this law should be:
. based on the consumer protection provisions in the TP Act,
and include a new law that addresses unfair contract
terms;
. augmented to incorporate certain key reforms as well as
provisions based on best practice in State and Territory
laws; and
. apply to all consumer transactions in all jurisdictions,
including financial services, with Australian Securities
and Investments Commission (ASIC) retaining its primary
role for regulating financial services.
4. The PC concluded that the Australian Government should have greater
responsibility for the consumer policy framework given that
Australia's consumer markets are increasingly becoming more
national in character. The current arrangements have resulted in
inconsistent laws and enforcement practices across jurisdictions,
leading to unnecessary compliance burdens for businesses operating
in more than one jurisdiction, and different protections for
consumers depending on the State or Territory in which they reside.
Council of Australian Governments' reform process
5. On 26 March 2008 the Council of Australian Governments (COAG)
agreed that the Business Regulation and Competition Working Group
of COAG (BRCWG), in consultation with the Ministerial Council on
Consumer Affairs (MCCA), would develop an enhanced consumer policy
framework, drawing on the final report of the PC.
6. MCCA developed detailed proposals for consumer policy reforms,
along with an indicative implementation plan, that it agreed and
announced on 15 August 2008.
7. On 2 October 2008 COAG agreed to establish a new national consumer
policy framework comprising a single consumer law based on the
TP Act, drawing on the recommendations of the PC and best practice
from state and territory laws, including a national unfair
contracts terms provision. This agreement was based on the
detailed policy proposals put forward by MCCA on 15 August 2008.
National Partnership Agreement to deliver a seamless national economy
8. The National Partnership Agreement to Deliver a Seamless National
Economy (NPA) commits all Australian governments to pass
legislation to implement a national consumer law by the end of
2010. A key objective of the NPA is to contribute to the creation
of a seamless national economy, reducing costs incurred by business
in complying with unnecessary and inconsistent regulation across
jurisdictions.
9. By implementing the ACL, and completing a range of other reforms,
the States and Territories will receive certain payments and will
also make a range of savings arising from the consolidation or
transfer of certain existing regulatory functions.
10. The Australian Government is responsible for introducing the
legislation that establishes the ACL. This will include provisions
in the TP Act to apply the ACL as a law of the Commonwealth and
also to provide for the jurisdiction of Courts, the modification of
the ACL and related matters.
11. In accordance with the NPA, the States and Territories will
introduce and enact application legislation to apply the ACL as
part of their respective laws and make such modifications to their
laws as are required to give effect to the ACL, including repealing
existing provisions which deal with matters covered by the ACL.
Implementation of the Australian Consumer Law
12. The ACL will be implemented by an application law scheme, with the
Australian Government as the lead legislator.
13. The ACL is being developed in close consultation with the States
and Territories, and will be implemented as part of this Bill. A
second Bill, which the Government intends to introduce into the
Parliament in early 2010, will amend the ACL to include the
remainder of the reforms agreed by COAG.
14. This Bill:
. amends the TP Act to establish the ACL as a schedule to
the TP Act;
. makes provision for the application and amendment of the
ACL;
. includes in the ACL provisions to address unfair contract
terms;
. introduces into the TP Act new penalties, enforcement
powers and consumer redress options (which will later be
the basis of consistent national provisions in the ACL);
and
. amends the Australian Securities and Investments
Commission Act 2001 (ASIC Act) to introduce corresponding
provisions that will apply in respect of financial
services, in relation to unfair contract terms, penalties,
enforcement powers and consumer redress options.
15. The States and Territories will be able to implement the ACL (which
currently includes only the unfair contract terms provisions) from
its commencement, should they decide to do so.
16. The second Bill will implement the bulk of COAG's agreed reforms as
part of the ACL, and will include:
. the transfer of the existing consumer protection and
related provisions of the TP Act to the ACL;
. amendments augmenting or modifying the TP Act's existing
consumer protection and related provisions to reflect best
practice in existing State and Territory consumer laws (as
agreed to by the Australian Government and the States and
Territories);
. provisions that introduce a new national product safety
regulatory framework; and
. further amendments to the ASIC Act to ensure its
consistency with the ACL.
Commencement
17. The ACL, including the unfair contract terms provisions (also
mirrored in the ASIC Act) and associated application law
provisions, will commence on a date to be proclaimed by the
Governor-General. The Government has announced its intention that
the date of commencement be 1 January 2010. [Section 2]
18. The new penalties, enforcement powers and redress measures insofar
as they apply to the relevant existing TP Act and the ASIC Act
provisions will commence on the day after the Act receives the
Royal Assent. However, amendments to apply those provisions to the
ACL in the TP Act (including the unfair contract terms provisions)
will commence at the same time as the ACL provisions. [Section 2]
19. A number of minor and consequential amendments to the TP Act will
depend on whether the Statute Stocktake (Regulatory and Other Laws)
Act commences before the Bill. If this Act commences before the
Bill, a number of minor amendments in the Bill will commence to
address certain resulting new section construction and numbering in
the TP Act. [Section 1]
20. Each Act specified in the Schedules to the Bill is amended in the
terms specified in the Schedules to the Bill. [Section 3]
Chapter 2
Unfair contract terms
Outline of chapter
21. The Australian Consumer Law (ACL) and the Australian Securities and
Investments Commission Act 2001 (ASIC Act) will include provisions
that address the use of unfair contract terms in consumer
contracts.
Context of amendments
22. On 2 October 2008, the Council of Australian Governments (COAG)
agreed to establish a national law addressing unfair contract
terms, as proposed by the Ministerial Council on Consumer Affairs
(MCCA) on 15 August 2008.
23. The proposal draws on the recommendations for a national unfair
contract terms provision as part of a national consumer law made by
the Productivity Commission (PC).
24. On 15 August 2008, the MCCA considered the PC's recommendations,
and agreed to the introduction of a national consumer law, that
includes an unfair contract terms provisions. The MCCA-agreed
model for an unfair contract terms provision would have the
following features:
. the term is unfair when it causes a significant imbalance
in the parties' rights and obligations arising under the
contract and it is not reasonably necessary to protect the
legitimate interests of the supplier;
. a remedy could only be applied where the claimant shows
detriment, or a substantial likelihood of detriment, to
the consumer (individually or as a class). Detriment is
not limited to financial detriment;
. it would relate only to standard form (that is, non-
negotiated) contracts. Should a supplier allege that the
contract at issue is not a consumer contract, then the
onus will be on the supplier to prove that it is not;
. it would exclude the upfront price of the good or service,
using the approach currently adopted in Regulation 6(2) of
the United Kingdom's Unfair Terms in Consumer Contracts
Regulations 1999; and
. it would require all of the circumstances of the contract
to be considered, taking into account the broader
interests of consumers, as well as the particular
consumers affected.
25. MCCA further agreed that:
. where these criteria are met, the unfair term would be
voided only for the contracts of those consumers or class
of consumers subject to detriment (or the substantial
likelihood thereof), with suppliers also potentially
liable to damages for that detriment, along with other
remedies available under the Trade Practices Act 1974
(TP Act);
. the drafting of any new provision should ensure the
potential for private (and regulator-led) representative
actions for damages by a class of consumers detrimentally
affected by unfair contract terms, in keeping with the
PC's recommendation that representative actions be
improved;
. the provision should also permit the prescription of
certain terms that are, in all circumstances, considered
to be unfair. This regulation making power would rest
with the Australian Government Minister, who would
prescribe terms in accordance with the national consumer
law amendment process set out in the Intergovernmental
Agreement (IGA) and the requirements of regulatory impact
assessment;
. the provision should be supported by national guidance on
its enforcement, developed by the national and state and
territory regulators, in accordance with a process set out
in the IGA;
. transitional arrangements should be put in place after
enactment, which would give businesses the time to modify
their contracts; and
. the operation and effects of the new provision should be
reviewed within seven years of its introduction.
Summary of new law
26. The unfair contract terms provisions are included in the ACL (a new
Schedule 2, Part 2 of the TP Act) and a new Part 2, Division 2,
Subdivision BA of the ASIC Act.
27. The unfair contract terms provisions apply to consumer contracts
only. A consumer contract is defined in the ACL as a contract for
a supply of goods or services or a sale or grant of an interest in
land to an individual whose acquisition of the goods, services or
interest is wholly or predominantly for personal, domestic or
household use or consumption.
28. In the ASIC Act, a consumer contract is a contract at least one of
the parties to which is an individual whose acquisition of what is
supplied under the contract is wholly or predominantly an
acquisition for personal, domestic or household use or consumption.
29. A term in a consumer contract is void if:
. the term is unfair; and
. the contract is in a standard form contract; and
. in the context of the ASIC Act, the contract is:
- a financial product; or
- a contract for the supply, or possible supply, of
services that are financial services.
30. A term in a consumer contract is unfair if the term:
. causes a significant imbalance in the parties' rights and
obligations under the standard form contract; and
. is not reasonably necessary to protect the legitimate
interests of the party who would be advantaged by the
term.
31. There is a rebuttable presumption that an unfair term is not
reasonably necessary to protect the legitimate interests of the
party who would be advantaged by the application or reliance on
that term, unless that party can prove otherwise.
32. In finding that a term in a consumer contract is unfair, a Court
may take into account any matters it considers relevant. However,
the Court must take into account the following:
. the extent to which it would cause detriment, or a
substantial likelihood of detriment (whether financial or
otherwise) to a party if the term was to be applied or
relied on;
. the extent to which a term is transparent; and
. the contract as a whole.
33. Terms that:
. define the main subject matter of the contract;
. set the upfront price payable under the consumer contract;
or
. that are required or expressly permitted by a law of the
Commonwealth, State or Territory.
are not subject to the unfair contract terms provisions, except to
the extent that they may be a prohibited term.
34. Examples of terms used in consumer contracts that may be unfair are
listed. The provision setting out the examples does not prohibit
or presume such terms to be unfair.
35. A prohibited term in a consumer contract of a kind prescribed by
the regulations is void, and a person must not include, apply or
rely on, or purport to include, apply or rely on such a term.
36. Prohibited terms in the ACL may be prescribed by the Minister, in
accordance with the requirements for the amendment of the ACL set
out in Part XI of the TP Act and the IGA. Prohibited terms under
the ASIC Act may be prescribed by the Minister, in accordance with
the requirements for the amendment of the ASIC Act set out in the
Corporations Agreement 2002, to the extent that they are
applicable.
37. The inclusion of or reliance on a prohibited term is a
contravention of the TP Act and ASIC Act. This means that the
applicable penalties and remedies provisions of the TP Act or the
ASIC Act will apply to such contraventions.
38. The unfair contract terms provisions of the ACL and the ASIC Act
will apply to new consumer contracts entered into on or after the
commencement of the provisions. The provisions will not apply to
contracts entered into before the date on which the provisions
commence, unless such a contract is renewed or varied after that
date, but then only to the extent of that renewal or variation.
Comparison of key features of new law and current law
|New law |Current law |
|An term in a consumer |No equivalent. |
|contract is void: if the |Similar provisions exist |
|term is unfair; and the |in Part 2B of the Fair |
|contract is in a standard|Trading Act 1999 |
|form contract. |(Victoria). |
|In the ASIC Act, a term | |
|in a consumer contract is| |
|void if: | |
|the term is unfair; and | |
|the contract is in a | |
|standard form contract; | |
|and | |
|the contract is a | |
|financial product; or a | |
|contract for the supply, | |
|or possible supply, of | |
|financial services. | |
|A consumer contract is |No equivalent. |
|defined as a contract |Similar provisions exist |
|for: |in Part 2B of the Fair |
|a supply of goods or |Trading Act 1999 |
|services; or |(Victoria). |
|a sale or grant of an | |
|interest in land; | |
|to an individual whose | |
|acquisition of the goods,| |
|services or interest is | |
|wholly or predominantly | |
|for personal, domestic or| |
|household use or | |
|consumption. | |
|In the context of the | |
|ASIC Act, a 'consumer | |
|contract' is defined as a| |
|contract at least one of | |
|the parties to which is | |
|an individual whose | |
|acquisition of what is | |
|supplied under the | |
|contract is wholly or | |
|predominantly an | |
|acquisition for personal,| |
|domestic or household use| |
|or consumption. | |
|A term in a consumer |No equivalent. |
|contract is unfair if the|Similar provisions exist |
|term causes a significant|in Part 2B of the Fair |
|imbalance in the parties'|Trading Act 1999 |
|rights and obligations |(Victoria). |
|under the consumer | |
|contract, and is not | |
|reasonably necessary to | |
|protect the legitimate | |
|interests of the party | |
|who would be advantaged | |
|by the term. | |
|There is a presumption | |
|that a term is not | |
|reasonably necessary to | |
|protect the legitimate | |
|interests of the party | |
|who would be advantaged | |
|by the term, unless that | |
|party can prove | |
|otherwise. | |
|The Court may take |No equivalent. |
|account of any |Similar provisions exist |
|consideration it thinks |in Part 2B of the Fair |
|is relevant when |Trading Act 1999 |
|determining whether a |(Victoria). |
|term in a consumer | |
|contract is unfair. | |
|However, the Court must | |
|take into account whether| |
|the term causes | |
|detriment, or a | |
|substantial likelihood | |
|thereof, whether the term| |
|is transparent, and the | |
|contract as a whole. | |
|Terms in a consumer |No equivalent. |
|contract that define the | |
|main subject matter of | |
|the contract, set out the| |
|upfront price payable | |
|under the contract, or | |
|are required or expressly| |
|permitted by a law of the| |
|Commonwealth, State or | |
|Territory are also | |
|excluded from the | |
|application of the unfair| |
|contract terms provisions| |
|in this Bill. | |
|A prohibited term in a |No equivalent. |
|consumer contract is |Similar provisions exist |
|void. |in Part 2B of the Fair |
|In the ASIC Act, a |Trading Act 1999 |
|prohibited term of a |(Victoria). |
|consumer contract is void| |
|if the contract is: a | |
|financial product; or a | |
|contract for the supply, | |
|or possible supply, of | |
|financial services. | |
Detailed explanation of new law
Unfair terms
39. The scope of the unfair contract terms provisions in the ACL (as
applied by the TP Act as a law of the Commonwealth) and the ASIC
Act is restricted to business-to-consumer transactions as the
provisions apply only to a consumer contract in which at least one
of the parties is an individual.
40. Contracts between businesses are excluded from the scope of the
unfair contract terms provisions, except in respect of 'sole
traders'.
41. A term in a consumer contract is void if the term is unfair and the
contract is a standard form contract. A finding by a Court that a
term is unfair, and therefore void, means that the term is treated
as if it never existed. [Schedule 1, Part 1, item 1, sections 2(1)
and (2)]
42. In the context of the ACL, a consumer contract is defined as a
contract entered into for:
. a supply of goods or services; or
. a sale or grant of an interest in land;
to an individual whose acquisition of the goods, services or
interest is wholly or predominantly for personal, domestic or
household use or consumption. [Schedule 1, Part 1, item 1,
sections 1 and 2(3)]
43. This definition does not limit the operation of the unfair contract
terms provisions to things of a personal, domestic or household
nature, and would include the supply of any good, service or
interest in land to a consumer provided the acquisition of what is
supplied under the contract is wholly or predominantly for
personal, domestic or household use or consumption.
44. An interest in relation to land, is taken to mean one of the
following:
. a legal or equitable estate or interest in the land; or
. a right of occupancy of the land or of a building or part
of building erected on the land, arising by virtue of the
holding of shares, or by virtue of a contract to purchase
shares, in an incorporated company that owns the land or
building; or
. a right, power or privilege over, or in connection with,
the land. [Schedule 1, Part 1, item 1, section 1]
45. A relevant contract does not include:
. a contract that is a shipping contract; and
. a contract that is a constitution of a company, managed
investment scheme or other kind of body. [Schedule 1,
Part 1, item 1, section 8] (See also paragraphs 2.91 to
2.100 below).
46. In the context of the ASIC Act, a term in a consumer contract is
void if:
. the term is unfair; and
. the contract is a standard form contract; and
. the contract is a financial product or a contract for the
supply, or possible supply, of services that are financial
services.
A 'financial product' and a 'financial service' are defined in
sections 12BAA and 12BAB of the ASIC Act. [Schedule 3, Part 1,
item 7, subsection 12BF(1)]
47. In the context of the ASIC Act, a 'consumer contract' is defined as
a contract at least one of the parties to which is an individual,
whose acquisition of what is supplied under the contract is wholly
or predominantly an acquisition for personal, domestic or household
use or consumption. This definition would include the supply of
any financial product or service to a consumer provided the
acquisition of what is supplied under the contract is wholly or
predominantly for personal, domestic or household use or
consumption. [Schedule 3, Part 1, item 7, subsection 12BF(3)]
48. A relevant contract does not include a contract that is a
constitution of a company, managed investment scheme or other kind
of body. [Schedule 3, Part 1, item 7, section 12BL]
49. Where a Court finds that a term in a consumer contract is unfair,
the contract will continue to bind the affected parties to the
extent that the contract is capable of operating without the unfair
term. [Schedule 1, Part 1, item 1, section 2(2)] [Schedule 3, Part
1, item 7, subsection 12BF(2)]
Meaning of 'unfair'
50. A term in a consumer contract is unfair if:
. it would cause a significant imbalance in the parties'
rights and obligations arising under the contract; and
. the term is not reasonably necessary to protect the
legitimate interests of the party who would be advantaged
by the supplier. [Schedule 1, Part 1, item 1, section 1
and section 3(1)] [Schedule 3, Part 1, item 4, subsection
12BA(1)] [Schedule 3, Part 1, item 5, subsection 12BG(1)]
First element of the test
51. The first element of the test requires the Court to consider
whether the term has caused a significant imbalance in the parties'
rights and obligations arising under the contract. This would
involve a factual determination of whether any such significant
imbalance exists. [Schedule 1, Part 1, item 1, subsection 3(1)(a)]
[Schedule 3, Part 1, item 7, paragraph 12BG(1)(a)]
52. A claimant in proceedings is required to prove this element of the
test on the balance of probabilities.
Second element of the test
53. The second element of the test requires the Court to consider
whether the term is reasonably necessary to protect the legitimate
interests of the party who would be advantaged by the term.
[Schedule 1, Part 1, item 1, subsection 3(1)(b)] [Schedule 3, Part
1, item 7, paragraph 12BG(1)(b)]
54. In respect of the second element of the test, a term of a consumer
contract is presumed not to be reasonably necessary in order to
protect the legitimate interests of the party who would be
advantaged by the term, unless that party can prove otherwise in a
Court. [Schedule 1, Part 1, item 1, section 3(4)] [Schedule 3,
Part 1, item 7, subsection 12BG(4)]
55. Where a claimant in proceedings has alleged that a term is unfair,
it is for the respondent to establish that a term is reasonably
necessary to protect its legitimate interests on the balance of
probabilities. The respondent may introduce any evidence relevant
to this element of the test.
56. While it is ultimately a matter for the Court to determine whether
a term is reasonably necessary to protect the legitimate interests
of the respondent, the provision would require the respondent to
establish, at the very least, that its legitimate interest is
sufficiently compelling on the balance of probabilities to overcome
any detriment caused to the consumer, or a class of consumers, and
that therefore the term was 'reasonably necessary'.
Considerations the Court may take into account
57. In determining whether a term in a consumer contract is unfair, the
Court may take into account any matter which it thinks is relevant,
but the Court must take into account the following matters:
. the extent to which it would cause, or there is a
substantial likelihood that it would cause, detriment
(whether financial or otherwise) to a party if it were
relied on;
. the extent to which the term is transparent; and
. the contract as a whole. [Schedule 1, Part 1, item 1,
section 3(2)] [Schedule 3, Part 1, item 7, subsection
12BG(2)]
Detriment
58. The Court must have regard to the extent to which a term would
cause detriment, or a substantial likelihood thereof, to a party if
it were relied on. The consideration of detriment requires a Court
to have regard to whether the term subject to challenge has caused
detriment to consumers (individually or as a class), or a
substantial likelihood thereof. [Schedule 1, Part 1, item 1,
subsection 3(2)(a)] [Schedule 3, Part 1, item 7,
paragraph 12BG(2)(a)]
59. By requiring evidence of a 'substantial likelihood of detriment',
the provision requires more than a hypothetical case to be made out
by the claimant. In this context, a claimant does not need to have
proof of having suffered actual detriment, but that there is a
substantial likelihood of detriment relating to the application of
or reliance on the term.
60. In this regard, a term does not need to be enforced in order to be
unfair, although the possibility of such enforcement may impact on
the decisions made by the party that would be disadvantaged by the
term's practical effect, to that party's detriment.
61. Detriment is not limited to financial detriment. This is designed
to allow the Court to consider situations where there may be other
forms of detriment that have affected or may affect the party
disadvantaged by the practical effect of the term.
62. Where it is found that a term is unfair and there is only a
substantial likelihood of detriment arising from the application of
or reliance on that term, then the remedies available would likely
be limited to a declaration that the term is an unfair term and an
injunction preventing the party advantaged by it applying or
relying on it, or purporting to do so. Any form of compensatory
remedy would likely be limited to those situations where there is
material or actual detriment proven.
Transparency
63. The Court must have regard to whether a term is transparent in
determining whether that term is 'unfair'. [Schedule 1, Part 1,
item 1, subsection 3(2)(b)] [Schedule 3, Part 1, item 7, paragraph
12BG(2)(b)]
64. A term is transparent if the term is:
. expressed in a reasonably plain language;
. legible;
. presented clearly; and
. readily available to any party affected by the term.
[Schedule 1, Part 1, item 1, section 1 and section 3(3)]
[Schedule 3, Part 1, item 4, subsection 12BA(1), item 7,
subsection 12BG(3)]
65. A lack of transparency in the terms of a consumer contract may be a
strong indication of the existence of a significant imbalance in
the rights and obligations of the parties under the contract.
66. Transparency, on its own account, cannot overcome underlying
unfairness in a contract term. Furthermore, the extent to which a
term is not transparent is not, of itself, determinative of the
unfairness of a term in a consumer contract and the nature and
effect of the term will continue to be relevant.
67. The elements set out subsections 3(3)(a)-(c) of the ACL and
paragraphs 12BG(3)(a)-(c) of the ASIC Act relate to the way in
which a term is presented in a consumer contract. The remaining
element covers situations where the term is set out by the party
who seeks to rely upon it in a document which is not physically
available to the other party at or before the time the parties
entered into the contract.
Contract as a whole
68. The Court must have regard to the contract as a whole in
determining whether that term is 'unfair'. [Schedule 1, Part 1,
item 1, subsection 3(2)(c)] [Schedule 3, Part 1, item 7, paragraph
12BG(2)(c)]
Examples of unfair terms
69. There is a non-exhaustive, indicative list of examples of the types
of terms that may be considered 'unfair'. [Schedule 1, Part 1,
item 1, section 4] [Schedule 3, Part 1, item 7, section 12BH]
70. Without limiting the meaning of unfair, the following examples are
provided:
a) a term that permits, or has effect of permitting, one
party (but not another party) to avoid or limit performance of
the contract;
b) a term that permits, or has the effect of permitting, one
party (but not another party) to terminate the contract;
c) a term that penalises, or has the effect of penalising,
one party (but not another party) for a breach or termination of
the contract;
d) a term that permits, or has the effect of permitting, one
party (but not another party) to vary the terms of the contract;
e) a term that permits, or has the effect of permitting, one
party (but not another party) to renew or not renew the
contract;
f) a term that permits, or has the effect of permitting, one
party to vary the upfront price payable under the contract
without the right of another party to terminate the contract;
g) a term that permits, or has the effect of permitting, one
party unilaterally to vary the:
. characteristics of the goods or services to be supplied,
or the interest in land to be sold or granted, under the
contract in the context of the ACL; or
. financial services to be supplied under the contract in
the context of the ASIC Act;
h) a term that permits, or has the effect of permitting, one
party unilaterally to determine whether the contract has been
breached or to interpret its meaning;
i) a term that limits, or has the effect of limiting, one
party's vicarious liability for its agents;
j) a term that permits, or has the effect of permitting, one
party to assign the contract to the detriment of another party
without that other party's consent;
k) a term that limits, or has the effect of limiting, one
party's right to sue another party;
l) a term that limits, or has the effect of limiting, the
evidence one party can adduce in proceedings relating to the
contract; and
m) a term that imposes, or has the effect of imposing, the
evidential burden on one party in proceedings relating to the
contract. [Schedule 1, Part 1, item 1, subsections 4(a)-(m)]
[Schedule 3, Part 1, item 7, paragraphs 12BH(a)-(m)]
71. The relevant Minister may prescribe additional examples of terms of
a kind, or a term that has an effect of a kind, prescribed by the
regulations. [Schedule 1, Part 1, item 1, subsection 4(n)]
[Schedule 3, Part 1, item 7, paragraph 12BH(n)]
72. The examples provide statutory guidance on the types of terms which
may be regarded as being of concern. They do not prohibit the use
of those terms, nor do they create a presumption that those terms
are unfair.
73. Any consideration of a term of a type listed as an example is
subject to the test set out in section 3(1) of the ACL and
subsection 12BG(1) of the ASIC Act. In this context, there may be
circumstances in which the use of such a term is reasonably
necessary in order to protect a party's reasonable business
interests.
Terms permitting unilateral changes by one party to the contract
74. Paragraphs (a), (b), (d), (e), (f), (g) and (h) are examples of
types of terms that allow a party to make changes to key elements
of a contract, including terminating it, on a unilateral basis.
75. The inclusion of these examples does not prohibit unilateral
variation terms, not does it create a presumption that such terms
are unfair. Indeed, the need for the unilateral variation of
contract terms is expressly contemplated by legislation in specific
contexts, including for example Parts 4 and 5 of the Uniform
Consumer Credit Code (see also Parts 4 and 5, Schedule 1 of the
National Consumer Credit Protection Bill 2009).
Terms limiting the rights of parties to a consumer contract
76. Paragraphs (i), (k), (l) and (m) are examples of types of terms
that have the effect of limiting the rights of the party to whom
the consumer contract is presented.
77. Paragraph (i) specifically deals with limitation of liability
clauses. There are many instances in which limitations of
liability are expressly permitted by national, State or Territory
legislation for legitimate public policy reasons.
78. In this regard, subsection 5(1)(c) of the ACL and paragraph
12BI(1)(c) of the ASIC Act expressly exclude references to terms
that are required, or expressly permitted, by a law of the
Commonwealth or a State or Territory from the application of the
unfair contract terms provisions. However, this exclusion applies
only to the extent that such terms are required or expressly
permitted.
Terms which penalise a party for a breach or termination of the
contract
79. Paragraph (c) refers to terms that penalise, or have the effect of
penalising, one party for a breach or termination of the contract.
80. This provision reflects the common law concept of 'penalties'. To
be valid, a penalty imposed by a contract must be a genuine pre-
estimate of the loss likely to be suffered by the party as a result
of the breach or early termination, and should not be an arbitrary
sum. However, under the unfair contract terms provision the
relevant consideration is whether the term is unfair, within the
meaning given to that term by the provisions.
Terms which permit the assignment of a contract to the detriment of
the other party without their consent
81. Paragraph (j) refers to terms that allow for a party to assign the
contract to the detriment of the other party, without the other
party's consent.
82. This example does not prohibit the use of such clauses. Indeed,
assignment of contracts is expressly contemplated by other
legislation, for example section 166 of the Uniform Consumer Credit
Code (see also Division 2, Part 3-2, Chapter 3 and Parts 3 and 11,
Schedule 1 of the National Consumer Credit Protection Bill 2009).
Terms that define the subject matter etc of consumer contracts are
unaffected
83. Certain terms of a consumer contract are unaffected by section 2(1)
of the ACL and subsection 12BF(1) of the ASIC Act, but only to the
extent that the term:
. defines the main subject matter of a consumer contract;
. sets the 'upfront price' payable under the contract; or
. is a term required, or expressly permitted, by a law of
the Commonwealth or a State or Territory. [Schedule 1,
Part 1, item 1, section 5(1)] [Schedule 3, Part 1, item 7,
subsection 12BI(1)]
Main subject matter of the contract
84. The exclusion of terms that define the main subject matter of a
consumer contract ensures that a party cannot challenge a term
concerning the basis for the existence of the contract. [Schedule
1, Part 1, item 1, subsection 5(1)(a)] [Schedule 3, Part 1,
paragraph 12BI(1)(a)]
85. Where a party has decided to purchase the goods, services, land,
financial services or financial product that is the subject of the
contract, that party cannot then challenge the fairness of a term
relating to the main subject matter of the contract at a later
stage, given that the party had a choice of whether or not to make
the purchase on the basis of what was offered.
86. The main subject matter of the contract may include the decision to
purchase a particular type of good, service, financial service or
financial product, or a particular piece of land. It may also
encompass a term that is necessary to give effect to the supply or
grant, or without which, the supply or grant could not occur.
Upfront price
87. The upfront price payable under a consumer contract is
consideration that is:
. provided, or is to be provided, for the supply, sale or
grant under the contract; and
. is disclosed at or before the time the contract is entered
into,
but does not include any other consideration that is contingent on
the occurrence or non-occurrence of a particular event. [Schedule
1, Part 1, item 1, section 1, subsection 5(1)(b) and section 5(2)]
[Schedule 3, Part 1, item 6, subsection 12BA(1] [Schedule 3,
Part 1, item 7, paragraph 12BI(1)(b) and subsection 12BI(2)]
88. Consideration includes any amount or thing provided as
consideration for the supply of a good, service, financial service,
financial product or a grant of land. It would also include any
interest payable under a consumer contract.
89. In respect of contracts covered by the unfair contract terms
provisions in the ASIC Act, if the consumer contract is a contract
under which credit is provided, then the upfront price includes the
total amount of principal that is owed under the credit contract.
This means that consideration in the context of a credit contract
includes both the principal repayable and the interest payable
under that contract. [Schedule 3, Part 1, item 7,
subsection 12BI(3)]
90. The exclusion of upfront price means that a term concerning the
upfront price cannot be challenged on the basis that it is unfair.
Having agreed to provide a particular amount of consideration when
the contract was made, which was disclosed at or before the time
the contract was entered into, a person cannot then argue that that
consideration is unfair at a later time. The upfront price is a
matter about which the person has a choice and, in many cases, may
negotiate.
91. The upfront price would cover the cash price payable for a good,
service, financial service, financial product or land at the time
the contract is made. It would also cover a future payment or a
series of future payments.
92. The definition also requires that the upfront price must be
disclosed at or before the time the contract was entered into by
the parties. In the case of most transactions this is reasonably
straightforward, as a key pre-condition of the transaction
occurring is an understanding of the price to be paid.
93. A key consideration for a Court in considering whether a future
payment, or a series of future payments, forms the upfront price
may be the transparency of the disclosure of such a payment, or the
basis on which such payments may be determined, at or before the
time the contract is made.
94. In the context of non-financial services contracts, another
relevant consideration is compliance with section 53C of the TP Act
(which commenced on 25 May 2009), which imposes specific
obligations in relation to the disclosure of a single price in many
cases.
95. Other consideration (that is, further forms of consideration which
are not part of the upfront price) under the consumer contract that
is contingent on the occurrence or non-occurrence of a particular
event, is excluded from the determination of upfront price.
96. Terms that require further payments levied as a consequence of
something happening or not happening at some point in the duration
of the contract are covered by the unfair contract terms
provisions. Such payments are additional to the upfront price, and
are not necessary for the provision of the basic supply, sale or
grant under the contract.
Terms required as a matter of law
97. The exclusion of terms 'required, or expressly permitted, by a law
of the Commonwealth or a State or Territory' ensures that a Court
is not required to determine the fairness of terms that are
required to be included, or expressly permitted to be included, in
consumer contracts as a matter of public policy. There are many
examples of mandated consumer contracts or terms that are required
to be used or are expressly permitted to be used in order to ensure
the validity of specific transactions, which apply in the laws of
the Commonwealth, the States or the Territories. [Schedule 1, Part
1, item 1, subsection 5(1)(c)] [Schedule 3, Part 1, item 7,
paragraph 12BI(1)(c)]
Prohibited terms of consumer contracts
98. In the ACL, a term of a consumer contract is void if:
. the term is a prohibited term; and
. the contract is a standard form contract. [Schedule 1,
Part 1, item 1, section 6(1)]
99. A prohibited term is a term of a kind prescribed by the
regulations. [Part 1, Schedule 1, item 1, section 1 and section 6
(4)] No regulations are proposed to be made at the present time
and so there are no prohibited terms.
100. Any future prohibition of terms in regulations made by the Minister
is subject to:
. the Australian Government's best-practice regulation
requirements; and
. the voting process for amending the ACL set out in the
IGA,
as any regulations will form part of the ACL. [Schedule 1, Part 2,
item 11, paragraph 135(1)(c)]
101. In the ASIC Act, a term of a consumer contract is void if:
. the term is a prohibited term; and
. the contract is a standard form contract; and
. the contract is a financial product or a contract for the
supply, or possible supply of financial services.
A 'financial product' and a 'financial service' are defined in
sections 12BAA and 12BAB of the ASIC Act. [Schedule 3, Part 1,
item 7, subsection 12BJ(1)]
102. For the purposes of the ASIC Act, a prohibited term is a term of a
kind prescribed by the regulations. [Schedule 3, Part 1, item 2,
subsections 12BA(1)] [Schedule 3, Part 1, item 7,
subsection 12BJ(4)] No regulations are proposed to be made at the
present time and so there are no prohibited terms. Any future
prohibition of terms in regulations made by the Minister is subject
to:
. the Australian Government's best-practice regulation
requirements; and
. the agreement processes as may be required by the
Corporations Agreement 2002, to the extent that they
apply.
103. A party must therefore not include, rely on, purport to include or
purport to rely on, a prohibited term in a consumer contract that
is a standard form contract. A breach of these provisions would be
a contravention for the purposes of the TP Act and the ASIC Act and
are subject to a civil pecuniary penalty, as well as certain other
enforcement and remedies provisions in either Act. [Schedule 1,
Part 1, item 1, sections 6(2) and (3)] [Schedule 3, Part 1, item 7,
subsections 12BJ(2) and (3)]
104. The reference to rely on in relation to a term of a consumer
contract, includes the following conduct:
. an attempt to enforce the term;
. an attempt to exercise a right conferred, or purportedly
conferred, by the term; and
. assert the existence of a right conferred or purportedly
conferred by the term. [Schedule 1, Part 1, item 1,
section 1] [Schedule 3, Part 1, item 3, subsection
12BA(1)]
105. This ensures that claims made by a party in respect of the rights
conferred on it by the term are also covered by the provision, in
addition to attempts by that party to enforce or exercise the
rights conferred by the term.
106. If a prohibited term in a consumer contract is void, the contract
will continue to bind the parties if it is capable of operating
without the prohibited term. [Schedule 1, Part 1, item 1, section
6(5)] [Schedule 3, Part 1, item 7, subsection 12BJ(5)]
Meaning of standard form contract
107. To account for circumstances where a question about whether a
contract is in a standard form is the subject of dispute between
the parties in proceedings, there is a rebuttable presumption that
a contract the subject of proceedings is a standard form contract.
The respondent in those proceedings must then show that, on the
balance of probabilities, the contract is not in a standard form.
[Schedule 1, Part 1, item 1, sections 7(1) and (2)] [Schedule 3,
Part 1, item 7, subsections 12BK(1) and (2)]
108. If a party wishes to argue that the contract has been negotiated
and is not in a standard form, then the rebuttable presumption
requires the party that presents the contract to show that the
contract is not a standard form contract. This reflects that:
. the claimant will usually only have evidence of the
existence of one contract - their own; and
. the respondent is best placed to bring evidence regarding
the nature of the contracts it uses and the way in which
it deals with other parties to such contracts, including
whether negotiations have been entered into.
109. In determining whether a contract is a standard form contract, the
Court may consider any matter it thinks relevant. However, it must
have regard to certain factors. These include whether:
. one of the parties has all or most of the bargaining power
relating to the transaction;
. the contract was prepared by one party before any
discussion relating to the transaction commenced;
. another party was, in effect, required to accept or reject
the terms in the contract (other than terms excluded by
section 5(1) of the ACL or subsection 12BI(1) of the
ASIC Act) in the form in which they were presented (that
is, on a 'take-it-or-leave-it' basis);
. another party was given an effective opportunity to
negotiate the terms of the contract that were not terms
excluded by section 5(1) of the ACL or subsection 12BI(1)
of the ASIC Act;
. the terms of the contract (other than terms excluded by
section 5(1) of the ACL or subsection 12BI(1) of the
ASIC Act) take into account the specific characteristics
of another party or the particular transaction; and
. any other matter prescribed by the regulations. [Schedule
1, Part 1, item 1, section 7(2)] [Schedule 3, Part 1, item
7, subsection 12BK(2)]
110. Additional factors may be added to the list of factors by way of
regulations made by the relevant Minister. This will permit the
expansion of the list in response to changes in markets and the way
in which standard form contracts are constructed and used. The
making of such regulations would be subject to the same conditions
as those which apply to the prescription of prohibited terms (see
paragraphs 2.80 and 2.82 of the explanatory memorandum).
Contracts exempted from the unfair contract terms provisions
111. Certain contracts are excluded from the application of the unfair
contract terms provisions of the ACL to the extent that:
. the contract relates to certain shipping contracts; and
. the contract is a constitution of a company, managed
investment scheme or other kind of body. [Schedule 1,
Part 1, item 1, section 8]
112. A contract is excluded from the application of the unfair contract
terms provisions in the ASIC Act to the extent that the contract is
a constitution of a company, managed investment scheme or other
kind of body. [Schedule 3, Part 1, item 7, section 12BL]
Shipping contracts
113. The unfair contract terms provisions will not apply to consumer
contracts which are shipping contracts. Shipping contracts
include:
. contracts of marine salvage or towage;
. a charter party of a ship; or
. a contract for the carriage of goods by ship. [Schedule
1, Part 1, item 1, section 8(1)]
114. A ship is given the meaning it has under section 3 of the Admiralty
Act 1988 for the purposes of the unfair contract terms provisions
in the ACL. [Schedule 1, Part 1, item 1, section 1]
115. These shipping contracts are already subject to a comprehensive
legal framework (nationally and internationally) that deals with
contractual terms in a maritime law context.
116. The reference to a contract for the carriage of goods by ship
includes a reference to any contract covered by a sea carriage
document within the meaning of the amended Hague Rules referred to
in subsection 7(1) of the Carriage of Goods by Sea Act 1991.
[Schedule 1, Part 1, item 1, section 8(2)]
117. The amended Hague Rules consists of the text set out in Schedule 1
of the Carriage of Goods by Sea Act which, in its unmodified form,
is the English translation of Articles 1 to 10 of the International
Convention for the Unification of Certain Rules of Law relating to
Bills of Lading, done at Brussels on 25 August 1924 (otherwise
referred to as the Brussels Convention). The Brussels Convention
was amended by Articles 1 to 5 of the Visby Protocol on 23 October
1968, and Article II of the SDR Protocol on 21 December 1979.
Constitutions of companies etc
118. The unfair contract terms provisions will not apply to contracts
which are constitutions of companies, managed investment schemes or
other kinds of bodies. [Schedule 1, Part 1, item 1, section 8(3)]
[Schedule 3, Part 1, item 7, subsection 12BL(2)]
119. A constitution is given the meaning it has under section 9 of the
Corporations Act 2001. [Schedule 1, Part 1, item 1, section 1]
Effect of the Insurance Contracts Act 1984 on certain consumer
contracts
120. Section 15 of the Insurance Contracts Act 1984 provides that a
contract of insurance (as defined by that Act) is not capable of
being made the subject of relief under any other Commonwealth Act,
a State Act or an Act or Ordinance of a Territory. In this context
'relief' means relief in the form of:
. the judicial review of a contract on the ground that it is
harsh, oppressive, unconscionable, unjust, unfair or
inequitable; or
. relief for insureds from the consequences in law of making
a misrepresentation,
but does not include relief in the form of compensatory damages.
The effect of section 15 is to mean that the unfair contract terms
provisions of either the ACL or the ASIC Act do not apply to
contracts of insurance covered by the Insurance Contracts Act 1984,
to the extent that that Act applies.
Enforcement and remedies
Enforcement and remedies in relation to a finding that a term is
unfair or is a prohibited term
121. A claimant who is a party to a contract covered by the unfair
contract terms provisions can seek the remedies available under the
Federal Court of Australia Act 1976 (FCA Act), particularly those
orders that may be made as part of the exercise of the Court's
original jurisdiction (as set out in Part III, Division 1 of the
Federal Court of Australia Act 1976; see also section 86(1) of the
TP Act and section 12GJ of the ASIC Act).
122. In this respect, the Federal Court may, in accordance with the
Federal Court of Australia Act 1976:
. make binding declarations of right, whether or not any
consequential relief is or could be claimed (section 21);
. determine matters completely and finally, that is, the
Court has the power to grant, either absolutely or on such
terms or conditions as the Court thinks just, all remedies
to which any of the parties appears to be entitled in
respect of a legal or equitable claim properly brought
forward in the matter (section 22); and
. make orders (including interlocutory orders) and issue, or
direct the issue of, writs as the Court thinks appropriate
(section 23).
123. Without limiting any other power of the Court to make declarations:
. the Australian Competition and Consumer Commission (ACCC)
may seek a declaration from a Court that a term of a
consumer contract is an unfair term or a prohibited term;
and
. the Australian Securities and Investments Commission
(ASIC) may seek a declaration from a Court that a term of
a consumer contract is an unfair term or a prohibited term
if the contract is:
- a financial product; or
- for the supply, or possible supply of, financial
services. [Schedule 2, Part 7, item 74, section 87AC]
[Schedule 3, Part 8, item 55, section 12GND]
124. A finding that a term of a consumer contract is an unfair term or a
prohibited term under sections 2(1) and 6(1) of the ACL and
subsections 12BF(1) or 12BJ(1) of the ASIC Act is not a
contravention for the purposes of the enforcement of the ACL or
Subdivision BA of the ASIC Act. [Schedule 1, Part 2, item 5,
section 4KC] [Schedule 3, Part 1, item 7, section 12BM]
125. Where a Court has declared a term in a consumer contract to be an
unfair term or a prohibited term, then it is a contravention of the
ACL or the ASIC Act for a person to apply or rely on, or purport to
apply or rely on, that term.
126. In such circumstances, the Court may exercise certain enforcement
powers specified in the TP Act or the ASIC Act. A reference to a
contravention of a provision of the ACL includes a reference to
applying or relying on, or purporting to apply or rely on, a
declared term of a consumer contract for the purposes of the
Court's power to:
. grant an injunction in such terms as the Court determines
appropriate;
. make an order prohibiting payment or transfer of moneys or
other property to preserve assets pending the
determination of a matter; and
. make an order to redress non-party consumers (other than
an award of damages) as the Court thinks appropriate; and
. make any other orders the Court thinks appropriate, such
as specific performance, payment of compensation or
exemplary damages.
127. The Court has similar powers in respect of a contravention of a
provision in the Part 2, Division 2 of the ASIC Act.
128. For the purposes of the enforcement provisions, the references to a
consumer contract, a prohibited term in a consumer contract and
rely on and unfair in relation to a term of a consumer contract has
the same meaning given by the ACL. [Schedule 2, Part 7, items 27,
30, 31 and 32, section 4(1)]
Enforcement and remedies in relation to a provision of the ACL
129. From the time of the commencement of the unfair contract terms
provisions, the new penalties, enforcement powers and consumer
redress will also apply in respect of prohibited terms and, in some
respects, unfair terms that are the subject of a declaration (see
Chapters 4 to 9 of the explanatory memorandum).
Injunctions and actions for damages
130. In circumstances where a person has engaged or is proposing to
engage in conduct that either constitutes or would constitute a
contravention of a provision of the ACL or of Part 2, Division 2 of
the ASIC Act, the Court may grant, on the application of the ACCC
or ASIC or any other person:
. an injunction in such terms as the Court determines to be
appropriate (subsection 80(1) of the TP Act and section
12GD of the ASIC Act); or [Schedule 2, Part 7, items 40
to 42, paragraph 80(1)(a)-(d)]
. an amount of damages to another party who suffers loss or
damage as a result of that conduct (subsection 82(1) of
the TP Act and subsection 12GF(1) of the ASIC Act).
[Schedule 2, Part 7, item 44, subsection 82(1)] [Schedule
3, Part 8, item 39, subsection 12GF(1)]
131. For the purposes of the injunction power under subsection 80(1) of
the TP Act and section 12GD of the ASIC Act, a reference to a
contravention of the ACL or of Part 2, Division 2 of the ASIC Act
includes a reference to applying or relying on, or purporting to
apply or rely on, a term of a consumer contract that the Court has
declared under to be an unfair term or a prohibited term.
[Schedule 2, Part 7, item 43, subsection 80(1B)] [Schedule 3, Part
8, item 37, subsection 12GD(9)]
Non-punitive and other orders
132. The Court may make non-punitive orders under subsection 86C(2) of
the TP Act and subsection 12GLA(2) of the ASIC Act in respect of
contraventions of either Act. These orders include a community
service order or a probation order. For the purposes of allowing
the Court to make an order under these subsections, a contravention
of a provision of the ACL or of the unfair contract terms
provisions of the ASIC Act, is included in the definition of
'contravening conduct'. [Schedule 2, Part 7, items 51 and 52,
subsection 86C(4)] [Schedule 3, Part 8, item 39, subsection
12GLA(4)]
133. The Court may also make any other orders as it thinks appropriate
against a person who engages in the conduct that either constitutes
or would constitute a contravention of a provision of the ACL under
to subsection 87(1) of the TP Act and a contravention of the unfair
contract terms provisions of the ASIC Act under section 12GM(1) of
the ASIC Act. The Court may make such an order whether or not it:
. grants an injunction (under section 80 of the TP Act or
section 12GD of the ASIC Act);
. makes an order of damages (under section 82 of the TP Act
or section 12GF of the ASIC Act; or
. makes a non-punitive order or adverse publicity punitive
order (under section 86C and 86D of the TP Act or sections
12GLA and 12GLB of the ASIC Act). [Schedule 2, Part 7,
item 56, subsection 87(1)]
134. The Court may also make an order under subsection 87(1A) of the
TP Act and subsection 12GM(2) of the ASIC Act against a person who
has contravened or was involved in contravening a provision of the
ACL or of Part 2, Division 2 of the ASIC Act and has caused or is
likely to cause another person to suffer loss or damage as a
result. An application may be made under these subsections in
relation to a contravention even if an application had not been
made under another provision in relation to that contravention.
The ACCC or ASIC may also make an application on behalf of the
person who has suffered the loss or damage. [Schedule 2, Part 7,
item 57, paragraphs 87(1A)(a) and (b) and (1B)(a)] [Schedule 2,
Part 7, item 58, subsection 87(1C)]
135. For the purposes of an order under subsection 87(1A) of the TP Act
and subsection 12GM(2) of the ASIC Act, a reference to a
contravention of the ACL or of Part 2, Division 2 of the ASIC Act
includes a reference to applying or relying on, or purporting to
apply or rely on, a term of a consumer contract that the Court has
declared under to be an unfair term or a prohibited term.
[Schedule 2, item 59, subsection 87(5)] [Schedule 3, Part 8, item
42, subsection 12GM(10)]
136. In addition, under section 87A of the TP Act and section 12GN of
the ASIC Act, the Court may also make an order to prohibit a
payment or a transfer of money or other property where, in relation
to a contravention of a provision of the ACL or the unfair contract
terms provisions of the ASIC Act, an application has been made for
an injunction, damages or an order by the Minister, the ACCC or
ASIC. [Schedule 2, Part 7, item 70, paragraph 87A(1)(b] Schedule
2, Part 7, item 71, paragraph 87A(1)(c)] [Schedule 2, Part 7, item
72, paragraph 87A(1)(d)] [Schedule 3, Part 1, items 43 and 44,
paragraph 12GN(1)(c) and subsection 12GN(9)]
137. For the purposes of an order under section 87A of the TP Act, a
reference to a contravention of the ACL includes a reference to
applying or relying on, or purporting to apply or rely on, a term
of a consumer contract that the Court has declared under to be an
unfair term or a prohibited term. [Schedule 2, Part 7, item 73,
subsection 87A(9)]
Jurisdiction of Courts
138. As the ACL applies as a law of the Commonwealth to the conduct of
corporations and the Federal Court of Australia has jurisdiction
with respect to the ACL (under section 86 of the TP Act). However,
the TP Act has been amended to confer jurisdiction on the Federal
Court in any matter in which a civil proceeding has been instituted
in relation to a finding that a term of a consumer contract is an
unfair term or a prohibited term under sections 2(1) or 6(1) of the
ACL respectively. This is because, as outlined above, such a
finding is not a contravention of the ACL. [Schedule 2, Part 7,
item 47, subsection 86(1)]
139. The TP Act has also been amended to confer jurisdiction to the:
. Federal Magistrates Court;
. Courts of the States with Federal jurisdiction; and
. Courts of the Territories,
jurisdiction in respect of any matter in which a civil
proceeding has been instituted under a provision of the ACL.
[Schedule 2, Part 7, item 48, subsection 86(1A), item 49,
subsection 86(2)]
140. Sections 86A and 86B of the TP Act includes references to a
provision of the ACL for the purposes of transferring certain
proceedings from:
. the Federal Court to a court of a State or Territory and
the Family Court of Australia in certain circumstances;
and
. a court of a State or Territory (other than a Supreme
Court) to the Federal Court or another State or Territory
Court in certain circumstances. [Schedule 2, Part 2, item
50, paragraphs 86A(1)(b), (4)(b) and (5)(b) and 86B(1)(b)]
Other specific amendments to the TP Act
141. Subsection 75B(1) of the TP Act is amended to incorporate reference
to the ACL in interpreting when a person is involved in a
contravention under Part VI of the TP Act. For the purposes of
Part VI of the TP Act, a reference to a person who has contravened
the ACL is a reference to a person who has:
. aided, abetted, counselled, or procured the contravention;
. induced, where by threats, promises or otherwise, the
contravention;
. been in any way, directly or indirectly, knowingly
concerned in, or party to, the contravention; or
. conspired with others to effect the contravention.
[Schedule 2, Part 7, items 33 and 34, subsection 75B(1)]
142. Subparagraph 78(a)(iii) of the TP Act expressly provides that a
criminal proceeding cannot be brought against a person by reason
only that the person has contravened a provision of the ACL. A
civil proceeding must be instituted with respect to a contravention
of the ACL. [Schedule 2, Part 7, item 38 and 39, paragraphs 78(a)-
(d)]
143. Section 83 of the TP Act includes references to a contravention of
a provision of the ACL for the purpose of treating a finding of
fact by a Court as evidence in proceedings under section 82 (action
for damages) or subsection 87(1A) (other orders) of the TP Act.
[Schedule 2, Part 7, item 45, section 83]
144. Section 84 of the TP Act includes references to a contravention of
a provision of the ACL for the purposes of establishing the state
of mind of a body corporate or a person with respect to conduct
engaged in by the body corporate or person. [Schedule 2, Part 7,
item 46, paragraphs 84(1)(b) and 84(3)(b)]
Application and transitional provisions
145. The unfair contract terms provisions (set out in Schedule 1 of the
Bill in respect of the ACL and in Schedule 3, Part 1 of the Bill in
respect of the ASIC Act) will take effect on the date on which
Schedule 1 and Schedule 3, Part 1 commences.
146. The Bill provides that this date may be proclaimed by the Governor-
General. If the Governor-General has not proclaimed the
commencement of the provisions within six months of the date of the
Royal Assent, then the provisions will commence on the first day
after a day six months after the date of Royal Assent. [Section 2]
147. The Government has announced its intention that the provisions
should commence on 1 January 2010.
148. The unfair contract terms provisions of the TP Act and the ASIC Act
apply to new consumer contracts entered into on or after the date
on which the provisions commence. [Schedule 1, Part 1, Item 2(1)]
[Schedule 3, Part 1, Item 8(1)]
149. The unfair contract terms provisions of the TP Act or the ASIC Act
do not apply, however, to consumer contracts entered into before
the date on which the provisions commence, unless such a contract
is:
. renewed on or after that commencement, in which case the
unfair contract terms provisions apply to the contract as
renewed on and from the day on which the renewal takes
effect (the renewal day) in relation to conduct that
occurs on or after the renewal day; or
. varied on or after that commencement, in which case the
unfair contract terms provisions apply to the contract as
varied on and from that day on which the variation takes
effect (the variation day), in relation to conduct that
occurs on or after the variation day. [Schedule 1, Part
1, Item 2(2)] [Schedule 3, Part 1, Item 8(2)]
150. While the unfair contract terms provisions of the TP Act and the
ASIC Act apply to consumer contracts to the extent that they are
renewed or varied after the date on which the provisions commence,
the unfair contract terms provisions do not apply to a consumer
contract to the extent that the operation of the provisions would
result in an acquisition of property from a person otherwise than
on just terms, within the meaning of section 51(xxxi) of the
Australian Constitution. [Schedule 1, Part 1, Item 2(3)] [Schedule
3, Part 1, Item 8(3)]
Do not remove section break.
Outline of chapter
151. The Trade Practices Amendment (Australian Consumer Law) Bill 2009
(the Bill) amends the Trade Practices Act 1974 (TP Act) to
establish a single, national consumer law - the Australian Consumer
Law (ACL); which will apply as a law of the Commonwealth and each
of the States and Territories. A new Part XI of the TP Act will
make provision for the application, administration and amendment of
the ACL. The ACL will be set out in a new Schedule 2 of the
TP Act.
Context of amendments
152. The ACL will be a law of the Commonwealth and of each State and
Territory. In accordance with the Council of Australian
Government's (COAG) 2 October 2008 decision, the ACL will be
implemented as an application law, with the Australian Government
as the lead legislator.
153. An application law scheme is necessary as the Australian Government
has the power to legislate in respect of 'foreign corporations and
trading or financial corporations formed within the limits of the
Commonwealth', within the meaning of section 51(xx) of the
Australian Constitution. However, the use of an application law
model will not preclude a State or Territory referring all or part
of its consumer law powers or functions to the Australian
Government at a later time.
154. The ACL will form a Schedule to the TP Act. The Bill will also
amend the relevant consumer protection provisions in the TP Act and
the investor protection provisions of the Australian Investments
and Securities Commission Act 2001 (ASIC Act) to ensure that they
are consistent with the ACL. A further Bill will amend the ACL to
include the remainder of the consumer law reforms, as agreed by
COAG in 2008. This will involve transferring and amending, as
necessary, the current consumer protection provisions of the
TP Act.
155. In accordance with the National Partnership Agreement to Deliver a
Seamless National Economy (NPA), the States and Territories are
required to enact legislation by 31 December 2010 to apply the ACL
(as set out in the Schedule and as amended from time to time) as
the law of their respective jurisdictions.
156. The ACL will be supported by the Intergovernmental Agreement (IGA).
The final form of the IGA will be considered by COAG. A draft
text of the IGA was endorsed by the Ministerial Council on Consumer
Affairs on 8 May 2009.
157. The IGA will set out the manner in which the ACL will be
implemented, the consultation and voting process for amending it
and arrangements for its administration and enforcement. The IGA
also makes provision for cooperation with New Zealand on consumer
policy, law and enforcement.
Summary of new law
158. The Bill will amend the TP Act to insert a new Part XI. Part XI
will apply the ACL as a law of the Commonwealth, facilitate its
application as a law of each State and Territory and make provision
for its administration, enforcement and amendment.
159. Part XI of the TP Act provides that the ACL applies as a law of the
Commonwealth to the conduct of corporations, except in relation to
financial products and the supply, or possible supply, of services
that are financial services. Financial products and services are
dealt with separately under the ASIC Act.
160. Part XI of the TP Act provides for participating States and
participating Territories (collectively called participating
jurisdictions) to enact an applied Australian Consumer Law (applied
ACL) as part of the law of their respective jurisdictions. A
participating jurisdiction is a party to the IGA that has applied
the ACL, with or without modification.
161. Part XI facilitates the application of the ACL in participating
jurisdiction by:
. allowing participating jurisdictions to confer functions
or powers, or impose duties, on a Commonwealth entity for
the purposes of an applied ACL;
. conferring original and appellate jurisdiction on the
Federal Court in relation to a matter arising under the
ACL in a participating Territory's law;
. providing that there is no doubling-up of liabilities with
respect to a breach of the ACL as set out in the TP Act,
and an applied ACL; and
. confirming that the ACL provisions in the TP Act do not
exclude the operation of an application law of a
participating jurisdiction to the extent that they are
capable of operating concurrently.
Comparison of key features of new law and current law
|New law |Current law |
|The ACL applies as a law |No equivalent. |
|of the Commonwealth to | |
|the conduct of | |
|corporations. | |
|The applied ACL consists |No equivalent in respect |
|of: |of the ACL, however a |
|Schedule 2; |similar provision exists |
|the remaining provisions |in relation to the |
|of the TP Act (except |Competition Code (section|
|sections 2A, 4KB, 5, 6 |150C of Part XIA of the |
|and 172) so far as they |TP Act). |
|relate to Schedule 2; and| |
| | |
|the regulations under the| |
|TP Act so far as they | |
|relate to Schedule 2. | |
|An application law of a |No equivalent in respect |
|participating State or |of the ACL, however a |
|Territory may confer |similar provision exists |
|functions or powers, or |in relation to the |
|impose duties, on a |Competition Code (section|
|Commonwealth entity for |150F of Part XIA of the |
|the purposes of the |TP Act). |
|applied ACL, but only to | |
|the extent that conferral| |
|or imposition does not | |
|contravene the | |
|constitutional doctrines | |
|that bind the | |
|Commonwealth, or | |
|otherwise exceed the | |
|Commonwealth's | |
|legislative power. | |
|A duty is not taken to be|No equivalent in respect |
|imposed on a Commonwealth|of the ACL, however a |
|entity by an application |similar provision exists |
|law of a participating |in relation to the |
|State or Territory if the|Competition Code |
|legislative power of that|(sections 150F and 150FA |
|State or Territory is |of Part XIA of the |
|sufficient to support the|TP Act). |
|duty concerned. | |
|However, if the | |
|Commonwealth's | |
|legislative power is | |
|sufficient to support the| |
|imposition of a duty in | |
|circumstances where a | |
|State or Territory | |
|legislative power is not,| |
|then the duty is taken to| |
|be imposed by the TP Act | |
|to the extent necessary | |
|to ensure the validity of| |
|the duty. | |
|An application law may |No equivalent in respect |
|impose a duty on a |of the ACL, however a |
|Commonwealth entity if |similar provision exists |
|the law confers a power |in relation to the |
|or function on the entity|Competition Code (section|
|in circumstances that |150FB of Part XIA of the |
|gives rise to an |TP Act). |
|obligation on the entity | |
|to perform the function | |
|or exercise the power. | |
|An application law of a |No equivalent in respect |
|participating State or |of the ACL, however a |
|Territory is capable of |similar provision exists |
|operating concurrently |in relation to the |
|with the TP Act, unless |Competition Code (section|
|the application law is |150G of Part XIA of the |
|directly inconsistent |TP Act). |
|with the provisions of | |
|the TP Act. | |
|A person who commits an |No equivalent in respect |
|offence against both the |of the ACL, however a |
|TP Act and an application|similar provision exists |
|law and is punished or |in relation to the |
|liable to pay a pecuniary|Competition Code (section|
|penalty under an |150H of Part XIA of the |
|application law, cannot |TP Act). |
|then be punished or | |
|subject to a pecuniary | |
|penalty under the TP Act.| |
Detailed explanation of new law
Division 1 - Application of the Australian Consumer Law to the Commonwealth
Application of the Australian Consumer Law in relation to
corporations
162. The ACL applies as a law of the Commonwealth to the conduct of
corporations. The Australian Government has the power to legislate
in respect of 'foreign corporations and trading or financial
corporations formed within the limits of the Commonwealth', within
the meaning of section 51(xx) of the Australian Constitution.
[Schedule 1, Part 2, item 11, subsection 130(1)]
163. Schedule 1, Part 1 of the Bill in respect of the ACL, which
concerns unfair contract terms, specifically applies to, and in
relation to, a consumer contract to which a corporation is a party,
and not only to contracts where only corporations are parties.
[Schedule 1, Part 2, item 11, subsection 130(2)]
164. The reference to the phrase 'to, and in relation to' in subsection
130(2) extends the application of Part 2 of the ACL (relating to
unfair contract terms) to cover corporations as victims of
misconduct, as well as where they may be perpetrators (see Chapter
2 of this explanatory memorandum).
Division does not apply to financial services
165. The ACL will apply to all parts of the economy, except for
financial services. In accordance with the carve-out of financial
services in relation to the consumer protection provisions set out
in section 51AF of the TP Act, Part XI, Division 1 of the TP Act
and Part 2 of the ACL do not apply to financial services, which are
defined in section 4 of the TP Act. [Schedule 1, Part 2, item 11,
section 131]
166. While this is the case, the Australian Government has committed to
maintaining the consistency of consumer protection provisions in
the TP Act and the ASIC Act, so far as it is practical to do so.
167. The Bill makes amendments to the ASIC Act, which correspond to
those made in respect of the TP Act, except where it may not be
practical to do so.
Saving of other laws and remedies
168. The Bill includes a savings provision in respect of the concurrent
operation of other laws and remedies in States and Territories.
While the ACL applies as a law of the Commonwealth, it is not
intended to exclude or limit the concurrent operation of any law of
a State or Territory. [Schedule 1, Part 2, item 11, section 132]
169. To the extent that there is an inconsistency between a law of the
Commonwealth and State, section 109 of the Australian Constitution
provides that the Commonwealth law will prevail.
Division 2 - Application of the Australian Consumer Law to the States and
Territories
170. The IGA provides that the ACL will be implemented as a law of the
Commonwealth and of each State and Territory by means of an
application law, with the Commonwealth as the lead legislator. The
object of the new Part XI, Division 2 of the TP Act is to
facilitate the application of the ACL by participating
jurisdictions. [Schedule 1, Part 2, item 11, section 134]
171. Each participating jurisdiction will apply the ACL by means of an
application law. For the purposes of Part XI, Division 2 of the
TP Act, an application law is:
. a law of a participating jurisdiction that applies the
applied Australian Consumer Law either with or without
modifications, as a law of the participating jurisdiction;
. any regulations or other legislative instrument made under
a law of a participating jurisdiction that applies the
ACL; or
. the applied ACL, applying as a law of the participating
jurisdiction, either with or without modifications.
[Schedule 1, Part 2, item 11, section 133]
172. The meaning of apply is to apply the applied ACL by references:
. as in force from time to time; or
. as in force at a particular time. [Schedule 1, Part 2,
item 11, section 133]
173. A participating jurisdiction is a participating State or
participating Territory. A participating jurisdiction:
. is a party to the IGA; and
. applies the applied ACL as a law of the State or
Territory, either with or without modifications.
[Schedule 1, Part 2, item 11, section 133]
174. A Territory means the Australian Capital Territory or the Northern
Territory of Australia. [Schedule 1, Part 2, item 11, section 133]
The applied Australian Consumer Law
175. An applied ACL is defined, according to the context, as either the
text described in section 135 of Part XI of the TP Act, or that
text, applying as a law of a participating jurisdiction, with or
without modifications (which include additions, submissions and
substitutions). [Schedule 1, Part 2, item 11, section 133]
176. Section 135 provides that an applied ACL consists of:
. Schedule 2;
. the remaining provisions of the TP Act (except for
sections 2A, 4KB, 5, 6 and 172) to the extent that they
relate to Schedule 2; and
. the regulations prescribed under the TP Act to the extent
that they relate to any provision covered by Schedule 2 or
the remaining provisions. [Schedule 1, Part 2, item 11,
subsection 135(1)]
177. The 'remaining provisions of the TP Act' refers to those provisions
necessary to given effect to or define the provisions of the ACL,
as set out in Schedule 2. In making regulations which relate to
the ACL, the Minister will be required to follow the ACL amendment
process set out in the IGA.
178. The IGA provides that the Australian Government, in agreement with
the required number of States and Territories (being four
jurisdictions, of which three must be States), may amend the ACL,
provided certain formal requirements have been met. Where the
Australian Parliament has then enacted such agreed modifications to
the ACL, the provisions set out in paragraphs 135(1)(b) and (c) are
to be modified, as necessary, to fit in with Schedule 2. In
particular, references to 'corporations' in the applied ACL are
intended to include to persons who are not corporations. [Schedule
1, Part 2, item 11, subsection 135(2)]
Conferral of functions etc on Commonwealth entities and officers
179. Sections 136 to 138 of Part XI of the TP Act are intended to
facilitate the conferral of functions and powers, and the
imposition of duties on a Commonwealth entity or an officer of the
Commonwealth by participating jurisdictions.
180. A Commonwealth entity means an authority of the Commonwealth or an
officer of the Commonwealth. For these purposes, a Commonwealth
authority might relevantly include the Australian Competition and
Consumer Commission, the Australian Securities and Investments
Commission or the Administrative Appeals Tribunal. [Schedule 1,
Part 2, item 11, section 133]
181. An officer of the Commonwealth includes:
. a Minister of the Australian Government;
. a person who holds an office established by or under an
Act; or an appointment made under an Act; or an
appointment made by the Governor-General or a Minister
(but not under an Act);
. a person who is a member or officer of an authority of the
Commonwealth; and
. a person who is in the service or employment of the
Commonwealth, or of an authority of the Commonwealth; or
employed or engaged under an Act. [Schedule 1, Part 2,
item 11, section 133]
Jurisdiction of the Federal Court
182. A participating Territory may confer exclusive jurisdiction
(whether original or appellate) on the Federal Court of Australia
(Federal Court) with respect to a matter arising under the applied
ACL. [Schedule 1, Part 2, item 11, section 136]
183. The Federal Court does not, however, have jurisdiction to determine
a matter arising under the applied ACL of a participating State.
This reflects the decision of the High Court of Australia in Re
Wakim; Ex parte McNally [1999] HCA 27, where the Court found that
it was unconstitutional for State laws to confer jurisdiction on
Courts with federal jurisdiction. Accordingly, proceedings under
an applied ACL may be commenced in relevant Courts or tribunals of
a participating State, but not in the Federal Court.
184. Matters arising under the applied ACL may be subject to the cross-
vesting scheme which applies in respect of Federal, State and
Territory Courts. Division 2 of Part XI of the TP Act does not
affect the operation of any other law of the Commonwealth, or any
law of a State or Territory, with respect to the cross-vesting of
jurisdiction. [Schedule 1, Part 2, item 11, section 137]
Conferral of functions etc on Commonwealth entities
185. For the purposes of the applied ACL, an application law of a
participating jurisdiction may confer functions or powers, or
impose duties on a Commonwealth entity with the consent of the
Australian Government.
186. An application law is taken to impose a duty on a Commonwealth
entity if the law confers a function or power on the entity in
circumstances that give rise to an obligation on the entity to
perform the function or exercise the power. An application law may
not, however, confer a power or function, or impose a duty, to the
extent to which the conferral or imposition, or the authorisation,
would contravene any constitutional doctrines that bind the
Commonwealth, or the authorisation would otherwise exceed the
legislative power of the Commonwealth. Further, the Commonwealth
entity is not permitted to perform a duty or function, or exercise
a power, under an application law unless the conferral or
imposition is in accordance with the agreement between the
Australian Government and the State or Territory concerned.
[Schedule 1, Part 2, item 11, sections 133, 138 and 140]
How a duty is imposed
187. If a duty is imposed on a Commonwealth entity by a participating
jurisdiction, section 139 sets out the method in which the duty may
be imposed. However, this provision is not intended to limit the
operation of section 138, which permits the Commonwealth to consent
to a conferral of a function or power or imposition of a duty under
an application law. [Schedule 1, Part 2, item 11, subsections
139(1) and (6)]
188. A participating jurisdiction may only impose a duty on a
Commonwealth entity where that participating State's or Territory's
legislative power is sufficient to support the duty and imposing
the duty would be consistent with the constitutional doctrines
restricting the duties that may be imposed on the Commonwealth
entity. [Schedule 1, Part 2, item 11, subsection 139(2)]
189. In circumstances where the legislative power of the Commonwealth is
sufficient to support the imposition of a duty but the legislative
powers of the participating State or Territory are not, then the
duty is taken to be imposed by the TP Act to the extent necessary
to ensure the validity of the purported imposition of duty.
[Schedule 1, Part 2, item 11, subsection 139(3)]
190. In such cases, the Australian Parliament will rely on all of its
constitutional powers to support the imposition of a duty on a
Commonwealth entity by the TP Act. However, a duty is only taken
to be imposed by the TP Act to the extent that the imposing duty is
within the Commonwealth's legislative powers and is consistent with
the Australian Constitution. [Schedule 1, Part 2, item 11,
subsections 139(4) and (5)]
Application laws may operate concurrently with the TP Act
191. The TP Act is not intended to exclude the operation of any
application law of a participating jurisdiction. As a result, an
application law can operate concurrently with the TP Act, unless it
is directly inconsistent with a provision in the TP Act. [Schedule
1, Part 2, item 11, section 141]
No 'doubling-up' of liabilities
192. If an act or omission is an offence against the TP Act and an
offence against an application law of a participating jurisdiction
and the offender has been punished for an offence under the applied
law, then that offender cannot be punished for a like offence under
the TP Act. Similarly, if a person is ordered to pay a civil
pecuniary penalty for a breach of a provision under an application
law of a participating jurisdiction, the person is not subject to a
pecuniary penalty under the TP Act in respect of the same conduct.
[Schedule 1, Part 2, item 11, section 142]
193. It is expected that the application laws of participating
jurisdictions will provide for the reverse protection for persons
punished or subject to a civil pecuniary penalty under the TP Act.
Division 3 - Miscellaneous
194. Section 143 provides that, unless the contrary intention appears or
the context would otherwise require, an instrument to the ACL does
not need to refer specifically to the applied ACL of each
participating jurisdiction. A reference in any instrument to the
ACL is taken to be a reference to:
. the ACL as applied under Part XI, Division 1 set out in
this Bill; and
. the applied ACL of any or all of the participating
jurisdictions. [Schedule 1, Part 2, item 11, section 143]
195. An instrument under the ACL is any document prepared or made
pursuant to a provision of the ACL. It is not limited to
legislative instruments made under the Legislative Instruments
Act 2003.
Application and transitional provisions
196. The ACL provisions (set out in Schedule 1 of the Bill) will take
effect on the date on which Schedule 1 commences.
197. The Bill provides that this date may be proclaimed by the Governor-
General. If the Governor-General has not proclaimed the
commencement of the provisions within six months of the date of the
Royal Assent, then the provisions will commence on the first day
after a day six months after the date of Royal Assent. (Section 2)
198. The Government has announced its intention that the ACL (which for
current purposes includes on the unfair contract terms provisions)
should commence on 1 January 2010.
Consequential amendments
Interpretation
199. The Bill amends the interpretation provisions in subsection 4(1) to
insert a new definition of the Australian Consumer Law and
provision of the ACL. The Bill defines the ACL as Schedule 2 to
the TP Act, and provides that a provision of the ACL has the
meaning given by section 4KB. [Schedule 1, Part 2, item 3,
subsection 4(1)] [Schedule 1, Part 2, item 4, subsection 4(1)]
200. In the TP Act, a reference to the ACL is taken to be a reference to
the ACL as applied under Division 1 of Part XI of the TP Act. This
does not apply to the following provisions of the TP Act:
. the definitions of 'Australian Consumer Law' and
'provision' in subsection 4(1);
. section 4KB;
. Part XI; and
. Schedule 2. [Schedule 2, Part 7, item 5, subsection
4KB(1) and (2)]
201. A reference in the TP Act (other than in Part XI and Schedule 2) to
one or more provisions of the ACL is a reference to that provision
or those provisions as applied by Part XI of the TP Act. [Schedule
1, Part 2, item 5, subsection 4KB(3)]
202. Sections 2(1) and 6(1) of the ACL provide that an unfair term or a
prohibited term in a consumer contract is taken to be void. A
finding that a contract term is void under these sections does not
amount to a contravention of the ACL to which the remedies under
Part VI of the TP Act apply. [Schedule 1, Part 2, item 5, section
4KC]
Extended application of Parts IV, IVA, V, VB and VC and the Australian
Consumer Law
203. Section 5 is amended to include a reference to the ACL. The ACL
applies to conduct engaged in outside Australia by bodies corporate
incorporated or carrying on a business within Australia or by
Australian citizens or persons ordinarily resident within
Australia. [Schedule 1, Part 2, items 6 to 7, paragraphs 5(1)(e)
and (f)]
204. Section 6 is amended to include references to the ACL. Section 6
of the TP Act extends the application of specific Parts of the
TP Act to trade or commerce:
. between Australia and places outside Australia;
. among the States;
. within a Territory, between a State and a Territory or
between two Territories; or
. by way of the supply of goods or services to the
Commonwealth or an authority or instrumentality of the
Commonwealth. The new paragraph 6(2)(ca) provides that
any reference in Part 2 of the ACL to a contract were
confined, by express provision, to a contract made in the
course of, or in relation to, trade or commerce:
. between Australia and places outside Australia; or
. among the States; or
. between a State and a Territory or between two
Territories. [Schedule 1, Part 2, item 9,
subparagraph 6(2)(ca)]
205. The new subsection 6(3A) provides that, other than Parts IIIA, VIIA
and X of the TP Act, the provisions in Part 2 of the ACL have the
effect that they would have if:
. those provisions were, by express provision, confined in
their operation to contracts for or relating to the use of
postal, telegraphic and telephonic services or radio or
television broadcasts; and
. a reference in the provision of Part XI to a corporation
included a reference to a person not being a corporation.
[Schedule 1, Part 2, item 10, subsection 6(3A)]
206. The effect of this provision is to extend the operation of the
provisions in Part 2 of the ACL, including the unfair contract
terms provisions, to conduct involving the use of postal,
telegraphic or telephonic services. The meaning of 'telephonic
services' is not limited to the transmission of oral communications
but also applies to official directories published under the
Telecommunications Act 1975.
Chapter 4
Civil pecuniary penalties
Outline of chapter
207. The Trade Practices Amendment (Australian Consumer Law) Bill 2009
(the Bill) amends the:
. Trade Practices Act 1974 (TP Act), and
. Australian Securities and Investments Commission Act 2001
(ASIC Act)
to introduce civil pecuniary penalties for breaches of specified
consumer protection provisions.
Context of amendments
208. The consumer protection provisions of the TP Act and the ASIC Act
are currently enforced through civil remedies such as injunctions
and other orders (for example, those in Part VI of the TP Act; and
Part 2, Division 2, Subdivision G of the ASIC Act) and, in certain
circumstances, criminal sanctions (Part VC of the TP Act; and
section 12GB of the ASIC Act).
209. The lack of availability of civil pecuniary penalties and
disqualification orders for enforcement of consumer law represents
a significant gap in the range of enforcement options available to
the Australian Competition and Consumer Commission (ACCC) and the
Australian Securities and Investments Commission (ASIC). While
criminal sanctions provide an important deterrent against the most
serious forms of contravening misconduct, and civil remedies can
achieve timely outcomes for consumers, there is currently no means
of obtaining sanctions in the timely manner available under the
civil regime.
210. Civil pecuniary penalties and disqualification orders are a feature
of other national regulatory regimes - including the restrictive
trade practices provisions in Part IV of the TP Act. Their
availability will enable a more targeted and proportionate
regulatory response, in addition to increasing the deterrent effect
of consumer law provisions.
211. Moreover, at present the ACCC and ASIC are unable to obtain
compensation for consumers when bringing a criminal action alone.
If a matter is serious enough to warrant a penalty, the ACCC or
ASIC must institute both civil and criminal proceedings in order to
secure any type of compensation. Civil pecuniary penalties and
disqualification orders will provide an alternative to this
duplicative process, and provide timely and proportionate
resolutions to instances of illegal conduct that do not call for
criminal sanctions to be sought.
Summary of new law
212. Civil pecuniary penalties will apply to:
. a contravention of the unconscionable conduct
provisions (Part IVA of the TP Act; and of Part 2,
Division 2, Subdivision C of the ASIC Act);
. a contravention of the consumer protection provisions
relating to unfair practices, except misleading and
deceptive conduct (Part V, Division 1 of the TP Act;
and of Part 2, Division 2, Subdivision D of the ASIC
Act);
. a contravention of the consumer protection provisions
relating to pyramid selling (Part V, Division 1AAA of
the TP Act; and of Part 2, Division 2, Subdivision D of
the ASIC Act);
. a contravention of certain product safety and product
information provisions (Part V, Division 1A of the
TP Act);
. a breach of the new provision in the Australian
Consumer Law (ACL) concerning the use of prohibited
terms (Schedule 1, Part 2, section 6 of the TP Act; and
in section 12BJ of the ASIC Act) (see Chapter 2) once
those provisions commence; and
. failure to respond to a substantiation notice or
providing false or misleading information in response
to a substantiation notice (Part VID of the TP Act; and
in Part V, Division 2, Subdivision GC of the ASIC Act)
(see Chapter 6).
213. Civil pecuniary penalties will be available for attempted
contraventions and a person involved in contraventions of the above
provisions.
214. As the introduction of civil pecuniary penalties for conduct that
is also subject to criminal penalties could give rise to concerns
regarding double jeopardy, statutory bars to proceedings are
applied.
Comparison of key features of new law and current law
|New law |Current law |
|Section 76E of the TP Act|Section 76 of the TP Act |
|introduces civil |limits the availability |
|pecuniary penalties for |of civil pecuniary |
|contraventions of various|penalties to |
|consumer |contraventions of : |
|protection-related |the restrictive trade |
|provisions. |practices provisions of |
| |Part IV, including |
| |providing false and |
| |misleading information in|
| |respect of merger |
| |clearances and |
| |authorisations; and |
| |certain of the provisions|
| |prohibiting |
| |misrepresenting the |
| |effect of the New Tax |
| |System. |
|Section 12GBA of the ASIC|No equivalent. |
|Act introduces civil | |
|pecuniary penalties for | |
|contraventions of various| |
|consumer | |
|protection-related | |
|provisions. | |
|Section 76E of the TP Act|The accessorial liability|
|and section 12GBA of the |framework in section 76 |
|ASIC Act provide for |of the TP Act extends |
|attempted contraventions |liability to attempted |
|and accessorial liability|contraventions and |
|of persons involved in |persons involved in |
|contraventions. |contraventions. |
|Section 76F of the TP Act|Section 76B of the TP Act|
|and section 12GBB of the |applies similar statutory|
|ASIC Act applies |bars to civil pecuniary |
|statutory bars to civil |penalty proceedings. |
|pecuniary penalty | |
|proceedings in relation | |
|to conduct that is also | |
|subject to criminal | |
|penalties. | |
Detailed explanation of new law
Details of civil pecuniary penalty provisions
215. A Court may order a person to pay a pecuniary penalty for a
contravention of any of the following provisions:
. an unconscionable conduct provision (of Part IVA of the
TP Act and of Part 2, Division 2, Subdivision C of the
ASIC Act); [Schedule 2, Part 1, item 1,
subparagraph 76E(1)(a)(i)] [Schedule 3, Part 2, item 9,
paragraph 12GBA(1)(a)]
. a consumer protection provision relating to unfair
practices (of Part V, Division 1 of the TP Act; and of
Part 2, Division 2, Subdivision D of the ASIC Act),
except the misleading and deceptive conduct provision
(in section 52 of the TP Act; and in section 12DA of
the ASIC Act); [Schedule 2, Part 1, item 1,
subparagraph 76E(1)(a)(ii)] [Schedule 3, Part 2, item
9, paragraph 12GBA(1)(a)]
. a consumer protection provision relating to pyramid
selling (of Part V, Division 1AAA of the TP Act; and of
Part 2, Division 2, Subdivision D of the ASIC Act);
[Schedule 2, Part 1, item 1, subparagraph
76E(1)(a)(ii)] [Schedule 3, Part 2, item 9, paragraph
12GBA(1)(a)]
. failure to respond to a substantiation notice (in
section 87ZN of the TP Act; and in section 12GYB of the
ASIC Act); [Schedule 2, Part 1, item 1,
subparagraph 76E(1)(a)(iv)] [Schedule 2, Part 7, item
35, 76E(1)(a)(iv)] [Schedule 3, Part 2, item 9,
paragraph 12GBA(1)(a)]
. providing false or misleading information in response
to a substantiation notice (in section 87ZO of the
TP Act; and in section 12GYC of the ASIC Act);
[Schedule 2, Part 1, item 1, subparagraph
76E(1)(a)(iv)] [Schedule 3, Part 2, item 9, paragraph
12GBA(1)(a)]
. the new provision in the ACL concerning the use of
prescribed unfair contract terms (in Schedule 1, Part
2, section 6 of the TP Act; and in section 12BJ of the
ASIC Act) once those provisions commence; [Schedule 2,
Part 7, item 36, subparagraph 76E(1)(a)(v)] [Schedule
3, Part 8, item 35, paragraph 12GBA(1)(a)] and
. certain product safety and product information
provisions of Part V, Division 1A of the TP Act
relating to:
- product safety standards and unsafe goods (in
subsections 65C(1) and (3));
- product information standards (in
subsection 65D(1));
- compulsory product recall (in subsection 65F(8) and
section 65G);
- compliance with a product recall order (in
section 65G);
- producing information, documents and evidence (in
subsections 65Q (9), (9C) and (10)); and
- notification of voluntary recall (in
subsection 65R(1)). [Schedule 2, Part 1, item 1,
subparagraph 76E(1)(a)(iii)]
216. A civil pecuniary penalty is not available in relation to the
misleading and deceptive conduct provisions of the TP Act (section
52) or the ASIC Act (section 12DA) since that provision does not
purport to create any liability but establishes a norm of conduct.
Consistent with Part VC of the TP Act and Part 2, Division 2,
Subdivision G of the ASIC Act, no fine can be imposed but other
remedies are available for failing to observe that norm of conduct,
including injunctions, publication orders, damages and remedial
orders.
217. Mirroring the accessorial liability framework in section 76 of the
TP Act, liability to pay a civil pecuniary penalty is extended to
an attempt to contravene the above provisions, as well as to any
person involved in a contravention. [Schedule 2, Part 1, item 1,
subsection 76E(1)] [Schedule 3, Part 2, item 9, subsection
12GBA(1)]
218. Each act done or omission made by a person potentially attracts a
pecuniary penalty. [Schedule 2, Part 1, item 1, paragraphs
76E(1)(b)-(f)] [Schedule 3, Part 2, item 9, paragraphs 12GBA(1)(b)-
(f)]
219. In circumstances where a single act or omission contravenes two or
more provisions, pecuniary penalty proceedings may be brought in
relation to any one of those provisions, but a person is liable to
pay only one pecuniary penalty. [Schedule 2, Part 1, item 1,
subsection 76E(4)] [Schedule 3, Part 2, item 9, subsection
12GBA(4)]
220. There are a number of non-exhaustive factors that a Court must
consider in determining the amount of the pecuniary penalty,
including:
. the nature and extent of the act or omission and of any
loss or damage suffered as a result of the act or
omission;
. the circumstances in which the act or omission took
place; and
. whether the person has previously been found by the
Court in proceedings in relation to consumer protection
provision of the TP Act or the ASIC Act or a related
provision to have engaged in any similar conduct.
[Schedule 2, Part 1, item 1, subsection 76E(2)]
[Schedule 3, Part 2, item 9, subsection 12GBA(2)]
Maximum civil pecuniary penalties
221. The table in subsections 76E(3) and 12GBA(3) provides the maximum
civil pecuniary penalties applicable to applicable contraventions
of the TP Act and ASIC Act. [Schedule 2, Part 1, item 1,
subsection 76E(3)] [Schedule 2, Part 7, item 37, subsection 76E(3)]
[Schedule 3, Part 2, item 9, subsection 12GBA(3)]
Provisions common to the TP Act and the ASIC Act
222. The maximum pecuniary penalty payable for a contravention of an
unconscionable conduct provision, or a consumer protection
provision relating to unfair practices (except misleading and
deceptive conduct) or pyramid selling, is:
. for bodies corporate - 10,000 penalty units; and
. for persons other than bodies corporate - 2,000 penalty
units.
223. The maximum pecuniary penalty payable for failing to respond to a
substantiation notice is:
. for bodies corporate - 150 penalty units; and
. for persons other than bodies corporate - 30 penalty
units.
224. The maximum pecuniary penalty payable for providing false of
misleading information in response to a substantiation notice for
is:
. for bodies corporate - 250 penalty units; and
. for persons other than bodies corporate - 50 penalty
units.
225. The maximum pecuniary penalty payable for contravening a provision
of the ACL concerning the use of prescribed unfair contract terms
(once those provisions commence) is:
. for bodies corporate - 250 penalty units; and
. for persons other than bodies corporate - 50 penalty
units.
Product safety and product information provisions in the TP Act
226. The maximum pecuniary penalty payable for a contravention of
certain of the provisions relating to product safety standards and
unsafe goods (subsections 65C(1) and (3)), product information
standards (subsection 65D(1)), and product recalls (section 65G),
is:
. for bodies corporate - 10,000 penalty units; and
. for persons other than bodies corporate - 2,000 penalty
units.
227. The maximum pecuniary penalty payable for a contravention of
certain provisions relating to compulsory product recall
(subsection 65F(8)) and notification of voluntary recall
(subsections 65R(1)) is:
. for bodies corporate - 150 penalty units; and
. for persons other than bodies corporate - 30 penalty
units.
228. In relation to the power of the Minister or authorised officer to
obtain information, documents and evidence by written notice
(section 65Q), the maximum pecuniary penalty payable for a
contravention of the following provisions is:
. For failure to comply with the notice (subsection
65Q(9)):
- for bodies corporate - 200 penalty units; and
- for persons other than bodies corporate - 40 penalty
units.
. For providing false or misleading information or
evidence (subsection 65Q(9C)):
- for bodies corporate - 300 penalty units; and
- for persons other than bodies corporate - 50 penalty
units.
. For failure to assist an authorised officer
(subsection 65Q(10)):
- for bodies corporate - 600 penalty units; and
- for persons other than bodies corporate -
120 penalty units.
229. A penalty unit is $110 at the time of writing, as defined in
section 4AA of the Crimes Act 1914.
Parallel criminal and civil prohibitions
230. Section 4C of the Crimes Act 1914 provides some protection against
double jeopardy where an act or omission constitutes an offence
under two or more laws of the Commonwealth or under both a law of
the Commonwealth and at common law. However, this protection does
not extend to liability for civil penalties. To address concerns
regarding parallel criminal and civil schemes, most Federal
legislation containing such schemes provides for statutory bars to
proceedings. As a scheme of statutory bars is already present in
section 76B of the TP Act (but only applicable to sections 75AYA or
95AZN), the protection is extended to address concerns arising from
parallel criminal and civil prohibitions in relation to consumer
protection provisions.
231. Current section 76B of the TP Act provides that where substantially
the same conduct is a civil contravention and an offence, the Court
will be prevented from making a pecuniary penalty if the person has
already been convicted of an offence. This is extended to apply in
relation to criminal and civil consumer protection prohibitions.
[Schedule 2, Part 1, item 1, subsection 76F(1)] [Schedule 3, Part
2, item 9, subsection 12GBB(1)]
232. Further, proceedings for a pecuniary penalty order against a person
for a contravention of either the TP Act or the ASIC Act are stayed
if criminal proceedings are started or have already been started
for an offence, and the offence is constituted by conduct that is
substantially the same as the conduct alleged to constitute the
contravention. The pecuniary penalty proceedings will be able to
be resumed if the person is not convicted of the offence.
[Schedule 2, Part 1, item 1, subsection 76F(2)] [Schedule 3, Part
2, item 9, subsection 12GBB(2)]
233. Criminal proceedings may be started against a person for conduct
that is substantially the same as a consumer protection
contravention regardless of whether a pecuniary penalty order has
been made against the person in respect of the contravention.
[Schedule 2, Part 1, item 1, subsection 76F(3)] [Schedule 3, Part
2, item 9, subsection 12GBB(3)]
234. Evidence of information given or of documents produced will not be
admissible in criminal proceedings against the individual if the
individual gave the evidence or produced the documents in
proceedings for a pecuniary penalty order against the individual
for a contravention and the conduct constituting the criminal and
consumer protection pecuniary penalty contravention is
substantially the same. This does not apply to a criminal
proceeding in respect of the falsity of the evidence given by the
individual in the proceedings for the pecuniary penalty order.
[Schedule 2, Part 1, item 1, subsection 76F(4)] [Schedule 3, Part
2, item 9, subsection 12GBB(4)]
235. Criminal proceedings may be undertaken after civil proceedings to
ensure that civil remedies do not preclude later criminal penalties
from being imposed, and it is usual to stay the civil proceedings
until the criminal proceedings are completed after which time, if
the defendant is convicted of the criminal offence, the civil
proceedings are terminated. Part 9.4B of the Corporations Act 2001
contains equivalent provisions.
236. Separate amendments to section 76B of the TP Act have been made in
the Trade Practices Amendment (Cartel Conduct and Other Measures)
Bill 2008 to extend that section to Part IV of the TP Act. This
Bill was passed by the Senate and the House of Representatives on
16 June 2009 and is awaiting Royal Assent.
Application and transitional provisions
237. The amendments will commence on the day after the date of Royal
Assent.
Consequential amendments
238. A note clarifies that the heading in section 76 of the TP Act is
altered to refer to restrictive trade practices and other
provisions, to distinguish it from section 76E. [Schedule 2, Part
1, item 1, section 76E]
239. The introduction of civil pecuniary penalties in section 76E of the
TP Act requires references to section 76E to be added to certain of
the enforcement and remedies provisions of the TP Act. [Schedule
2, Part 1, item 2, subsection 77(1); item 3, subsection 77A(3)]
[Schedule 2, Part 1, item 2, subsection 77(1); item 4, subparagraph
79B(a)(i)] [Schedule 2, Part 1, item 2, subsection 77(1); item 6,
paragraph 86D(1)(a)]
240. A defence will be provided for persons other than bodies corporate
who may have contravened, or been involved in contraventions of,
the consumer protection-related provisions mentioned in this
Chapter. A person's liability from paying a pecuniary penalty may
be reduced or discharged if the Court considers that the person
acted honestly and reasonably, and ought to be excused. [Schedule
2, Part 1, item 5, subsection 85(7)] [Schedule 3, Part 2, item 12,
subsection 12GI(5)]
241. The ASIC Act will include provisions mirroring current section 77
of the TP Act to enable ASIC to bring civil proceedings to recover
pecuniary penalties on behalf of the Commonwealth. The
introduction of provisions mirroring current section 77 of the
TP Act require amendments to current section 12GG of the ASIC Act,
to bring it in line with current section 83 of the TP Act.
[Schedule 3, Part 2, item 9, section 12GBC] [Schedule 3, Part 2,
item 11, section 12GG]
242. The ASIC Act will include provisions mirroring current section 77A,
77B and 77C of the TP Act regarding the indemnification of officers
of bodies corporate in relation to the payment of pecuniary
penalties. [Schedule 3, Part 2, item 9, section 12GBD]
243. Current subsection 12GCA(a) of the ASIC Act will be repealed and
replaced with a new provision to mirror current section 79B of the
TP Act, which requires a Court to give preference to an order for
compensation over a fine or pecuniary penalty. [Schedule 3,
Part 2, item 10, paragraph 12GCA(a)]
244. Current subsection 12GLB(1) of the ASIC Act will be repealed and
replaced with a new provision to mirror current section 86D of the
TP Act, which relates to adverse publicity orders. [Schedule 3,
Part 2, item 13, subsection 12GLB(1)]
Do not remove section break.
Outline of chapter
245. The Trade Practices Amendment (Australian Consumer Law) Bill 2009
(the Bill) amends the:
. Trade Practices Act 1974 (TP Act), and
. Australian Securities and Investments Commission Act 2001
(ASIC Act)
to enable the Australian Competition and Consumer Commission (ACCC)
and the Australian Securities and Investments Commission (ASIC) to
seek an order disqualifying a person from managing corporations as
a consequence of breaches of various consumer protection-related
provisions.
246. The Bill also makes minor, consequential amendments to the
Corporations Act 2001.
Context of amendments
247. The lack of availability of disqualification orders is discussed
generally above in Chapter 4.
248. Disqualification orders, which are already available for breaches
of the Corporations Act 2001, carry serious personal and financial
consequences for the individuals concerned. They provide,
therefore, a deterrent for individuals from engaging in illegal
conduct, but do not impose the more serious consequences of a
criminal conviction.
249. Disqualification orders, which will be made available for breaches
of the civil pecuniary penalty provisions as well as for criminal
breaches of the consumer protection-related provisions, will widen
the range of regulatory responses available to deal with such
conduct, and enable the ACCC and ASIC to undertake a targeted
regulatory response. The amendments will bring the consumer law in
line with amendments made to the TP Act in 2006 that provide for
disqualification orders in relation to the restrictive trade
practices provisions.
Summary of new law
250. The amendments will allow the ACCC and ASIC to apply to the Court
seeking an order disqualifying a person from managing corporations,
in relation to a contravention of:
. an unconscionable conduct provision (of Part IVA of the
TP Act; and of Part 2, Division 2, Subdivision C of the
ASIC Act);
. the consumer protection provisions relating to unfair
practices (except misleading and deceptive conduct) (of
Part V, Division 1 of the TP Act; and of Part 2,
Division 2, Subdivision D of the ASIC Act);
. the consumer protection provisions relating to pyramid
selling (of Part V, Division 1AAA of the TP Act; and of
Part 2, Division 2, Subdivision D of the ASIC Act);
. certain of the product safety and product information
provisions of Part V, Division 1A of the TP Act;
. the offence provisions of Part VC of the TP Act; and
. the new provision in the Australian Consumer Law
concerning the use of a prohibited term (in Schedule 1,
Part 2, section 6 of the TP Act; and in section 12BJ of
the ASIC Act) once those provisions commence (see
Chapter 2).
251. A person involved in the contravention of the above provisions will
also be potentially subject to a disqualification order.
Comparison of key features of new law and current law
|New law |Current law |
|Subsection 86E(1B) of the|Section 86E of the TP Act|
|TP Act will disqualify a |limits the |
|person from managing |disqualification of a |
|corporations in relation |person from managing |
|to contraventions of |corporations to |
|various consumer |contraventions of the |
|protection-related |restrictive trade |
|provisions |practices provisions of |
| |Part IV. |
|New law |Current law |
|Section 12GLD of the ASIC|No equivalent. |
|Act will disqualify a | |
|person from managing | |
|corporations in relation | |
|to contraventions of | |
|various consumer | |
|protection-related | |
|provisions | |
|The disqualification |The disqualification in |
|provisions in the TP Act |section 86E of the TP Act|
|and the ASIC Act will |extends to attempted |
|extend to persons |contraventions and |
|involved in a |persons involved in a |
|contravention. |contravention. |
|The disqualification |The disqualification in |
|provisions in the TP Act |section 86E of the TP Act|
|and the ASIC Act |potentially applies to a |
|potentially apply to |contravention of Part IV.|
|specified consumer | |
|protection provisions. | |
Detailed explanation of new law
252. A Court may order that a person is disqualified from managing
corporations for a contravention of the following provisions:
. an unconscionable conduct provision (of Part IVA of the
TP Act and of Part 2, Division 2, Subdivision C of the
ASIC Act). [Schedule 2, Part 2, item 7,
subparagraph 86E(1B)(a)(i)] [Schedule 3, Part 3, item
14, paragraph 12GLD(1)(a)]
. a consumer protection provision relating to unfair
practices (of Part V, Division 1 of the TP Act; and of
Part 2, Division 2, Subdivision D of the ASIC Act),
except the misleading and deceptive conduct provision
(in section 52 of the TP Act; and in section 12DA of
the ASIC Act).
. a consumer protection provision relating to pyramid
selling (of Part V, Division 1AAA of the TP Act; and of
Part 2, Division 2, Subdivision D of the ASIC Act).
[Schedule 2, Part 2, item 7, paragraph 86E(1B)(a)(ii])
[Schedule 2, Part 2, item 10, paragraph 86E(4)(b)]
[Schedule 3, Part 3, item 14, paragraph 12GLD(1)(a)]
. certain product safety and product information
provisions of Part V, Division 1A of the TP Act
relating to:
- product safety standards and unsafe goods (in
subsections 65C(1) and (3));
- product information standards (in subsection
65D(1));
- compulsory product recall (in subsection 65F(8));
- compliance with a product recall order (in section
65G);
- producing information, documents and evidence (in
subsections 65Q(9), (9C) and (10)); and
- notification of voluntary recall (in subsection
65R(1)).
[Schedule 2, Part 2, item 7, subparagraph
86E(1B)(a)(iii)]
. an offence provision in Part VC of the TP Act relating
to unfair practices (Division 2), and product safety
and product information (Division 3). [Schedule 2,
Part 2, item 7, subparagraph 86E(1B)(a)(iv)] [Schedule
2, Part 7, item 54, subparagraph 86E(1B)(a)(iv]
. the new provision in the ACL concerning the use of
prescribed unfair contract terms (in Schedule 2, Part
2, section 6 of the TP Act; and in section 12BJ of the
ASIC Act) once those provisions commence. [Schedule 2,
Part 7, item 55, paragraph 86E(1B)(a)] [Schedule 3,
Part 8, item 41, paragraph 12GLD(1)(a)]
253. A disqualification order is not available in relation to the
misleading and deceptive conduct provisions of the TP Act (section
52) or the ASIC Act (section 12DA) since that provision does not
purport to create any liability but establishes a norm of conduct.
Other remedies are available for failing to observe that norm of
conduct, including injunctions, publication orders, damages and
remedial orders.
254. Mirroring the current section 86E of the TP Act, a person involved
in a contravention will also be potentially subject to a
disqualification order. [Schedule 2, Part 2, item 7, paragraph
86E(1B)(a)] [Schedule 3, Part 3, item 14, paragraph 12GLD(1)(a)]
255. In making a disqualification order, the Court must be satisfied
that the disqualification is justified. [Schedule 2, Part 2, item
7, paragraph 86E(1B)(b)] [Schedule 3, Part 3, item 14, paragraph
12GLD(1)(b)]
256. In determining this, the Court is not limited to considering
particular matters, but may have regard to a person's conduct in
relation to the management of a business or corporation, and any
other matters the court considers appropriate. [Schedule 2, Part
2, item 9, subsection 86E(2)] [Schedule 3, Part 3, item 14,
subsection 12GLD(2)]
257. The period of disqualification is that which the Court considers
appropriate. Disqualification may be either permanent or for a
specified period.
Application and transitional provisions
258. The amendments will commence on the day after the date of Royal
Assent.
Consequential amendments
259. The Bill inserts references to the new disqualification order
provision in relation to provisions in the TP Act requiring the
ACCC to notify ASIC if a disqualification order has been made.
[Schedule 2, Part 2, item 9, subsection 86E(3)]
260. A note in the ASIC Act clarifies that the Corporations Act 2001
provides that a person is disqualified from managing corporations
if a disqualification order has been made. [Schedule 3, Part 3,
item 14, section 12GLD]
261. A note in the ASIC Act clarifies that the Corporations Act 2001
provides that ASIC is required to keep a register of persons who
have been disqualified from managing corporations. [Schedule 3,
Part 3, item 14, section 12GLD]
Consequential amendments to the Corporations Act 2001
262. Mirroring section 206EA of the Corporations Act 2001 in relation to
disqualification orders under the TP Act, a person will be
disqualified from managing corporations if they have been
disqualified from doing so under section 12GLD of the ASIC Act.
[Schedule 3, Part 3, item 15, section 206EB]
263. The introduction of section 206EB requires references to it to be
added to provisions requiring ASIC to keep a register of
disqualified persons. [Schedule 3, Part 3, item 15, paragraph
1274AA(1)(a] [Schedule 3, Part 3, item 17, paragraph 1274AA(2)(ab)]
Do not remove section break.
Outline of chapter
264. The Trade Practices Amendment (Australian Consumer Law) Bill 2009
(the Bill) amends the:
. Trade Practices Act 1974 (TP Act), and
. Australian Securities and Investments Commission Act 2001
(ASIC Act)
to enable the Australian Competition and Consumer Commission (ACCC)
and the Australian Securities and Investments Commission (ASIC) to
issue substantiation notices relating to consumer protection in
certain circumstances.
Context of amendments
265. On 2 October 2008, the Council of Australian Governments (COAG)
agreed to introduce a national consumer law in accordance with the
proposals of Ministerial Council on Consumer Affairs (MCCA). As
part of this it was agreed to introduce a nationally consistent
power to issue substantiation notices, replacing the various state
and territory powers currently in existence.
266. The power to issue a substantiation notice will allow the ACCC and
ASIC to seek information relevant to the substantiation of claims
or representations, or in relation to the ability of a person to
supply goods and services.
267. The ACCC and ASIC will be able to issue substantiation notices for
claims or representations promoting, or apparently intended to
promote: the supply of goods or services; sales or grants of an
interest in land; and offers of employment.
268. This will enable the ACCC and ASIC, where they think it is
reasonable to issue a substantiation notice, to seek information
that may assist them in determining whether to take action for a
suspected breach of consumer protection provisions of the TP Act or
the ASIC Act.
Summary of new law
269. The ACCC or ASIC may issue a substantiation notice in relation to a
claim or representation promoting or apparently intended to
promote:
. the supply, or possible supply, of goods or services by a
corporation;
. a sale or grant, or possible sale or grant, of an interest
in land by a corporation; or
. employment that is, or may, be offered by a corporation,
in relation to the ability of the person to supply at the
advertised price in a reasonable quantity.
270. The substantiation notice will require the person to provide within
21 days of the notice being issued information or documents which
could be capable of substantiating the representations or their
ability to supply, both generally and in relation to specific
matters.
271. The ACCC or ASIC may seek particular information of a type that it
specifies, so long as the information requested is relevant to the
substantiation of the claim or representation or the person's
ability to supply.
272. The power is intended as a preliminary investigative tool where the
ACCC or ASIC suspects a representation may not be able to be
substantiated and subsequently in breach of the consumer protection
laws.
273. The provisions are framed in such a way that a bona fide attempt to
provide information which may support a claim will be sufficient,
even if the material is not capable of fully substantiating the
claim or representation. A person is also able to refuse to
provide particular documents or information on the grounds they
might incriminate the person.
Comparison of key features of new law and current law
|New law |Current law |
|The amendments to the |No equivalent in the |
|TP Act contained in |TP Act. |
|Division 3 of the Bill |A number of States and |
|will allow the ACCC to |Territories currently |
|issue a notice requiring |have similar provisions |
|a person to provide |in their consumer |
|information or documents |protection laws. |
|which may be capable of | |
|substantiating particular| |
|claims or | |
|representations, or their| |
|ability to supply. | |
Detailed explanation of new law
ACCC or ASIC may require claims to be substantiated
274. A substantiation notice may be issued by the ACCC or ASIC if a
person makes claims or representations promoting or apparently
intended to promote certain things. [Schedule 2, Part 3, item 12,
subsection 87ZL(2)] [Schedule 3, Part 4, item 20, subsection
12GY(2)]
275. The ACCC may issue a substantiation notice in relation to:
. the supply, or possible supply, of goods or services by a
corporation; [Schedule 2, Part 3, item 12, paragraph
87ZL(1)(a)]
. a sale or grant, or possible sale or grant, of an interest
in land (within the meaning of section 53A of the TP Act)
or by a corporation; and [Schedule 2, Part 3, item 12,
paragraph 87ZL(1)(b)]
. employment to be offered by a corporation. [Schedule 2,
Part 3, item 12, paragraph 87ZL(1)(c)]
276. ASIC may issue a substantiation notice in relation to claims or
representations promoting, or apparently intended to promote, a
supply, or possible supply, of financial services by that or any
other person. [Schedule 3, Part 4, item 20, subsection 12GY(1)]
277. The issuing of a substantiation notice by ASIC can only be carried
out by a person who is a member of ASIC or an SES employee of ASIC.
[Schedule 3, Part 9, item 57, paragraph 102(2C)]
278. A substantiation notice can require the person that is issued the
notice to do certain things, namely:
. give information or produce documents to the ACCC or ASIC
which could be capable of substantiating the claims or
representations; [Schedule 2, Part 3, item 12, paragraph
87ZL(2)(a)] [Schedule 3, Part 4, item 20, paragraph
12GY(2)(a)]
. give information or produce documents to the ACCC or ASIC
that could be capable of substantiating the quantities in
which and the period for which the person will be able to
make the supply to which the claims or representations
relate (whether or not the claims or representations
relate to those quantities or that period); and [Schedule
2, Part 3, item 12, paragraph 87ZL(2)(b)] [Schedule 3,
Part 4, item 20, paragraph 12GY(2)(b)]
. provide information or documents of a kind the ACCC or
ASIC specifies. [Schedule 2, Part 3, item 12, paragraph
87ZL(2)(c)] [Schedule 3, Part 4, item 20, paragraph
12GY(2)(c)]
279. A person must comply with the substantiation notice within 21 days
of the notice being given to the person by the ACCC or ASIC or such
later time by the agreement of the ACCC or ASIC. [Schedule 2, Part
3, item 12, subsection 87ZL(2)] [Schedule 3, Part 4, item 20,
subsection 12GY(2)]
280. In order to comply with a substantiation notice, the person to whom
it is issued does not need to substantiate the claim to the
satisfaction of the ACCC, ASIC or a Court.
281. If the ACCC or ASIC specifies in the substantiation notice that
particular information or documents are to be provided, then it
must be satisfied that those documents provided are relevant to
substantiating:
. the claims or representations; or
. the quantity in which, or the period for which, the
corporation is or will be able to make such a supply.
[Schedule 2, Part 3, item 12, subsection 87ZL(3)]
[Schedule 3, Part 4, item 20, subsection 12GY(3)]
282. The substantiation notice must include certain information, namely:
. the name of the person to whom it is given;
. a specification of the claim or representations to which
it relates; and
. an explanation of the effect of those provisions of the
TP Act or the ASIC Act that relate to:
- extending periods for complying with substantiation
notices (section 87ZM of the TP Act and section 12GYA of
the ASIC Act);
- compliance with substantiation notices (section 87ZN of
the TP Act and section 12GYB of the ASIC Act); and
- the consequences of providing false or misleading
information (section 87ZO of the TP Act and section
12GYC of the ASIC Act).
[Schedule 2, Part 3, item 12, subsection 87ZL(4)]
[Schedule 3, Part 4, item 20, subsection 12GY(4)]
283. The notice issued may relate to more than one claim or
representation. [Schedule 2, Part 3, item 12, subsection 87ZL(5)]
[Schedule 3, Part 4, item 20, subsection 12GY(5)]
284. Certain persons are exempt from substantiation notices on the basis
that they publish that information on behalf of another person in a
commercial context. Specifically, a person does not have to comply
with a substantiation notice if they:
. are a prescribed information provider within the meaning
of section 65A, which defines a range of media entities as
'prescribed information providers'; [Schedule 2, Part 3,
item 12, paragraph 87ZL(6)(a)] [Schedule 3, Part 4, item
20, paragraph 12GY(6)(a)]
. made the claim or representation by publishing it on
behalf of another person in the course of carrying on a
business of providing information; and [Schedule 2, Part
3, item 12, paragraph 87ZL(6)(b)] [Schedule 3, Part 4,
item 20, paragraph 12GY(6)(b)]
. does not have a commercial relationship with the other
person other than for the purpose of: publishing claims or
representations promoting, or apparently intended to
promote, (in respect of the TP Act) the other person's
business or other activities; or the other person
supplying goods or services, or selling or granting
interests in land (within the meaning of section 53A), or
(in respect of the ASIC Act) financial services to the
person. [Schedule 2, Part 3, item 12, paragraph
87ZL(6)(c)] [Schedule 3, Part 4, item, 19,
paragraph 12GY(6)(c)]
Extending periods for complying with substantiation notices
285. A person who has been given a substantiation notice may, at any
time within 21 days after the notice was given to the person, apply
in writing to the ACCC or ASIC for an extension of the period for
complying with the notice. The ACCC or ASIC may, by written notice
given to the person, extend the period within which the person must
comply with the notice. [Schedule 2, Part 3, item 12, section
87ZM] [Schedule 3, Part 4, item 20, section 12GYA]
Compliance with substantiation notices
286. A person who is given a substantiation notice must comply with it
within the substantiation notice compliance period for the notice,
which is defined as 21 days; or, if the period for complying with
the notice has been extended under section 87ZM of the TP Act or
12GYA of the ASIC Act, the period so extended. [Schedule 2, Part
3, item 12, subsections 87ZN(1) and (2)] [Schedule 2, Part 3, item
11, subsection 4(1)] [Schedule 3, Part 4, item 20, subsections
12GYB(1) and (2)] [Schedule 3, Part 4, item 19, subsection 12BA(1)]
287. Failure to comply with a substantiation notice (that is, not
providing any information which may be capable of substantiating
the claims or as specifically requested by the ACCC or ASIC) may
result in an infringement notice being issued or liability for a
civil pecuniary penalty.
288. A person may refuse or fail to give particular information or
produce a particular document in compliance with a substantiation
notice on the ground that the information or production of the
document might tend to incriminate the individual or to expose the
individual to a penalty. [Schedule 2, Part 3, item 12, subsection
87ZN(3)] [Schedule 3, Part 4, item 20, subsection 12GYB(3)]
False or misleading information etc.
289. A person must not, in compliance or purported compliance with a
substantiation notice, give to the ACCC or ASIC false or misleading
information; or produce to the ACCC or ASIC documents that contain
false or misleading information. [Schedule 2, Part 3, item 12,
subsection 87ZO(1)] [Schedule 3, Part 4, item 20, subsection
12GYC(1)]
290. This section does not apply to:
. information that the person could not have known was false
or misleading; or
. the production to the ACCC or ASIC of a document
containing false or misleading information if the document
is accompanied by a statement of the person that the
information is false and misleading. [Schedule 2, Part 3,
item 12, subsection 87ZO(2)] [Schedule 3, Part 4, item 20,
subsection 12GYC(2)]
291. Providing false or misleading information to the ACCC or ASIC may
result in an infringement notice being issued or liability for a
civil pecuniary penalty.
Application and transitional provisions
292. The amendments will commence on the day after the date of Royal
Assent.
Consequential amendments
293. Subsections 4(1) of the TP Act and 12BA(1) of the ASIC Act are
amended to provide that a substantiation notice is a notice given
under section 87ZL or section 12GY. [Schedule 2, Part 3, item 11,
subsection 4(1)] [Schedule 3, Part 4, item 18, subsection 12BA(1)]
Do not remove section break.
Outline of chapter
294. The Trade Practices Amendment (Australian Consumer Law) Bill 2009
amends the:
. Trade Practices Act 1974 (TP Act), and
. Australian Securities and Investments Commission Act 2001
(ASIC Act)
to allow the Australian Competition and Consumer Commission (ACCC)
and the Australian Securities and Investments Commission (ASIC) to
seek certain orders for the benefit of persons that are not parties
to proceedings.
Context of amendments
295. The Full Court of the Federal Court of Australia in Medibank
Private Ltd v Cassidy [2002] FCAFC 290 held that the existing
section 87 of the TP Act does not allow orders to be made for those
who are not parties to the proceedings. The High Court refused the
ACCC special leave to appeal the Full Court's decision.
296. The TP Act and the ASIC Act will include provisions allowing the
Court to make orders for the provision of civil redress to non-
parties to proceedings, within the limits provided by the
Australian Constitution.
Summary of new law
297. The ACCC or ASIC can seek orders that would redress, in whole or in
part, loss or damage to non-party consumers arising out of a
contravention of certain consumer protection provisions of the
TP Act (including the Australian Consumer Law (ACL)) and the ASIC
Act or who are disadvantaged by a term in a consumer contract which
has been declared to be an unfair term or a prohibited term (see
Chapter 2).
298. The non-party consumer is only bound by such an order if they
choose to accept the order. If a non-party consumer does accept
the redress they can not make further claims or take further action
in relation to that loss or damage.
299. The types of redress available include: declaring a contract or
arrangement void in whole or in part; varying a contract or
arrangement; an order refusing to enforce provisions of a contract
or arrangement; an order to refund monies or return property; an
order to repair goods or supply services at the respondent's
expense; or an order varying or terminating an instrument creating
or transferring an interest in land.
Comparison of key features of new law and current law
|New law |Current law |
|New sections 87AAA of the|Section 87 of the TP Act |
|TP Act and 12GNB of the |and section 12GM of the |
|ASIC Act will allow the |ASIC Act currently allow |
|Court to make certain |the Court to make orders |
|types of orders to |in such terms as it sees |
|redress, in whole or in |fit. However, such |
|part, loss or damage |orders are only able to |
|suffered by a person that|be made in respect of |
|is not party to the |parties to the |
|proceedings. |proceedings. |
Detailed explanation of new law
Enforcement proceedings and non-party consumers
300. Enforcement proceedings are defined as proceedings under Parts VC
or VI (other than section 87AAA) of the TP Act or Part 2, Division
2, Subdivision G of the ASIC Act. [Schedule 2, Part 4, item 13,
subsection 4(1)] [Schedule 3, Part 5, item 21, subsection 12BA(1)]
301. Non-party consumers are those persons who have not been party to an
enforcement proceeding in relation to the particular conduct or to
an enforcement proceeding in relation to the particular declared
term of a consumer contract. [Schedule 2, Part 4, item 14 and
Schedule 2, Part 7, item 29, subsection 4(1)] [Schedule 3, Part 5,
item 22, subsection 12BA(1)] [Schedule 3, Part 8, item 34,
subsection 12BA(1)]
Orders to redress loss or damage suffered by non-party consumers etc.
302. Where a person:
. engages in conduct in contravention of an
unconscionable conduct provision (of Part IVA of the
TP Act and of Part 2, Division 2, Subdivision C of the
ASIC Act);
. engages in conduct in contravention of a consumer
protection provision relating to unfair practices (of
Part V, Division 1 or Part VC of the TP Act; and of
Part 2, Division 2, Subdivision D of the ASIC Act);
. engages in conduct in contravention of a consumer
protection provision relating to pyramid selling (of
Part V, Division 1AAA of the TP Act; and of Part 2,
Division 2, Subdivision D of the ASIC Act); [Schedule
2, Part 4, item 18, paragraph 87AAA(1)(a)] [Schedule 3,
Part 5, item 26, paragraph 12GNB(1)(a)]
. breaches the new provision in the ACL concerning the
use of prescribed unfair contract terms (in Schedule 2,
Part 2, section 6 of the TP Act; and in section 12BJ of
the ASIC Act); [Schedule 2, Part 7, items 60 to 69,
section 87AAA] [Schedule 3, Part 8, items 45 to 54,
section 12GNB]
. is a party to a consumer contract and are advantaged by
a term in relation to which the Court has made a
declaration under section 87AC of the TP Act or section
12GND of the ASIC Act once those provisions commence;
[Schedule 2, Part 7, item 60, paragraph 87AAA(1)(a)]
[Schedule 3, Part 8, item 45, paragraph 12GNB(1)(a)]
and:
. the contravening conduct or declared term caused or is
likely to cause loss or damage to a class of persons
and the class of persons includes non-party consumers,
[Schedule 2, Part 4, item 18, paragraphs 87AAA(1)(b)
and (c)] [Schedule 2, Part 7, item 61, paragraphs
87AAA(1)(b) and (c)] [Schedule 3, Part 5, item 26,
paragraphs 12GNB(1)(b) and (c)] [Schedule 3, Part 8,
item 46, paragraphs 12GNB(1)(b) and (c)]
the Court may make such orders to redress the non-party consumers
(other than an award of damages) as it thinks appropriate.
[Schedule 2, Part 4, item 19, subsection 87AAA(1)] [Schedule 3,
Part 5, item 20, subsection 12GNB(1)]
303. References in relation to a prohibited or declared term below apply
once the unfair contract terms provisions commence (see the
provisions in Schedule 2, Part 7, items 60-69 and Schedule 3, Part
8, items 45-54 for relevant amendments on commencement of the
unfair contract terms provisions).
304. The orders that may be made are against the person engaging in or
involved in the contravention or alternatively, as the case may be,
the party to a contract who is advantaged by a declared term.
[Schedule 2, Part 4, item 18, subsection 87AAA(2)] [Schedule 2,
Part 7, item 62, paragraph 87AAA(2)] [Schedule 3, Part 5, item 26,
subsection 12GNB(2)] [Schedule 3, Part 8, item 47, paragraphs
12GNB(2)]
305. Such orders may only be made under subsections 87AAA(1) of the
TP Act or 12GNB(1) of the ASIC Act if they will redress, in whole
or in part, the related loss or damage to non-party consumers in
relation to the contravening conduct or declared term. [Schedule
2, Part 4, item 18, subsection 87AAA(3)] [Schedule 2, Part 7, item
63, paragraphs 87AAA(3)] [Schedule 3, Part 5, item 26,
subsection 12GNB(3)] [Schedule 3, Part 8, item 48, paragraphs
12GNB(3)]
306. An application seeking an order can be made even if enforcement
proceedings have not been instituted. As such, the ACCC or ASIC
can take action for redress for non-parties without previously
taking other action in relation to the contravening conduct or
declared term. [Schedule 2, Part 4, item 18, subsection 87AAA(4)]
[Schedule 2, Part 7, item 64, paragraphs 87AAA(4)] [Schedule 3,
Part 5, item 26, subsection 12GNB(4)] [Schedule 3, Part 8, item 49,
paragraphs 12GNB(4)]
307. An application seeking an order can be made at any time within six
years after the day on which the cause of action that relates to
the contravening conduct accrues or the declaration of a term in a
consumer contract is made. [Schedule 2, Part 4, item 18,
subsection 87AAA(5)] [Schedule 2, Part 7, item 65, paragraphs
87AAA(5)] [Schedule 3, Part 5, item 26, subsection 12GNB(5)]
[Schedule 3, Part 8, item 50, paragraphs 12GNB(5)]
308. In determining whether to make an order to redress non-party
consumers, the Court may have regard to the conduct of the person
(engaging in the contravening conduct or party to a consumer
contract advantaged by the declared term) of the non-party
consumers since the contravention or declaration was made. This
ensures that the Court may consider particularly whether the person
has already provided some redress for the loss or damage to the non-
party consumers. [Schedule 2, Part 4, item 18, subsections
87AAA(6)] [Schedule 2, Part 7, items 66 and 6, paragraphs 87AAA(6]
[Schedule 3, Part 5, item 26, subsections 12GNB(6)] [Schedule 3,
Part 8, item 51 and 52, paragraphs 12GNB(6)]
309. In determining whether to make an order, the Court does not need to
determine which specific persons are non-party consumers, nor the
exact loss or damage suffered or likely to be suffered by such
persons. [Schedule 2, Part 4, item 18, subsection 87AAA(8)]
[Schedule 3, Part 5, item 26, subsection 12GNB(8)]
310. If a non-party consumer accepts the redress provided under an
order, then: [Schedule 2, Part 4, item 18, paragraphs 87AAA(9)(a)-
(c)] [Schedule 3, Part 5, item 26, paragraphs 12GNB(9)(a)-(c)]
. the non-party consumer is bound by the order;
[Schedule 2, Part 4, item 18, paragraph 87AAA(9)(d)]
[Schedule 3, Part 5, item 26, paragraph 12GNB(9)(d)]
. any other order in relation to that loss or damage has
no effect in relation to the non-party consumer; and
[Schedule 2, Part 4, item 18, paragraph 87AAA(9)(e)]
[Schedule 3, Part 5, item 26, paragraph 12GNB(9)(e)]
. the non-party consumer cannot make any claim, action or
demand-against the person engaging in or involved in
the contravention or alternatively, as the case may be,
the party to a contract who is advantaged by a declared
term-in relation to that loss or damage. [Schedule 2,
Part 4, item 18, paragraph 87AAA(9)(f)] [Schedule 3,
Part 5, item 26, paragraph 12GNB(9)(f)]
311. An order has effect subject to section 87AB of the TP Act or 12GNA
of the ASIC Act, which relate to limiting occupational liability in
respect of breaches of section 52 of the TP Act or 12DA of the ASIC
Act (misleading and deceptive conduct). [Schedule 2, Part 4, item
18, subsection 87AAA(10)] [Schedule 3, Part 5, item 26, subsection
12GNB(10)]
312. If conduct occurred before the commencement of this section, this
section does not apply in respect of that conduct. [Schedule 2,
Part 4, item 18, subsection 87AAA(11)] [Schedule 3, Part 5, item
26, subsection 12GNB(11)]
Kinds of orders that may be made
313. Section 87AAB of the TP Act and section 12GNC of the ASIC Act does
not limit the types of orders that can be made.
314. The kinds of orders that can be made against a person (the
respondent) to redress loss or damage suffered by a non-party
consumer include the following:
. an order declaring the whole or any part of a contract
made between the respondent and a non-party consumer
referred to in that subsection, or a collateral
arrangement relating to such a contract to be void;
and, if the Court thinks fit-to have been void from the
beginning or void at all times on and after such date
as is specified in the order (which may be a date that
is before the date on which the order is made);
[Schedule 2, Part 4, item 18, paragraph 87AAB(a)]
[Schedule 3, Part 5, item 26, paragraph 12GNC(a)]
. an order varying such a contract or arrangement in such
manner as is specified in the order; and, if the Court
thinks fit-declaring the contract or arrangement to
have had effect as so varied on and after such date as
is specifed in the order (which may be a date that is
before the date on which the order is made); [Schedule
2, Part 4, item 18, paragraph 87AAB(b)] [Schedule 3,
Part 5, item 26, paragraphs 12GNC(b)]
. an order refusing to enforce any or all of the
provisions of such a contract or arrangement;
[Schedule 2, Part 4, item 18, paragraph 87AAB(c)]
[Schedule 3, Part 5, item 26, paragraph 12GNC(c)]
. an order directing the respondent to refund money or
return property to non-party consumers; [Schedule 2,
Part 4, item 19, paragraph 87AAB(d)] [Schedule 3, Part
5, item 26, paragraph 12GNC(d)]
. an order directing the respondent, at his or her own
expense, to repair, or provide parts for, goods that
had been supplied under the contract or arrangement to
non-party consumers; [Schedule 2, Part 4, item 18,
paragraph 87AAB(e)] [Schedule 3, Part 5, item 26,
paragraph 12GNC(e)]
. an order directing the respondent, at his or her own
expense, to supply specified services to non-party
consumers; and [Schedule 2, Part 4, item 18,
paragraph 87AAB(f)] [Schedule 3, Part 5, item 26,
paragraph 12GNC(f)]
. an order, in relation to an instrument creating or
transferring an interest in land (within the meaning of
section 53A), directing the respondent to execute an
instrument that: varies, or has the effect of varying,
the first mentioned instrument; or terminates or
otherwise affects, or has the effect of terminating or
otherwise affecting, the operation or effect of the
first mentioned instrument. [Schedule 2, Part 4, item
18, paragraph 87AAB(g)] [Schedule 3, Part 5, item 26,
paragraph 12GNC(g)]
Application and transitional provisions
315. The amendments will commence on the day after the date of Royal
Assent.
Consequential amendments
316. Section 4L of the TP Act (severability of contract provisions) is
amended to apply to orders under section 87AAA of the TP Act.
[Schedule 2, Part 4, item 15, section 4L]
317. Sections 83 of the TP Act and 12GG of the ASIC Act (findings in
proceedings to be evidence) are amended to apply to orders under
sections 87AAA of the TP Act or 12GNB of the ASIC Act,
respectively. [Schedule 2, Part 4, item 16, section 83] [Schedule
3, Part 5, item 23, section 12GG]
318. Subsections 87(1A) of the TP Act and 12GM(2) of the ASIC Act (other
orders) are amended to ensure that they do not limit the generality
of sections 87AAA of the TP Act or 12GNB of the ASIC Act,
respectively. [Schedule 2, Part 4, item 17, subsection 87(1A)]
[Schedule 3, Part 5, item 24, subsection 12GM(2)]
319. Paragraphs 87A(1)(d) of the TP Act and 12GN(1)(d) of the ASIC Act
(power of a Court to prohibit payment or transfer of monies or
other property) are amended to apply to orders under sections 87AAA
of the TP Act or 12GNB of the ASIC Act, respectively. [Schedule 2,
Part 4, item 19, paragraph 87A(1)(d)] [Schedule 3, Part 5, item 25,
paragraph 12GN(1)(d)]
320. Paragraphs 157(1)(d) of the TP Act and 12HB(1)(b) of the ASIC Act
(disclosure of documents by the Commission or ASIC respectively)
are amended to apply to applications under sections 87AAA of the
TP Act or 12GNB of the ASIC Act, respectively. [Schedule 2, Part
4, item 20, paragraph 157(1)(d)] [Schedule 3, Part 5, item 27,
paragraph 12HB(1)(b)]
Do not remove section break.
Outline of chapter
321. The Trade Practices Amendment (Australian Consumer Law) Bill 2009
(the Bill) amends the:
. Trade Practices Act 1974 (TP Act), and
. Australian Securities and Investments Commission Act 2001
(ASIC Act)
to allow the Australian Competition and Consumer Commission (ACCC)
and the Australian Securities and Investments Commission (ASIC) to
issue an infringement notice containing a financial penalty for
suspected contraventions of civil pecuniary penalty provisions of
the TP Act and the ASIC Act.
Context of amendments
322. Infringement notices will supplement existing criminal sanctions
and civil penalties, as well as the other enforcement powers
proposed in the Bill. They will remedy a significant gap in the
current enforcement framework by facilitating the payment of
relatively small financial penalties in relation to relatively
minor contraventions that may not otherwise be pursued through the
Courts.
323. The capacity to issue an infringement notice is not intended to
amount to the imposition of a financial penalty by the ACCC or
ASIC. It is intended, instead, to provide a mechanism through
which a person that in the opinion of the ACCC or ASIC has
contravened certain provisions of the TP Act or the ASIC Act may
forestall an application to the Courts by the ACCC or ASIC for the
imposition of a criminal sanction or civil penalty.
324. The power is intended to provide the ACCC and ASIC with greater
flexibility to respond to less serious contraventions and is
already available to:
. ASIC in relation to relatively minor contraventions of
the continuous disclosure provisions of the
Corporations Act 2001; and
. the Australian Communications and Media Authority for
contraventions of civil penalty provisions of the
Spam Act 2003 and Do Not Call Register Act 2006.
325. It will allow the ACCC and ASIC to take action against minor
breaches of unfair practices and other conduct more efficiently and
effectively than through Court action alone, and provide the
potential for a speedier resolution of matters than is possible
through the Courts (although this would depend on the complexity of
each matter).
Summary of new law
326. The ACCC and ASIC will be able to issue a person with an
infringement notice containing a financial penalty for suspected
contraventions of the following provisions:
. a contravention of the unconscionable conduct
provisions (of Part IVA of the TP Act; and of Part 2,
Division 2, Subdivision C of the ASIC Act);
. a contravention of certain of the consumer protection
provisions relating to unfair practices (except
sections 52, 53A(1)(c), 54, 56(1), 58 or 64) of Part V,
Division 1 of the TP Act; and of Part 2, Division 2,
Subdivision D (except sections 12DA, 12DC(2), 12DE,
12DG(1), 12DI or 12DM) of the ASIC Act);
. a contravention of the consumer protection provisions
relating to pyramid selling (of Part V, Division 1AAA
of the TP Act; and of Part 2, Division 2, Subdivision D
of the ASIC Act);
. a contravention of certain product safety and product
information provisions of Part V, Division 1A of the
TP Act;
. a breach of the new provision in the ACL concerning the
use of prescribed unfair contract terms (in Schedule 2,
Part 2, section 6 of the TP Act; and in section 12BJ of
the ASIC Act) (see Chapter 2) once those provisions
commence; and
. failure to respond to a substantiation notice or
providing false or misleading information in response
to a substantiation notice (in Part VID of the TP Act;
and in Part 2, Division 2, Subdivision GC of the ASIC
Act) (see Chapter 6).
327. Infringement notices will not be able to be issued for alleged
contraventions of sections 53A(1)(c), 54, 56(1), 58 or 64 of the
TP Act or 12DA, 12DC(2), 12DE, 12DG(1), 12DI or 12DM of the ASIC
Act as those provisions include reference to the state of mind of
the person, a decision on which should be left to the Court to
determine.
328. Infringement notices will also not be available for breaches of the
misleading and deceptive conduct provisions (section 52 of the
TP Act and 12DA of the ASIC Act) as those provisions are not
subject to civil pecuniary penalties.
329. Compliance with an infringement notice entails payment of the
financial penalty within a certain period of time to avoid legal
liability in respect of the alleged contravention.
330. Depending on the particular provision, the financial penalty
contained in an infringement notice varies:
. for bodies corporate - between 30 penalty units and
60 penalty units; and
. for persons other than bodies corporate - between
6 penalty units and 12 penalty units.
331. A penalty unit is $110 at the time of writing, as defined in
section 4AA of the Crimes Act 1914.
332. These penalties are substantially less than the maximum civil
pecuniary penalties proposed for contraventions of these provisions
(see Chapter 4), which reflects their intended application to minor
infringements of the law.
333. Compliance with an infringement notice is not taken as an admission
of liability or a contravention of the TP Act or the ASIC Act.
Furthermore, if it complies, a person is not subject to further
civil or criminal proceedings in relation to the alleged
contravention.
334. An infringement notice does not give rise to an enforceable
requirement to pay the financial penalty. If a person does not
comply with the infringement notice within the period of time
specified, the ACCC or ASIC cannot enforce the infringement notice.
335. Instead, the ACCC or ASIC may bring civil or criminal proceedings
against the person in relation to the same alleged contravention,
but not for failure to pay the penalty in the infringement notice.
336. The ACCC and ASIC will have the power both to issue and revoke an
infringement notice, as well as the ability to extend the
compliance period.
Comparison of key features of new law and current law
|New law |Current law |
|Part VIC of the TP Act |No equivalent. |
|will provide a mechanism | |
|for the ACCC to issue a | |
|person with an | |
|infringement notice | |
|containing a financial | |
|penalty for suspected | |
|contraventions of various| |
|consumer | |
|protection-related | |
|provisions of the TP Act.| |
|Part 2, Division 2, |No equivalent. |
|Subdivision GB of the | |
|ASIC Act will provide a | |
|mechanism for ASIC to | |
|issue a person with an | |
|infringement notice | |
|containing a financial | |
|penalty for suspected | |
|contraventions of various| |
|consumer | |
|protection-related | |
|provisions of the ASIC | |
|Act. | |
Detailed explanation of new law
Definitions
337. The Bill inserts a definition of infringement notice compliance
period which has the meaning as given by section 87ZJ of the TP Act
and 12GXF of the ASIC Act. [Schedule 2, Part 5, item 22,
subsection 4(1)] [Schedule 3, Part 6, item 28, subsection 12BA(1)]
338. The Bill inserts a definition of infringement notice, which means
an infringement notice issued under section 87ZE of the TP Act and
section 12GXA of the ASIC Act. [Schedule 2, Part 5, item 22,
subsection 4(1)] [Schedule 3, Part 6, item 29, subsection 12BA(1)]
339. The Bill inserts a definition of infringement notice provision,
which refers to the following provisions:
. an unconscionable conduct provision (of Part IVA of the
TP Act and of Part 2, Division 2, Subdivision C of the
ASIC Act);
. a contravention of certain of the consumer protection
provisions relating to unfair practices (except
sections 52, 53A(1)(c), 54, 56(1), 58 or 64) of Part V,
Division 1 of the TP Act; and of Part 2, Division 2,
Subdivision D (except sections 12DA, 12DC(2), 12DE,
12DG(1), 12DI or 12DM) of the ASIC Act);
. a consumer protection provision relating to pyramid
selling (of Part V, Division 1AAA of the TP Act; and of
Part 2, Division 2, Subdivision D of the ASIC Act);
. failure to respond to a substantiation notice (in
section 87ZN of the TP Act; and in section 12GYB of the
ASIC Act);
. providing false or misleading information in response
to a substantiation notice (in section 87ZO of the
TP Act; and in section 12GYC of the ASIC Act);
[Schedule 2, Part 5, item 23, paragraph 4(1)] [Schedule
3, Part 6, item 30, subsection 12BA(1)]
. certain product safety and product information
provisions of Part V, Division 1A of the TP Act
relating to:
- product safety standards and unsafe goods (in
subsections 65C(1) and (3));
- product information standards (in subsection
65D(1)); and
- compliance with a product recall order (in section
65G); and [Schedule 2, Part 5, item 23, subsection
4(1)]
. the new provision in the ACL concerning the use of
prescribed unfair contract terms (in Schedule 2, Part
2, section 6 of the TP Act; and in section 12BJ of the
ASIC Act) (once those provisions commence). [Schedule
2, Part 7, item 28, subsection 4(1)] [Schedule 3, Part
8, item 33, subsection 12BA(1)]
340. An infringement notice is not available in relation to section 52
of the TP Act and section 12DA of the ASIC Act since those
provisions do not purport to create any liability but establish a
norm of conduct. Other remedies are available for failing to
observe that norm of conduct, including injunctions, publication
orders, damages and remedial orders.
341. A mechanism will be inserted to provide for the ACCC and ASIC to
issue a person with an infringement notice containing a financial
penalty for suspected contraventions of various consumer protection-
related provisions of the TP Act and the ASIC Act.
342. The function of the proposed infringement notice mechanism is to
provide a mechanism for the ACCC and ASIC to issue an infringement
notice to a person for an alleged contravention of an infringement
notice provision, as an alternative to civil Court proceedings.
Under the mechanism:
. the ACCC or ASIC is not obliged to issue an
infringement notice;
. the liability of a person to Court proceedings is
unaffected if an infringement notice is either not
issued or withdrawn; and
. if a person fails to comply with the infringement
notice there is no penalty for non-compliance, however
if the ACCC or ASIC commences Court proceedings, a
Court can impose a higher penalty than the infringement
notice penalty in respect of the conduct giving rise to
the original alleged breach. [Schedule 2, Part 5, item
24, section 87ZD] [Schedule 3, Part 6, item 31, section
12GX]
Issue of an infringement notice
343. The ACCC or ASIC can issue an infringement notice to a person that
the ACCC or ASIC has reasonable grounds to believe has contravened
an infringement notice provision. [Schedule 2, Part 5, item 24,
subsection 87ZE(1)] [Schedule 3, Part 6, item 31, subsection
12GXA(1)]
344. An infringement notice can only be issued once for the same alleged
contravention. It has no effect if it either is issued more than
12 months after the contravention allegedly occurred or relates to
more than one alleged contravention. [Schedule 2, Part 5, item 24,
subsections 87ZE(2) and (3)] [Schedule 3, Part 6, item 31,
subsections 12GXA(2) and (3)]
345. The issuing of an infringement notice by ASIC can only be carried
out by a person who is a member of ASIC or an SES employee of ASIC.
[Schedule 3, Part 9, item 56, paragraph 102(2C)]
Matters to be included in an infringement notice
346. The infringement notice must include various matters, including a
number of formal and administrative requirements. [Schedule 2,
Part 5, item 24, subsections 87ZF(a)-(e),(j) and (k)] [Schedule 3,
Part 6, item 31, subsections 12GXB(a)-(e),(j) and (k)]
347. The infringement notice must:
. inform the person of the nature of the ACCC's or ASIC's
case against it in relation to the alleged
contravention; [Schedule 2, Part 5, item 24,
subsection 87ZF(f)] [Schedule 3, Part 6, item 31,
subsection 12GXB(f)]
. inform the person of the maximum pecuniary penalty that
a Court may impose (if the ACCC or ASIC commences
proceedings against the person following the person's
decision not to comply with the infringement notice);
[Schedule 2, Part 5, item 24, subsection 87ZF(g)]
[Schedule 3, Part 6, item 31, subsection 12GXB(g)]
. specify the penalty payable; [Schedule 2, Part 5, item
24, subsection 87ZF(h)] [Schedule 3, Part 6, item 31,
subsection 12GXB(h)]
. state that the person is payable within the compliance
period; and [Schedule 2, Part 5, item 24, subsection
87ZF(i)] [Schedule 3, Part 6, item 31, subsection
12GXB(i)]
. explain the consequences for the person if they comply
or fail to comply with the infringement notice, and of
ACCC or ASIC withdrawing the infringement notice.
[Schedule 2, Part 5, item 24, subsection 87ZF(m)]
[Schedule 3, Part 6, item 31, subsection 12GXB(m)]
Penalties specified in the infringement notice
Provisions common to the TP Act and the ASIC Act
348. A penalty unit is $110 at the time of writing, as defined in
section 4AA of the Crimes Act 1914.
349. For an alleged contravention of an unconscionable conduct
provision, or a consumer protection provision relating to unfair
practices (except misleading and deceptive conduct) or pyramid
selling, the penalty to be specified in the infringement notice is:
. for bodies corporate - 60 penalty units; and
. for persons other than bodies corporate - 12 penalty
units. [Schedule 2, Part 5, item 24, section 87ZG
(Items 1 and 2)] [Schedule 3, Part 6, item 31, section
12GXC (Item 2)]
350. For the alleged provision of false or misleading information in
response to a substantiation notice, the penalty to be specified in
the infringement notice is:
. for bodies corporate - 50 penalty units; and
. for persons other than bodies corporate - 10 penalty
units. [Schedule 2, Part 5, item 24, section 87ZG (Item
5)] [Schedule 3, Part 6, item 31, section 12GXC (Item 4)]
351. For an alleged contravention of the new provision in the ACL
concerning the use of prescribed unfair contract terms (once those
provisions commence), the penalty to be specified in the
infringement notice is:
. for bodies corporate - 50 penalty units; and
. for persons other than bodies corporate - 10 penalty
units. [Schedule 2, Part 7, item 75, section 87ZG]
[Schedule 3, Part 8, item 55, section 12GXC]
352. For an alleged failure to respond to a substantiation notice, the
penalty to be specified in the infringement notice is:
. for bodies corporate - 30 penalty units; and
. for persons other than bodies corporate - 6 penalty
units. [Schedule 2, Part 5, item 24, section 87ZG
(Item 4)] [Schedule 3, Part 6, item 31, section 12GXC
(Item 3)]
Product safety and product information provisions in the TP Act
353. For an alleged contravention of certain of the provisions relating
to product safety standards and unsafe goods (subsections 65C(1)
and (3)), product information standards (subsection 65D(1)), and
compliance with a product recall order (section 65G), the penalty
to be specified in the infringement notice is:
. for bodies corporate - 60 penalty units; and
. for persons other than bodies corporate - 12 penalty
units. [Schedule 2, Part 5, item 24, section 87ZG
(Item 3)]
Effect of compliance with an infringement notice
354. A person complies with an infringement notice if they correctly pay
the penalty specified in the infringement notice within the
infringement notice compliance period, and the infringement notice
is not withdrawn. [Schedule 2, Part 5, item 24, subsection
87ZH(1)] [Schedule 3, Part 6, item 31, subsection 12GXD(1)]
355. If a person complies with an infringement notice:
. the person is not taken by the same conduct to have
contravened the TP Act or the ASIC Act for any other
purpose; and
. new or existing civil or criminal proceedings in
relation to the alleged contravention cannot be
commenced or continued by the ACCC, ASIC or the
Commonwealth. [Schedule 2, Part 5, item 24,
subsections 87ZH(2) and (3)] [Schedule 3, Part 6, item
31, subsections 12GXD(2) and (3)]
356. Compliance with an infringement notice brings the process for
enforcing the alleged contravention to an end after its
administrative phase. This reflects the intention behind the
infringement notice mechanism of providing a process through which
the entity may forestall Court proceedings by the ACCC or ASIC in
relation to the alleged contravention. While the Commonwealth, the
ACCC or ASIC cannot take further action in respect of the alleged
contravention, this does not prevent private parties from doing so.
Effect of failure to comply with an infringement notice
357. If a person does not comply with an infringement notice - that is,
if they do not correctly pay the penalty specified in the
infringement notice within the infringement notice compliance
period and the infringement notice is not withdrawn - the ACCC,
ASIC or the Commonwealth may bring civil or criminal proceedings
against the person not for failing to pay, but in relation to the
same alleged contravention. [Schedule 2, Part 5, item 24, section
87ZI] [Schedule 3, Part 6, item 31, section 12GXE]
358. The limitation on the size of the financial penalty specified in
the infringement notice and restrictions preventing the ACCC or
ASIC from taking other action in relation to conduct dealt with
using this mechanism are intended to ensure that it is not used for
more serious contraventions as an alternative to existing Court
processes. However, if a person fails to comply with an
infringement notice and a Court subsequently determines that a
contravention has occurred, the Court can impose a significantly
higher pecuniary penalty (see Chapter 4).
359. To avoid doubt, while the infringement notice mechanism applies to
suspected contraventions of certain civil pecuniary penalty
provisions of the TP Act and the ASIC Act, a person that fails to
comply with an infringement notice may still be pursued by the ACCC
and ASIC in relation to a civil or criminal breach arising from the
same alleged contravention.
Compliance period for infringement notice
360. The infringement notice compliance period is initially 28 days,
however, the ACCC or ASIC may extend the infringement notice
compliance period once for a further period of 28 days. [Schedule
2, Part 5, item 24, subsections 87ZJ(1)-(3)] [Schedule 3, Part 6,
item 31, subsections 12GXF(1)-(3)]
361. The ACCC or ASIC must give notice of an extension of an
infringement notice compliance period to the person issued with the
infringement notice, however, failure to do so does not make the
extension invalid. [Schedule 2, Part 5, item 24, subsections
87ZJ(4)-(6)] [Schedule 3, Part 6, item 31, subsections 12GXF(4)-
(6)]
Withdrawal of an infringement notice
362. The person who was issued an infringement notice may make written
representations to the ACCC or ASIC seeking its withdrawal.
[Schedule 2, Part 5, item 24, subsection 87ZK(1)] [Schedule 3, Part
6, item 31, subsection 12GXG(1)]
363. Evidence given to the ACCC or ASIC in making such representations
is not admissible as evidence in a proceeding other than
proceedings based on the evidence or information given being false
or misleading. [Schedule 2, Part 5, item 24, subsection 87ZK(2)]
[Schedule 3, Part 6, item 31, subsection 12GXG(2)]
364. The ACCC or ASIC may withdraw an infringement notice if it
considers it appropriate, by written notice to the person.
[Schedule 2, Part 5, item 24, subsection 87ZK(3)] [Schedule 3, Part
6, item 31, subsection 12GXG(3)]
365. The ACCC or ASIC may extend the period for compliance whether or
note the person has sought an extension. [Schedule 2, Part 5,
item 24, subsection 87ZK(4)] [Schedule 3, Part 6, item 31,
subsection 12GXG(4)]
366. The withdrawal notice must include various matters. In addition to
the formal and administrative requirements, the withdrawal notice
must inform the person that they are liable to civil or criminal
proceedings in relation to the alleged contravention. [Schedule 2,
Part 5, item 24, subsection 87ZK(5)] [Schedule 3, Part 6, item 31,
subsection 12GXG(5)]
367. The ACCC or ASIC may withdraw the infringement notice with the
intention of not pursuing the alleged contravention, in which case
the ACCC or ASIC would not commence proceedings against the entity.
Alternatively, the rationale behind the withdrawal may be that the
ACCC or ASIC considers that the alleged contravention is more
serious than the ACCC or ASIC initially believed, and warrants
civil or criminal proceedings.
368. If the ACCC or ASIC wishes to withdraw an infringement notice, then
a withdrawal notice must be issued within the infringement notice
compliance period for the infringement notice. [Schedule 2, Part
5, item 24, subsection 87ZK(6)] [Schedule 3, Part 6, item 31,
subsection 12GXG(6)]
369. If the ACCC or ASIC withdraws the notice following payment of the
penalty, the ACCC or ASIC must refund the penalty paid by the
person. [Schedule 2, Part 5, item 24, subsection 87ZK(7)]
[Schedule 3, Part 6, item 31, subsection 12GXG(7)]
Application and transitional provisions
370. The amendments will commence on the day after the date of Royal
Assent.
Consequential amendments
371. To accommodate the infringement notice and substantiation notice
provisions of the Bill, current section 87ZD of the TP Act will be
renamed section 87ZP. [Schedule 2, Part 5, item 25]
Do not remove section break.
Outline of chapter
372. The Trade Practices Amendment (Australian Consumer Law) Bill 2009
amends the:
. Trade Practices Act 1974 (TP Act), and
. Australian Securities and Investments Commission Act 2001
(ASIC Act)
to provide for the Australian Competition and Consumer Commission
(ACCC) and the Australian Securities and Investments Commission
(ASIC) to issue public warning notices relating to consumer
protection in certain circumstances.
Context of amendments
373. On 2 October 2008, the Council of Australian Governments (COAG)
agreed to introduce a national consumer law in accordance with the
proposals of the Ministerial Council on Consumer Affairs (MCCA).
As part of this it was agreed to introduce a nationally consistent
power to issue public warning notices, replacing the various state
and territory powers currently in existence. These provisions give
effect to that agreement in the Commonwealth law.
374. The amendments will allow the ACCC or ASIC to issue a warning
notice in respect of a suspected breach of certain provisions
within the TP Act or the ASIC Act or a failure to respond to a
substantiation notice, provided certain conditions are satisfied.
Summary of new law
375. The ACCC or ASIC may issue a warning notice where:
. it has reasonable grounds to believe a corporation's
conduct may have breached certain provisions of the TP Act
or the ASIC Act; or
. a person refuses or fails to respond to a substantiation
notice,
and:
. it is satisfied that one or more persons has suffered, or
is likely to suffer detriment as a result of the conduct;
and
. it is satisfied that it is in the public interest to issue
a public warning notice.
376. The power to issue a public warning notice is in addition to any
other information dissemination or notification powers of either
the ACCC or ASIC and is not intended to limit such existing
abilities.
Comparison of key features of new law and current law
|New law |Current law |
|The amendments will allow|No equivalent in |
|the ACCC or ASIC to issue|Commonwealth law. |
|public warning notices |Most States and |
|relating to consumer |Territories have public |
|protection in certain |warning provisions |
|circumstances. |allowing warnings to be |
| |issued in relation to |
| |consumer protection |
| |matters. |
Detailed explanation of new law
The power to issue a public warning
377. The ACCC or ASIC may issue a public warning notice in writing about
the conduct of a corporation where:
. it has reasonable grounds to believe a corporation's
conduct may have breached certain provisions of the TP Act
or the ASIC Act; or
. a person refuses or fails to respond to a substantiation
notice,
and:
. it is satisfied that one or more persons has suffered, or
is likely to suffer detriment as a result of the conduct;
and
. it is satisfied that it is in the public interest to issue
a public warning notice. [Schedule 2, Part 6, item 26,
subsection 86DA(1)] [Schedule 3, Part 7, item 32,
subsection 12GLC(1)]
378. The determination of whether the ACCC or ASIC is satisfied that
there is, or is likely to be, detriment to one or more persons as a
result of the conduct, and that it is in the public interest to
issue a public warning notice, is a matter within the discretion of
the ACCC or ASIC, in accordance with the proper exercise of their
functions.
379. The ACCC may issue a public warning notice in relation to suspected
contraventions of:
. the unconscionable conduct provisions (Part IVA of the
TP Act);
. the consumer protection provisions (Part V of the TP Act);
. the offences provisions (Part VC of the TP Act) or of the
ACL [Schedule 2, Part 6, item 26, paragraph 86DA(1)(a)]
[Schedule 2, Part 7, item 53, paragraph 86DA(1)(a]; or
. the provisions of the ACL once those provisions commence.
[Schedule 2, Part 7, item 53, paragraphs 86DA(1)(a)]
380. The ACCC may not issue a public warning notice in relation to
financial services. [Schedule 2, Part 6, item 26, subsection
86DA(2)]
381. ASIC may issue a public warning notice in respect of a suspected
contravention of:
. the unconscionable conduct provisions (Part 2, Division 2,
Subdivision C of the ASIC Act);
. the consumer protection provisions (Part 2, Division 2,
Subdivision D of the ASIC Act); or [Schedule 3, Part 7,
item 32, paragraph 12GLC(1)(a)]
. the unfair contract terms provisions (Part 2, Division 2,
Subdivision BA of the ASIC Act) once those provisions
commence. [Schedule 3, Part 8, item 40, paragraph
12GLC(1)(a)]
382. The issuing of a public warning notice by ASIC can only be carried
out by a person who is a member of ASIC or an SES employee of ASIC.
[Schedule 3, Part 9, item 56, paragraph 102(2C)]
Substantiation notices under the TP Act and ASIC Act
383. The ACCC or ASIC may issue a public warning notice in writing where
a person has refused or failed to respond to a substantiation
notice. [Schedule 2, Part 6, item 26, paragraph 86DA(3)(a)]
[Schedule 3, Part 7, item 32, paragraph 12GLC(2)(a)]
384. The ACCC or ASIC can only issue this notice if it is satisfied that
it is in the public interest to issue such a notice. [Schedule 2,
Part 6, item 26, paragraph 86DA(3)(b)] [Schedule 3, Part 7, item
32, paragraph 12GLC(2)(b)]
Notice not a legislative instrument
385. A public warning notice issued in relation to either a
contravention or a substantiation notice matter is not a
legislative instrument within the meaning of section 5 of the
Legislative Instruments Act 2003, and is not exempted from the
operation of that Act. [Schedule 2, Part 6, item 26, subsection
86DA(4)] [Schedule 3, Part 7, item 32, subsection 12GLC(3)]
Application and transitional provisions
386. The amendments will commence on the date of Royal Assent or such
other day as may be prescribed.
Do not remove section break.
Chapter 10
Minor and technical amendments
Outline of chapter
387. In implementing the Australian Consumer Law (ACL), the Trade
Practices Amendment (Australian Consumer Law) Bill 2009 (the Bill)
makes a number of consequential amendments to various Acts.
Detailed explanation of new law
388. The existing schedule in the Trade Practices Act 1974 (TP Act)
currently contains the Schedule version of Part IV of the TP Act,
which is applied as a law of the States and Territories.
389. The Bill will introduce another Schedule, which will contain the
ACL, to the TP Act.
390. In implementing these changes, references to the existing schedule
in the TP Act are amended to reflect the addition of a new Schedule
to the TP Act, such that what was the 'Schedule' to the TP Act
should now read 'Schedule 1' to the TP Act. This includes
amendments to the Administrative Decisions (Judicial Review) Act
1977 and the Telecommunications (Intercept and Access) Act 1979 as
well as the TP Act. [Schedule 4, item 1] [Schedule 4, item 2]
[Schedule 4, item 4] [Schedule 4, item 5]
391. A minor amendment will also ensure that, as with other consumer
protection laws in the TP Act, the extended application provisions
also apply to the prohibition on pyramid selling in Division 1AAA
of Part V of the TP Act. [Schedule 4, item 3]
Application and transitional provisions
392. With the exception of the amendment mentioned below, the amendments
in this Chapter will commence either on a day to be fixed by
Proclamation, or six months after the Bill receives Royal Assent,
whichever is earlier.
393. The amendment described in paragraph 10.5 will commence on the day
after Royal Assent.
Chapter 11
Regulation impact statement - An enhanced national consumer policy
framework
Part A Introduction and Background
Introduction
394. This RIS covers the proposed reforms recommended by the
Productivity Commission (PC) in its Review of Australia's Consumer
Policy Framework, which was published in May 2008 (see Attachment
A). These reforms form the basis of a series of recommendations
for reform agreed by the Business Regulation and Competition
Working Group (BRCWG) of the Council of Australian Governments
(COAG), in consultation with the Ministerial Council on Consumer
Affairs (MCCA). COAG will consider the BRCWG's recommendations at
its meeting on 2 October 2008.
Australia's existing consumer policy framework
Scope of this regulation impact statement
395. This regulation impact statement (RIS) addresses proposed reforms
to Australia's consumer policy framework, which consists of the
generic consumer and related provisions of the Trade Practices Act
1974 (TPA), which apply nationally, and the States' and
Territories' fair trading Acts (FTAs), along with supporting policy
development and enforcement capabilities.
396. Consumer regulation in Australia is split between national and
state/territory legislative and regulatory frameworks. A new
national consumer policy framework will need to be developed
through the agreement to all Australian governments. Reforms to
Australia's consumer policy framework will involve changes to
national, State and Territory legislation and regulations affecting
government, businesses and consumers. The options for reform are
set out in this RIS and are based in the recommendations of the PC.
Background to the reform of Australia's consumer policy framework
397. The object of the TPA is to enhance the welfare of Australians
through the promotion of competition and fair trading and provision
for consumer protection. The TPA contains a range of provisions
which provide generic protections for consumers. In many cases,
these provisions are reflected in a substantially similar way in
state and territory laws.
398. On 11 December 2006 the previous government commissioned the PC to
undertake an inquiry into Australia's consumer policy framework.
The PC was asked to report on ways to improve harmonisation and
coordination of consumer policy, its development and administration
across jurisdictions in Australia, avoiding regulatory duplication
and inconsistency.
399. The PC presented its final report to the Government on
30 April 2008, and it was tabled in the Australian Parliament and
published on 8 May 2008. During the course of its work, the PC
received more than 250 submissions over the course of its inquiry
from government bodies, businesses, consumer representatives and
the public as well as conducting two rounds of public hearings
around Australia. It also published a draft report in December
2007. Submissions were received and public hearings conducted
following the publication of the draft report which the PC took
into account when producing its final report and recommendations.
400. On 26 March 2008 COAG agreed that BRCWG, in consultation with MCCA,
would develop an enhanced consumer policy framework, including
legislative and regulatory structures, drawing on the final report
of the PC.
401. Since that time, MCCA has developed a series of reform proposals
designed to respond to the PC's report, which it agreed on
15 August 2008 (see Attachment B), along with an indicative
implementation plan (see Attachment C). These proposals were then
submitted to the BRCWG for consideration, prior to being put to
COAG for agreement on 2 October 2008.
The PC's recommendations for reform
402. The PC found that 'while Australia's consumer policy framework has
considerable strengths, parts of it require an overhaul' (PC 2008
I.2). With this in mind the PC made a wide-ranging series of
recommendations to all Australian governments. Its recommendations
are set out in Attachment A.
403. In summary the PC recommendations included (see PC 2008 I.65-76 and
II.47, 79, 168) that:
. Australian governments should implement a new national
consumer law, based on the consumer provisions in the TPA.
The new law could be augmented in areas that the TPA does
not adequate protection in particular generic issues and
incorporate certain provisions from FTAs.
. The new law should apply to all consumer transactions,
including financial services, with ASIC retaining its role
as the primary regulator for financial services.
. Unnecessary or divergent sector-specific laws should be
identified with a view of repealing or harmonising it
across jurisdictions where possible.
. A provision should be incorporated in the new law that
addresses unfair contract terms. The PC's preferred
approach would be that the provision would relate only to
standard form contracts, exclude up-front price and
require all circumstances of the contract to be
considered. A term would be unfair when it causes
significant imbalance in the parties' rights and
obligations and resulted in material detriment to
consumers.
. Responsibility for enforcing the consumer product safety
provisions of the new law in all jurisdictions should be
transferred to the Australian Government and undertaken by
the ACCC.
. The remainder of the new law should be jointly enforced by
the Australian Competition and Consumer Commission (ACCC)
and State and Territory consumer regulators. Individual
States and Territories should have the option of referring
their enforcement powers for all of the new law to the
Australian Government with enforcement undertaken by the
ACCC.
. The new enforcement arrangements should be independently
reviewed, with explicit consideration of the costs and
benefits given to the case of moving towards a single
national regulator model. A single national enforcer
should be considered if the review finds evidence of
differing enforcement practices or divergence of
jurisdictional regulation (PC 2008 II.79-80).
The current legislative framework
404. Generic consumer protections for Australian consumers are currently
found in ten separate laws: the TPA and the Australian Securities
and Investment Act 2001 (ASIC Act), which apply nationally, and the
eight State and Territory FTAs. While many of the generic
protections contained in these laws are broadly consistent, there
have for a long time been a large number of small differences
between them. In recent years, more significant differences have
started to emerge, such as:
. Victoria's provisions dealing with unfair contract terms
(2003);
. the ACT's provisions regulation of credit card limit
increases (2002);
. NSW and Victoria's similar but different rules concerning
telemarketing (2003-2004); and
. Queensland's decision to introduce its own grocery unit
pricing regulation (2008).
405. The once gradual - but now substantial - shift away from largely
consistent generic consumer laws (which were agreed in 1983 and
enacted over the next decade), has seen the current framework
become more costly for consumers and businesses, while providing
few or no counterbalancing benefits (PC 2008 II.57).
406. There are many differences between Australian consumer laws which
have significant implications for the consistency of those laws.
The major differences are set out below:
. The definition of 'consumer': There are significant
differences between jurisdictions in how a 'consumer' is
defined for the purposes of consumer protection under the
TPA, ASIC Act and FTAs. The two main qualities used to
define categories of consumers between jurisdictions are
whether the goods or services are acquired for personal
and domestic or business use, and the value of the goods
or services purchased (most jurisdictions use $40,000 as
the upper threshold) (Corones & Christensen 2007 39-61).
. Objects of the TPA and FTAs: There are significant
differences between the objects provisions of the various
Australian consumer laws. Objects provisions can be
significant as an aid to judicial interpretation and
therefore differences can influence judicial outcomes for
consumers seeking to utilise a particular consumer
provision. They can also reflect and inform very
different approaches to issues of policy development and
enforcement (Corones & Christensen 2007 25-26).
. Implied conditions and warranties: Inconsistencies exist
as to the application of implied warranties and conditions
nationally. Only the TPA and the FTAs of NSW and NT
extend implied conditions and warranties to consumers who
have not had a contractual relationship with the supplier
(Corones & Christensen 2007 84-94).
. Industry codes: There are differences in the laws that
apply to codes in respect of their content, time limits,
enforcement, drafting and consultation processes, with
further differences based on whether they are mandatory
and voluntary (Corones & Christensen 2007 69-73).
. Industry-specific regulation: The PC recognised
significant differences in industry-specific consumer
regulation in the energy, food, credit, tobacco,
electrical products and therapeutic goods industries. The
PC also found some industry-specific legislation is overly
prescriptive and unnecessary given the existence of
generic consumer protections. Furthermore, changes to
industry-specific regulation often occur, which creates
ongoing complexity and cost of businesses as they attempt
to maintain compliance across jurisdictions (PC 2008
II.65, 81-87).
. Occupational licensing: The PC found more than 30 of
around 100 consumer-related occupations licensed by the
States and Territories are only licensed in one or more
jurisdictions. This raises questions as to the necessity
of such licensing schemes and their ongoing economic
impacts. Negative licensing is only used in Victoria and
South Australia (PC 2008 II.93-94).
. Product standards: Product safety standard provisions,
modelled on those in the TPA, are included in the NSW, NT,
WA, Queensland and Victorian FTAs. Victoria, Queensland
and SA also have legislation that allows for mandatory
standards to be applied to services (Corones and
Christensen 2007).
. Enforcement and remedies: The majority of consumer
protection matters are handled by the State and Territory
Fair Trading offices, with the ACCC focused on issues
relating to corporations, and international and inter-
state trade. However, the diversity of industry-specific
consumer laws is matched in enforcement terms by the
existence of more than 100 regulators responsible for
their enforcement.
. The diversity of consumer law agencies is also reflected
in the wide range of regulatory approaches that they
adopt. These reflect a range of practical considerations,
including cost and the needs of the industry being
regulated, but also the regulatory objectives of the
organisation concerned, informed by the legislation it is
responsible for enforcing (PC 2008 II.227). Variable
outcomes for consumers occur due to the divergent
requirements for businesses, differences in enforcement
intensity and jurisdictional priorities (PC 2008 II.19).
. The Victorian Government highlighted that State and
Territory fair trading agencies have had a greater focus
on encouraging compliance and tend to undertake more
consumer education, information and advice than is the
case with the ACCC (PC 2008 II.227). State and Territory
agencies generally possess most of the enforcement powers
found in the TPA and all have additional powers. For
example, FTAs in NSW, Queensland, SA, Victoria and the ACT
all include the power to require the substantiation of
claims made in the promotion of goods or services, which
is not provided for in the TPA.
. Consumers also have additional options for consumer
redress under different State and Territory FTAs. In NSW,
Victoria and the ACT, there are consumer tribunals as well
as small claims courts. In other jurisdictions there
small claims courts. These provide a quick and relatively
inexpensive alternative to litigation for consumers
(Corones and Christensen 2007 116).
The current enforcement framework
407. At the national level, the Australian Competition and Consumer
Commission (ACCC) enforces generic consumer protections. The
Australian Securities and Investments Commission (ASIC) monitors
and promotes market integrity and consumer protection in relation
to the Australian financial system. The TPA excludes the provision
of financial services from the scope of its provisions.
408. There are also eight lead consumer agencies that administer and
enforce consumer protection policy in the States and Territories:
. New South Wales - Office of Fair Trading ;
. Consumer Affairs Victoria;
. Queensland - Office of Fair Trading;
. Western Australia - Department of Consumer and Employment
Protection;
. South Australia - Office of Consumer and Business Affairs;
. Tasmania - Office of Consumer Affairs and Fair Trading;
. Australian Capital Territory - Consumer Affairs and Fair
Trading; and
. Northern Territory - Office of Consumer and Business
Affairs.
409. The division, in terms of jurisdictional and functional
responsibilities, between the different enforcement agencies is not
always straightforward and has been a long-term source of confusion
for consumers and industry alike. In practice, it can result in a
waste of resources as enforcement agencies try to ascertain
jurisdiction in overlapping cases (Corones & Christensen 2007 21-
22,130-132).
The problem
The development of national consumer product and service markets
410. Australia's consumer product and service markets are becoming
increasingly national in character. In 2007 around 48 per cent of
goods and services, measured by turnover, were supplied by firms
operating nationally. Since 1998, the number of retail businesses
operating nationally has increased from 47 per cent to 53 per cent
and, since 2003, there has been a 70 per cent increase of firms
that operate in every State and Territory (PC 2008 II.51-52).
411. Innovations in supply chain management, enabled by the greater use
of computers, have led to an expansion in national chain stores
that supply a range of goods. Internet technology has also seen
the increase of consumers buying goods or services across
jurisdictions. The NSW Office of Fair Trading estimates the
percentage of adult Australians ordering or purchasing online to be
above 50 per cent (Burnley 2007).
412. The trend towards national consumer markets means that the burden
imposed by divergent and complex regulatory requirements will grow.
The increasing pace of change in many of those markets, fuelled by
technological change, means that detriment for consumers from
unresponsive policy making will also escalate (PC 2008 II.57).
The impact of divergent and inconsistent consumer laws
413. Variation exists in consumer protection legislation, policy
approaches, enforcement intensity and practices and redress options
between the Commonwealth and the States and Territories, and
between the States and Territories. Australian consumers currently
experience differing levels of protections and redress options
depending on where they reside or where they make purchases, due to
the divisions of responsibility of consumer policy. These
differences promote inconsistent signals to consumers about their
rights and responsibilities
414. The development of e-commerce and resulting increase in cross-
border transactions raises concern in relation to application of
State and Territory consumer protection legislation. Extra-
territorial application of State and Territory legislation can
create uncertainty where a transaction involves parties in
different jurisdictions and therefore there is a need to determine
which consumer protection framework applies. Although a consumer
purchasing interstate or online may be able to rely on the TPA, in
contrast with State or Territory legislation, low-cost redress
through tribunals will not be available.
415. Business compliance costs are increased as suppliers operate within
multi-jurisdictional and somewhat divergent policy regimes. A
large part of these costs will be passed onto consumers in the form
of higher prices. Variations in business requirements may reduce
the opportunities or attractiveness to utilise economies of scale.
Even where there are no actual differences in regulation, suppliers
may still incur legal costs to ascertain their obligations across
jurisdictions. (see PC 2008 I.17)
Policy inertia
416. The existing multi-jurisdictional consumer policy structures impede
responsive policy making through ineffectual processes and lengthy
delays. Policy making can be slow and reduces the ability to keep
pace with changing market circumstances in consumer markets
nationally. Harmonisation of laws can take years to implement.
417. Under the current regime, there is a need to secure agreement from
nine jurisdictions for changes to policy settings to apply
consistently in all jurisdictions. Governments have sought to
ensure that this requirement does not impede responsive policy
making through the Ministerial Council of Consumer Affairs (MCCA)
and other related coordination mechanisms. In some cases, specific
issues can remain unresolved for years as MCCA must also contend
with external constraints for timely decision making.
418. Policy inertia will remain a significant cost for consumers unless
the various constraints on MCCA can be significantly reduced.
Without timely responses, there is always the risk that some
jurisdictions will rely on unilateral changes to their consumer
laws, adding to further divergence. The lack of timeliness in
decision making and implementation can be partly attributed to the
frequent changing of responsible Ministers, lack of resources in
individual sponsoring agencies undertaking cross-jurisdictional
policy development and the inconsistent pace at which individual
jurisdictions apply template legislation (PC 2008 I.17, PC 2008
II.135).
The objective of consumer policy reform
419. A major objective of consumer policy framework reform is to promote
consistency in consumer policy and protections across all
Australian jurisdictions. This will reduce multi-jurisdictional
complexities and result in lower compliance costs for businesses
operating nationally, reductions in jurisdictional overlaps and
duplication and fragmentation of governmental resources, increased
certainty and equity in protections and redress options for all
Australian consumers (PC 2008 I.18-19).
420. This objective is consistent with the Australian Government's
response to the Banks Taskforce (Report of the Taskforce on
Reducing Regulatory Burdens on Business (Banks Taskforce) 2006 50-
52).
How we assess the regulatory impact of reforms
421. Potential impacts of these reforms, positive or negative, could
affect three impact groups: consumers, business and governments.
Typical impacts on consumers could be changes in prices of goods or
services or increased consumer choice. Typical impacts on business
could be increases or decreases in compliance costs. Typical
impacts on government could be changes in the costs of
administering and enforcing changed regulations. The impacts of
each potential reform option will be compared to the status quo
position.
422. In its final report the PC provided a detailed analysis of the
benefits of the proposed reforms in Chapter 14 of its final report.
The reforms outlined below, are based, with some slight variation,
on the recommendations of the PC. A summary of the PC's analysis
is provided in Part E - Benefits of the proposed reforms.
Part B National generic consumer provisions
Options for national consumer provisions
423. Four options will be considered in achieving the objective of
promoting consistency in consumer policy and protection across
Australian jurisdictions.
. Option A - Status Quo: This option would involve a
retention of the current arrangements with no significant
change;
. Option B - Re-harmonisation of existing generic consumer
provisions: This option would involve a realignment of
existing generic consumer provisions by each jurisdiction.
Governments could provide high level commitments to
ongoing consistency;
. Option C - A national generic consumer law - application
law: This option would involve the development of a new
national consumer law, which would be legislated
nationally, and then applied (as amended from time to
time) into the law of each jurisdiction; or
. Option D - Referral of powers to the Commonwealth: This
option would involve each jurisdiction referring its
powers in relation to consumer affairs and fair trading
matters to the Commonwealth.
Impact analysis
Option A - Status quo
424. This option would involve retaining the current legislative
arrangements without any significant change. A description of the
current legislative situation is set out in Section 2 of this RIS.
|Option A - Status quo |
|Impact group |Benefit |Cost |
|Consumers |Consumers will retain|Ongoing business |
| |familiarity with |compliance costs |
| |existing laws, |resulting from |
| |consumer agencies and|complexity will be |
| |enforcement |passed onto consumers|
| |mechanisms. |in the form of higher|
| | |prices and reduced |
| | |choice. |
| |Consumer protections |Consumers will have |
| |tailored specifically|to deal with |
| |to the needs of |mul-tiple information|
| |residents of |sources about |
| |individual |consumer issues at |
| |jurisdictions. |both national and |
| | |jurisdictional |
| | |levels, leading to |
| | |complexity and |
| | |confusion. |
| | |Regulatory complexity|
| | |means that regulation|
| | |is not responsive and|
| | |out-of-date. This |
| | |creates greater |
| | |potential for |
| | |non-compliance by |
| | |business and |
| | |increased |
| | |opportunities for |
| | |consumer harm and |
| | |exploitation. |
| | |Consumers will have |
| | |to navigate complex |
| | |dispute resolution |
| | |and consumer redress |
| | |options, at both |
| | |national and |
| | |jurisdictional |
| | |levels. |
| |The existence of |Varying levels of |
| |'best practice' |protection for |
| |regulation for some |consumers, which can |
| |consumers. |disadvantage some, |
| | |based purely on the |
| | |jurisdiction in which|
| | |they live. |
|Business |Businesses will |Increasing complexity|
| |retain familiarity |and inefficiency in |
| |with existing laws, |consumer regulation |
| |consumer agencies and|will lead to |
| |enforcement |increased compliance |
| |mechanisms. |costs, in respect of |
| | |dealing with |
| | |individual |
| | |legislative and |
| | |enforcement |
| | |requirements and in |
| | |managing these across|
| | |national businesses. |
| | |Unresponsive |
| | |regulation and |
| | |regulatory complexity|
| | |creates a greater |
| | |potential for |
| | |non-compliance by |
| | |business, with |
| | |consequent legal |
| | |costs and penalties. |
| |Specific regulation |Increased legal costs|
| |which takes account |flowing from |
| |of the needs of |different legislative|
| |businesses, including|requirements, |
| |small businesses, in |consumer redress |
| |individual |options and |
| |jurisdictions. |enforcement practices|
| | |across Australia. |
| | |Complexity |
| | |discourages the |
| | |development of |
| | |national businesses |
| | |and markets, leading |
| | |to reduced business |
| | |development, |
| | |innovation and |
| | |competition. Limits |
| | |the scope of small |
| | |businesses to operate|
| | |inter-state and |
| | |expand. |
|Governments |The application of |Complexity and |
| |'best practice' |diversity of |
| |regulation in some |regulation for |
| |jurisdictions. |increasingly national|
| | |consumer product and |
| | |service markets, |
| | |requiring greater |
| | |knowledge and |
| | |resources to manage. |
| |Regulatory innovation|Duplication of effort|
| |in jurisdictions, |and resources |
| |leading to wider |dedicated to policy |
| |innovation |development and |
| |nationally. |implementation. |
| |Scope and nature of |Duplication of |
| |enforcement powers |resources dedicated |
| |tailored to the |to enforcement |
| |specific |issues, and complex |
| |circumstances of |inter-jurisdictional |
| |individual |arrangements for |
| |jurisdictions. |referrals and |
| | |information sharing. |
| | |Difficulties in |
| | |ensuring effective |
| | |cross border |
| | |enforcement, |
| | |particularly in |
| | |relation to |
| | |inter-state |
| | |transactions, where |
| | |laws differ across |
| | |jurisdictions. |
| | |In relation to |
| | |national issues, the |
| | |incidence of policy |
| | |inertia and lack of |
| | |responsiveness, due |
| | |to complex policy |
| | |discussion and |
| | |decision structures, |
| | |vested political and |
| | |bureaucratic |
| | |interests and a lack |
| | |of engagement beyond |
| | |the consumer policy |
| | |realm. |
Option A - Outcome
425. The PC concluded that, in a number of respects, Australia's
consumer policy framework is sound. It provides a broad platform
for consumer protection for most products and services. However,
it has systematic deficiencies which impair its effectiveness and
which limit its capacity to adapt to emerging issues (PC 2008
II.17).
426. These systematic deficiencies are based in an inappropriate
delineation of responsibilities between the Commonwealth and the
States and Territories that has led to jurisdictional
inconsistencies, gaps and overlaps in the framework and hampered
coherent and timely policy development (PC 2008 II.17). Most of
these variations are minor. However, while their individual
impacts on the protections afforded to consumers and on business
compliance costs may generally be considered to be small, when
considered collectively they are, and will increasingly become,
more of a burden (PC 2008 II.14).
427. It is also not clear that changes to the existing regulatory
framework have been subject to appropriate scrutiny, and that quick
fixes and piecemeal analysis have been applied (PC 2008 II.8). It
is increasingly recognised that regulatory measures designed to
protect consumers may have impacts on markets that create
unintended consequences and costs, in terms of business compliance
and complexity, but also increased consumer costs, restricted
choice and reduced competition, and that there are opportunities
for policy makers to use better tools to identify the nature of
consumer problems and behaviours, with the consequence that the
existing consumer policy framework falls short.
428. In this respect the following costs resulting from the current
framework were identified in the PC's review process:
. the cost to all Australian governments of maintaining
duplicative policy development, implementation and law
enforcement capabilities;
. the compliance cost to businesses of dealing with 'myriads
of enforcement agencies, multiple statutes,
inconsistencies across states and multiple licensing
systems' (quoted in PC 2008 II.49) in increasingly
national consumer product and service markets; and
. the cost to consumers of:
- inconsistent regulation that does not keep pace with
market developments, which leads to opportunities for
consumer harm and exploitation and a greater potential
for business non-compliance;
- bearing higher prices as a result of business compliance
costs being passed on; and
- limitations in accessing effective dispute resolution
and redress options (see PC 2008 II.49).
429. By contrast, the benefits of maintaining the current frameworks are
more limited, with reference being made to the ability of State and
Territory policy makers and enforcement agencies to respond to
regional, industry and marketplace issues more flexibly and the
greater scope for policy experimentation and learning (PC 2008
II.48-51).
Option B - Re-harmonisation of existing generic consumer
provisions:
430. Option B would involve a realignment of existing generic consumer
provisions by each jurisdiction to ensure that each had a set of
nationally consistent generic consumer protections. Governments
could provide high level commitments to maintaining ongoing
consistency.
431. This would reflect the previous approach agreed in 1983, when the
Commonwealth, States and Territories agreed to consistent consumer
protections. Between 1987 and 1992 each State and Territory
subsequently introduced consumer protection provisions broadly
equivalent to those in the TPA through the FTAs (PC 2008 II.18).
432. Under Option B, States and Territories could remain responsible for
administering a large body of specific consumer regulation but
generic protections would be harmonised. However, it would
preserve the ability of jurisdictions to adapt legislation to suit
issues and problems specific to their jurisdictions, while
maintaining a commitment to broad consistency. Under the current,
similar approach, some important innovations in consumer policy
have emerged from individual jurisdictions, such as Victoria's
unfair contract terms laws.
|Option B - Re-harmonisation of existing generic consumer |
|provisions |
|Impact group |Benefit |Cost |
|Consumers |The provision of |Ongoing risk that |
| |consistent national |jurisdictions will |
| |consumer protections, |not remain |
| |encouraging consumer |committed to |
| |confidence in national|harmonisation, and |
| |consumer product and |will introduce |
| |service markets. |divergent |
| | |provisions, which |
| | |creates |
| | |inconsistent levels|
| | |of protection for |
| | |consumers. |
| |Reduced prices for |Ongoing risk that |
| |consumers, as a |regulatory |
| |consequence of |break-out will lead|
| |lowering business |to increased |
| |compliance costs. |business compliance|
| | |costs, which will |
| | |be passed onto |
| | |consumers. |
| |Beyond the initial |Beyond the initial |
| |phase, benefits are as|phase, costs are as|
| |for Option A. |for Option A. |
|Business |National consistency |Business compliance|
| |would reduce |costs during a |
| |compliance costs (once|transition phase. |
| |harmonisation is | |
| |effected) for | |
| |businesses operating | |
| |(or seeking to | |
| |operate) across | |
| |jurisdictional | |
| |borders, and for new | |
| |entrants seeking to | |
| |enter Australian | |
| |markets. | |
| |Consistency encourages|Ongoing risk that |
| |development of |jurisdictions will |
| |national businesses |not remain |
| |and markets, leading |committed to |
| |to reduced business |harmonisation, and |
| |development, |will introduce |
| |innovation and |divergent |
| |competition. |provisions, which |
| | |create inconsistent|
| | |regulation and |
| | |increased |
| | |compliance costs. |
| |Beyond the initial |Beyond the initial |
| |phase, benefits are as|phase, costs are as|
| |for Option A. |for Option A. |
|Government |Permits individual |Ongoing risk of |
| |jurisdictions to |regulatory |
| |maintain consistency |breakout, where |
| |while also having |individual |
| |freedom to engage in |jurisdictions, in |
| |policy innovation and |responding to |
| |provide tailored |specific local |
| |protections where |pressures introduce|
| |justified. |new or modified |
| | |consumer laws, thus|
| | |creating complexity|
| | |and undermining the|
| | |commitment to |
| | |national |
| | |consistency. |
| |Jurisdictions can |Retains the need |
| |share the cost of |for lengthy and |
| |developing policy. |cumbersome policy |
| | |development and |
| | |policy change |
| | |processes, and the |
| | |need for all |
| | |jurisdictions to |
| | |agree and also act |
| | |on initiatives. |
| |Jurisdictions can |Duplication of |
| |legislate in the most |effort in terms of |
| |appropriate manner for|legislative |
| |their jurisdictional |processes, as nine |
| |requirements, within |legislative |
| |the requirement for |processes are |
| |national consistency. |required to modify |
| | |the consistent |
| | |national law and |
| | |the requirements of|
| | |electoral cycles, |
| | |government changes |
| | |and parliamentary |
| | |timetables make |
| | |this cumbersome. |
| |Greater consistency |Transitional cost |
| |for enforcement |of enforcement |
| |agencies, allowing for|agencies |
| |more efficient and |implementing to the|
| |effective |new arrangements. |
| |cross-jurisdictional | |
| |action and information| |
| |sharing. | |
| |Easier to inform |Transitional cost |
| |consumers and |of educating |
| |businesses of their |businesses and |
| |rights, due to |consumers about the|
| |national consistency. |new law, and the |
| |Creates opportunities |impact of changes. |
| |for enforcement | |
| |agencies to pool | |
| |resources and provide | |
| |more nationally | |
| |focussed information | |
| |and advice. | |
| |Beyond the initial |Beyond the initial |
| |phase, benefits are as|phase, costs are as|
| |for Option A. |for Option A. |
Option B - Outcome
433. The fundamental problem with Option B is that, once harmonisation
has been achieved, there are limited incentives for individual
jurisdictions to ensure consistency in the long term, and the
situation reverts to the status quo (Option A). The PC identified
that previous attempts at legislative harmonisation have not been
successful due to:
. the willingness of individual jurisdictions to engage in
unilateral policy innovation in responding to specific
issues and pressures within their jurisdiction (PC 2008
II.19,59); and
. the varying pace at which jurisdictions amend consumer
laws, due to their own policy processes, legislative
timetables, changes of government and government
priorities (PC 2008 II.55-57).
434. More than 20 years after the Commonwealth, States and Territories
agreed to harmonise consumer protection, it is evident that it was
not effective and is imposing considerable business costs, with
flow on costs for consumers.
435. While re-harmonisation would eliminate the inconsistencies and
overlap of consumer protection laws across different Australian
jurisdictions and is, accordingly, a worthy objective, this is
dependent on a range of things occurring, including:
. the strength of commitment at a government-to-government
level by jurisdictions to agree to and maintain consistent
laws;
. the ability of individual jurisdictions to implement the
agreed reforms in a timely way (bearing in mind it took
over five years for the States and Territories to
introduce changes modelled on Part V of the TPA in the
1980s and early 1990s);
. the willingness of individual jurisdictions to commit to
the requirement for consistency, and to engage in policy
development and implementation in a timely way after that;
and
. the willingness of individual jurisdictions to consider
the wider implications of unilateral policy action in
preference to immediate jurisdictional priorities, when
decisions are made to undertake such a course.
436. Without these issues being managed, it is unlikely that such
harmonisation is any more than a short-term goal, with the same
problems of legislative and enforcement inconsistency developing
over time, with flow on effects for business compliance costs and
wider consumer detriment. In terms of achieving efficiencies in
the development of policy, this option poses difficulties in terms
of:
. the ongoing requirement for the agreement of all
jurisdictions to achieve change, with the risk that
individual jurisdictions are free at any time to undertake
unilateral policy innovation; and
. ongoing inefficiencies and duplication of effort in the
policy development and implementation phases (see PC 2008
II.51-57).
437. With these concerns in mind, the costs and benefits of Option B
remain much the same as for Option A, with some additional short
term costs and benefits:
. governments would bear the short term costs of a policy
process designed to achieve harmonisation, while
ultimately also bearing a long term cost of retaining many
of the existing duplicative policy development,
implementation and enforcement structures;
. business would bear a short term cost of adjusting to
harmonised generic consumer protections, without a long
term benefit in the form of guaranteed national
consistency of consumer laws and reduced compliance costs
over time; and
. consumers would bear a short term benefit from harmonised
generic consumer protections, without a long term benefit
in the form of guaranteed national consistency of consumer
protections, and guaranteed longer term reductions in
business compliance costs (see PC 2008 II.58).
Option C - A national generic consumer law - application law
438. Under an applied law scheme, one jurisdiction acts as the lead
legislator, passing the law in their own jurisdiction, along with a
schedule version for application elsewhere. The other
jurisdictions then apply that schedule version in their own laws,
and provide that subsequent amendments to the schedule version will
also apply. Amendments would require agreement by jurisdictions
according to an Inter-Governmental Agreement. In this way,
consistency is maintained, without the need for a full referral of
powers (PC 2008 II.62, 77).
439. The use of an application law model would not preclude an
individual jurisdiction referring all or part of its powers to the
Commonwealth at a future time.
440. Given the dual national/jurisdictional dimension of consumer
regulation in Australia, it is proposed that the lead legislator
should be the Commonwealth, and each State and Territory could
adopt the national law. This reflects the Competition Law model,
under which the national law is contained in a schedule to the
Trade Practices Act 1974 and applied in each State and Territory.
441. The PC recommended that the law should be based on the existing
consumer protection provisions of the TPA, with amendments to
reflect the PC's other recommendations or, where there is general
agreement that an issue is not adequately dealt with by the TPA,
include provisions based on best practice in State and Territory
laws (Rec 4.1). Minor variations in legislation at the
jurisdictional level may be required to ensure that the new
national generic law extends to non-corporate entities and reflect
differing judicial arrangements among the States and Territories.
There will also be the need for protocols or mechanisms to specify
the basis for reviewing or making changes to the law.
442. An application law model would also permit Australia's self-
governing territories (that is, Norfolk Island) and New Zealand
(which is a member of MCCA and party to the Closer Economic
Relations Treaty, and as such committed to greater commonality of
regulation with Australia) to pick up in a fairly straightforward
way all or part of application law in respect of their own
jurisdictions, should they choose to do so.
443. An application law model reflecting Option C (and the PC's
recommended approach) was agreed by MCCA on 15 August 2008.
|Option C - A national generic consumer law - application |
|law |
|Impact |Benefit |Cost |
|group | | |
|Consumers |Consistent national |Potential for a |
| |protections for |reduction in tailored |
| |consumers, which would |consumer protections |
| |allow consumers to |applicable to the |
| |operate in national |specific circumstances |
| |consumer product and |of an individual |
| |service markets with |jurisdiction. |
| |greater confidence. | |
| |Consistent national | |
| |regulation for | |
| |businesses, reducing | |
| |complexity and | |
| |compliance costs, by | |
| |eliminating a great deal| |
| |of jurisdictional | |
| |variation. Business | |
| |savings due to decreased| |
| |compliance costs can be | |
| |passed to consumers in | |
| |the form of lower | |
| |prices. | |
| |Greater clarity and | |
| |certainty in relation to| |
| |consumer law for both | |
| |consumers, allowing for | |
| |more efficiency in | |
| |markets, as there is a | |
| |greater common | |
| |understanding of the | |
| |'ground rules' for | |
| |activity in the market. | |
| |Greater consistency of | |
| |enforcement for | |
| |consumers and a | |
| |realignment of resources| |
| |as policy functions are | |
| |streamlined and greater | |
| |emphasis can be placed | |
| |on effective enforcement| |
| |by the most appropriate | |
| |consumer law agency. | |
|Business |Consistent national |Potential for a |
| |regulation for |reduction in tailored |
| |businesses, reducing |business regulation |
| |complexity and |applicable to the |
| |compliance costs, by |specific circumstances |
| |eliminating a great deal|of an individual |
| |of jurisdictional |jurisdiction. |
| |variation. This will | |
| |provide savings for | |
| |businesses currently | |
| |operating nationally, | |
| |provide incentives for | |
| |expansion and innovation| |
| |for businesses | |
| |previously unwilling to | |
| |deal with the complexity| |
| |of multi-jurisdictional | |
| |regulation, and provide | |
| |greater incentives for | |
| |new entrants (both | |
| |domestic and overseas) | |
| |due to a simpler | |
| |regulatory framework. | |
|Business |Greater clarity and |Transitional costs for |
|(continued|certainty in relation to|businesses in |
|) |consumer law for both |understanding and |
| |businesses, allowing for|complying with the new |
| |more efficiency in |national protections. |
| |markets, as there is a | |
| |greater common | |
| |understanding of the | |
| |'ground rules' for | |
| |activity in the market. | |
| |Greater consistency of | |
| |enforcement for | |
| |businesses and a | |
| |realignment of resources| |
| |as policy functions are | |
| |streamlined and greater | |
| |emphasis can be placed | |
| |on effective enforcement| |
| |by the most appropriate | |
| |consumer law agency. | |
|Government|Provides for simpler |Individual |
| |legislation and greater |jurisdictions would |
| |efficiency in policy |have a far more limited|
| |development and |ability to engage in |
| |innovation, reducing the|regulation that is |
| |need for slow policy |tailored to the |
| |decision-making and |individual requirements|
| |duplicative legislative |of each jurisdiction. |
| |processes. | |
| |Jurisdictions can share |Transitional costs |
| |the cost of developing |resulting from a |
| |policy, and allocate |reallocation of |
| |administrative resources|resources within |
| |more efficiently with |consumer policy and |
| |the resulting savings, |enforcement agencies. |
| |including potentially | |
| |providing greater | |
| |resources to enforcement| |
| |functions. It would | |
| |allow individual | |
| |jurisdictions the | |
| |ability to pick and | |
| |choose issues on the | |
| |basis of specific | |
| |interest, rather than | |
| |being involved in all | |
| |policy debates. | |
| |As the provisions are | |
| |generic, jurisdictions | |
| |retain scope for making | |
| |specific provision in | |
| |cases where these | |
| |protections would not | |
| |conflict with the | |
| |generic consumer law. | |
| |Greater consistency for |Enforcement agencies |
| |enforcement agencies, |would potentially be |
| |allowing for more |more limited to action |
| |efficient and effective |that was consistent |
| |cross-jurisdictional |with national |
| |action and information |approaches, with |
| |sharing. This could |potential for decreased|
| |allow for more |enforcement innovation.|
| |innovative enforcement | |
| |approaches. | |
| |Greater clarity and |Transitional costs |
| |consistency in consumer |relating to educating |
| |laws, enabling clearer |consumers and |
| |communication and |businesses about the |
| |education by consumer |changes. |
| |agencies. | |
| |Facilitates the | |
| |development of national | |
| |markets, facilitates | |
| |greater competition and | |
| |choice for consumers and| |
| |encourages economic | |
| |growth, by simplifying | |
| |the regulatory 'playing | |
| |field' and reducing | |
| |complexity and business | |
| |costs. | |
Option C - Outcome
444. The PC examined the costs and benefits of its recommendation (which
is essentially the same as Option C) in detail in its Final Report
(see PC 2008 II.Ch.14). On the PC's analysis, MCCA's
recommendation of a new national consumer law pose few downside
risks, with the worst case scenarios still producing significant
benefits to Australian consumers (PC 2008 II.323).
445. The implementation of a single national consumer law, which remains
consistent, would give rise to greater regulatory and market
efficiency, and greater fairness and equity for businesses and
consumers. The broad, principles-based, nature of a generic
national consumer law will allow for its application to a wide
variety of particular circumstances, reducing the perceived need
for sector or jurisdiction specific regulation to apply (even if
only for 'emphasis') generic protections in specific markets (PC
2008 II.323).
446. In an environment where consumer product and service markets are
increasingly national in scope, then it is invidious that consumers
should have different levels of protection based purely on their
jurisdiction of residence or that businesses should be constrained
in the way that they trade due to the cost of compliance with multi-
jurisdictional regulation. The end result of complexity and
divergence in regulation is inconsistent, and in some cases
reduced, protection for consumers and decreased competition, as
businesses and consumers cannot operate efficiently in the market.
447. The PC concluded that the net benefits of a single national law
would:
. directly assist consumers by either improving the
effectiveness of existing measures and their enforcement,
or lowering compliance costs for business (PC 2008 II.323,
352-353);
. provide consumers with intangible gains, including fairer
outcomes and less emotional distress, in relation to
consumer transactions that do not go as expected.
However, these benefits are difficult to quantify.
Intangible benefits have flow on effects as consumers gain
greater capacity to make informed decisions. From the
reforms consumers will have increased confidence in
dealing with unknown suppliers, reduced transaction costs
incurred in avoiding risk and a reduced level of detriment
potentially suffered if an actual problem occurs. In this
way consumers can operate with more confidence in the
market (PC 2008 I.54-55, II.340-348); and
. increase the impact of existing laws, by eliminating
needless variations in generic and sector specific
protections and any outdated or redundant regulation.
This will improve compliance with the national law and
making enforcement more effective, all of which will lower
business costs and lowering barriers to entry. The new
national law will collate and improve the effectiveness of
existing measures and enforcements, rather than create a
large amount of new regulations (PC 2008 I.54, II.327).
448. One of the long-term benefits would be the prospect of more
responsive policy making in relation to consumer matters. A single
national law, with an efficient decision-making process, would
enable quicker responses to emerging consumer issues and problems,
and reduce aggregate consumer detriment through its increased
response rate (PC 2008 II.328).
449. Transitional costs will be incurred as part of the reforms required
by governments in the policy processes, regulation-making and
institutional change. However, significant long term net benefits
will be made for businesses, government and consumers in decades to
come (see Part E below for further analysis of these benefits, also
PC 2008 I.55-56, II.328-330).
Option D - Referral of powers to Commonwealth
450. Section 51 (xxxvii) of the Constitution permits the States, either
severally or individually, to refer powers over a particular area
to the Commonwealth. An example of where the referral of powers
approach was employed is in relation to the laws regulating
corporations and financial services (PC 2008 II.77).
|Option D - Referral of powers to Commonwealth |
|Impact group |Benefit |Cost |
|Consumers |As for Option C |As for Option C |
|Business |As for Option C |As for Option C |
|Government |Much simpler policy |An end to direct |
| |development, |State and Territory |
| |decision-making and |involvement in |
| |legislative processes, |consumer policy |
| |as all policy and |issues, and more |
| |legislation functions |diverse policy |
| |are undertaken by the |perspectives. |
| |Commonwealth. | |
| |Otherwise as for Option| |
| |C | |
| | |Potential costs |
| | |flowing from national|
| | |enforcement, |
| | |particularly in |
| | |relation to |
| | |enforcement at the |
| | |local level. |
Option D - Outcome
451. Referral of powers would achieve consistency that would be
maintained across all Australian jurisdictions, by virtue of all
power being vested in the Commonwealth.
452. The PC noted that smaller jurisdictions, that experience issues in
maintaining limited policy development and enforcement resources in
the face of competing budgetary priorities, may consider the
referral of their enforcement powers (PC 2008 II.77-78). Therefore
individual States and Territories should have the voluntary option
to refer their powers, in particular enforcement powers, left open.
453. The PC acknowledged the ongoing benefit of policy engagement by the
States and Territories in consumer policy (PC 2008 II.48), and
there is a low likelihood that individual States and Territories
would agree to the referral of their powers in consumer policy and
enforcement at the present time. The PC concluded that there would
be little practical difference between a referral of legislative
powers and an application law model, particularly when the States
and Territories will retain an important enforcement role (PC 2008
II.77).
454. Therefore, Option D would face opposition from most, if not all, of
the States and Territories that would impede the reality of this
option. This would effectively render the objective of achieving
national consistency in consumer policy regulation through Option D
as too politically difficult and time-consuming to achieve a
national consensus.
Conclusions and recommendations for national consumer regulation
455. In considering the options outlined above, it is clear that Option
A and Option B do not provide any confidence of any medium to long
term consistency in Australia's consumer laws. The adoption of
either of these two models would undermine significant gains in the
development of increasingly national consumer product and service
markets as they would continue to impose largely unnecessary costs
on consumers, business and government.
456. A previous attempt at harmonisation did not succeed beyond the
short term, if at all, and any attempt to re-harmonise along the
lines of Option B would incur transitional costs for consumers,
governments and business and ongoing compliance costs for
businesses, with no guarantee that the situation will not return to
the status quo within a reasonably short time frame.
457. Options C and D would ensure that a single national consumer law,
which is enacted through an applied legislation scheme or by means
of referral, would achieve and maintain consistency across all
jurisdictions. A new national consumer law would increase the
impact of existing laws through extra clarity and certainty for
both business and consumers, while reducing compliance costs from
overlapping and inconsistent legislation between jurisdictions.
Furthermore, these options (which accord with the PC's
recommendations, would provide the Australian community with net
annuity gains benefits of between $1.5 and $4.5 billion per year
(see Part E below for a summary of the PC's analysis of these
benefits).
458. It is clear from the policy development process that Option D is
politically unacceptable for most jurisdictions at this time.
459. Option C therefore presents the most viable option for achieving a
nationally consistent consumer law. Through an application
legislation scheme, any amendments to the national law would remain
consistent across all jurisdictions, without the risk of regulatory
break out from one or more jurisdictions. The States and
Territories would retain an important ongoing policy development
role, as they would not have referred powers and change would
require the agreement of a minimum number of jurisdictions.
Part C Unfair contract terms
Background on unfair contract terms
Background on unfair contract terms regulation
460. Unfair consumer contract terms are those that, while not being
reasonably necessary for protecting the legitimate business
interests of suppliers, create disadvantage for consumers (PC
Review II.403). Reserving the right to vary the contract at any
time for any reason, or removing liability for interruptions in
supply, are two common examples of 'unfair' terms giving suppliers
unilateral power and putting consumers at a disadvantage.
461. While 'unfair' terms appear to be widespread in contracts,
particularly in standard form contracts, there is only limited
evidence of the extent of their use and the consumer detriment
occasioned by their use. However, the PC found that that emerging
information suggests this detriment is likely to be non-trivial.
462. Unfair terms are more likely to be found in standard form
contracts, presented to consumers as a 'take-it-or-leave-it' offer.
Uniform, pre-printed contracts have become more widespread as they
lower the cost of doing business with large numbers of consumers,
and those savings are in part passed on to consumers as lower
prices.
463. Various jurisdictions, in Australia and abroad have introduced
legislation addressing unfair contract terms. Victoria amended its
Fair Trading Act 1999 in 2003, while the United Kingdom introduced
an Unfair Contract Terms Act in 1977. Currently, unfair contracts
in the UK are governed by the Unfair Terms in Consumer Contracts
Regulations 1999, which implements European Council Directive
93/13/EC.
464. The PC identified some costs associated with the introduction in
Australia of a law against unfair terms (PC Review I.34-5; II.155-
6, 433-8):
. standard form contracts can provide significant cost
savings for businesses and consumers. If these are
altered in response to unfair terms regulation, upfront
prices for consumers could rise;
. renegotiation of certain terms where it is reasonable for
a supplier to vary regularly (for example. mortgage
interest rates) would be far more costly than allowing
unilateral variation;
. the law may weaken the capacity of businesses to deal with
a small number of consumers acting in bad faith, limiting
in turn their capacity to deal fairly, cheaply and
efficiently with the bulk of consumers; and
. while there would be some administrative and compliance
costs for governments and businesses, evidence from
Victoria and other countries suggests these are not likely
to be significant. In fact, many businesses support
unfair contract terms regulation, and many already comply
with similar, industry-specific regimes.
465. The PC identifies the risk that, in the absence of a national
approach to unfair contract terms, jurisdictions may pursue their
own, possibly diverging regulatory regimes (PC Review II.433).
National regulation of unfair contract terms is to be preferred
over jurisdictional inconsistency, in this as in other areas of the
consumer law. A national approach may also reduce the need for
some industry-specific regulation.
466. While the PC considers evidence of consumer detriment from unfair
contracts to be sparse, it emphasises the importance of national
consistency in the consumer law. The PC therefore recommends a
national unfair contracts provision, so long as that provision is
well crafted. Proper design of any such provision would increase
the likely net benefits from policy intervention. A well designed
unfair terms provision would sensibly limit the application of the
law, provide clear definitions or guidelines on 'unfair' terms, and
focus on those terms identified as likely to cause consumer
detriment (PC Review II.403 - 441).
National consistency
467. In the PC's analysis, the strongest argument for the inclusion of
an unfair contracts term provision in the new consumer law is to
maintain national consistency (PC Review I.35). The existing
unfair contract terms legislation in one jurisdiction only results
in an inconsistency for trading businesses nationally and
inequality in protections for Australian consumers.
468. The extent to which State and Territory FTAs operate beyond the
boundaries of the State and Territory to regulate the conduct of
suppliers in another State or Territory is particularly relevant to
transactions over the internet. While there has been judicial
consideration of the application of the TPA to the conduct of
foreign individuals on websites accesses and directed to Australian
consumers, a similar consideration of the State and Territory
legislation, such as the Victorian unfair contract terms laws, has
not occurred.
469. As other States and Territories consider the inclusion of an unfair
contract terms provision in their FTAs, the risk of jurisdictional
divergence and inconsistencies increases. Comparing the existing
differences in content and protections provided by the State and
Territories, the scenario of nine slightly different unfair
contract terms provisions across the jurisdictions is a real
possibility.
Options for unfair contract terms regulation
470. Three unfair contract term models will be considered. The model
developed in Victoria will be considered both as part of the status
quo, with no national regulation, and as a candidate for adoption
at the national level.
. Option A - no regulation;
. Option B - national adoption of the Victorian model; or
. Option C - a modified model based on that recommended by
the PC, which was endorsed by MCCA.
Impact analysis
Option A - Status quo
471. Currently, there is no national regulation of unfair contract
terms. State and territory jurisdictions may choose to develop
their own unfair terms legislation. At present, the only State to
have introduced such legislation is Victoria, which incorporated
unfair contracts provisions into its FTA in 2003.
472. As the situation stands, only those consumers who contract with a
supplier subject to the Victorian law benefit from any protection
from unfair contract terms. However, all Australian consumers will
continue to have the benefit of the general consumer law and its
prohibitions of various unfair business practices.
473. Since the PC considers it possible that many jurisdictions will
implement their own, divergent unfair contract terms regimes, the
status quo may well evolve such that consumers and businesses are
subject to a variety of regimes or none, depending on where their
goods and services are bought and sold.
|Option A - Status quo |
|Impact |Benefit |Cost |
|group | | |
|Consumers |Consumers benefit from |Australian consumers |
| |their familiarity with |may be subject to |
| |the current system. |different regimes and |
| | |have different rights |
| | |depending on where they|
| | |purchase their goods |
| | |and services. |
| |Prices are relatively |Consumers in Victoria |
| |undistorted by |and elsewhere may face |
| |regulation. |higher prices as |
| | |businesses pass on the |
| | |cost of complying with |
| | |Victorian and other |
| | |future legislation. |
| | |Ongoing consumer |
| | |detriment due to a lack|
| | |of protection and |
| | |uniformity. |
|Business |No transition costs. |Businesses operating |
| |All ongoing compliance |across jurisdictions |
| |costs are known. |will have to ensure |
| | |compliance with at |
| | |least the Victorian |
| | |regime and the national|
| | |consumer law, and |
| | |possibly with more |
| | |regimes as |
| | |jurisdictions diverge. |
|Government |No increase to the |Risk of divergent State|
| |scope of the new |and Territory |
| |national consumer law |legislation, making |
| |through including |coordination and |
| |unfair contracts in the|uniformity of the |
| |law, potentially |consumer law more |
| |reducing implementation|difficult. |
| |costs. | |
| | |Duplication of effort |
| | |as more jurisdictions |
| | |look to introduce a law|
| | |for unfair contract |
| | |terms. |
Option A - Outcome
474. The absence of regulation of unfair contract terms has the
advantage of maintaining existing business and consumer familiarity
with the current regime. However, the PC noted that existing
provisions dealing with similar conduct (such as unconscionable
conduct) may operate less effectively than a law on unfair contract
terms (PC Review II.154). Additionally, since regulation exists in
Victoria and may well be developed in other jurisdictions, the risk
of increasing national inconsistency in this area is real (PC
Review II.155). It would be preferable to introduce national
legislation, to provide consumers and businesses with a
consistently applied and enforced law on unfair contract terms.
Option B - National adoption of the Victorian model
475. Victoria amended its FTA in 2003 to include provisions (Part 2B)
that define and deal with unfair contract terms. While the
Victorian legislation draws heavily on the United Kingdom's Unfair
Terms in Consumer Contracts Regulations 1999, it has a wider scope
in several key respects.
476. In the Victorian legislation, a term is considered unfair if,
'contrary to the requirements of good faith and in all the
circumstances, it causes a significant imbalance in the parties'
rights and obligations arising under the contract to the detriment
of the consumer' (section 32W). Contracts between suppliers and a
business are not covered by the statute; nor are contracts covered
by the Consumer Credit (Victoria) Act 1995. Section 32X of the FTA
includes a broad list of prescribed unfair terms, similar to those
in the UK legislation. In contrast to the UK legislation, the
Victorian provisions extend to:
. negotiated contract terms; and
. up-front price.
477. If a Victorian court finds a term to be unfair, that term is void.
However, the rest of the contract remains in effect if it is
capable of operating without the voided term (PC 2008 II.407,
422).
|Option B - National application of the Victorian model |
|Impact |Benefit |Cost |
|group | | |
|Consumers |Consistent protections |The unsettled status of|
| |across all Australian |'good faith' in |
| |jurisdictions. |Australian law leaves |
| | |consumers uncertain as |
| | |to the application of |
| | |this law. |
| |Consumers are protected|Businesses subject to |
| |from abuse of unfair |pre-emptive alteration |
| |contract terms before |of their standard form |
| |they suffer any |contracts may face |
| |detriment. |higher compliance |
| | |costs, which may be |
| | |passed on to consumers |
| | |as higher prices. |
| | |Decreased availability |
| | |of standard form |
| | |contracts may make some|
| | |consumer transactions |
| | |more difficult to |
| | |negotiate, and some |
| | |goods or services more |
| | |difficult to obtain. |
|Business |Consistent requirements|Compliance costs for |
| |across Australian |businesses in rewriting|
| |jurisdictions. |standard form contracts|
| | |and in dealing with |
| | |regulators. |
| | |Reduced capacity to |
| | |impose contingent |
| | |charges (like |
| | |termination fees) on |
| | |consumers, affecting |
| | |profits and putting |
| | |pressure on prices. |
| | |Reduced capacity to |
| | |deal with consumers |
| | |acting in bad faith, |
| | |possibly discouraging |
| | |the supply of some |
| | |goods and services. |
| | |Business cannot rely on|
| | |having negotiated terms|
| | |with consumers for |
| | |those terms not to be |
| | |considered unfair, nor |
| | |is the upfront price |
| | |excluded from |
| | |consideration. |
|Government |No duplication of |Increased risk of |
| |effort, as the model |regulatory error / |
| |for adoption has |government failure. |
| |already been developed.|Where consumer |
| | |detriment does not have|
| | |to have occurred before|
| | |action is taken, it is |
| | |difficult to judge |
| | |where intervention is |
| | |necessary. |
| |Streamlined consumer |Possible regulatory |
| |policy framework across|overreach in response |
| |jurisdictions. |to a problem which may |
| | |not occasion serious |
| | |consumer detriment. |
|Government | |Additional |
|(continued)| |administrative costs |
| | |(PC estimated $1 to |
| | |$1.5 million annually, |
| | |not including |
| | |litigation expenses), |
| | |as enforcement agencies|
| | |police contracts |
| | |proactively rather than|
| | |responding to real or |
| | |perceived cases of |
| | |consumer detriment. |
Option B - Outcome
478. The Victorian model has operated successfully and the PC notes that
it has not resulted in significant compliance costs for businesses
or adverse consequences on the market (PC 2008 II.433-5, 440).
However, the PC observes, regulators would inevitably be called on
to 'make fine judgments, some of which may be suspect' (PC 2008
II.436). While this is true of any unfair contract terms regime,
the risk of overreach may be apparent in an ex ante regime.
479. Upfront prices, which 'cannot legitimately be seen as surprises
veiled by a complex contract' and are easily avoided by consumers,
are not excluded as a possible unfair term under the Victorian
model (PC 2008 II.161-2). Neither are negotiated terms excluded,
limiting the capacity of businesses and consumers to negotiate good
outcomes. The level of government intervention under the Victorian
model therefore relies greatly on the discretion and judgement of
the regulators, leaving some scope for an excessively burdensome
regime.
Option C - The modified PC model
480. The PC noted that there is a rationale for intervention against any
damaging exploitation of unfair contract terms. However, while the
argument for a prohibition on unfair contract terms per se is less
compelling, on balance the PC felt there is a basis for some
national regulation of unfair contract terms (PC 2008 I.34-5).
481. The PC recommended (Rec. 7.1) that a provision addressing unfair
contract terms be included in the new national generic consumer
law, and made some proposals as to the form that provision should
take. This recommendation was considered by MCCA at its meeting on
15 August 2008, where it agreed to recommend the incorporation of
an unfair contract terms provision to the BRCWG.
482. The agreed model would include the following features (which
include some refinements of the PC's recommended model):
. a term is established as 'unfair' where it causes a
significant imbalance in the parties' rights and
obligations arising under the contract, and it is not
reasonably necessary to protect the legitimate interests
of the supplier. It is proposed that the definition
should not make reference to 'good faith', given the
uncertain application of that principle in Australian law.
While the PC did not have a problem with the inclusion of
the term 'good faith', it noted the potential for
differing interpretations of 'good faith' as it is not a
well-understood concept in Australian law. The PC also
noted that other definitions of an unfair term may be
equally apt (PC 2008 II.159). The inclusion of the phrase
'it is not reasonably necessary to protect the legitimate
interests of the supplier' is designed to ensure that,
when applying the test, the question of the business's
reasons for including a provision in a contract is
addressed;
. remedies would be available only where the claimant (an
individual or a class) shows detriment, or a substantial
likelihood of detriment, not limited to financial
detriment. This reflects the PC's preferred ex post
approach (as per PC 2008 II.139), although it includes
provision for action to be undertaken on the basis of a
'substantial likelihood of detriment'. This recognises
concerns about the limitations that a requirement limiting
enforcement action to 'actual' detriment would place on
the effectiveness of the provision in practice. However,
by requiring a proof of a 'substantial likelihood of
detriment' in the particular case, the provision requires
more than a theoretical case to be made out. This
recognises the PC's concern about the potential for
regulatory overreach, where no such limitation is applied
(see PC 2008 II.139);
. the provision would relate only to standard form, non-
negotiated contracts, and would extend to standard form
contracts entered into by businesses, including small
businesses. This recognises the PC's view that the
inclusion of negotiated contracts would involve risks that
exceeded the likely benefits (PC 2008 II.161);
. the provision would exclude the upfront price of the good
or service (as recommended by the PC, see PC 2008 II.139);
and
. there would be scope to proscribe certain terms that are,
in all circumstances, considered to be unfair. This
regulation making power would rest with the Commonwealth
Minister, who would proscribe terms in accordance with the
generic law amendment process set out in the Inter-
Governmental Agreement and the requirements of regulatory
impact assessment. Ensuring that proper impacts of
regulation are considered before the proscription of each
proscribed term would allay much of the PC's concern
regarding ex ante enforcement of the provision (PC 2008
II.165).
483. Where these conditions are met, the unfair term would be voided
only for the contracts of those consumers or class of consumers
subject to detriment, with suppliers also potentially liable to
damages for that detriment. This reflects the PC's concerns about
ensuring that the use of the provision is confined to situations
where there is detriment (including a substantial likelihood of
it), and not merely a theoretical concern (see PC Rec. 7.1).
484. The drafting of any provision should ensure the potential for
private (and regulator-led) representative actions for damages by a
class of consumers detrimentally affected by unfair contract terms.
This reflects the PC's recommendations (see PC 2008 II.139 & PC
Rec. 7.1).
485. All of the circumstances of the contract would be considered,
taking into account the broader interests of consumers, as well as
the particular consumers affected (PC Rec. 7.1).The PC noted that
implicit consideration of the broader impacts of any particular
term being deemed unfair should be relevant to the application of
any new provision (PC 2008 II.160).
486. Transitional arrangements should be put in place after enactment,
which would give businesses the time to modify their contracts (PC
Rec. 7.1).
487. The operation and effects of the new provision should be reviewed
within five years of its introduction (PC Rec. 7.1).
|Option C - Modified PC model |
|Impact group|Benefit |Cost |
|Consumers |Consistent protection |Risk that availability|
| |from unfair terms in |of standard form |
| |all jurisdictions. |contractual |
| | |arrangements will |
| | |decrease. |
| |Consumers suffering | |
| |detriment will have | |
| |the benefit of | |
| |representative action | |
| |under the national | |
| |consumer law. | |
| |No uncertainty with | |
| |respect to 'good | |
| |faith'. | |
| |Will not have to | |
| |demonstrate that | |
| |contracts are in a | |
| |standard form. | |
|Business |Not subject to |Low compliance costs |
| |pre-emptive alteration|associated with |
| |of their standard form|re-examining standard |
| |contracts. |form contracts. |
| |No uncertainty with |Limited capacity to |
| |respect to 'good |deal with consumers |
| |faith'. |acting in bad faith, |
| | |though such consumers |
| | |may find it difficult |
| | |to prove detriment. |
| |Benefit from the same | |
| |protections available | |
| |to consumers when | |
| |entering standard form| |
| |contracts. | |
| |Terms negotiated with | |
| |consumers will not be | |
| |considered unfair. | |
|Government |No duplication of |Additional |
| |legislative effort |administrative costs |
| |across jurisdictions. |in enforcing an unfair|
| | |terms provision. |
| |Single law of unfair | |
| |contracts across | |
| |Australia. | |
| |Reduced risk of | |
| |regulatory error in | |
| |deciding to intervene | |
| |in contracts where | |
| |there is no | |
| |demonstrated | |
| |detriment. | |
Option C - Outcome
488. The model derived from the PC Review, and adopted by BRCWG/MCCA,
addresses many of the uncertainties and concerns surrounding other
models of unfair contract terms legislation. By excluding upfront
price and negotiated contracts, this model provides greater
certainty to businesses and consumers as to the effectiveness of
their commercial dealings. By requiring evidence of consumer
detriment before remedies are available, the model limits scope for
regulatory overreach and ensures the legislation is applied to real
and demonstrable problems. While effectively addressing these
concerns, the model still provides protection for those consumers
subject to detriment from unfair contract terms, and creates
nationally consistent regulation in this area of the consumer law,
while maintaining a low compliance and enforcement burden on
businesses, individuals, and the economy.
Conclusions and recommendations
489. With increasing policy interest in unfair contract terms
regulation, Option A is not likely to achieve any regulatory
consistency across Australian jurisdictions. A decision not to
implement national legislation would almost certainly see other
States and Territories follow Victoria's lead in developing their
own regulatory regimes. Only Options B and C provide national
uniformity in addressing unfair contract terms, and avoid a
fragmented and inconsistent approach.
490. Option B has proved its effectiveness in Victoria, ensuring a
fairer commercial environment for consumers and avoiding
significant compliance costs for businesses. However, the PC
identified (PC Review II.161-2) elements of the Victorian approach
that may not be a necessary response to levels of consumer
detriment which are difficult to quantify. These elements, such as
the inclusion of upfront price and negotiated terms, and the
application of the law without requiring evidence of detriment,
give rise to risks of government failure and regulatory overreach.
491. These risks are effectively addressed by Option C. While excluding
upfront price and negotiated terms from the application of the law,
this option continues to provide protection and remedies to those
consumers subject to material detriment, or to a substantial
likelihood of material detriment. By providing greater certainty
about its scope and application, this model reduces any compliance
burdens on businesses.
492. Having been agreed to by MCCA and the BRCWG, Option C enjoys the
support of the Commonwealth and all States and Territories. It
therefore holds greatest promise for national consistency in the
regulation of unfair contract terms.
Part D Enforcement of Australia's consumer laws
Options for the future enforcement of Australia's consumer laws
493. In implementing a new national consumer law, it is important to
ensure that enforcement arrangements meet the needs of all
Australians effectively, including the most vulnerable and
disadvantaged.
494. The PC recommended that enforcement and redress powers for
regulators should be enhanced through the inclusion of civil
pecuniary penalties, disqualification orders, substantiation
notices, public warning powers and, potentially, infringement
notices (Rec.10.2). The PC also recommended that consumer
regulators should also be able to take representative actions on
behalf of consumers not party to court proceedings and have the
power to gather evidence until substantive proceedings have
commenced (Rec.9.5).
495. Two options will be considered in achieving the objective of
promoting consistency in consumer policy and protection across
Australian jurisdictions. These are based on the assumption that
there will be, in some form, a single, national consumer law,
applicable across all jurisdictions. The options are:
. Option A - Single law, single regulator; or
. Option B - Single law, multiple regulators.
Impact analysis
Option A - Single law, single regulator
496. The PC noted that a single regulator would ensure that the intent
of the single law in promoting consistent treatment for consumers
and business nationally would not be undermined by unwarranted
jurisdictional variations in enforcement (PC 2008 II.63).
Currently, enforcement priorities differ across jurisdictions
depending on:
. differing levels of available resources, including
funding, staff resources and relevant expertise;
. differing political, social and economic priorities, which
may vary across jurisdictions; and
. differing enforcement 'cultures' which reflect systemic,
legal, historical and other factors, which impact on the
way a consumer law enforcement agency undertakes its
functions.
497. A single national regulator would mean that all aspects of the
national consumer law regulation would be carried out by one body;
in the PC's view the logical choice would be the ACCC (PC 2008
II.67).
498. The PC noted in its draft report that there may be advantages in a
single regulator model such as consistency and reduction of
regulatory overlap, but noted that introducing such a model would
be problematic at this time and recommended further research into
the possibility of this model in the future (PC 2007 DR.65).
499. The PC also noted constitutional issues which may arise in having a
single regulator model, particularly that the Commonwealth could
not replicate state and territory tribunals and small claims
courts, and also the Commonwealth not being able to vest power in
state or territory tribunals (PC 2008 II.66,67). Whilst the PC did
not see these obstacles as insurmountable they were obstacles
nonetheless.
500. There was significant opposition to the single regulator proposal
from some States and Territories in response to the PC's draft
report (submissions can be found at
www.pc.gov.au/projects/inquiry/consumer). One of the arguments
that the PC found most persuasive against the single regulator was
the resulting loss of synergies from collocated enforcement of
consumer protection and other industry-specific enforcement regimes
(PC 2008 II.64).
501. In its final report, the PC did not recommend the single regulator
model, but was sceptical of suggestions that a single national
regulator would be less able or inclined to deal with local issues.
While problematic, the PC concluded that the one regulator model
should be considered and should at least remain on the long term
policy agenda (PC 2008 II.72).
|Option A - Single law, single regulator |
|Impact group|Benefit |Cost |
|Consumers |Consistent enforcement |Less localised |
| |would allow consumers |presence may reduce |
| |to receive similar |access or a lesser |
| |service regardless of |understanding of local|
| |location. |market conditions or |
| | |the needs of |
| | |consumers. |
| |Encourage compliance on|Local issues may |
| |a nationally consistent|unavoidably have a |
| |basis, leading to |lower priority for a |
| |greater consumer |national regulator as |
| |confidence. |compared with national|
| | |issues. |
|Business |Businesses would only |Less localised, |
| |have to deal with one |businesses may find |
| |regulatory agency |that compliance is |
| |Australia-wide. |less geared to local |
| | |conditions. |
|Government | |Synergies from |
| | |collocating |
| | |enforcement of |
| | |consumer protection |
| | |and other regimes |
| | |would be lost. |
| |Cheaper to run - one |There would be |
| |national regulator to |significant transfer |
| |manage one legislative |costs in setting up |
| |structure. |the many new offices |
| | |that would be needed |
| | |in regional areas for |
| | |the national |
| | |regulator. |
| |Regulatory duplication |Synergies may be lost |
| |and overlap may be |where previously |
| |reduced as multiple |breaches of consumer |
| |regulators would not |law could be pursued |
| |pursue one issue, and |concurrently with |
| |demarcation issues |breaches of other |
| |would not arise. |local regimes. |
Option A - Outcome
502. While noting that the PC considers a single national regulator to
be something which should remain as a possibility on the long-term
policy agenda, the PC recommended that the enforcement of the new
national consumer law should be enforced by both the national and
state and territory regulators.
503. The PC particularly noted the loss of synergies between enforcement
of consumer protection and other legislation may be significant,
and that based on the current experience with shifting
responsibility for the regulation of trade weights and measures to
the Commonwealth, transfer costs for all enforcement functions
could be considerable (PC 2008 II.49, 50, 64, 72).
504. Constitutional issues with a single regulator model, whilst the PC
noted may be resolvable (PC 2008 II 66), might also add to the
costs associated with the transfer to such a model.
505. While the PC noted the advantages and disadvantages it was also
aware of the political reality that most, if not all, jurisdictions
are opposed to the idea of a single national regulator and
packaging a single regulator model with the new national law may
put the latter at risk (PC 2008 II.72).
506. In summary, were a single regulator model pursued, it is uncertain
whether there would be a net gain for consumers and business, and
potentially significant costs for government. Also, understanding
the political opposition to such a model it may be impossible to
gain the significant level of cooperation that would be required to
successfully manage a transition to a single regulator.
Option B - Single law, multiple regulators
507. The PC recommended that the enforcement responsibilities for the
new national law should be shared between the ACCC and the State
and Territory offices of fair trading, supported by formal
agreements between these enforcement bodies that cover arrangements
for communication and coordination of their activities (Rec. 4.4).
ASIC would retain primary national responsibility for enforcing
those consumer laws that relate to financial services and assume
primary national responsibility for laws that apply to consumer
credit (Rec. 4.2).
508. This is largely the same framework as the system that is currently
in place, however with a new nationally consistent law and enhanced
inter-governmental agreements would aim to deliver a more
consistent and beneficial enforcement outcomes for businesses and
consumers.
509. The PC's support for this model was significantly due to the
synergies (economies of scope) that exist between enforcement of
consumer protection laws and other industry-specific regulation.
The ability to pursue a remedy for consumers with a range of
legislative options can increase the likelihood of a successful
outcome (PC 2008 II.64).
510. A number of jurisdictions made submissions to the PC expressing a
very strong preference for a multiple regulator model based on
regulatory synergies and a desire to retain localised enforcement
powers; the ACCC also felt that the case for a single national
regulator had not been convincingly made (ACCC Submission to the
PC, 2007 Sub.176).
|Option B - Single law, multiple regulators |
|Impact group|Benefit |Cost |
|Consumers |An ability to obtain |Occurrences of |
| |targeted enforcement |inconsistent |
| |with a localised focus |enforcement for |
| |where necessary. |consumers could reduce|
| | |consumer confidence. |
| |Synergies between |Potential confusion |
| |enforcement of general |about which regulator |
| |consumer protection and|to approach on an |
| |other industry-specific|issue. |
| |legislation can give a | |
| |better resolution for | |
| |consumers because of | |
| |the range of | |
| |enforcement tools | |
| |available. | |
|Business |Being able to discuss |Potentially having to |
| |consumer problems on a |field enquiries from |
| |less formal basis with |multiple regulators on|
| |a regulator where the |one issue, though |
| |problem is small or |enhanced coordination |
| |localised. |mechanisms should |
| | |largely preclude the |
| | |possibility. |
|Government |Synergies between |Duplication of some |
| |enforcement of general |resources and efforts.|
| |consumer protection and| |
| |other industry-specific| |
| |legislation can save | |
| |costs and deliver | |
| |better outcomes. | |
| |Maintaining the current|Enhanced cooperation |
| |multiple regulator |mechanisms will need |
| |system will mean |to be developed to |
| |avoiding significant |ensure consistency of |
| |monetary costs which a |enforcement. |
| |transfer of enforcement| |
| |functions would entail.| |
Option B - Outcome
511. The PC, while noting that there are costs and benefits with both
models, has recommended that the multiple regulator model be used
(Rec. 4.4), particularly at the outset of the consumer policy
framework reforms (PC 2008 II.72).
512. Any costs of retaining the current model could also be reduced by
implementing improved cooperation and coordination mechanisms
between the state and territory and national regulators.
513. Benefits from synergies in the collocation of enforcement at the
local level are important advantages (PC 2008 II.64), and even if
they were not as significant as some have suggested it is unlikely
that net costs would result from this model overall.
514. The strong desire from state and territory jurisdictions to retain
enforcement powers must also be taken into account (PC 2008 II.72),
with a single regulator model unlikely to be supported by most
jurisdictions.
Conclusions and recommendations
515. Considering the options outlined above, it is clear that while
Option A may have consistency benefits, these benefits may be
outweighed by the loss of regulatory synergies (economies of scope)
and significant transfer costs which may occur in moving to a
single national regulator for consumer protection. Conversely,
Option B, which largely reflects the status quo, has less potential
costs and will also avoid the major cost concerns in relation to
Option A.
516. It is also clear that the majority of jurisdictions would find
Option A unacceptable and have a strong preference for Option B.
In addition the enhancement of cooperation and coordination
mechanisms for enforcing the new national consumer law could work
to mitigate any inconsistency concerns in relation to Option B.
517. Option B is therefore the most viable option for enforcement of the
new national consumer law, with states and territories continuing
their joint enforcement with the national regulators, the ACCC and
ASIC (in relation to financial services and credit).
518. The benefits of greater consistency in enforcement are included
within the PC's analysis of benefits, which are summarised in Part
E below.
Part E Benefits of the proposed reforms
Summary of the PC's analysis of Benefits and Costs
Benefits flowing from the reforms
519. The PC identified that the most important gains from the proposed
reform package would be the reduction of consumer detriment,
dynamic gains through enhanced productivity and innovation and the
reduction of transaction costs in the economy. Net annuity gains
between $1.5 billion and $4.5 billion will likely be produced from
reform of the consumer policy framework (PC 2008 II.352-353).
520. When examining the placement of costs and benefits into a
framework, the PC emphasised that consumer policy is aimed
primarily at giving consumers a greater capacity to exercise their
decisions and encourage appropriate business behaviour. Policy
measures that do this have far-reaching effects on consumer
welfare.
521. The majority of the PC recommendations do not involve the
introduction of new laws, but are aimed at lowering the costs of
the current layers of consumer protection provisions and increase
the impact of the existing consumer laws. Therefore, implementing
the recommendations will raise the benefits associated with the
existing consumer laws while lowering their costs by removing
overlap and inconsistencies (PC 2008 II.325). The reforms will do
this in the following ways:
. increasing the impact of existing laws, which will be
realised through a single law operating nationally, better
redress, better enforcement measures, more comprehensive
ADR, better coordination of complaints, easier and cheaper
access to redress for small claims, improved scope for
representative actions and increased funding for legal aid
and financial counselling (PC 2008 II.327);
. lowering costs for business and consumers, which will
occur through the removal of needless variations in the
generic law, repealing unnecessary industry-specific
consumer laws and the diversion of consumer complaints
from more costly courts through improved ADR (PC 2008
II.327); and
. providing positive effects for consumers, including lower
transaction costs and a lower incidence of economic and
emotional detriment resulting from defective or unsafe
goods or services, decreased need to complain or seek
redress and greater consumer confidence (PC 2008 II.325-
353).
522. The PC's analysis can be found in Chapter 14 of its final report
(PC 2008 II.323ff).
Quantifying benefits to consumers
523. In estimating the benefits of the proposed reforms, the PC noted
data inadequacies and therefore had to assume many key parameters
and modelling choices. It examined evidence of the existing extent
of consumer detriment in the UK and Victoria. The Consumer Affairs
Victoria (CAV) study (2006) estimated consumer detriment in
Victoria at $3.15 billion per annum, roughly $800 per Victorian.
Grossing up the Victorian data would see national consumer
detriment totalling approximately $13 billion in 2006 (PC 2008
II.334-336).
524. The PC marked down the Victorian estimate to reduce the risk of
overstating the base level of detriment. However, it also noted
the CAV study omitted un-revealed detriment, detriment stemming
from costly or inappropriate regulation and individually small, but
collectively significant consumer problems (PC 2008 II.337).
525. The PC assumed a 5 per cent reduction in detriment, stemming from
its policy reform package, resulting in substantial gains. The
gross gains, when including the reduced emotional costs, would be
estimated at $850 million in 2008-09. After taking account of the
transfer components, from suppliers to consumers, of the gross
gains, the PC estimated that the net gains would be around $700
million in 2008-09 (PC 2008 II.341).
|Summary of impacts of a new consumer policy framework |
| |Present value |Annuity value |
| |($m) |($m) |
|Net avoided direct detriment |20 514 |1 231 |
|for consumers |9 166 |550 |
|Reduction in risk based |14 033 |842 |
|transaction efficiencies |1 628 |98 |
|Gains from increased |399 |24 |
|innovation/productivity |44 943 |2 697 |
|Net gains from reduced | | |
|business compliance costs | | |
|All legal and administrative | | |
|costs | | |
|Net gain | | |
* Present value calculations are based on discounting all future streams
back to December 2008, while annuity values are for 2008-09 and all
subsequent years. A discount rate of 6 per cent was used. All values are
in 2006-07 constant prices.
526. While the PC's experimental estimates strongly suggest net gains
will come about as part of the reform package, the PC's analysis
highlights the difficulty in obtaining appropriate data for
assessing the impact of consumer policy generally (PC 2008 II.353).
Transitional costs of moving to the new framework
527. Regulatory reform can also introduce costs in the form of
compliance burdens for businesses and administrative costs for
governments and additional complexity increases the incremental
costs of regulatory compliance as economies of scope in dealing
with new consumer laws are exhausted (PC 2008 II.324).
528. The PC's reforms will involve transitional costs for governments
that include new legal drafting, negotiation by policymakers and
ministers to achieve consensus, investments in policy processes and
institutional change. There will be some additional court and
administrative costs and until courts establish precedent, there
will be increased uncertainty in a small number of instances (PC
2008 II.329, 351).
529. Businesses will face transitional compliance costs, including new
information disclosure practices and the re-formulation of
contracts. Any measures that shift some of the risk onto suppliers
could see increases in upfront prices as businesses seek to cover
their higher costs. This increased risk and shift in contractual
balances can also be seen to stem from new enforcement powers and
push up costs for businesses. However these costs are unlikely to
be substantial and as businesses are constantly altering their
contracts within natural business cycles, the timing of
implementation will greatly offset or reduce any transitory costs
(PC 2008 II.329-330).
530. Businesses will also face transitional transaction costs in legal
advice, diversion of staff and management time, printing and
distribution costs and dealing with the convergence of multiple
state laws. Yet overall compliance burdens are likely to fall, not
only through the elimination of current variations between
jurisdictions but the gain of preventing future variation (PC 2008
II.348).
Part F Implementation and Review
Proposed implementation arrangements
531. At its 15 August 2008 meeting MCCA agreed an indicative
implementation plan for the implementation of consumer policy
framework reforms. This was endorsed by the BRCWG and has been
recommended to COAG.
532. MCCA anticipates that the new national consumer law and related
changes will be implemented by the end of 2011. The implementation
process will be divided into three principal streams:
. developing and implementing the national consumer law and
related reforms;
. agreeing the Inter-Governmental Agreement (IGA) governing
the process for agreeing and amending the new national
consumer law; and
. developing and implementing supporting enforcement
arrangements for the new national consumer law.
533. The PC recommended that the enforcement of the new national generic
law regime should be reviewed 10 years after its implementation.
After consultation and discussion, MCCA/BRCWG agreed that a period
of seven years would be sufficient time prior to a detailed review.
534. A copy of the indicative implementation program is set out in
Attachment C.
Attachment A - Productivity Commission Recommendations (30 April 2008)
Chapter 3 - Objectives for consumer policy
RECOMMENDATION 3.1
Australian Governments should adopt a common overarching objective
for consumer policy:
'to improve consumer wellbeing by fostering effective competition
and enabling the confident participation of consumers in markets in
which both consumers and suppliers trade fairly and in good faith'.
To provide more specific guidance to those developing and
implementing consumer policy, this overarching objective should be
supported by six operational objectives.
The consumer policy framework should efficiently and effectively
aim to:
. ensure that consumers are sufficiently well-informed to
benefit from, and stimulate effective competition;
. ensure that goods and services are safe and fit for the
purposes for which they were sold;
. prevent practices that are unfair or contrary to good
faith;
. meet the needs of those who, as consumers, are most
vulnerable, or at greatest disadvantage;
. provide accessible and timely redress where consumer
detriment has occurred; and
. promote proportionate, risk-based enforcement.
Chapter 4 - A new national generic consumer law
RECOMMENDATION 4.1
Australian Governments should implement a new national generic
consumer law to apply in all jurisdictions. The new law should be
based on the consumer protection provisions of the Trade Practices
Act (TPA), amended to:
. reflect other recommendations in this report;
. incorporate additional provisions from State and Territory
Fair Trading Acts in those cases where the TPA is
generally agreed not to be adequate to deal with a
particular generic issue; and
. ensure that the new law covers non-corporate entities and
accommodates jurisdictional differences in court and
tribunal arrangements.
RECOMMENDATION 4.2
The new national generic consumer law should apply to all consumer
transactions, including financial services. However:
. the Australian Securities and Investments Commission
(ASIC) should remain the primary regulator for financial
services, with any involvement by the Australian
Competition and Consumer Commission or State and Territory
consumer regulators in this area only occurring after
prior consultation with ASIC; and
. financial disclosures currently only subject to 'due
diligence' requirements should be exempted from the
misleading or deceptive conduct provisions of the new law.
RECOMMENDATION 4.3
Responsibility for enforcing the consumer product safety provisions
of the new national generic consumer law in all jurisdictions
should be transferred to the Australian Government and be
undertaken by the Australian Competition and Consumer Commission
(ACCC).
If the Council of Australian Governments determines that the States
and Territories should retain the power to issue interim product
safety bans, these should lapse after 30 days if not extended
nationally by the responsible Australian Government Minister, on
advice from the ACCC.
RECOMMENDATION 4.4
The remainder of the new national generic consumer law should be
jointly enforced by the Australian Competition and Consumer
Commission (ACCC) and State and Territory consumer regulators.
However, individual States and Territories should have the option
to refer their enforcement powers for all of the new law to the
Australian Government, with enforcement to be undertaken by the
ACCC.
RECOMMENDATION 4.5
The enforcement arrangements for the new national generic consumer
law should be subject to an independent review within ten years,
with explicit consideration of the benefits and costs of moving to
a single national regulator model for all of the law, having regard
to:
. any evidence that differing enforcement practices or
regulatory 'break-out' are leading to divergent outcomes
for consumers and businesses across Australia;
. experiences and outcomes in any jurisdictions that have
referred their powers of enforcement for the new national
generic consumer law to the Australian Government; and
. the implications of any shifts in enforcement
responsibility for industry specific consumer policy to
the national level (see recommendations 5.1 to 5.3).
Chapter 5 - Industry specific consumer regulation
RECOMMENDATION 5.1
COAG's Business Regulation and Competition Working Group, in
consultation with the Ministerial Council on Consumer Affairs,
should instigate and oversee a review and reform program for
industry-specific consumer regulation that, drawing on previous
reviews and consultations with consumers and businesses, would:
. identify and repeal unnecessary regulation, with an
initial focus on requirements that only apply in one or
two jurisdictions;
. identify other areas of specific consumer regulation where
unnecessary divergences in requirements, or lack of policy
responsiveness, have significant costs; and
. determine how these costs would be best reduced, whilst
maintaining protections for consumers, with explicit
consideration of:
- the case for transferring policy and, where appropriate,
regulatory enforcement responsibilities to the
Australian Government and how this transfer might be
best pursued; and
- a process and timetable for harmonising and streamlining
currently divergent specific regulation that remains the
responsibility of the States and Territories.
RECOMMENDATION 5.2
Responsibility for the regulation of credit providers and
intermediaries providing advice on credit products ('finance
brokers') should be transferred to the Australian Government, with
enforcement to be undertaken by the Australian Securities and
Investments Commission (ASIC).
Amongst other things, the new national credit regime should:
. cover all consumer credit products and all intermediaries
providing advice on such products (including through
electronic or other arms-length means);
. retain the Uniform Consumer Credit Code (UCCC) as a self
standing set of requirements within the broader financial
services regulatory regime; incorporating changes to the
Code that have been agreed to by the Ministerial Council
on Consumer Affairs (MCCA), but not yet implemented;
. incorporate requirements from state and territory credit
legislation outside of the code, where these pass a
benefit-cost test;
. include a national licensing system for finance brokers,
and a licensing or registration system for credit
providers that would give consumers guaranteed access to
an approved dispute resolution service; and
. allow, over time, for the streamlining of the current UCCC
in the light of requirements within the broader financial
services regime, where net benefits are likely.
Also, COAG should give consideration to implementing the new
national regime in a phased way, including as initial steps:
. importing into the Australian Government's jurisdiction
the current UCCC - modified to reflect changes agreed to
by MCCA, but not yet implemented - and making ASIC
responsible for its enforcement; and
. introducing an interim, ASIC enforced, national licensing
arrangement for finance brokers, based on the draft
proposal developed by MCCA.
RECOMMENDATION 5.3
The specific requirements for that regime should be developed under
the auspices of the MCE after the Australian Energy Market
Commission has completed its reviews of the effectiveness of
competition in each of the jurisdictional retail energy markets.
Through the MCE, State and Territory Governments should also agree
to implement the new non-price regulatory requirements for retail
energy services, scheduled for introduction around 2010, with
minimal jurisdictional variations so as to enable a smooth
transition to a uniform national regime at a later date.
RECOMMENDATION 5.4
The Australian Government should remove all retail price regulation
applying to telecommunications products and services.
Also, where the Australian Energy Market Commission finds a
jurisdictional retail energy market to be fully contestable, the
State or Territory Government concerned should remove all retail
price regulation in that market as soon as practicable.
Ensuring that disadvantaged consumers continue to have sufficient
access to utility services at affordable prices should be pursued
through transparent community service obligations, supplier-
provided hardship programs, or other targeted mechanisms that are
monitored regularly for effectiveness.
RECOMMENDATION 5.5
In examining how to improve 'last resort' home builders' warranty
insurance, the Senate Economics Committee should also consider how
to enhance the effectiveness of earlier stage consumer protection
measures in the home building sector, including through:
. providing for guaranteed access to effective ADR across
Australia; and
. better linking licensing schemes to actual builder
performance.
Chapter 6 - Supporting institutional changes
RECOMMENDATION 6.1
As part of the transfer of greater responsibility for consumer
policy to the national level, the Australian Government should
ensure that there are effective arrangements in place to:
. facilitate enhanced coordination between Treasury and
other relevant government portfolios;
. promote consistent consumer policy approaches and outcomes
across portfolios; and
. enhance the profile of consumer policy across government
generally.
States and Territory Governments should similarly ensure that their
current governmental structures promote coordinated and consistent
consumer policy approaches and outcomes and give sufficient profile
to consumer policy across all relevant portfolio areas.
RECOMMENDATION 6.2
The Australian Government should enhance the capacity of the
Commonwealth Consumer Affairs Advisory Council to advise the
Minister on emerging, nationally significant, consumer policy
issues and on other consumer matters requiring further research
(see recommendation 11.3). Specifically the Government should:
. provide additional resourcing to support the Council's
advisory role; and
. ensure that membership of the Council is selected to
provide the necessary core consumer policy expertise and
to bring a national perspective to its advisory functions.
RECOMMENDATION 6.3
Australian Governments should agree to the following changes to
improve the effectiveness of the Ministerial Council on Consumer
Affairs (MCCA).
. The Council's voting rules should be altered such that
future policy changes would only require the agreement of
the Australian Government and three other jurisdictions
(a similar arrangement to those for competition and
corporations law).
. The MCCA secretariat should be sufficiently resourced to
carry out policy development work (including the
preparation of regulation impact statements) as well as
administrative functions.
. MCCA should be made more accountable for its performance
through improved public reporting of meeting agendas and
outcomes. It should also seek greater stakeholder input
on its strategic agenda and performance.
Chapter 7 - Unfair contracts
RECOMMENDATION 7.1
A provision should be incorporated in the new national generic
consumer law that addresses unfair contract terms. The
Commission's preferred approach would have the following features:
. a term is established as 'unfair' when, contrary to the
requirements of good faith, it causes a significant
imbalance in the parties' rights and obligations arising
under the contract;
. there would need to be material detriment to consumers
(individually or as a class);
. it would relate only to standard form, non-negotiated
contracts;
. it would exclude the upfront price of the good or service;
and
. it would require all of the circumstances of the contract
to be considered, taking into account the broader
interests of consumers, as well as the particular
consumers affected.
Where these criteria are met, the unfair term would be voided only
for the contracts of those consumers or class of consumers subject
to detriment, with suppliers also potentially liable to damages for
that detriment. The drafting of any new provision should ensure
the potential for private (and regulator-led) representative
actions for damages by a class of consumers detrimentally affected
by unfair contract terms.
Transitional arrangements should be put in place after enactment,
which would give businesses the time to modify their contracts.
The operation and effects of the new provision should be reviewed
within five years of its introduction.
Chapter 8 - Defective products
RECOMMENDATION 8.1
Australia's consumer regulators should:
. raise awareness among consumers and suppliers about the
statutory rights and responsibilities conferred by the
implied warranties and conditions in the generic consumer
law; and
. where appropriate, take specific enforcement action
against misleading marketing and sale of extended
warranties.
The adequacy of existing legislation related to implied warranties
and conditions should be examined as part of the development of the
new national generic consumer law.
RECOMMENDATION 8.2
Consistent with the recommendations in the Productivity
Commission's Review of the Australian Consumer Product Safety
System, Australian Governments should:
. develop a hazard identification system for consumer
product incidents;
. introduce mandatory reporting requirements for voluntary
product recalls; and
. require suppliers to report products associated with
serious injury or death or products which have been the
subject of a successful product liability claim or
multiple out-of-court settlements.
Ideally, these measures should be implemented as part of the
development of the new national generic consumer law (see
recommendation 4.1).
RECOMMENDATION 8.3
Drawing on the mechanisms proposed in recommendation 8.2 and on the
baseline study examining product related accidents prepared for the
Ministerial Council on Consumer Affairs, Australian Governments
should monitor trends in product safety, including any impacts of
the civil liability reforms, with a view to assessing whether the
incentives to supply safe products continue to be adequate.
Chapter 9 - Access to remedies
RECOMMENDATION 9.1
To facilitate more effective referral of complaints to the right
body and sharing of information on complaints:
. all consumer regulators should participate in the shared
national database of serious complaints and cases,
AUZSHARE; and
. the Australian Competition and Consumer Commission should
provide an enhanced national web-based information tool
for guiding consumers to the appropriate dispute
resolution body, as well as providing other consumer
information. It should be subject to consumer testing to
ensure that it is easy to use and has the appropriate
content.
RECOMMENDATIONS 9.2
Australian Governments should improve the effectiveness of
alternative dispute resolution (ADR) arrangements for consumers by:
. extending the functions of the Telecommunications Industry
Ombudsman to pay TV and reviewing options for further
consolidation, including through a single consumer entry
point for communication services complaints, or an
umbrella arrangement (similar to that proposed below for
financial services) encompassing all individual dispute
resolution services in this area;
. reducing the inconsistencies in the complaint-handling and
reporting processes used by energy ombudsman and assessing
the scope for some jurisdictions to immediately combine
their energy ombudsman offices on a bilateral basis, prior
to the ultimate formation of a national energy ombudsman;
. further enhancing financial ADR services through:
- integration of the existing bodies into a single
umbrella scheme to provide one referral and complaint
pathway, while allowing independent governance of its
subsidiary schemes;
- the requirement that any new industry ADR services,
including for credit, be accessed through the gateway
service, the Financial Ombudsman Service;
- timely and coordinated revision of ceilings on the value
of transactions subject to ADR, with ceilings
differentiated according to the relative risks of
consumer detriment for the relevant classes of products;
and
- allowing a consumer with a claim exceeding any given
ceiling to waive the excess and have their claim met up
to the limit;
. ensuring there are effective, properly resourced,
government-funded ADR mechanisms to deal consistently with
all consumer complaints not covered by industry-based
ombudsmen; and
. establishing a formal cooperative mechanism between the
various regulators, ADR schemes and other stakeholders to
re-assess every five years the nature and structure of ADR
arrangements to achieve best practice and address
redundancies or new needs.
RECOMMENDATION 9.3
Australian Governments should improve small claims court and
tribunal processes by:
. introducing greater consistency in key aspects of those
processes across jurisdictions, including:
- common higher ceilings for claims;
- common criteria for fee waivers for disadvantaged
consumers; and
. allowing small claims courts and tribunals to make
judgments about civil disputes based on more flexible
forms of testimony, including written submissions and
video-conferencing, unless either of the disputing parties
requests otherwise.
RECOMMENDATION 9.4
In the light of the Victorian Law Reform Commission's Civil Justice
inquiry and recent decisions by the Federal Court of Australia
regarding third-party financing of private class actions,
Australian Governments should assess the desirability of
clarification (or amendment) of the relevant legislation and the
use of other policy approaches to facilitate appropriate private
class action, taking into account any risks of excessive litigation
or other unintended effects.
RECOMMENDATION 9.5
Australian Governments should ensure a provision is incorporated in
the new national generic consumer law that allows consumer
regulators to take representative actions on behalf of consumers,
whether or not they are parties to the proceedings.
RECOMMENDATION 9.6
Australian Governments should provide enhanced support for
individual consumer advocacy through increased resourcing of legal
aid and financial counselling services, especially for vulnerable
and disadvantaged consumers.
Chapter 10 - Enforcement
RECOMMENDATION 10.1
The new national generic consumer law should give consumer
regulators the capacity to:
. seek the imposition of civil pecuniary penalties,
including the recovery of profits from illegal conduct,
for all relevant provisions;
. apply to a court to ban an individual from engaging in
specific activities after the court has found that a
breach of consumer law has occurred;
. issue notices to suppliers requiring them to reasonably
substantiate the basis on which claims or representations
are made; and
. subject to guidelines informed by the current Treasury
review of infringement notice powers under corporations
law, issue infringement notices for minor contraventions
of consumer law.
The possible inclusion of naming and shaming powers in the new law
should be the subject of further examination and consideration by
the Australian and State and Territory Governments under the
auspices of the Ministerial Council on Consumer Affairs.
RECOMMENDATION 10.2
The Australian Government should commission a review by an
appropriate legal authority of the merits of giving consumer
regulators the power to gather evidence after an initial
application for injunctive relief has been granted, but prior to
substantive proceedings commencing.
RECOMMENDATION 10.3
Australian Governments should ensure that all of their consumer
regulators are required to report annually on the nature of
specific enforcement problems, their consequences, steps taken to
address them (including enforcement strategies and priorities) and
the impact of such initiatives. Such reporting should be informed
by input from stakeholder groups.
Chapter 11 - Empowering consumers
RECOMMENDATION 11.1
Where a need for mandatory information disclosure requirements has
been established, the regulator concerned should require that:
. information is comprehensible, with the broad content,
clarity and form of disclosure consumer tested prior to
and/or after implementation, and amended as required, so
that it facilitates good consumer decision-making; and
. complex information is layered, with businesses required
to initially provide only agreed key information necessary
for consumers to plan or make a purchase, with other more
detailed information available (including by electronic
means) by right on request or otherwise referenced.
Also, the respective roles and responsibilities of regulators and
businesses in regard to such matters as consumer testing, content
and amendment should be understood and agreed at the outset.
Consistent with these principles, prospective reform of mandatory
disclosure requirements for financial services should be progressed
as a matter of urgency.
RECOMMENDATION 11.2
Through the National Education and Information Advisory Taskforce,
Australian Governments should commission a cross-jurisdictional
evaluation of the effectiveness of a sample of consumer information
and education measures, and the prospects for improving them. The
evaluation should focus on campaigns in areas where the benefits
from changing consumer (or supplier) behaviour are likely to be
most significant. It should also include an evaluation of the
proposed school-based financial literacy program, drawing on
evidence from similar programs overseas.
RECOMMENDATION 11.3
Within the broader consumer policy implementation framework agreed
to by COAG, the Australian Government, in consultation with MCCA,
should take the lead role in developing arrangements to provide
additional public funding to:
. help support the basic operating costs of a representative
national peak consumer body;
. assist the networking and policy functions of general
consumer advocacy groups; and
. enable an expansion in policy-related consumer research.
Part of the latter funding component should be used to establish
and support the operation of a dedicated National Consumer Policy
Research Centre (NCPRC), with the remainder provided as contestable
grants for research on specified consumer policy issues. An
independent review of the effectiveness of the NCPRC in delivering
beneficial research outcomes should be conducted after five years.
The new funding arrangements should be subject to appropriate
guidelines and governance requirements to help ensure that taxpayer
support contributes to high quality advocacy and policy research in
priority areas, and that the national interest is appropriately
represented.
Attachment B - Extract From Ministerial Council on Consumer Affairs
Communiqu� (23 May 2008)
Enhancing Australia's Consumer policy Framework: Reform Proposals
Today the Ministerial Council on Consumer Affairs (MCCA) agreed a
series of proposals for far-reaching consumer policy reform. In
doing so, the Ministerial Council responded to the Council of
Australian Government's (COAG) request that the Business Regulation
and Competition Working Group (BRCWG), in cooperation with MCCA,
develop enhanced national approaches for Australia's consumer
policy framework, drawing on the final report of the Productivity
Commission (PC).
MCCA has taken this opportunity to build on its high-level
commitments made in May 2008 and reach in-principle agreement on a
range of policy initiatives designed to provide greater national
consistency in Australia's consumer laws, their enforcement and the
way in which those laws are developed. This represents a
cooperative approach by the States and Territories to work with the
Commonwealth to develop national reforms. The PC estimated that
taking these steps could result in benefits to Australian consumers
of between $1.5 billion and $4.5 billion a year.
In proposing these reforms, MCCA recognises that while Australia's
current consumer policy framework has strengths, it is in need of
significant improvements to overcome existing inconsistencies, gaps
and duplication in Australia's consumer legislation and its
enforcement. Australian consumers can benefit from consistent
national coverage by a uniform national consumer law, and by
coordinated enforcement action, providing them greater confidence
in Australia's product and service markets. In this way,
Australian governments can build on the structural market reforms
of the past 15 years, to better enable consumers to drive
competitive, efficient and well-functioning markets in future.
In agreeing to these proposals, MCCA seeks to build on its earlier
agreement to introduce a new national product safety regulation and
enforcement system, which was confirmed by COAG at its 3 July 2008
meeting, and also the agreement of the State and Territories to
transfer their responsibilities for the regulation of consumer
credit to the Commonwealth. The development of increasingly
national consumer product and service markets means that Australian
consumers will benefit from uniform national consumer policy,
legislative and enforcement frameworks.
The Ministerial Council proposes that COAG consider the following
reform proposals, which would form the basis of an enhanced
consumer policy framework for Australia to be agreed by COAG at its
2 October 2008 meeting. These policy proposals have been developed
through a process led by the Commonwealth, in which the States and
Territories have been actively involved.
A national consumer policy objective
Effective national consumer policy requires common adherence by the
Commonwealth, the States and the Territories to a single national
objective. With this in mind, the Ministerial Council proposes
that all Australian governments should agree to a common,
overarching objective for consumer policy based on the Productivity
Commission's proposed objective: 'To improve consumer wellbeing
through consumer empowerment and protection, fostering effective
competition and enabling the confident participation of consumers
in markets in which both consumers and suppliers trade fairly.'
Ministers further propose that this overarching objective should be
supported by six operational objectives for consumer policy:
. to ensure that consumers are sufficiently well-informed to
benefit from and stimulate effective competition;
. to ensure that goods and services are safe and fit for the
purposes for which they were sold;
. to prevent practices that are unfair;
. to meet the needs of those consumers who are most
vulnerable or are at the greatest disadvantage;
. to provide accessible and timely redress where consumer
detriment has occurred; and
. to promote proportionate, risk-based enforcement.
A national consumer law
The keystone of the proposed enhanced national consumer policy
framework is a single national consumer law, which represents best
practice regulation. A single national consumer law will enhance
individual consumer well-being, further assist in the development
of a single national economy, reduce burdens on business and
facilitate well-functioning markets, to the benefit of all
Australian consumers and businesses.
The Ministerial Council proposes that all Australian governments
should agree to adopt a new national consumer law, which operates
in all Australian jurisdictions and which remains consistent. This
law should be based on the current consumer protection provisions
of the Trade Practices Act 1974 (TPA) and also incorporate
appropriate amendments reflecting best practice in state and
territory legislation.
The Ministerial Council further proposes that:
. the new national consumer law should be developed by the
agreement of all Australian governments and made law
through an application legislation scheme, with the
Commonwealth as the lead legislator and the States and
Territories applying the new national consumer law (as
amended from time to time) as part of their own laws;
. national consumer law provisions should apply to all
sectors of the economy. However, Ministers also recognise
that existing constitutional issues may mean that the
financial services sector will need to retain a distinct
legislative framework. In this regard, Ministers note the
Commonwealth's position that there should be an ongoing
commitment by the Australian Government to consistency
between the national consumer law's provisions and
consumer provisions in credit and financial services laws,
to the extent that it is practicable to do so; and
. amendments to the national consumer law must be agreed by
governments according to an Inter-Governmental Agreement,
which will provide, among other things, for the amendments
to be agreed by the Commonwealth plus four state and
territory governments, of which three must be states,
noting that these arrangements will require endorsement by
COAG on 2 October 2008.
Unfair contract terms
As part of the proposed national consumer law, the Ministerial
Council proposes that it should include a provision that addresses
unfair contract terms. The provision should have the following
features:
. the term is unfair when it causes a significant imbalance
in the parties' rights and obligations arising under the
contract and it is not reasonably necessary to protect the
legitimate interests of the supplier;
. a remedy could only be applied where the claimant shows
detriment, or a substantial likelihood of detriment, to
the consumer (individually or as a class). Detriment is
not limited to financial detriment;
. it would relate only to standard form (that is non-
negotiated) contracts. Should a supplier allege that the
contract at issue is not a consumer contract, then the
onus will be on the supplier to prove that it is not;
. it would exclude the upfront price of the good or service,
using the approach currently adopted in regulation 6(2) of
the United Kingdom's Unfair Terms in Consumer Contracts
Regulations 1999; and
. it would require all of the circumstances of the contract
to be considered, taking into account the broader
interests of consumers, as well as the particular
consumers affected.
Where these criteria are met, the unfair term would be voided only
for the contracts of those consumers or class of consumers subject
to detriment (or the substantial likelihood thereof), with
suppliers also potentially liable to damages for that detriment,
along with other remedies available under the Trade Practices Act
1974.
The drafting of any new provision should ensure the potential for
private (and regulator-led) representative actions for damages by a
class of consumers detrimentally affected by unfair contract terms,
in keeping with the PC's recommendation that representative actions
be improved.
The provision should also permit the prescription of certain terms
that are, in all circumstances, considered to be unfair. This
regulation making power would rest with the Commonwealth minister,
who would prescribe terms in accordance with the national consumer
law amendment process set out in the Inter-Governmental Agreement
and the requirements of regulatory impact assessment.
The provision should be supported by national guidance on its
enforcement, developed by the national and State and Territory
regulators, in accordance with a process set out in the Inter-
Government Agreement.
Transitional arrangements should be put in place after enactment,
which would give businesses the time to modify their contracts.
The operation and effects of the new provision should be reviewed
within seven years of its introduction.
Enforcement of the national consumer law
In implementing a new national consumer law, the Ministerial
Council recognises the importance of ensuring that enforcement
arrangements can address the needs of all Australian consumers
effectively, including the most vulnerable and disadvantaged. In
this respect, Ministers are mindful of the findings of the PC,
which concluded that current enforcement arrangements could be
greatly enhanced.
To this end, Ministers propose that:
. enforcement of the national consumer law will be shared
between the ACCC and the State and Territory offices of
fair trading, supported by formal agreements between these
enforcement bodies that cover arrangements for
communication between them and the coordination of their
activities;
. at the Commonwealth level, ASIC will have primary
responsibility for the enforcement of consumer laws
relating to financial services, and the States and
Territories will retain their enforcement powers in this
area, and ASIC will assume primary responsibility for
enforcing national consumer credit laws; and
. all enforcement arrangements should be reviewed by COAG
within seven years after the commencement of the new
national consumer law.
The Ministerial Council also proposes that enforcement and redress
powers for regulators should be enhanced under the national
consumer law, as recommended by the PC and as previously agreed by
the Ministerial Council, through the inclusion of civil pecuniary
penalties, disqualification orders, substantiation notices and
public warning powers and infringement notices (to the extent
permitted by relevant Commonwealth and State and Territory laws and
policies). Consumer regulators should also be able to take
representative actions on behalf of consumers not party to court
proceedings and have the power to gather evidence until substantive
proceedings have commenced.
Ministers recognise the need for consistent and timely national
information as a basis for improving the general understanding of
existing and developing consumer policy issues. To this end, the
Ministerial Council proposes that the consumer regulators should be
required to report annually to it, in a nationally consistent
manner, on common enforcement issues, or consumer issues arising
from their enforcement activities.
The Ministerial Council recognises that consumer law enforcement
bodies need to share information in order to provide comprehensive
enforcement coverage. To this end, it proposes that all Australian
consumer regulators consistently participate in the AUZSHARE
complaints database.
Consumer information
The Ministerial Council also recognises that consumers must access
a range of consumer law enforcement bodies and other bodies
providing consumer assistance and advice. In keeping with the PC's
recommendation, the Ministerial Council also proposes that the
Commonwealth would work in consultation with State and Territory
governments to develop an enhanced national web-based information
tool for guiding consumers to the appropriate dispute resolution
body, as well as providing other consumer information. It should
be subject to consumer testing to ensure that it is easy to use and
has the appropriate content.
Consumer research and advocacy
Ministers recognise the importance of evidence-based policy,
supported by robust research and effective stakeholder advocacy.
To this end, Ministers propose that the Commonwealth will work with
the States and Territories to further develop the effectiveness of
consumer representation and consumer policy research nationally.
Review of sector specific laws
The Ministerial Council notes the Productivity Commission's
recommendation that the BRCWG, in consultation with MCCA, should
oversee a process to identify unnecessary or divergent industry-
specific consumer regulation with a view to repealing or
harmonising it across jurisdictions where beneficial, and that the
BRCWG has commenced a process to do this.
Other issues for noting
In making these proposals, the Ministerial Council also notes that
a number of other areas of consumer policy are being considered and
developed as part of other processes:
. Ministers note that implied warranty and condition laws,
including a consideration of 'lemon' laws, require review
(as agreed by the Council on 23 May 2008), and further
note that, as a part of the incorporation of these
provisions into the national consumer law, further steps
should be taken to educate consumers and business as to
their rights and responsibilities by Australian
governments.
. Ministers note that the Commonwealth Attorney-General is
considering initiatives to improve access to justice for
all claimants in Commonwealth courts, including consumers,
and agrees that the Commonwealth will work with the States
and the Territories to consider enhancements to the
procedures of small claims courts and tribunals so as to
create greater national consistency for consumer law
actions, as well as considering the need for changes to
arrangements for class actions in the Federal Court of
Australia.
. Ministers note that SCAG is currently considering legal
aid policy and funding in the context of COAG's new
framework for Commonwealth-State relations.
. Ministers propose that Australian governments should
review the effectiveness and consistency of alternative
dispute resolution (ADR) schemes both within and across
industry sectors throughout Australia.
Progress on other recommendations
Ministers also propose that COAG should note that:
. the Australian Government is working with the States and
Territories to implement a new product safety system in
line with COAG's decision in July 2008 and that this
process will be completed by mid-2010; and
. the Ministerial Council's National Education and
Information Advisory Taskforce is currently pursuing an
evaluation of the effectiveness of publicly available
consumer information.
Implementation
Ministers have given preliminary consideration to the issue of
implementing these reforms, and have agreed an indicative
implementation plan to propose to the BRCWG, with a proposed date
for completing the policy development and implementation process by
the end of 2011. Ministers recognise that there is a need for much
of the detail of these proposals to be further developed as part of
the policy development and implementation process and further note
that individual jurisdictions are already engaged in discussions to
identify the scope of this work.
Attachment C - National Generic Consumer Law - Indicative Implementation
plan
|Date* |National |Inter-governm|Enforcement |
| |generic |ental |arrangements |
| |consumer law |agreement and| |
| | |related | |
| | |arrangements | |
|14-Aug-08 |SCOCA meeting to prepare for MCCA, |
| |presentation of agreed positions |
|15-Aug-08 |MCCA meeting |
|18-Aug-08 |MCCA chair writes to BRCWG reporting on |
| |MCCA outcomes, identifying responses to PC |
| |recommendations |
|25-Aug-08 |BRCWG meeting |
|September |Commonwealth pre-CoAG Cabinet process |
|2008 | |
|September |States and Territories pre-CoAG Cabinet |
|2008 |processes |
|02-Oct-08 |CoAG meeting (CoAG to agree to formal |
| |response to PC Report) |
|October- |Coordinated by the Commonwealth, in |
|November |cooperation with the States and |
|2008 |Territories, develop a detailed project |
| |management and implementation plan for: |
| |the development of a new national generic |
| |consumer law and supporting institutional |
| |and administrative arrangements; |
| |the development of an Inter-Governmental |
| |Agreement; |
| |the development of new enforcement |
| |arrangements for the new national generic |
| |consumer law. |
| |This will require high-level oversight by |
| |senior officials (SCOCA-level), and |
| |processes for regularly reporting to BRCWG |
| |and COAG. |
|Ongoing |Regular engagement by the Commonwealth, and|
| |the States and Territories, with the BRCWG |
| |(and also COAG) to: |
| |report on progress on policy development |
| |and implementation; and |
| |address specific policy issues subject to |
| |BRCWG consideration and review, within the |
| |context of the BRCWG's reform agenda. |
| |[BRCWG meets monthly or bi-monthly; COAG |
| |meets quarterly]. |
|November |Establishment|Establishment|Establishment |
|2008 |of a senior |of a senior |of a senior |
| |officials |officials |officials |
| |working group|working group|working group |
| |to manage the|to manage the|to manage the |
| |development |development |development of|
| |of the new |of the |new |
| |national |inter-governm|enforcement |
| |generic |ental |arrangements. |
| |consumer law.|arrangements |This would |
| | |to support to|involve |
| |This would |the new |consumer |
| |involve |national |policy and |
| |consumer |generic |enforcement |
| |policy |consumer law.|officials from|
| |officials | |the |
| |from the |This would |Commonwealth |
| |Commonwealth,|involve |(Treasury, |
| |States and |consumer |ACCC and |
| |Territories. |policy |ASIC), States |
| | |officials |and |
| | |from the |Territories. |
| | |Commonwealth,| |
| | |States and | |
| | |Territories. | |
|December |Development |Development |Development |
|2008 - |of the new |of the |of: |
|December |national |Inter-Governm|new |
|2009 |generic |ental |legislative |
| |consumer law,|Agreement, |and |
| |including |including: |administrative|
| |public |legislative |arrangements |
| |consultation |and |to enable |
| |on specific |institutional|effective |
| |issues. |arrangements |administration|
| |Includes: |for the new |and |
| |adaptation of|national |enforcement of|
| |the existing |generic |the new |
| |consumer |consumer law;|national |
| |protection | |consumer law; |
| |provisions of| |new |
| |the TPA; | |inter-agency |
| |new or | |arrangements |
| |amended | |between |
| |provisions to| |Commonwealth |
| |reflect the | |(ACCC and |
| |PC's | |ASIC), State |
| |recommendatio| |and Territory |
| |ns (including| |consumer |
| |unfair | |agencies for |
| |contract | |cooperation |
| |terms); and | |and |
| | | |communication.|
|December |new or |processes for| |
|2008 - |amended |the agreement| |
|December |provisions to|of the new | |
|2009 |address areas|national | |
|(continued) |where the |generic | |
| |TPA's |consumer law;| |
| |provisions |and | |
| |are agreed to|processes for| |
| |be |the amendment| |
| |inadequate, |of the new | |
| |drawing on |national | |
| |State and |generic | |
| |Territory |consumer law.| |
| |approaches. | | |
| | |The IGA | |
| |In this |should also | |
| |regard, |make | |
| |States and |provision for| |
| |Territories |the | |
| |have |integration | |
| |identified |of the agreed| |
| |the following|product | |
| |issues as |safety | |
| |potential |reforms into | |
| |issues for |the national | |
| |consideration|generic | |
| |in developing|consumer law.| |
| |the national | | |
| |law (which |The IGA | |
| |reflect |should also | |
| |either |take into | |
| |existing |account the | |
| |State and |PC's | |
| |Territory |recommendatio| |
| |laws or |ns on | |
| |address |improvements | |
| |specific |to | |
| |issues not |institutional| |
| |covered by |arrangements | |
| |the TPA), |for consumer | |
| |among others:|policy. | |
| | | | |
| |the | | |
| |definition of| | |
| |'consumer'; | | |
| |future | | |
| |representatio| | |
| |ns; | | |
| |industry | | |
| |codes; | | |
| |accepting | | |
| |payment | | |
| |without | | |
| |intention to | | |
| |supply; | | |
| |limitations | | |
| |of liability;| | |
| | | | |
| |injunctions; | | |
| |intimidation | | |
| |protections; | | |
| |false and | | |
| |misleading | | |
| |representatio| | |
| |ns; | | |
| |asserting a | | |
| |right to | | |
| |payment for | | |
| |unauthorised | | |
| |advertisement| | |
| |s; | | |
| |door-to-door | | |
| |trading; | | |
| |telemarketing| | |
| |practices; | | |
| |e-commerce | | |
| |and | | |
| |m-commerce | | |
| |practices; | | |
| |pyramid | | |
| |selling | | |
| |practices; | | |
| |lay-by sales | | |
| |practices; | | |
| |dual pricing;| | |
| | | | |
| |clarity of | | |
| |consumer | | |
| |documents; | | |
| |fair | | |
| |reporting; | | |
| |and | | |
| |cooling off | | |
| |periods. | | |
| |Review of | | |
| |legislation | | |
| |to be | | |
| |repealed, | | |
| |necessary | | |
| |transitional | | |
| |arrangements | | |
| |and savings. | | |
| |Engagement | | |
| |with expert | | |
| |legal | | |
| |advisers and | | |
| |parliamentary| | |
| |drafters. | | |
| |Commencement | | |
| |of regulatory| | |
| |impact | | |
| |assessment. | | |
|January |Drafting of | |Drafting of |
|2010-June |the new | |any amendments|
|2010 |national | |required to |
| |generic | |give full |
| |consumer law,| |effect to the |
| |repeals, | |enforcement |
| |consequential| |arrangements |
| |and | |for the new |
| |transitional | |national |
| |provisions | |generic |
| |and savings. | |consumer law. |
| |Provision for| | |
| |integration | | |
| |of the agreed| | |
| |legislative | | |
| |framework for| | |
| |product | | |
| |safety in the| | |
| |national | | |
| |generic | | |
| |consumer law.| | |
|April - June|Public |Finalisation |Public |
|2010 |consultation |of the |consultation |
| |on the final |Inter-Governm|on the new |
| |draft of the |ental |enforcement |
| |new national |Agreement. |arrangements |
| |generic | |to support the|
| |consumer law.| |new national |
| | | |generic |
| |Finalisation | |consumer law. |
| |of regulatory| | |
| |impact | | |
| |assessment. | | |
|April-July |Australian |Australian | |
|2010 |Government's |Government's | |
| |Cabinet |Cabinet | |
| |processes for|processes for| |
| |agreeing the |agreeing the | |
| |new national |Inter-Governm| |
| |generic |ental | |
| |consumer law.|Agreement. | |
| | |State and | |
| |State and |Territory | |
| |Territory |Governments' | |
| |Governments' |Cabinet | |
| |Cabinet |processes for| |
| |processes for|agreeing the | |
| |agreeing the |Inter-Governm| |
| |new national |ental | |
| |generic |Agreement. | |
| |consumer law.| | |
|July 2010 |COAG sign-off|COAG sign-off| |
| |on the new |on the | |
| |national |Inter-Governm| |
| |generic |ental | |
| |consumer law.|Agreement | |
|July 2010 |Formal |Commencement | |
| |agreement of |of the | |
| |all |Inter-Governm| |
| |Australian |ental | |
| |governments |Agreement. | |
| |to the new | | |
| |national | | |
| |generic | | |
| |consumer law.| | |
|June-Decembe|The | |Development of|
|r 2010 |Australian | |national |
| |Parliament to| |guidance on |
| |enact | |various common|
| |legislation | |enforcement |
| |providing for| |issues through|
| |the new | |the IGA policy|
| |national | |development |
| |generic | |and agreement |
| |consumer law,| |process, |
| |including | |including |
| |necessary | |guidance on |
| |changes to | |unfair |
| |integrate the| |contract |
| |agreed | |terms. |
| |reforms on | | |
| |product | | |
| |safety and to| | |
| |make relevant| | |
| |Commonwealth | | |
| |sector-specif| | |
| |ic laws | | |
| |consistent | | |
| |(telecommunic| | |
| |ations, | | |
| |financial | | |
| |services and | | |
| |credit). | | |
| |The | | |
| |Australian | | |
| |Parliament to| | |
| |repeal | | |
| |existing | | |
| |consumer laws| | |
| |superseded by| | |
| |the national | | |
| |generic | | |
| |consumer law,| | |
| |and to make | | |
| |consequential| | |
| |and | | |
| |transitional | | |
| |provisions | | |
| |and savings. | | |
| | | | |
| |Application | | |
| |of the new | | |
| |law in | | |
| |relation to | | |
| |the | | |
| |Commonwealth | | |
| |and the | | |
| |Territories | | |
| |to commence | | |
| |July-December| | |
| |2011. | | |
|January-June|The | | |
|2011 |Parliaments | | |
| |of the States| | |
| |to enact | | |
| |application | | |
| |legislation, | | |
| |applying the | | |
| |national | | |
| |generic | | |
| |consumer law,| | |
| |including | | |
| |necessary | | |
| |changes to | | |
| |integrate the| | |
| |agreed | | |
| |reforms on | | |
| |product | | |
| |safety and to| | |
| |make relevant| | |
| |state and | | |
| |territory | | |
| |sector-specif| | |
| |ic laws | | |
| |consistent | | |
| |(including | | |
| |national | | |
| |legislative | | |
| |schemes like | | |
| |energy). | | |
| |The | | |
| |Parliaments | | |
| |of the States| | |
| |to repeal | | |
| |existing | | |
| |consumer laws| | |
| |superseded by| | |
| |the national | | |
| |generic | | |
| |consumer law,| | |
| |and to make | | |
| |consequential| | |
| |and | | |
| |transitional | | |
| |provisions | | |
| |and savings. | | |
|July-Decembe|Commencement | |Commencement |
|r 2011 |of: | |of new |
| |national | |enforcement |
| |generic | |arrangements, |
| |consumer law;| |including MOUs|
| | | |between |
| |supporting | |Commonwealth, |
| |institutional| |State and |
| |changes (for | |Territory |
| |example, | |enforcement |
| |court | |agencies. |
| |processes), | | |
| |in the | | |
| |Commonwealth,| | |
| |States and | | |
| |Territories. | | |
| |Ongoing review of the effectiveness of the |
| |new arrangements. |
|July-Decembe|Review of the| |Review of the |
|r 2018 |effectiveness| |effectiveness |
| |of the | |of the |
| |consumer law | |consumer law |
| |enforcement | |enforcement |
| |arrangements.| |arrangements. |
*Dates are indicative and subject to change.
Index
Schedule 1: The Australian Consumer Law
|Bill reference |Paragraph |
| |number |
|Part 1, item 1, sections 2(1) and (2) |2.21 |
|Part 1, item 1, sections 1 and 2(3) |2.22 |
|Part 1, item 1, section 1 |2.24, 2.84, |
| |2.94 |
|Part 1, item 1, section 8 |2.25, 2.91 |
|Part 1, item 1, section 2(2) |2.29 |
|Part 1, item 1, section 1 and section 3(1) |2.30 |
|Part 1, item 1, subsection 3(1)(a) |2.31 |
|Part 1, item 1, subsection 3(1)(b) |2.33 |
|Part 1, item 1, section 3(4) |2.34 |
|Part 1, item 1, section 3(2) |2.37 |
|Part 1, item 1, subsection 3(2)(a) |2.38 |
|Part 1, item 1, subsection 3(2)(b) |2.43 |
|Part 1, item 1, section 1 and section 3(3) |2.44 |
|Part 1, item 1, subsection 3(2)(c) |2.48 |
|Part 1, item 1, section 4 |2.49 |
|Part 1, item 1, subsections 4(a)-(m) |2.50 |
|Part 1, item 1, subsection 4(n) |2.51 |
|Part 1, item 1, section 5(1) |2.63 |
|Part 1, item 1, subsection 5(1)(a) |2.64 |
|Part 1, item 1, section 1, subsection |2.67 |
|5(1)(b) and section 5(2) | |
|Part 1, item 1, subsection 5(1)(c) |2.77 |
|Part 1, item 1, section 6(1) |2.78 |
|Part 1, item 1, sections 6(2) and (3) |2.83 |
|Part 1, item 1, section 6(5) |2.86 |
|Part 1, item 1, sections 7(1) and (2) |2.87 |
|Part 1, item 1, section 7(2) |2.89 |
|Part 1, item 1, section 8(1) |2.93 |
|Part 1, item 1, section 8(2) |2.96 |
|Part 1, item 1, section 8(3) |2.98 |
|Bill reference |Paragraph |
| |number |
|Part 1, item 1, section 1 |2.99 |
|Part 1, Item 2(1) |2.128 |
|Part 1, Item 2(2) |2.129 |
|Part 1, Item 2(3) |2.130 |
|Part 2, item 3, subsection 4(1) |3.49 |
|Part 2, item 4, subsection 4(1) |3.49 |
|Part 2, item 5, section 4KC |2.104, 3.52 |
|Part 2, item 5, subsection 4KB(3) |3.51 |
|Part 2, items 6 to 7, paragraphs 5(1)(e) and|3.53 |
|(f) | |
|Part 2, item 9, subparagraph 6(2)(ca) |3.54 |
|Part 2, item 10, subsection 6(3A) |3.55 |
|Part 2, item 11, section 133 |3.21, 3.22, |
| |3.23, 3.24, |
| |3.30, 3.31 |
|Part 2, item 11, section 133 |3.25 |
|Part 2, item 11, subsection 135(1) |3.26 |
|Part 2, item 11, subsection 135(2) |3.28 |
|Part 2, item 11, section 136 |3.32 |
|Part 2, item 11, section 137 |3.34 |
|Part 2, item 11, sections 133, 138 and 140 |3.36 |
|Part 2, item 11, subsections 139(1) and (6) |3.37 |
|Part 2, item 11, subsection 139(2) |3.38 |
|Part 2, item 11, subsection 139(3) |3.39 |
|Part 2, item 11, subsections 139(4) and (5) |3.40 |
|Part 2, item 11, section 141 |3.41 |
|Part 2, item 11, section 142 |3.42 |
|Part 2, item 11, section 143 |3.44 |
|Part 2, item 11, paragraph 135(1)(c) |2.80 |
|Part 2, item 11, subsection 130(1) |3.12 |
|Part 2, item 11, subsection 130(2) |3.13 |
|Part 2, item 11, section 131 |3.15 |
|Part 2, item 11, section 132 |3.18 |
|Part 2, item 11, section 134 |3.20 |
Schedule 2: Enforcement and remedies under the Trade Practices Act 1974
|Bill reference |Paragraph |
| |number |
|Item 59, subsection 87(5) |2.115 |
|Part 1, item 1, subparagraph 76E(1)(a)(i) |4.9 |
|Part 1, item 1, subparagraph 76E(1)(a)(ii) |4.9 |
|Part 1, item 1, subparagraph 76E(1)(a)(ii) |4.9 |
|Part 1, item 1, subparagraph 76E(1)(a)(iv) |4.9 |
|Part 1, item 1, subparagraph 76E(1)(a)(iv) |4.9 |
|Part 1, item 1, subparagraph 76E(1)(a)(iii) |4.9 |
|Part 1, item 1, subsection 76E(1) |4.11 |
|Part 1, item 1, paragraphs 76E(1)(b)-(f) |4.12 |
|Part 1, item 1, subsection 76E(4) |4.13 |
|Part 1, item 1, subsection 76E(2) |4.14 |
|Part 1, item 1, subsection 76E(3) |4.15 |
|Part 1, item 1, subsection 76F(1) |4.25 |
|Part 1, item 1, subsection 76F(2) |4.26 |
|Part 1, item 1, subsection 76F(3) |4.27 |
|Part 1, item 1, subsection 76F(4) |4.28 |
|Part 1, item 1, section 76E |4.32 |
|Part 1, item 2, subsection 77(1); item 3, |4.33 |
|subsection 77A(3) | |
|Part 1, item 2, subsection 77(1); item 4, |4.33 |
|subparagraph 79B(a)(i) | |
|Part 1, item 2, subsection 77(1); item 6, |4.33 |
|paragraph 86D(1)(a) | |
|Part 1, item 5, subsection 85(7) |4.34 |
|Part 2, item 7, subparagraph 86E(1B)(a)(i) |5.8 |
|Part 2, item 7, paragraph 86E(1B)(a)(ii |5.8 |
|Part 2, item 7, subparagraph 86E(1B)(a)(iii)|5.8 |
|Part 2, item 7, subparagraph 86E(1B)(a)(iv) |5.8 |
|Part 2, item 7, paragraph 86E(1B)(a) |5.11 |
|Part 2, item 7, paragraph 86E(1B)(b) |5.12 |
|Part 2, item 9, subsection 86E(2) |5.13 |
|Part 2, item 9, subsection 86E(3) |5.16 |
|Part 2, item 10, paragraph 86E(4)(b) |5.8 |
|Part 2, item 50, paragraphs 86A(1)(b), |2.120 |
|(4)(b) and (5)(b) and 86B(1)(b) | |
|Part 3, item 11, subsection 4(1) |6.23, 6.30 |
|Bill reference |Paragraph |
| |number |
|Part 3, item 12, paragraph 87ZL(1)(a) |6.12 |
|Part 3, item 12, paragraph 87ZL(1)(b) |6.12 |
|Part 3, item 12, paragraph 87ZL(1)(c) |6.12 |
|Part 3, item 12, paragraph 87ZL(2)(a) |6.15 |
|Part 3, item 12, paragraph 87ZL(2)(b) |6.15 |
|Part 3, item 12, paragraph 87ZL(2)(c) |6.15 |
|Part 3, item 12, subsection 87ZL(3) |6.18 |
|Part 3, item 12, subsection 87ZL(4) |6.19 |
|Part 3, item 12, subsection 87ZL(5) |6.20 |
|Part 3, item 12, paragraph 87ZL(6)(a) |6.21 |
|Part 3, item 12, paragraph 87ZL(6)(b) |6.21 |
|Part 3, item 12, paragraph 87ZL(6)(c) |6.21 |
|Part 3, item 12, section 87ZM |6.22 |
|Part 3, item 12, subsections 87ZN(1) and (2)|6.23 |
|Part 3, item 12, subsection 87ZL(2) |6.11, 6.16 |
|Part 3, item 12, subsection 87ZN(3) |6.25 |
|Part 3, item 12, subsection 87ZO(1) |6.26 |
|Part 3, item 12, subsection 87ZO(2) |6.27 |
|Part 4, item 13, subsection 4(1) |7.7 |
|Part 4, item 14 and Schedule 2, Part 7, |7.8 |
|item 29, subsection 4(1) | |
|Part 4, item 15, section 4L |7.23 |
|Part 4, item 16, section 83 |7.24 |
|Part 4, item 17, subsection 87(1A) |7.25 |
|Part 4, item 18, subsection 87AAA(3) |7.12 |
|Part 4, item 18, subsection 87AAA(4) |7.13 |
|Part 4, item 18, subsection 87AAA(5) |7.14 |
|Part 4, item 18, subsections 87AAA(6) |7.15 |
|Part 4, item 18, subsection 87AAA(8) |7.16 |
|Part 4, item 18, paragraphs 87AAA(9)(a)-(c) |7.17 |
|Part 4, item 18, paragraph 87AAA(9)(d) |7.17 |
|Part 4, item 18, paragraph 87AAA(9)(e) |7.17 |
|Part 4, item 18, paragraph 87AAA(9)(f) |7.17 |
|Part 4, item 18, subsection 87AAA(10) |7.18 |
|Part 4, item 18, subsection 87AAA(11) |7.19 |
|Part 4, item 18, paragraph 87AAB(a) |7.21 |
|Part 4, item 18, paragraph 87AAB(b) |7.21 |
|Bill reference |Paragraph |
| |number |
|Part 4, item 18, paragraph 87AAB(c) |7.21 |
|Part 4, item 18, paragraph 87AAB(e) |7.21 |
|Part 4, item 18, paragraph 87AAB(f) |7.21 |
|Part 4, item 18, paragraph 87AAB(g) |7.21 |
|Part 4, item 18, paragraph 87AAA(1)(a) |7.9 |
|Part 4, item 18, paragraphs 87AAA(1)(b) and |7.9 |
|(c) | |
|Part 4, item 18, subsection 87AAA(2) |7.11 |
|Part 4, item 19, subsection 87AAA(1) |7.9 |
|Part 4, item 19, paragraph 87AAB(d) |7.21 |
|Part 4, item 19, paragraph 87A(1)(d) |7.26 |
|Part 4, item 20, paragraph 157(1)(d) |7.27 |
|Part 5, item 22, subsection 4(1) |8.17 |
|Part 5, item 22, subsection 4(1) |8.18 |
|Part 5, item 23, paragraph 4(1) |8.19 |
|Part 5, item 23, subsection 4(1) |8.19 |
|Part 5, item 24, section 87ZD |8.22 |
|Part 5, item 24, subsection 87ZE(1) |8.23 |
|Part 5, item 24, subsections 87ZE(2) and (3)|8.24 |
|Part 5, item 24, subsections 87ZF(a)-(e),(j)|8.26 |
|and (k) | |
|Part 5, item 24, subsection 87ZF(f) |8.27 |
|Part 5, item 24, subsection 87ZF(g) |8.27 |
|Part 5, item 24, subsection 87ZF(h) |8.27 |
|Part 5, item 24, subsection 87ZF(i) |8.27 |
|Part 5, item 24, subsection 87ZF(m) |8.27 |
|Part 5, item 24, section 87ZG (Items 1 and |8.29 |
|2) | |
|Part 5, item 24, section 87ZG (Item 5) |8.30 |
|Part 5, item 24, section 87ZG (Item 4) |8.32 |
|Part 5, item 24, section 87ZG (Item 3) |8.33 |
|Part 5, item 24, subsection 87ZH(1) |8.34 |
|Part 5, item 24, subsections 87ZH(2) and (3)|8.35 |
|Part 5, item 24, section 87ZI |8.37 |
|Part 5, item 24, subsections 87ZJ(1)-(3) |8.40 |
|Part 5, item 24, subsections 87ZJ(4)-(6) |8.41 |
|Part 5, item 24, subsection 87ZK(1) |8.42 |
|Part 5, item 24, subsection 87ZK(2) |8.43 |
|Part 5, item 24, subsection 87ZK(3) |8.44 |
|Bill reference |Paragraph |
| |number |
|Part 5, item 24, subsection 87ZK(4) |8.45 |
|Part 5, item 24, subsection 87ZK(5) |8.46 |
|Part 5, item 24, subsection 87ZK(6) |8.48 |
|Part 5, item 24, subsection 87ZK(7) |8.49 |
|Part 5, item 25 |8.51 |
|Part 6, item 26, subsection 86DA(1) |9.6 |
|Part 6, item 26, paragraph 86DA(1)(a) |9.8 |
|Part 6, item 26, subsection 86DA(2) |9.9 |
|Part 6, item 26, paragraph 86DA(3)(a) |9.12 |
|Part 6, item 26, paragraph 86DA(3)(b) |9.13 |
|Part 6, item 26, subsection 86DA(4) |9.14 |
|Part 7, item 5, subsection 4KB(1) and (2) |3.50 |
|Part 7, items 27, 30, 31 and 32, |2.108 |
|section 4(1) | |
|Part 7, item 28, subsection 4(1) |8.19 |
|Part 7, items 33 and 34, subsection 75B(1) |2.121 |
|Part 7, item 35, 76E(1)(a)(iv) |4.9 |
|Part 7, item 36, subparagraph 76E(1)(a)(v) |4.9 |
|Part 7, item 37, subsection 76E(3) |4.15 |
|Part 7, item 38 and 39, paragraphs 78(a)-(d)|2.122 |
|Part 7, items 40 to 42, paragraph |2.110 |
|80(1)(a)-(d) | |
|Part 7, item 43, subsection 80(1B) |2.111 |
|Part 7, item 44, subsection 82(1) |2.110 |
|Part 7, item 45, section 83 |2.123 |
|Part 7, item 46, paragraphs 84(1)(b) and |2.124 |
|84(3)(b) | |
|Part 7, item 47, subsection 86(1) |2.118 |
|Part 7, item 48, subsection 86(1A), item 49,|2.119 |
|subsection 86(2) | |
|Part 7, items 51 and 52, subsection 86C(4) |2.112 |
|Part 7, item 53, paragraph 86DA(1)(a |9.8 |
|Part 7, item 53, paragraphs 86DA(1)(a) |9.8 |
|Part 7, item 54, subparagraph 86E(1B)(a)(iv |5.8 |
|Part 7, item 55, paragraph 86E(1B)(a) |5.8 |
|Part 7, item 56, subsection 87(1) |2.113 |
|Part 7, item 57, paragraphs 87(1A)(a) and |2.114 |
|(b) and (1B)(a) | |
|Part 7, item 58, subsection 87(1C) |2.114 |
|Part 7, item 60, paragraph 87AAA(1)(a) |7.9 |
|Part 7, items 60 to 69, section 87AAA |7.9 |
|Bill reference |Paragraph |
| |number |
|Part 7, item 61, paragraphs 87AAA(1)(b) and |7.9 |
|(c) | |
|Part 7, item 62, paragraph 87AAA(2) |7.11 |
|Part 7, item 63, paragraphs 87AAA(3) |7.12 |
|Part 7, item 64, paragraphs 87AAA(4) |7.13 |
|Part 7, item 65, paragraphs 87AAA(5) |7.14 |
|Part 7, items 66 and 6, paragraphs 87AAA(6 |7.15 |
|Part 7, item 70, paragraph 87A(1)(b |2.116 |
|Part 7, item 72, paragraph 87A(1)(d) |2.116 |
|Part 7, item 73, subsection 87A(9) |2.117 |
|Part 7, item 74, section 87AC |2.103 |
|Part 7, item 75, section 87ZG |8.31 |
Schedule 3: Amendment of corporations legislation
|Bill reference |Paragraph |
| |number |
|Part 1, paragraph 12BI(1)(a) |2.64 |
|Part 1, item 2, subsections 12BA(1) |2.82 |
|Part 1, item 3, subsection 12BA(1) |2.84 |
|Part 1, item 4, subsection 12BA(1), item 7, |2.44 |
|subsection 12BG(3) | |
|Part 1, item 4, subsection 12BA(1) |2.30 |
|Part 1, item 5, subsection 12BG(1) |2.30 |
|Part 1, item 6, subsection 12BA(1 |2.67 |
|Part 1, item 7, paragraph 12BG(1)(a) |2.31 |
|Part 1, item 7, paragraph 12BG(2)(b) |2.43 |
|Part 1, item 7, subsection 12BF(3) |2.27 |
|Part 1, item 7, section 12BM |2.104 |
|Part 1, item 7, paragraph 12BI(1)(b) and |2.67 |
|subsection 12BI(2) | |
|Part 1, item 7, subsection 12BI(3) |2.69 |
|Part 1, item 7, paragraph 12BG(1)(b) |2.33 |
|Part 1, item 7, paragraph 12BI(1)(c) |2.77 |
|Part 1, item 7, section 12BL |2.28, 2.92 |
|Part 1, item 7, paragraph 12BG(2)(c) |2.48 |
|Part 1, item 7, subsection 12BJ(1) |2.81 |
|Part 1, item 7, subsection 12BG(4) |2.34 |
|Part 1, item 7, subsection 12BJ(4) |2.82 |
|Bill reference |Paragraph |
| |number |
|Part 1, item 7, section 12BH |2.49 |
|Part 1, item 7, subsections 12BJ(2) and (3) |2.83 |
|Part 1, item 7, subsection 12BF(1) |2.26 |
|Part 1, item 7, paragraphs 12BH(a)-(m) |2.50 |
|Part 1, item 7, subsection 12BJ(5) |2.86 |
|Part 1, item 7, subsection 12BG(2) |2.37 |
|Part 1, item 7, subsections 12BK(1) and (2) |2.87 |
|Part 1, item 7, paragraph 12BH(n) |2.51 |
|Part 1, item 7, subsection 12BK(2) |2.89 |
|Part 1, item 7, subsection 12BF(2) |2.29 |
|Part 1, item 7, subsection 12BI(1) |2.63 |
|Part 1, item 7, paragraph 12BG(2)(a) |2.38 |
|Part 1, item 7, subsection 12BL(2) |2.98 |
|Part 1, Item 8(2) |2.129 |
|Part 1, Item 8(1) |2.128 |
|Part 1, Item 8(3) |2.130 |
|Part 1, items 43 and 44, |2.116 |
|paragraph 12GN(1)(c) and subsection 12GN(9) | |
|Part 2, item 9, subsection 12GBB(3) |4.27 |
|Part 2, item 9, subsection 12GBA(2) |4.14 |
|Part 2, item 9, subsection 12GBB(4) |4.28 |
|Part 2, item 9, paragraph 12GBA(1)(a) |4.9 |
|Part 2, item 9, paragraphs 12GBA(1)(b)-(f) |4.12 |
|Part 2, item 9, subsection 12GBA(3) |4.15 |
|Part 2, item 9, paragraph 12GBA(1)(a) |4.9 |
|Part 2, item 9, subsection 12GBB(1) |4.25 |
|Part 2, item 9, section 12GBC |4.35 |
|Part 2, item 9, section 12GBD |4.36 |
|Part 2, item 9, subsection 12GBA(4) |4.13 |
|Part 2, item 9, subsection 12GBB(2) |4.26 |
|Part 2, item 9, subsection 12GBA(1) |4.11 |
|Part 2, item 10, paragraph 12GCA(a) |4.37 |
|Part 2, item 11, section 12GG |4.35 |
|Part 2, item 12, subsection 12GI(5) |4.34 |
|Part 2, item 13, subsection 12GLB(1) |4.38 |
|Part 3, item 14, paragraph 12GLD(1)(b) |5.12 |
|Bill reference |Paragraph |
| |number |
|Part 3, item 14, paragraph 12GLD(1)(a) |5.8, 5.11 |
|Part 3, item 14, subsection 12GLD(2) |5.13 |
|Part 3, item 14, paragraph 12GLD(1)(a) |5.8 |
|Part 3, item 14, section 12GLD |5.17 |
|Part 3, item 14, section 12GLD |5.18 |
|Part 3, item 15, section 206EB |5.19 |
|Part 3, item 15, paragraph 1274AA(1)(a |5.20 |
|Part 3, item 17, paragraph 1274AA(2)(ab) |5.20 |
|Part 4, item, 19, paragraph 12GY(6)(c) |6.21 |
|Part 4, item 18, subsection 12BA(1) |6.30 |
|Part 4, item 19, subsection 12BA(1) |6.23 |
|Part 4, item 20, subsection 12GY(1) |6.13 |
|Part 4, item 20, section 12GYA |6.22 |
|Part 4, item 20, subsection 12GY(4) |6.19 |
|Part 4, item 20, paragraph 12GY(2)(b) |6.15 |
|Part 4, item 20, subsections 12GYB(1) and |6.23 |
|(2) | |
|Part 4, item 20, subsection 12GY(5) |6.20 |
|Part 4, item 20, subsection 12GY(2) |6.11, 6.16 |
|Part 4, item 20, subsection 12GYB(3) |6.25 |
|Part 4, item 20, paragraph 12GY(6)(a) |6.21 |
|Part 4, item 20, subsection 12GYC(1) |6.26 |
|Part 4, item 20, paragraph 12GY(2)(c) |6.15 |
|Part 4, item 20, subsection 12GYC(2) |6.27 |
|Part 4, item 20, paragraph 12GY(6)(b) |6.21 |
|Part 4, item 20, paragraph 12GY(2)(a) |6.15 |
|Part 4, item 20, subsection 12GY(3) |6.18 |
|Part 5, item 20, subsection 12GNB(1) |7.9 |
|Part 5, item 21, subsection 12BA(1) |7.7 |
|Part 5, item 22, subsection 12BA(1) |7.8 |
|Part 5, item 23, section 12GG |7.24 |
|Part 5, item 24, subsection 12GM(2) |7.25 |
|Part 5, item 25, paragraph 12GN(1)(d) |7.26 |
|Part 5, item 26, subsection 12GNB(11) |7.19 |
|Part 5, item 26, subsection 12GNB(4) |7.13 |
|Part 5, item 26, paragraph 12GNC(a) |7.21 |
|Part 5, item 26, subsection 12GNB(8) |7.16 |
|Bill reference |Paragraph |
| |number |
|Part 5, item 26, paragraphs 12GNC(b) |7.21 |
|Part 5, item 26, paragraphs 12GNB(1)(b) and |7.9 |
|(c) | |
|Part 5, item 26, paragraph 12GNC(c) |7.21 |
|Part 5, item 26, paragraphs 12GNB(9)(a)-(c) |7.17 |
|Part 5, item 26, paragraph 12GNC(d) |7.21 |
|Part 5, item 26, subsection 12GNB(3) |7.12 |
|Part 5, item 26, paragraph 12GNC(e) |7.21 |
|Part 5, item 26, paragraph 12GNB(9)(d) |7.17 |
|Part 5, item 26, paragraph 12GNC(f) |7.21 |
|Part 5, item 26, subsection 12GNB(5) |7.14 |
|Part 5, item 26, paragraph 12GNC(g) |7.21 |
|Part 5, item 26, paragraph 12GNB(9)(e) |7.17 |
|Part 5, item 26, subsection 12GNB(2) |7.11 |
|Part 5, item 26, paragraph 12GNB(9)(f) |7.17 |
|Part 5, item 26, paragraph 12GNB(1)(a) |7.9 |
|Part 5, item 26, subsection 12GNB(10) |7.18 |
|Part 5, item 26, subsections 12GNB(6) |7.15 |
|Part 5, item 27, paragraph 12HB(1)(b) |7.27 |
|Part 6, item 28, subsection 12BA(1) |8.17 |
|Part 6, item 29, subsection 12BA(1) |8.18 |
|Part 6, item 30, subsection 12BA(1) |8.19 |
|Part 6, item 31, subsections 12GXF(4)-(6) |8.41 |
|Part 6, item 31, section 12GXC (Item 2) |8.29 |
|Part 6, item 31, subsection 12GXG(1) |8.42 |
|Part 6, item 31, subsections 12GXA(2) and |8.24 |
|(3) | |
|Part 6, item 31, subsection 12GXG(2) |8.43 |
|Part 6, item 31, section 12GXC (Item 4) |8.30 |
|Part 6, item 31, subsection 12GXG(3) |8.44 |
|Part 6, item 31, subsection 12GXB(g) |8.27 |
|Part 6, item 31, subsection 12GXG(4) |8.45 |
|Part 6, item 31, subsection 12GXA(1) |8.23 |
|Part 6, item 31, subsection 12GXG(5) |8.46 |
|Part 6, item 31, section 12GXC (Item 3) |8.32 |
|Part 6, item 31, subsection 12GXG(6) |8.48 |
|Part 6, item 31, subsection 12GXB(h) |8.27 |
|Part 6, item 31, subsection 12GXG(7) |8.49 |
|Bill reference |Paragraph |
| |number |
|Part 6, item 31, |8.26 |
|subsections 12GXB(a)-(e),(j) and (k) | |
|Part 6, item 31, subsection 12GXD(1) |8.34 |
|Part 6, item 31, subsection 12GXB(i) |8.27 |
|Part 6, item 31, subsections 12GXD(2) and |8.35 |
|(3) | |
|Part 6, item 31, section 12GX |8.22 |
|Part 6, item 31, section 12GXE |8.37 |
|Part 6, item 31, subsection 12GXB(m) |8.27 |
|Part 6, item 31, subsections 12GXF(1)-(3) |8.40 |
|Part 6, item 31, subsection 12GXB(f) |8.27 |
|Part 7, item 32, paragraph 12GLC(2)(a) |9.12 |
|Part 7, item 32, paragraph 12GLC(1)(a) |9.10 |
|Part 7, item 32, paragraph 12GLC(2)(b) |9.13 |
|Part 7, item 32, subsection 12GLC(1) |9.6 |
|Part 7, item 32, subsection 12GLC(3) |9.14 |
|Part 8, item 33, subsection 12BA(1) |8.19 |
|Part 8, item 34, subsection 12BA(1) |7.8 |
|Part 8, item 35, paragraph 12GBA(1)(a) |4.9 |
|Part 8, item 37, subsection 12GD(9) |2.111 |
|Part 8, item 39, subsection 12GF(1) |2.110 |
|Part 8, item 39, subsection 12GLA(4) |2.112 |
|Part 8, item 40, paragraph 12GLC(1)(a) |9.10 |
|Part 8, item 41, paragraph 12GLD(1)(a) |5.8 |
|Part 8, item 42, subsection 12GM(10) |2.115 |
|Part 8, item 45, paragraph 12GNB(1)(a) |7.9 |
|Part 8, items 45 to 54, section 12GNB |7.9 |
|Part 8, item 46, paragraphs 12GNB(1)(b) and |7.9 |
|(c) | |
|Part 8, item 47, paragraphs 12GNB(2) |7.11 |
|Part 8, item 48, paragraphs 12GNB(3) |7.12 |
|Part 8, item 49, paragraphs 12GNB(4) |7.13 |
|Part 8, item 50, paragraphs 12GNB(5) |7.14 |
|Part 8, item 51 and 52, paragraphs 12GNB(6) |7.15 |
|Part 8, item 55, section 12GND |2.103 |
|Part 8, item 55, section 12GXC |8.31 |
|Part 9, item 56, paragraph 102(2C) |8.25, 9.11 |
|Part 9, item 57, paragraph 102(2C) |6.14 |
Schedule 4: Miscellaneous
|Bill reference |Paragraph |
| |number |
|Item 1 |10.4 |
|Item 2 |10.4 |
|Item 3 |10.5 |
|Item 4 |10.4 |
|Item 5 |10.4 |
Do not remove section break.