Goodbye Trade Practices Act

Regulators can apply directly to a court for pecuniary penalties (effectively fines) for breaches of consumer protection provisions, although not where the breaches involve merely misleading and deceptive conduct, breach of consumer guarantees or including unfair terms in standard form consumer contracts.  Previously, fines were only available by way of prosecution by the Director of Public Prosecutions   The penalties have been substantially increased.  The penalties vary according to the type of offending conduct, but range up to $1.1M for companies and up to $220,000 for individuals. 

Infringement notices

As an alternative to applying to a court to impose penalties, the ACCC under the CCA now has the novel ability to issue on the spot fines known as infringement notices (which are rather like speeding fines) where it believes on reasonable grounds that there has been a contravention of consumer protection provisions (the breaches which are not liable to these fines are the same as those listed in relation to pecuniary penalties above).  These on the spot fines are considerably lower than court imposed pecuniary penalties.  While they vary according to the offending conduct, they are generally in the order of $6,600 for companies and $1,320 for individuals.  If the fine is paid, then no further civil or criminal action can be taken against the business.  If it is not paid, then the business is liable to be prosecuted (if the conduct is an offence) or pursued for pecuniary penalties. 

Banning orders & redress for third parties

Regulators now have the ability to:

  • seek orders banning individuals from managing corporations if they have contravened or been involved in a contravention of certain of the consumer protection provisions of the ACL.  Such orders could not previously be obtained for consumer protection breaches.
  • seek redress for people who are not parties to the court proceeding.  Previously, such people could only obtain redress if they were joined as a party to the court action.

What can businesses do to adapt?

A critical issue for many businesses will be reviewing their contracts and practices to ensure compliance with the new regime.  Of course, given the complex and wide-ranging nature of the changes wrought by the new Competition and Consumer Act 2010, businesses will be affected in different ways. 

Simon Jay heads our commercial team and is able to help businesses adapt to the CCA regime and offer advice on each person’s specific requirements.

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