Goodbye Section 52
What's in a name?
Forget the fireworks! The New Year has brought with it big changes to the evolving world of consumer law. the introduction of the Competition and Consumer Law Act 2010 (or the artist formally known as the Trade Practices Act 1974) on New Years Day 2011 means more than just a name change for the legislative chameleon. It will have an incendiary effect on relationships between Australian businesses and their customers.
Key changes to Consumer Law
- Drawing together current provisions with state and territory laws to enhance the effect of unconscionable conduct, misleading and deceptive conduct and unfair practices provisions;
- Introduction of a national product safety system which imposes strict standards on the suppliers of goods; and
- A shiny new set of consumer guarantees incapable of contractual exclusion.
While it appears these changes are designed to create simple uniform laws in each state of Australia, this lawyer is sad to say goodbye to the stock standard legislative section that all baby lawyers learn before leaving the university nest. Section 52 of the Trade Practices Act has gone the way of Monty Python's dead parrot, "this is no more. It has ceased to be. It's expired and gone to meet its maker." While the effectiveness of the law is unchanged, a change of address card may be necessary for you to locate its new home in the Australian Consumer Law Schedule 2, Chapter 2, Part 2-1 Section 18 (aka Schedule 2).
Australian Consumer Law
Schedule 2 (which comes complete with its own website www.consumerlaw.gov.au) identifies the key legislative changes as follows:
- A new, national unfair contract law covering standard form contracts (Part 2-3)
- A new, national law guaranteeing consumer rights when buying goods and services (Part 3-2, Division 1)
- which replaces existing laws on conditions and warranties;
- A new, national product safety law and enforcement system;
- A new, national law for unsolicited consumer agreements, which replaces existing State and territory laws on door-to-door sales and other direct marketing (Division 2);
- Simple national rules for lay-by agreements and
- New penalties, enforcement powers and consumer redress options, which currently apply national.
Schedule 3 ill allow the ACCC to flex its muscles more freely with new enforcement powers including:
- Stiff civil monetary penalties (including compensatory damages);
- Banning Orders (court orders banning a person from managing corporations);
- Substantiation Notices (requiring a person to provide documents in support of representations made);
- Refunds for consumers (for goods and services); and
- Public warnings (that advertisements may be misleading).
These additional powers finally let the ACCC watch dog off the leash to punish companies that demonstrate a flagrant disregard for Trade Practices Law.
What does this mean for consumers?
Section 52 was designed with consumer protection in mind. To ensure fair competition and practices amongst Australian businesses, Schedule 2 will ensure consumers benefit form the stricter standards on product safety and a trader's inability to contract out of providing goods and services of less than an acceptable quality and/or purpose.
What does this mean for Traders?
If you follow the rules, not much. If you have a conscience you're in the clear! Provide consumers with the products and services they pay for. All supplier contracts and advertising should be reviewed by your legal team now to ensure you are Schedule 2 compliant.