Whether New South Wales and Commonwealth Consumer Protection Legislation Needs Further Development - Essay Example

The proliferation of consumer protection legislation in Australia has affected contract law considerably. Critically analyse whether New South Wales and Commonwealth consumer protection legislation is now sufficient, or needs further development Name: Course Name: Tutor: Date: Introduction There has been a heated debate concerning the consumer protection legislation in Australia. The bone of contention is rooted in the relationship between the legislation and the contract law. To some individuals, the consumer protection legislation is of little use; rather it is mere replication of laws- precisely the contract law. However, the contract law is not sufficient to deal with the challenges that modernisation and globalisation of the market bring. The interest of the consumer is much more at risk than ever. This paper aims to track the relevance of the proliferation of the consumer protection legislation in Australia and the improvements that need to be addressed to ensure its success. Many scholars agree that the voice of the individual consumer is much powerful than the way the contemporary market image may be expressing it in theory but still agree that expressing the voice in practice may not be that easy (Stephen Weatherill 205). In relation to this very knowledge of the consumer voice in the market setup, and in much connection with the fact that the inherent desire to augment competition in the market may create a threat to the consumer’s voice, consumer protection comes in handy. More often, consumers may simply fail to know the salient qualities or features of the commodities or products they are presented for in the market. Even where pertinent information is available, the consumers are more likely to misread it hence be subjected to some particular risk for instanced in the case of drugs. On the one hand of the plane is the assumption or assumptions which the producer has to make dependent on the consumer behaviour. Due to lack of sufficient information about the consumer behaviour may however lead to unrealistic being made. The modern market is more complicated given the extent to which information technology has been embraced in the operations of the market and in countering competition while endeavouring to satisfy the customer at the same time. Some scholars (for instance John Goldring: 2004 in the Journal of Consumer Policy Consumer law and legal theory: Reflections of a common lawyer), on the basis that consumer law sprouts from the contract law as its foundation, argue that the consumer law is of no use given that it lacks a precise definition for a consumer and therefore it cannot specify the extent to which it is applicable. The federal Government of Australia has had a marked concern over the rights of the consumer in light of the features indicated above and thus has become more concerned about creating a balance between the consumer and the seller. Critics of the consumer protection legislation argue that the legislation is unnecessary but rather the state should work it out to ensure that in any case of imbalance arising in the market, the government should do all that is possible to ensure that consumers are protected (an interventionist approach which also receives an attack for being paternalistic). The consumer protection law: case of New South Wales Australia It is important that the legal and regulatory framework in various industries create an atmosphere that bolsters public interest as well as confidence and participation in the concerned sector. In most countries, these laws have been effected in different areas such as telecommunications where provisions have been enacted in areas like quality of service, number portability and universal service. Consumer interests also need to be protected and this has been achieved through enacting of general consumer laws which help in protecting the consumer interest when purchasing goods or services. Given the wide spectrum which the consumer protection laws are founded and the fact they cover interests in different areas or industries, there must be harmony and consistency among the laws considering that there is interaction of diverse consumer protection laws. This harmony and consistency when put in place guarantees prevalence of high consumer protection standards and it also lessens confusion. Furthermore, the paradigm shift in the technological field creates challenges each day which may put the consumer at a much more risk than before and hence the need to protect the consumer interest. Regulation of unfair contract terms In Victoria, there has been a prohibition has been placed on unfair terms in consumer contracts under part 2B of the Fair Trading Act (Vic.). The 1999 fair trading Act prohibits unfair terms in contracts that consumers are involved. There are in addition, certain terms which the Australian consumer legislation bans from being used in consumer contracts, which if left to be used in consumer contracts may put the consumer interest at risk. Thus, those are the terms classified as being unfair to the consumer. Such terms put the interest of the consumer at risk in any of the following six ways: first, the terms which do not recognise the existence of representations prior to or after the contract formation. Secondly, if the terms take the suppliers’ generated evidence, for instance an invoice, to be conclusive substantiation of the matter at hand for example giving evidence for monies owed, such terms are definitely a threat to the interest and security of the consumer and fail to be recognised by the Australian Consumer Legislation (ACL). Another term that ACL does not recognise is that which purports to exclude or put a limitation to the liability of the supplier in respect to a matter in which a consumer’s interest is threatened. Contractual terms that require the consumer to forfeit a fixed sum of money or fee to terminate a contract prematurely are also not recognised. If terms allow the supplier to set off amounts that are in dispute or debit them or even retain the amounts are also considered unfair and are therefore banned besides those terms which mandate that unconventional or alternative means should be used to resolve disputes before a consumer goes to court or to a tribunal for redress. Under these conditions, there are a number of areas that are affected including telecommunications, other utility services contracts that involve electricity, gas, water and sewerage; internet and telephony in the communications services; in the banking and financial service industry for instance in credit agreements; in online business like online auctions and e-commerce in general; in professional service industry in areas like those where lawyers, engineers or surveyors among others are involved; and lastly, residential as well as retail tenancies. The Australian national regulatory regime whose main objective is to ensure product safety in Australia is the regulatory system mandated with several 4responsibilities across the land in states and territories. The Australian Consumer Legislation that is proposed is aimed at providing a coherent regulatory framework that is consistent for product safety. Therefore under thee system, though the task of enforcement is carried out by ACCC, the governments at the state and territory levels are able to temporarily impose vetoes on products and such bans can go up to sixty days. Under the ACL system the minister concerned with competition and consumer affairs receives information from the ACC on whether a product deserves a permanent ban or a standard. However, the ACC on the other hand receives information and notifications from the state and territory governments which becomes useful in making decisions on whether a ban or a standard should be imposed and that is after it has carried out its assessment. In terms of enforcement, the task is bestowed to the ACC to enforce the ACL in conjunction with the Offices of fair Trading at State and Territory level. Though these provisions have an origin from the Australian trade Practices Act (1974), the powers in the current ACL are extended to include a number of supplementary provisions. Hence, the provisions extend to include wider civil financial penalties in addition to disqualification orders. Such disqualification orders, for instance, might ban a particular party from taking part in particular activities for a certain period of time (Goldring John 2004). Secondly, the suppliers must substantiate notices by supplying evidence to the regulator which prove any alleged misrepresentation with regard to its supply of goods and services. The legislation also extends to cover remedies for any damage caused to parties that have no stake in enforcement proceedings. The legislation also covers the ability to warn the public and provides the regulator with the powers to issue infringement notices and respond appropriately to any circumstances of contravention of the Australian Consumer Legislation. This enables facilitation of quick and flexible enforcement of the ACL. Minors (Property and Contacts) Act 1970 (NSW) In the 8th section of the property and contracts Act of 1970 (NSW), terms of a contract do not bind a minor to the contract except where, as indicated in the provision of the Act (s 17, s 19,s 26 and s 30), any beneficial acts entered by the minor are binding, they may be bound by the terms through their affirmation at that time when they attain the age of capacity or the minor may be bound by the terms of a contract where a court confers to the minor such contractual capacity such as putting him/her in the position that he/she is bound by the terms of the specific contract. Another reason for the protection of consumers against emerging challenges is that consumers are now becoming participants in the global market arena more probably in the cyber-market. This implies therefore that the challenges that come along the globalisation of business need rules to protect the consumers. The laws that are required to bring forth the protection should be enforceable at a national framework. These consumer protection laws which are enacted via a political process make it possible for the existence of a correctional mechanism to the market failures and create a redress to the market inequalities created in the process of globalisation. Though the consumer laws are important for the protection of consumer interest in the wake of globalisation, they make not to be easy to implement more so in the cyberspace and the global economy ion general. There are however more challenges that are likely to face the process of ensuring consumer protection legislation. One major factor that poses a challenge to the nation-state endeavour by New South Wales to ensure protection of consumer interest is the issue of new technologies and an intermarriage of that with globalisation of economy. This is because political processes at the national level bring forth national legal systems as a result of the democratic process which is actually affected by these challenges. A further implication is that if the New South Wales. In Williams v. The Society of Lloyd’s, the defendant was alleged to breach the Australian Trade Practices act 1974 section 52 as well as section 11 of the Fair Trading Act 1985 (Victoria) which bar any person from, be it in commerce or trade, engaging in conduct that misleads or deceives or that is likely to mislead or deceive. The majority of the defendants resided in England while one of them and the plaintiff were located in Victoria. The action resulted from representations alleged to have been executed on the behalf of defendants and others by their representative in Victoria. In the provisional proceedings, the judge ruled that the Victoria Supreme court did not an application to the proceedings and hence the proceeding went permanently against the English defendants. The basis here was that the claims made under the two Acts (Trade practices act 1974 and Fair trading Act (Victoria)) do not qualify as “actions in tort”. Such decisions and others of this kind have implications which point out that consumers essentially need to be protected against misleading or deceptive behavior in the marketing of goods and services. Nevertheless, if the laws are to be characterised in a different way other than those that create tort liability, then it is possible that enforcing such legislation that give protection to consumers in addition to other social benefits may not be easy beyond the boundaries of the state where the laws were enacted. And criminal laws are rarely easy to enforce beyond such boundaries. This further points out to the fact that the contract law has faced challenges that have rendered unable to offer any protection to the consumers. A nation-state needs to address this lapse by giving protection to the interests of different groups in its political community by way of consumer legislation which provides civil remedies for marketing behaviours that go against the interests of the consumers. Guaranteeing the welfare of the consumer is actually the responsibility of the state. Impediments of the legislation The consumer legislation faces impediments in implementation as a result of a number of reasons. Various stakeholders in Australia have differing views concerning the legislation aimed at protecting the consumer. These parties feel that the right of the consumer has already been represented in the contract law and therefore the consumer legislation is a duplication of other already existing laws that give the consumer the protection which the consumer protection legislation intends to do. For instance,, in the perspective of the bankers, for the legislation to work or any other reforms on the consumer protection to be successful, there must be acceptance or approval by all the banks. Banks have not yet made any meaningful support for the approval of the legislation. Among the factors that are causing this impasse in the consumer law reforms in relation to the bankers are the fears that these reforms might have an adverse effect on their own interests in the banking industry and the market as a whole. The bankers also feel that there own security levels in the market might be significantly weakened if the proposed legislations sail through given that there is little evidence to demonstrate that there is any substantial economic or efficiency advantages that exude from the consumer legislation should it be implemented. On the other hand, on the part of the financial service industry, the reforms are of great interest to the general public and the global well-being of consumers and therefore must be supported since there are facts to show that at least the market has not provided all the satisfactory consideration in terms of consumer interest as far as it should have done. Deficiencies in various industries across the land have elicited market responses to some market procedures that have not sufficiently sdat5isfied the market. The function and effectiveness of regulation in consumer protection Consumer law has received mixed reactions with some critics (Wilson and Howell) arguing that it is pervasive and its better role would be to confuse the role of the contract law. The major point is that consumers are not a homogeneous group and therefore legislating another law for the sole purpose of protecting the consumer interest while the same interest is represented in the contract law is tantamount to paralleling the contract law without defining the boundaries; hence the boundaries of the consumer law are left amorphous. In this view, policy-makers are left with one significant challenge being the one of ensuring an effective and appropriate up to date consumer law is developed. In the journey of consumer protection, there is a specific method that needs to be followed akin to that followed in the development of competition in the market maturation. In the set up for the market maturation there is need for the rules of interconnection that protect competitors. Competition in the market may have effects that could easily pass on to the consumer. However, competition when intermarried with liberalisation is likely to be of benefit to the consumer more so considering that prices tend to go down when there is heightened competition in the market. Consumer Protection as Minimum Standards Consumer protection measures entail setting of minimum standards. The buyers or consumers are allowed to buy higher quality service if they desire and they have the resources necessary to do so. Nevertheless, the law lays down what the minimum standards that should be availed to all. The consumer legislation makes it possible for protection to be accorded to particular groups of interest for instance individuals that have hearing impairment. Under the discrimination law, the individuals with disabilities have a right to be supplied with services that all other individuals get unless technical feasibility renders it impossible or it is prohibitive in terms of the expenses involved; otherwise, it amount to discrimination. Services like those offered by the National Relay Service (which enable the persons with disabilities to access telephone service). As technology changes rapidly, such consumer regulation as these minimum standards regulation are likely to become irrelevant There are several sectors that need specific consideration as far as implementation of the consumer protection regulation is concerned. These sectors need some changes to be made so that the respective industry takes sufficient responsibility in the process of consumer protection. Taking an example of the telecommunication industry, consumer welfare can be taken into account if the government agencies share the responsibilities attached to consumer welfare and protection with the industry. With setting up of the telecommunications industry ombudsman consumer complaints and grievances can be resolved through instant award of damages. Though the changes are important for the success of the consumer protection legislation, the system needs to incorporate more industry participants. For this reason, as the ACCA protects the consumer interests on the general perspective by ensuring fair practices in the market including effects of competition, the ACA can be further empowered to deal particularly as an industry-specific regulator. Areas like the radio-communication and telecommunication will thus be easier to regulate and monitor the extent of implementation of the consumer protection regulation. Generally, imprisonment is still unavailable for dealing with criminal contravention though New South Wales has gone further to incorporate imprisonment in its consumer protection legislation. Improvements necessary for the Enforcement by consumers Many infringements of consumer protection regulation also amount to an infringement of the private rights of the consumer; in particular, those arising under contract law. By enforcing the consumer rights, regulatory compliance can easily be achieved. The consumer protection legislation brings in items like consumer bargaining and the consumers together with other third parties could be allowed to contribute to the process of regulatory enforcement. It is imperative, therefore, to scrutinise the potentials in the different jurisdictions. Preferably, these would incorporate the reinforcement and funding of consumer protection systems and then providing institutions which offer cheap arbitration of disputes. The principal focal point is on the relationship subsisting between the private enforcement systems and the public enforcement systems. This area needs further improvement to bolster the effectiveness of the consumer protection legislation. Such a contribution requires procedural facilitation to succeed. A mechanism should be exist which allows the consumer to instigate administrative proceedings for the regulatory infringement. The mechanism should also enable the consumer to initiate the criminal prosecution following any contravention of the consumer protection regulation. The mechanism that exists should also enable the consumer to make use of the available administrative or criminal determinations of the infringement as proof for the purpose of a private law claim. Lastly, the mechanism that is well representative of the consumer rights should enable the consumer to coalesce a private right claim with the administrative or criminal processes. Since enforcement agencies in Australia principally depend on the civil justice system to obtain the remedies, further improvements would need to be pursued to guarantee more effectiveness and efficiency. First of all, though civil proceedings seem to be an effective method of dealing with dishonest conduct by the recalcitrant traders besides appearing to be a better avenue for achieving a judicious redress for consumers, the civil regime should also allow the courts in their jurisdiction to impose pecuniary penalties in case of breach of the Australia’s consumer protection regulation. Such a move, if implemented, is likely to add to the efficiency of the system as a whole in the protection of the consumer rights. Some of the major devices regarded as significant in ensuring compliance are adverse publicity and probation orders. Sanctions that are criminal in nature are mostly reserved for the most sombre infringements of the law. There is however complexity associated with the task and more time is required to ensure effectiveness of the legislation. Consumer protection regulation The majority of Australian federal consumer protection regulation is found in the TPA (Trade Practices Act) 1974. Part V of the act contains civil remedies while the part V(c) of the same act contains the criminal liability provisions. Some of the significant provisions that are relevant to the consumer protection are contained in the financial services legislation. The states and territories at the local level are mandated to enact legislation akin to the consumer protection regulations contained in the TPA. The Trade Practices Act is technology neutral and deals with three basic areas in relation to consumer. The first of these areas is the failure to supply or avail information the case of distance sales transactions. Furthermore, the TPA in this case pertains to broad norms of conduct to commercial transactions and this is irrespective of how those transactions are made. In respect to providing information, failure to provide the relevant information relating to cancellation of a transaction may be construed to imply a misrepresentation under section 52 and section 53(g) of the TPA. This is by extension governed by the contract law. In addition, the legislation that governs state/ territory door-to-door selling enforces the regulations further than the provisions of the Trade Practices Act. Secondly, under section 52 and section 53 (a) false representations is prohibited and for this matter, tampering with the odometer is considered as a misleading conduct or an attempt aimed at deceiving or misleading the consumer. The states and territories have particular legislation pertaining to tampering with the odometer. The legislation includes falsely advertising that goods or products are of a given quality or standards yet they do not meet the stated standards (section 52 of the trade Practices Act). Lastly, under part V of section 53(e) and section 75 AZC (g) Part VC, misleading price labelling is prohibited. Besides the states/territory level obligation in provision of consumer protection, there are other enforcement a8uthorities that ensure adherence to the provisions of the TPA. The ACCC (the Australia Competition and Consumer Commission) is one body active at the federal level and which targets every conduct that has a national or international focus. The activity of the ACCC also encompasses those cases which might call for enforcement action that has a broad national effect; either in an educative or deterrent manner. Every capital city in Australia has ACCC offices. Another agent in the enforcement of the TPA provisions is the DPP- the Commonwealth Director of Public Prosecutions. This body is exclusively responsible for handling (by prosecution) breaches of the criminal liability provisions as defined under the Trade Practices Act. The DPP works in co-operation with the ACCC as far as their roles are concerned especially in relation to carrying out investigation and ensuring prosecution of perpetrators of breaches. Through their lines of operation they might determine whether it is apposite to follow an issue through the criminal justice system. This means that though the consumer protection legislation has its roots from the contract law, it has a modified outlook that goes hand in had with the changes that take place in the market and which might complicate the operability of the contract law and its extent of consumer representation and protection. Employing other strategies that have been proposed by the Ministerial Council on Consumer Affairs will also be a great stride in ensuring that the consumer protection legislation is of desired benefit to all the parties pertinent in the consumer affairs; basically the traders and the consumers. Since the basic objective of the Ministerial Council on Consumer Affairs is to avail the most excellent and the most consistent consumer protection by means of putting in measures that take the Australian consumer into consideration, working towards developing a system of consistent approaches to the issue of trading affairs and consumer affairs would be a notable achievement. This calls for harmonisation of policy and legislation. This would ensure legislative consistency in development and implementation. Harmonisation of the legislation and policy requires inclusion of other issues to guarantee its success. Product safety must be approached in terms of development of a strategy that is hazard-based. A base-line examination of the product-related accidents needs to be undertaken to uncover any impediment and hindrance to the implementation of the legislation is uncovered. Internet and its role in the modern market cannot go unmentioned. The extent to which it can be used to provide information to both the consumers and the suppliers concerning the product safety and safety measures can be applied to ensure harmonisation of legislation and policy. Bolstering business reporting requisites regarding commodities evidently associated with severe injury or death would lead to an improvement in the implementation of the legislation. The standard making process should also be enhanced. The process of enforcement of the policy decisions should also be consistent for all the suppliers of commodities and services at the national level of the marketplace. Thirdly, information in the contemporary is just as important as empowerment to the consumers and the suppliers and therefore as a priority, information should be made available to the consumers and the suppliers. These are the major players in the consumer protection legislation and the process of implementation puts them in square position as relevant parties. Another thing is that the New South Wales must co-operate with the Australia as a whole. Lastly, more research needs to be carried out in relation to the consumer concerns and the Australian trade practices. In relation to Consumer Policy Research, the aim is to provide information to the policy makers for better and appropriate decision making process. This research must include scams and product safety. In the research, attempts should be made to unearth any factors that may expose the consumers to the scam activities. This is in light of the modern market developments which take place at a high rate and pose challenges that require solution in speedy manner. Conclusion The globalisation of markets has come with a range of challenges that need flexibility to handle in terms of consumer protection. This implies that continuous development and improvement in the consumer protection legislation is called for. Otherwise it may not be easy to deal with businesses that operate in environments external to their physically defined ones. Computer-aided communication systems are able to provide an advantage for new opportunities for trans-national marketing which may disregard the restrictions established under the consumer protection laws. Japan and Australia are at closer business partnership and therefore such bilateral ties in the modern market are also a challenge. 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