23 Oct 2008

National consumer protection laws one step closer

by Andrew Morrison, Sara Dennis, Mary Sheargold

Australian governments have agreed to introduce a national, cohesive framework for consumer protection laws.

As part of a jam-packed agenda, the Council of Australian Governments (COAG) meeting in Perth on 2 October took the next steps towards implementing plans for a national, cohesive framework for consumer protection laws in Australia.

This is the latest in a series of steps taken by COAG and the Ministerial Council of Consumer Affairs in light of the Productivity Commission's Review of Australia's Consumer Policy Framework report which was handed down earlier this year. One of the key outcomes of the Ministerial Council's 15 August 2008 meeting was to provide high level support for the Productivity Commission's proposals, and a range of reforms were proposed.

These included:

  • adopting a uniform national consumer law (based on the provisions of the Trade Practices Act 1974 (Cth)), incorporating amendments "reflecting best practice in state and territory legislation"
  • implementation of a single consumer policy objective across all Australian governments
  • provision for joint enforcement of the new laws by both the ACCC and State and Territory fair trading offices
  • providing a mechanism for judging unfair contract terms in standard form contracts (ie. non-negotiated contracts)
  • enhancing the enforcement powers for the new laws by providing civil pecuniary penalties (eg. recovery of profits from illegal conduct)
  • measures to enable regulators such as the ACCC to bring representative actions (class actions) on behalf of consumers not party to court proceedings; and
  • improving information sharing, to result in better informed consumers, and more clear channels of communication between federal and state/territory regulators.

COAG has now paved the way forward for widespread legislative reform with its apparent endorsement of these recommendations in Perth. The communiqué states that "COAG also agreed to a new consumer policy framework comprising a single national consumer law based on the Trade Practices Act 1974, drawing on the recommendations of the Productivity Commission and best practice in State and Territory consumer laws, including a provision regulating unfair contract terms."

"The new national consumer law will deliver on COAG's commitment to a seamless national economy by providing a uniform and higher level of protection for Australian consumers and addressing weaknesses in existing laws. The new policy framework will improve consumer law enforcement powers, reduce compliance costs for business and increase access to information regarding dispute resolution and consumer issues."

We understand that both COAG and the Ministerial Council are keen to see these reforms introduced swiftly, with efforts being made to see the changes implemented by the end of 2011. We expect further developments when COAG next meets on Monday 17 November 2008.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.