14 Apr 2016

Is Australia's Consumer Law fit for purpose? Have your say in the first review

by Greg Williams, Alexandra Rose, Caitlin Sheehy, Mihkel Wilding

At the same time as the Australian Consumer Law is being reviewed, the public's understanding of it is being investigated.

The review of the 2010 Australian Consumer Law (ACL) has now commenced, with submissions and feedback due on 27 May 2016. This is the first review of the ACL since its introduction on 1 January 2011.

The review is being undertaken by Consumer Affairs Australia and New Zealand (CAANZ) and will consider numerous things, including:

  • the effectiveness of the current laws and their administration;
  • whether the law is sufficiently flexible to address emerging issues, innovation and economic and technological shifts; and
  • whether the ACL framework is striking the correct balance between consumer protection and business compliance regulation and, if not, how it can be improved.

Interested stakeholders now have an opportunity to provide feedback on how the ACL is working in practice and how it can be improved and how it might apply to emerging issues. There is scope to provide feedback on the detail of the existing provisions of the ACL as well as these broader issues of principle.

An interim report will be released for public consultation in the second half of this year and a final report will be provided to state consumer affairs Ministers by March 2017.

Have your say: Review process, submissions and survey

The release of an Issues Paper on 31 March 2016 initiated eight weeks of public consultation. The Issues Paper is intended to outline the key areas of review and provide a framework for feedback. Interested parties can respond to all or some of the questions posed in the Issues Paper and may more generally provide feedback on the operation and impact of the ACL.

The Australian Consumer Survey has also commenced. It will report on consumer and business understanding of, and experience with, the current consumer law framework. Findings from the Australian Consumer Survey will also help to inform the review by providing a broader perspective on the impact of the ACL.

Both initiatives will culminate in the publication of interim and final reports.

What will the review cover?

The review is wide ranging and has three key themes:

  • to assess the effectiveness of the ACL provisions ‒ that is, whether the provisions are operating as intended or creating unnecessary and detrimental regulatory burden for consumers and businesses alike. Focus areas include the enforcement process, penalties and the unfair practices provisions;
  • to determine whether the national consumer framework has met the objectives articulated by COAG. This will include an assessment of existing regulatory structures and an evaluation of the extent to which businesses and consumers are aware of their rights under the ACL; and
  • to assess the flexibility of the ACL to respond to new and emerging issues to ensure that it remains relevant as the overarching legislative framework for consumer protection in Australia.

The review will also consider the effectiveness of the "single law, multiple regulator" model; that is, the joint administration and enforcement arrangements between the Commonwealth and State and Territory consumer regulators.

How to participate in the ACL review

Formal submissions can be lodged electronically via the "Australian Consumer Law Review ‒ Have Your Say" page of the Australian Consumer Law website.

Further details about the Australian Consumer Survey will be released later this year.

Hot topics

The ACCC has commented on the review and flagged some possible areas of focus:

  • the adequacy of the ACL penalty regime in delivering deterrence following the recent Coles judgment in December 2014 (in proceedings for unconscionable conduct);
  • the application of the ACL to consumer protection in the sharing economy;
  • the adoption of international product safety standards and the reduction in duplicitous regulation; and
  • redress for contraventions of the ACL when companies phoenix.

Another area of interest will be "Notification and Reporting". The current product recall notification and mandatory reporting framework (including progress reporting) can result in inefficiencies and an unnecessary regulatory burden for businesses, particularly in the "multiple regulator" framework where a business may be required to report to multiple regulators about the same issue. A more streamlined process for multiple regulator reporting is required. Industry submissions on this topic are the first step in initiating reform in this area.

Other areas that the review may provide an opportunity for clarification including:

  • the meaning of "acceptable quality" and what constitutes a "major" and "minor" failure in the compliance with consumer guarantees;
  • whether the difficulties in enforcement against suppliers in other jurisdictions discriminates the application of the ACL to local suppliers; and
  • the requirement to include the statement outlined in regulation 90(2) with respect to warranties which:
    • is worded to apply only to the supply of goods only, while also being required to apply to services; and
    • does not accurately reflect the law. 

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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.