The Australian Consumer Law (ACL)

The Australian Consumer Law ( 'the ACL ') resulted from extensive government consultation and review of the existing legislative framework. This review was undertaken with a view to improving uniformity and consistency between Australian jurisdictions, and to ensure that customers are adequately protected when entering into a contract with a business for the supply of a good or service. Broadly speaking, the primary objectives of the ACL are to: Introduce new civil pecuniary penalties for contravention of certain consumer protection provisions. Prohibit unfair contract terms in standard form consumer contracts. Introduce new enforcement powers for the Australian Competition and Consumer Commission ( 'ACCC ') and the Australian Securities and

This article is intended to be a brief overview of the key changes and new concepts which came into force on 1 January 2011, with the enactment of the Competition and Consumer Act 2010 (Cth), replacing the Trade Practices Act 1974 (Cth) ( 'the TPA ').

History of the Australian Consumer Law

The Trade Practices Amendment (Australian Consumer Law) Act (No. 1) 2010 (Cth) was the first of two Acts to implement the new Australian Consumer Law. The Act was passed by the Commonwealth Parliament on 17 March 2010. On 24 June 2010, the Trade Practices Amendment (Australian Consumer Law) Bill (No. 2) 2010 (Cth) followed.

When the amendments came into force on 1 January 2011, the Trade Practices Act 1974 (Cth) changed its name to the Competition and Consumer Act 2010 (Cth), and the new Australian Consumer Law came into existence.

These two enactments, along with the passage of State and Territory laws applying the ACL and new Trade Practices Regulations have reformed Australia 's previously inconsistent Commonwealth, State and Territory

New civil pecuniary penalties

The ACL introduced civil penalties up to a maximum of $1.1 million for corporations and, $220,000 for individuals, relating to contraventions of particular provisions of the former TPA, such as the unconscionable conduct provisions and provisions relating to false or misleading representations.

This change will have significant ramifications. Until now, there had only been scope to seek criminal fines, requiring the prosecution to establish the claim 'beyond reasonable doubt. ' A civil penalty regime has a lower onus of proof (the 'balance of probabilities ') and also allows the ACCC to commence Court actions.

Stronger enforcement powers

The ACL has strengthened the ACCC 's enforcement powers (and those of ASIC, in relation to financial services and products). Under the TPA, because the regime was strict and the penalties severe, cases commenced by the ACCC were reasonably rare. The ACL has now empowered the ACCC to: Apply for a Court order disqualifying a person from managing corporations following a contravention of certain consumer protection provisions. Seek a Court order to redress loss or damage to consumers arising out of contravention of certain consumer protection provisions. Issue 'substantiation notices ' requiring the recipient to provide information and / or documentation to substantiate representations made by the recipient. Issue 'infringement notices ' containing a financial penalty for suspected contraventions of