On 27 November 2009, the Federal Government published the Issues Paper ‘The nature and application of unconscionable conduct regulation. Can statutory unconscionable conduct be further clarified in practice?’. The proposals contained in the Issues Paper intend to clarify the meaning and scope of unconscionable conduct in the TPA, as well as in corresponding provisions for financial services in the Australian Securities and Investments Commission Act 2001 (Cth). The proposals are part of a package of reforms to create a new national ‘Australian Consumer Law’ as reported in Freehills’ June and September 2009 Competition and Market Regulation Updates.8
The Issues Paper proposes the following options:
- doing nothing in addition to the accepted amendment, which clarifies the circumstances in which the unconscionable conduct provisions apply
- implementing legislative measures such as inserting into the TPA a list of examples of conduct which are unconscionable or a statement of principles to direct the court’s attention to issues it must consider in making a finding of unconscionable conduct, or
- pursuing non-legislative measures such as increased guidance by the ACCC, the Australian Securities and Investments Commission and other consumer regulators.
Submissions, which were due by 18 December 2009, will be considered by an expert panel that will report to the government by the end of January 2010. 48 submissions were received, including a submission by the Law Council of Australia (LCA). The LCA expressed the view that the existing provisions in the TPA in relation to unconscionable conduct are sufficiently broad and that the concept of unconscionable conduct should be developed on a case by case basis as the proposed legislative measures are likely to be overly restrictive.