The Competition and Consumer Legislation Amendment Bill
2010 (the Bill) will amend the Trade
Practices Act 1974 (the TPA) and the
Australian Securities and Investments Commission Act 2001
(ASIC Act) to clarify each statute's
unconscionable conduct provisions. It will also amend the
Australian Consumer Law once the Trade Practice Amendment
(Australian Consumer Law) Bill (No.2) 2010 (the
ACL) is passed by Parliament.
The unconscionable conduct amendments are central to the
implementation of uniform consumer laws throughout Australia and
will form part of the Australian Consumer Law once the ACL is
passed by Parliament.
In adopting the Senate Economics Committee recommendations, the
Bill will enhance the unconscionable conduct provisions and
introduce interpretative principles to clarify the scope and
definition of "unconscionable conduct".
The interpretive principles will:
clarify that the prohibitions against unconscionable conduct in
sections 21 and 22 of the ACL (the equivalent to ss.51AB and 51AC
of the TPA) are not limited by the equitable or common law
doctrines of unconscionable conduct (eg the need to establish a
clarify that unconscionable conduct is not limited to the
bargaining practices leading to contract formation, but that Courts
can examine the terms and the manner and extent to which the
contract is carried out (including the ways in which contracts are
renewed, negotiated and terminated)
ensure the prohibition on unconscionable conduct applies to
systematic conduct or patterns of behavior, and is not limited to
individual transactions or events. The focus will be on the conduct
engaged in rather than the need to identify a person who is at a
disadvantage in order to enforce the prohibition.
The Bill will also remove the potentially confusing distinction
in the existing provisions between unconscionable conduct that
affects businesses and that which affects consumers by combining
sections 21 and 22 of the ACL (sections 51AB and 51AC of the TPA)
and sections 12CB and 12CC of the ASIC Act into one section. The
Bill also provides a non-exhaustive list of types of conduct that
may be unconscionable in the context of business and consumer
transactions for Courts to consider.
The Bill was introduced into Parliament on 27 May 2010 and, if
passed, the provisions relating to unconscionable conduct will
commence immediately after the commencement of the ACL, which is
currently expected to be 1 January 2011.
Implications and recommended action
The amendments to the unconscionable conduct provisions will
ensure that the Courts are not constrained by equitable principles
and may apply the statutory prohibitions against unconscionable
conduct according to their terms. The proposed clarifications focus
upon the conduct of businesses - as a result, businesses will need
to be vigilant in their dealings with customers, be aware that an
accumulation of minor incidents can expose them to unconscionable
conduct, and should ensure systems are in place to ensure their
business practices are not at risk of falling foul of the
unconscionable conduct provisions.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
In some cases these fees or surcharges are higher than what a bank charges to these merchants for use of the system.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).