CONSUMER PROTECTION LAWS VIP UPDATE
In the explanatory memorandum of the Australian Parliament the changes to consumer law set out below were explained. The Federal Government is creating a single national consumer law for Australia, including a national product safety law. The Trade Practices Amendment (Australian Consumer Law) Bill 2009 (first ACL Bill) will implement the first tranche of these reforms
The Trade Practices Amendment (Australian Consumer Law) Bills 2009 and 2010 will be:
• incorporating the fair trading and consumer protection provisions of the Trade Practices Act into the Australian Consumer Law, including unfair contract terms and provisions implementing enhanced enforcement powers, penalties and redress options;
• creating a national legislative scheme for consumer product safety, to replace the existing Commonwealth, State and Territory regulatory schemes;
• creating a national legislative scheme for statutory consumer guarantees, to replace the existing Commonwealth and State and Territory legislation concerning implied conditions and warranties in consumer transactions;
• creating a national legislative scheme for consumer product safety, to replace the existing Commonwealth, State and Territory regulatory schemes
• adding to the fair trading and consumer protection provisions of the Trade Practices Act changes drawn from existing provisions of the consumer laws of the States and Territories.
The first stage of the Trade Practices Amendment (Australian Consumer Laws) Bill 2009 appears likely to come into force on July 1, 2010. One of the significant features will be the prohibition against unfair trading terms contained in a standard form of contract. These provisions will apply as between a business and a consumer, who obtains the goods or services for domestic services or services of a personal application basis. Such provision can have far reaching effects reaching out of general sale situations to agreements to buy property, obtain finance, service contracts and building contracts.
There is a rebuttable presumption in favour of a contract being a standard contract. A form of contract which is non- negotiable would be regarded as a standard form of contract. If a contract goes beyond the reasonable protection of legitimate trading interests, contains an imbalance in the rights of the parties and is detrimental to the consumer then it will be an unfair contract.
The second round of changes is not due till next year and will amend the provisions in the Trade Practices Act relating to unconscionable conduct and the Franchising Code of Conduct.
The Australian Consumer Law will also provide that a person must not, in trade or commerce, engage in misleading or deceptive conduct or conduct that is likely to mislead or deceive. This is a general prohibition. The new Act will not contain a definition of ‘Misleading or deceptive’ but the High Court has previously held that such type of conduct must either induce error or be capable of inducing error and that intention is not a requirement for a person to have engaged in misleading or deceptive conduct.
The new Australian Consumer Product Safety System, will:
• cover services related to the supply, installation or maintenance of consumer goods;
• allow product safety standards, bans and recalls where a reasonable foreseeable use, or misuse, may render an otherwise safe product dangerous;
• allow regulators to undertake product recalls directly where no supplier can be found; and
• require suppliers to report serious product incidents to regulators.
These changes will have an impact on the manner in which business is conducted. Business should be preparing for the new laws. It is timely to review current practices, documentation and train staff Training. Consumer compliance programmes will need to be reviewed.
