Australian Regulatory Compliance Review

Commonwealth legislation update

Commonwealth Parliament is in recess and will next sit on 19 October 2009.

Bills awaiting passage include:

• Corporations Amendment (Improving Accountability on Termination Payments) 2009
• Corporations Legislation Amendment (Financial Services Modernisation) 2009
• National Consumer Credit Protection 2009
• Personal Property Securities 2009
• Trade Practices Amendment (Australian Consumer Law) 2009

See Bills list

Do you "drop test" your products and services?

I discussed product safety issues at a recent Trade Practices Act training session I gave. A retailer said that apart from other precautions (including compliance with safety standards), he always gave products a "drop test" before he bought them for resale.

In other words, he dropped the product on the floor from a set height to see whether it would break!

Whilst the test he described was not scientific, it seemed effective and relevant for the products he was buying and made me wonder why we don't "drop test" all the products and services we provide.

Services and non-tangible products should also be subjected to usability tests and mystery shoppers to see if they perform adequately.

Don't wait to be caught out by a regulator's inspector or an unhappy customer's internet review.

Here are some interesting drop tests:

Kindle

The Lexus car drop commercial

Trip Advisor

Choice

Senate reports on Australian Consumer Law

The Senate Standing Committee on Economics has released its report on the Trade Practices Amendment (Australian Consumer Law) Bill 2009. It recommended the Bill be passed.

Recommendations

The report considers submissions in respect of uncertainty caused by the Bill: the Commuittee recommends this be addressed by ACCC and ASIC issuing a set of guidelines on the operation of the bill's provisions to assist all parties to understand their rights and obligations under the new regime. The guidelines should make reference to the examples in the grey list in section 4 of the bill.

In respect of insurance contracts (which are exempt from the Bill) the committee is of the view that consumers are not provided with adequate protection in insurance contracts under existing law and that either the Insurance Contracts Act or the ACL be amended to give consumers equivalent protection.

Product safety information

The ACCC is the responsible Commonwealth agency for product safety under the Trade Practices Act.

How do you find out what has been banned, recalled or is the subject of product safety or information standards?

You can sign up for email updates at these pages:

• Recalls
• Bans
• Product safety and information standards

Review of statutory implied conditions and warranties

The Minister for Competition Policy and Consumer Affairs, the Hon Dr Craig Emerson MP, has released an Issues Paper, Consumer rights: Statutory implied conditions and warranties, on behalf of the Commonwealth Consumer Affairs Advisory Council (CCAAC).

On 12 March 2009, the former Minister for Competition Policy and Consumer Affairs announced a review of the Australian law on implied conditions and warranties (implied terms) by CCAAC.

The Issues Paper explores the adequacy of the current laws on implied terms and the need, if any, for amendments to improve existing laws and to empower regulators to ensure compliance with these laws. The Issues Paper also considers some of the related issues, such as 'lemon laws' to protect consumers where goods repeatedly fail to meet expected standards; the existence of extended warranties and their interaction with laws on implied conditions and warranties; and other possible means to improve the operation of the existing laws on implied terms in Australia.

The closing date for submissions is Monday, 24 August 2009

Consolidated Trade Practices Act

ComLaw has published a consolidated Trade Practices Act 1974 incorporating the anti-cartel provisions in Part IV.

ACCC guidelines on cartel prosecutions

The ACCC has published guidelines on how it will investigate alleged cartel arrangements under the anti-cartel laws that will commence on 24 July 2009.

The guidelines also set out how the ACCC will make decisions in relation to referral of matters for possible criminal prosecution.

The ACCC’s position is that serious cartel conduct should be prosecuted criminally whenever possible. For this reason, the ACCC will distinguish serious cartel conduct from that which is less serious in nature, including relatively minor conduct.

Serious cartel arrangements involve conduct of the type that usually causes, or has the potential to cause, large scale or serious economic harm.

The factors it will consider include:

• the value of the affected commerce exceeded or would have exceeded $1 million within a 12-month period (i.e. where the combined value for all cartel participants of the specific line of commerce affected by the cartel would exceed $1 million within a 12-month period)
• in the case of bid rigging, the value of the bid or series of bids exceeded $1 million within a 12 month period.

Revised ACCC immunity policy for cartel conduct

Following the introduction of criminal penalties for cartels, the ACCC has released its revised policy for the application of immunity in relation to cartel conduct.

The immunity policy applies to civil proceedings instituted by the ACCC.

Immunity from criminal prosecution will be determined by the Commonwealth DPP in accordance with the same principles that determine immunity under the ACCC’s immunity policy.

UPDATE: Here's the Trade Practices Amendment Act containing the anti-cartel amendments.

New legislation review

Parliament is on a winter break and will next sit from 11 to 20 August 2009.

It's left us with some significant new Bills to review:

• Australian Consumer Law and Trade Practices Amendments
• National Consumer Credit Reform Package
• Personal Property Securities
• Financial services modernisation: margin loans, trustee companies and debentures
• Director and executive termination payment changes

On 1 July we'll have:

• tax changes
• changes to superannuation contributions concessions
• new unfair dismissal rules under the Fair Work Act

And we're waiting for:

• assent and commencement of the anti-cartel laws;
• a decision on the new rules for employee share schemes.
• further updating on COAG's reform program.

Australian Consumer Law introduced

The Government has introduced the Trade Practices Amendment (Australian Consumer Law) Bill 2009 into Parliament.

If passed, the Bill will amend the Trade Practices Act 1974 by adding the Australian Consumer Law dealing with unfair contract terms as a schedule to the Act.

It also introduces new penalties, enforcement powers and consumer redress options in the Trade Practices Act and amends the consumer protection provisions of the Australian Securities and Investments Act 2001. to make them consistent with the Trade Practices Act and the Australian Consumer Law.

Further provisions will be included in the Australian Consumer Law by means of a second Bill to be introduced in early 2010. All Australian jurisdictions will be required, in accordance with the National Partnership Agreement to Deliver a Seamless National Economy to apply the full Australian Consumer Law by 1 January 2011.

UPDATE 25 June:Treasury has set up an Australian Consumer Law website.