Senate Committee Consideration of Consumer Law Bill

A Senate Committee has concluded its consideration of the Trade Practices Amendment (Australian Consumer Law) Bill (No. 2) 2010. This bill is the second in a suite of trade practices reforms. It renames the Trade Practices Act 1974 as the Competition and Consumer Act 2010. While transferring many protections from the existing act, it changes the drafting to conform to modern plain English. It also replaces a variety of federal, state and territory legislation with uniform national law. In addition, the bill introduces specific protections such as consumer guarantees and introduces new remedies and enforcement mechanisms for regulators and consumers.

The Committee recommendations include the following:

• The Committee believed that the Government should aim to arrive at a single definition of 'consumer' throughout the provisions of the Australian Consumer Law. The Committee recommended that the definition of 'consumer' should be derived from the definition of 'consumer goods' which defines goods as those 'of a kind ordinarily acquired for personal, domestic or household use or consumption'.

• The Committee recommended that the Government introduce a programme to educate Australian consumers about their statutory rights in relation to express warranties and other consumer guarantees. The programme should particularly aim to educate consumers about the guarantee that goods must be of "acceptable quality", which may offer protection above that included in manufacturers or extended warranty contracts.

• ACCC and consumer regulators should issue national guidance in relation to the new consumer guarantees to ensure regulators, consumers and businesses have a consistent understanding of their new rights and responsibilities.

• The Committee noted that the bill envisages a distinction between 'minor' and 'major' breaches of consumer guarantees. The Committee recommended that the operation of this distinction be monitored over time.

• The Committee noted that retailers were concerned that the requirement to report incidents involving death, serious injury or illness 'associated with' a product rather than 'caused by' the product could be casting the net too widely. The Committee indicated that it was sympathetic to the need to balance protection of consumers and avoidance of overwhelming both retailers and regulators with unproductive paperwork, but took the view that making exceptions to legislation causes complexity and ambiguity. Furthermore, they concluded that replacing 'associated with' by 'caused by', would probably raise more problems by putting an onus on the reporter to verify or investigate the incident before reporting.

The Committee recommended that the provisions of the legislation relating to product safety be reviewed within three years of implementation, particularly with regard to the costs of compliance versus the benefits obtained, the integrity of confidentiality of reports and any requirement to review definitions of product safety and risk in mandatory reporting.
 
The Committee recommendations may or may not be incorporated into the new legislation when it is finally settled.  Members will be kept informed of further developments.