Some Old, Some New – The Australian Consumer Law

by Fiona Vidler, Senior Associate of Gadens Lawyers Brisbane

The Australian Government is in the process of introducing a single national consumer law, to be introduced in two stages:

• the Trade Practices Amendment (Australian Consumer Law) Act (No. 1) 2010 (Act), most of which became operational on 15 April 2010. However, its unfair contract terms provisions will not be in force until at least 1 July 2010 (and possibly as late as 16 October 2010). As expected, the unfair contract terms provisions will only apply to standard form (non-negotiated) consumer contracts (Phase I); and
• the Trade Practices Amendment (Australian Consumer Law) Bill (No. 2) (Cth) (Bill), which was introduced into the House of Representatives on 17 March 2010 and has been referred to the Senate Economics Committee for report by 21 May 2010. The Bill is not expected to become law before 1 January 2011 (Phase II).

Under the new framework, the Trade Practices Act 1974 (TPA) will be renamed the (Competition and Consumer Act 2010) and the legislation will be re-organised. Consumer protection provisions will be included in a schedule to the main piece of legislation and titled the "Australian Consumer Law". While some new requirements and regulatory powers will be introduced, some existing TPA provisions will be merely re-stated in the new legislation.

The new national legislation will be enforced by the Australian Competition and Consumer Commission (ACCC) and State and Territory fair trading agencies.

Phase I

New ACCC powers included in the Act, which already apply, include the power to issue:

• Substantiation Notices – to require a party to provide information and/or documents to substantiate claims they have made (eg in advertisements). In effect these notices reverse the onus of proof.
• Infringement Notices – which are similar to a fine. If the amount specified in the notice is paid, proceedings will not be commenced. These notices can be issued in relation to some, but not all, consumer protection provisions. For example, they cannot be issued in relation to misleading or deceptive conduct.
• Public Warning Notices – these are "naming and shaming" notices. They can be used where the ACCC has reasonable grounds to suspect that a consumer protection or unconscionable conduct provision has been breached, or if a party fails to respond to a substantiation notice.

Phase II

The Bill (which could yet change) includes provisions that would:

• Change the name of the Trade Practices Act 1974 to Competition and Consumer Act 2010 .
• Introduce consumer guarantees, which will be implied into consumer contracts and will replace the consumer conditions and warranties currently provided for in the TPA. These new guarantees will relate to some behaviour regulated by the existing conditions and warranties provisions of the TPA, but will also cover other conduct. For example, they will include guarantees that any express warranty is complied with and that services will be provided in a reasonable period of time.
• Give the Commonwealth Minister the power to determine that a business display a notice advising consumers of their rights as specified by the Minister.

Included above is merely a brief overview of some of the changes. Businesses should identify all provisions of the new legislation that relate to them, what requirements will change and when the relevant provisions will commence.

Please contact us if you require further information about the impact of these changes on your business or advice on how to manage these new risks.