New Laws effecting what the Australian Government calls the “biggest reforms to consumer laws in a generation”1 came into effect on 1 January 2011 with the Trade Practices Act 1974 [TPA] re-badged, as the Competition and Consumer Act 2010 (Cth) [ACL].
States and territories have adopted identical legalisation to create a single national law concerning consumer protection allowing consistency in transactions.
All businesses that provide goods or services, whether to consumers or other businesses, need to be aware of these changes.
1. Majority of changes came into effect from 1 January 2011;
2. The changes affect business-to-business transactions AND business-to-consumer transactions;
3. Unfair contract terms (in standard form contracts with an individual, which include contracts with recreational service providers) can be assessed and deemed to be void;
4. Consumer guarantees replace implied warranties and can not be limited by negotiation;
5. There is a mandatory two day reporting period for instances of injury, illness or death caused by consumer goods or product-related services;
6. Misleading and deceptive conduct provision remain unchanged.
7. Increased investigative and enforcement powers granted to ACCC include the ability to take action against a business independent of a consumer compliant;
8. Remedies for damages have been extended to enable claims for consequential loss;
9. The ACL provides for substantial penalties for offences with fines ranging from $1,000 to $220,000 for an individual and up to $1.1million for a company; and
10. Urgent action required to ensure compliance for all businesses.
Prior to the implementation of the ACL, recreational service providers could modify their liability by registering for a safety code under the Recreation Services (Limitation of Liability) Act 2002. However the ACL imposes consumer guarantees (which can not be limited) that require all services that are provided:
• to be rendered with due skill and care;
• to be reasonably fit for the purpose for which the services are being acquired;
• to be of such nature as to achieve the result the consumer (reasonably) wishes to achieve.
s42 of Fair Trading Act 1987 (SA) has addressed this imbalance by allowing recreational service providers, (being any service which consists of a sporting activity or similar leisure-time pursuit or any other activity which involves a significant degree of physical exertion or risk and is undertaken for the purposes of recreation, enjoyment or leisure) to
“…exclude restrict or modify a guarantee that would otherwise have been implied in the contract…”.
In order for recreation service providers to rely on modification to their liability they must ensure that the waiver wording from the regulation is included in all standard form contracts, brought to the attention of the client before providing the service, and the waiver is signed before an independent witness.
All businesses should urgently review their documentation to ensure compliance. The time to act is NOW.
1. Media Release No. 002 24 September 2010, on David Bradbury MP, Parliamentary Secretary to the Treasurer.
This communication provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. Should you wish to discuss any matter raised in this article, or what it means for you, your business or your clients' businesses, please feel free to contact us.