Comparison between Pre-2011 Consumer Protection and Regime Consumer Protection 2011 - Essay Example

Australian Consumer Law Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Name Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Course Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Lecture Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 23rd March, 2012. Introduction The paper draws on the comparison in reference to the similarities and the differences between the pre – 2011 consumer protections that operated in Australia and the national regime consumer protection 2011 which commenced in January 2011. The paper will therefore bring out the differences and the similarities between the two regimes that is the pre – 2011 and the 2011 consumer protection. However, the paper will use the approach where the differences and the similarities are discussed side by side without the need of having headings differentiating between the two for the differences and the similarities to come out clearly. Prior to 2011 consumer law in Australia, the general provisions that operated in Australia included the TPA and the FTAs (Territory Fair Trading Acts) in the states and territories. Consumer Law Act 2011 The Australian Consumer Law is an overarching law that replaced previous legislations that were meant for consumer protection by eliminating the unilateral decisions of individual jurisdictions and having a consumer law that applies nationwide; Australian Consumer Law 2011. The Consumer Law Act 2011 ensures that there is uniformity and consistency in the various jurisdictions in Australia and therefore, it is the law that applies to the Commonwealth of Australia and also in Australia’s states and all its territories. Australia Consumer Law 2011 was as a result of an agreement between the Council of Australian Governments, states and territories and this was done through the MCCA (Ministerial Council on Consumer Affairs)1. The law therefore simplifies the work of the Federal Government in amending the various provisions that are to be applied to the states and the territories without the need of individual jurisdictions having to debate and make amendments to the provisions separately. However, it is paramount to note that the various states and territories in Australia can fail to implement amendments in their jurisdictions. In line with having a single law is the fact that the nation wants to serve consumers in various ways among them having consumers being treated the same whenever they are in Australia, protecting the consumer from unfair conduct and also trade in business transactions, protecting the consumer from unfair terms which may be in the consumer contracts that render such contracts void among other reasons as to why the government choose to have an overarching consumer law. In addition, the Australian government in enacting a single consumer law requires that consumers are treated the same throughout the nation and therefore their expectations when conducting business in Australia is the same. The nation wants the consumers to be served similarly in the Commonwealth of Australia, the states and the territories and hence the introduction of a consumer law that has consistency in terms of business rules, trading practices, business conduct to the consumers all over Australia which is inclusive of consumer contracts and business obligations towards the safety of products being sold2. Among the objectives of the ACL Act 2011 by the federal government is to have an economy that is seamless. This means that with the introduction of the ACL 2011, firms that operated across jurisdictions were to reduce these unnecessary costs while complying with the various jurisdictions laws and regulations3. The federal government also wanted to attain other objectives for instance, enhancing Australia’s economic growth for capacity production through introductory of competition reforms, improve the participation of the workforce and also increase the mobility of labor in Australia4. Differences and similarities between the pre – 2011 and the 2011 consumer protection Overarching Consumer Law One of the striking differences between the ACL with the TPA (Trade Practices Act) 1974, pre – consumer protections in Australia is that the ACL is an overarching law applying to all the states and territories and the commonwealth of Australia. The ACL has provided Australia with a consumer law that unifies the states and territories in Australia and also the Commonwealth of Australia. Before its enactment, there were various consumer laws operating within the states and territories in Australia and hence the ACL has played the role of harmonizing the consumer laws in the states by having a single national regime to operate in the states and territories and the Commonwealth of Australia. Pre – 2011 consumer laws were different in the states, territories and the Commonwealth of Australia. ACL Offers a Modernized Regime where Consumer Rights are Protected Prior to the Australian Consumer Law Act 2011, there existed various effective consumer laws in Australia which were complex, duplicated, and inconsistent and hindered business in Australia. The pre – 2011 consumer laws regime increased the costs of doing business in Australia to the consumer and eroded the consumer’s confidence when making choices for the consumer was deterred from seeking redress and also in asserting for his or her rights when things between the trader and the consumer turned sour. This was made possible by the complexity, inconsistency and rigidity of the various consumer laws that operated in the states, territories and the Commonwealth of Australia. ACL Act 2011 has simplified this into a single national consumer law and hence eliminated the complexity, rigidity, inconsistency and inefficiency of the pre – 2011 consumer laws. ACL 2011 regime has made Australia a business friendly environment. While the 2011 ACL gives consumers all over Australia equal rights regardless of where there are conducting businesses in, the pre – 2011 consumer protections had varying provisions that were so impractical and which were credited with rigidity to the extent that the consumers had to check the various jurisdictions laws whenever they were conducting business in a certain state or territory in Australia. In addition, though the differences in the consumer protections among the different jurisdictions and states in Australia and the Commonwealth of Australia could be considered as small, the effect of having a national consumer regime ensured that there was less red tape which applied to businesses all over the states, territories and the Commonwealth of Australia. Therefore, cumulative differences of consumer protections in the states created red tape to businesses and the uncertainty to the consumer when conducting business in the Commonwealth of Australia, states and territories which the ACL 2011 has managed to eliminate. The pre – 2011 consumer protections did not offer similar protections to the consumer and the consumer could not expect similar conduct from businesses all over Australia. Different states, territories and the Commonwealth of Australia had different consumer protections that made the consumer confused especially when the consumer would trade across Australia. With different consumer protections in the pre – 2011 Australia consumer laws, the states, territories and the Commonwealth of Australia had no obligations to enforce a certain consumer protection in all the jurisdictions in Australia but the ACL Act 2011 has changed the face of consumer protection in Australia whereby the law is applied across Australia and hence enforceable by all the courts and tribunals in the states and the territories of Australia together with the Commonwealth of Australia. In the pre - 2011 consumer protection regime, the various courts in the states and the territories did not have an overarching consumer protection law that applied to all the states and territories and the commonwealth of Australia. In regard to offering a modernized regime where consumer rights are protected, ACL Act 2011 creates a scenario where there is protection of consumers in the ever changing world markets. The Case of Implied Conditions and Warranties The Australian Consumer Law Act 2011 has guarantees that replaced the Trade Practices Act conditions and warranties which were implied. Implied warranties and the conditions in the TPA, made consumers confused as to the existence of their rights (statutory rights). Under the TPA, consumers were easily exploited and traders discouraged consumers from seeking remedies which they were supposed to seek simply because the TPA implied conditions and warranties were complex. Under the ACL Act 2011, the consumer awareness of the existence of implied conditions and warranties which were reviewed by CCAAC (Commonwealth Consumer Affairs Advisory Council) is enhanced through the enactment of the new powers of enforcement. For instance, if a trader gives false information or information which is misleading on consumer guarantees, the trader or the business which offers such information risks facing fines that amounts to 1.1 million dollars maximum fines. This new ways of enforcing compliance with the ACL 2011, more so in regard to implied conditions and warranties of the consumer ensures that business in the states, territories and the Commonwealth of Australia are deterred from engaging in harmful practices. Therefore, ACL Act 2011 eliminates the TPA constitutional implied conditions and also the warranties. In addition, warranties are to be included in contracts between the consumer and the supplier of goods and their inclusion in the supplier’s goods is mandatory under the ACL Act 2011. Warranties are to bear the name of the person, who will give the warranty, give clear indication of whether the consumer is entitled to have a warranty, states the name of the organization, the address among other things that are to be included in the warranty. This collectively works in eliminating the confusion associated with the pre – 2011 consumer regime where consumers were unaware of warranties. Business Competition, Innovations and Economy Efficiency The pre – 2011 consumer regime discouraged competition among businesses and the laws also did not create room for innovation and efficiency in the Australian economy. The Australian legal framework in the pre – 2011 consumer regime did not support many of the consumer decisions and therefore the consumer used to spend more when seeking legal redress whenever things turned sour between the consumer and the seller. Such spending created a negative effect on the Australian economy thereby discouraging innovation, competition and reduced the country’s economy5. With the harmonized 2011 consumer law, there would be varying impacts to the governments for instance, legislative control falls on the Australian government and hence administration costs and regulatory harmonization could be expected to be in the hands of one jurisdiction other than the nine jurisdictions for proper harmonization to occur. If every jurisdiction is to enact its own legislation of the 2011 ACL, some jurisdictions would have some policies that would make the administrative costs of harmonization less creating a setback in terms of costs of having coordination and harmonization of the 2011 ACL6. Just like the 2011 ACL, the pre - 2011 consumer regime also sought to protect the consumer from dubious trade from trader’s deceptive behavior, offer the consumer with remedies when they suffered loss, provide information to the consumer among others which the overarching consumer law is trying to achieve though with major changes from the previous provisions. Another similarity between the pre – 2011 consumer law regime and the 2011 ACL is that the 2011 ACL built its basis on the extant provisions of the TPA. Therefore, not all the provisions that were in the TPA were completely changed for some still apply. In a nutshell, the 2011 ACL can be said to have introduced new provisions in the states, territories based on the best practices of states and territories and also intensified the rate at which these provisions are to be enforced in the states, territories and the Commonwealth Australia. Under the pre – 2011 consumer regime, whenever consumer’s guarantee was breached, the consumer only had to rely on common law remedy. The consumer guarantees included in the ACL are provided to the consumer in a language the consumer can understand if the consumer purchases goods which are not satisfactory. In addition, in the ACL, the consumer guarantees are in such a way that they even confer to the consumer what he or she is entitled to. In the new consumer regime, the ACCC holds the power to enforce the new provisions. The ACCC has the power to act on behalf of the consumers if there is clear evidence that the provisions in the ACL have been breached and where consumer protections have also been breached. The pre – 2011 consumer regime gave the states and territories the right to have mandatory and permanent bans as part of the product bans. However, even after the changes in the ACL, the states and territories have the right to come up with temporary product bans for almost 60 – 90 days in the jurisdictions. The two regimes coincides or are congruent in the issue of unsolicited consumer agreements in that while the new consumer regime prohibits approaching consumers on days which are not official for business for instance on Sunday and also contacting the consumer in hours that are not considered business hours, the pre – 2011 consumer regime also had banned such activities. Victoria during the pre – 2011 consumer regime was the only state that included a provision for unfair terms in the FTA. Such a provision covers contracts which are negotiated between a business and a consumer on an individual basis that they are not allowed in Victoria. In similarity, the new provisions captured in the 2011 ACL included the provision7. In conclusion, it almost feels that the unifying national and overarching consumer law for all the states, territories and the Commonwealth of Australia which has made it possible for the disappearance of the TPA is the greatest change to have ever been experienced in Australia since the TPA 1974 came into force and also the disappearance of well known provision numbers and taxonomy in the TPA. This disappearance of the TPA has been possible though the notion of having an overarching consumer law in the states, territories and the Commonwealth of Australia. One can also not eliminate the fact that it feels as if the 2011 ACL is operating in the shadows of the previous consumer laws regime, the pre – 2011 consumer laws regime but nonetheless an important milestone in regulating business in Australia’s states, territories and the Commonwealth Australia. References Australian Consumer Survey 2011, Australian consumer survey. Retrieved from http://www.consumerlaw.gov.au/content/consumer_survey/downloads/Australian_Consumer_Survey_Report.pdf, Retrieved on 23rd March 23, 2012. CAV (Consumer Affairs Victoria) 2006, Consumer Detriment in Victoria: A Survey of its Nature, Costs And Implications, Research Paper no. 10, October. Competition and Consumer Act 2010 Schedule 2, The Australian Consumer Law". Commonwealth Consolidated Acts. Australasian Legal Information Institute. Retrieved on 23rd March, 2012. Retrieved from http://www.austlii.edu.au/au/legis/cth/consol_act/caca2010265/sch2.html Kelly, J. 2010. "Shoppers and parents among those to benefit from law changes at midnight". The Australian. Retrieved 25 January 2011 MCCA (Ministerial Council on Consumer Affairs) 2006, Review of National Arrangements for Administering Trade Measurement in Australia: Final Report, Commissioned by the Standing Committee of Officials on Consumer Affairs and prepared by Booz Allen Hamilton (Aust) Ltd., August. Smith, G. 2010, (Head of Strategic Solutions, Salmat Ltd), Economics Legislation Committee, Senate, Official Committee Hansard, 29 April 2010, p. 26. Soames, L., Brunker, D. and Talgaswatta, T. 2011, Competition, Innovation and Productivity in Australian Businesses, Australian Bureau of Statistics and Productivity Commission Research Paper, Canberra. Read More