Page 2136 - Week 08 - Wednesday, 9 September 1992
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consumers bring a damages action under clause 46. However, they can seek an injunction under clause 44 or a compensatory or rectification order under clause 50. For example, harsh contracts can be rewritten, refunds can be ordered, or orders for compensatory damages can be made. In the first instance, the conduct complained of must relate to goods or services that are of a kind ordinarily acquired for personal, household or domestic use or consumption. To obtain a court order for relief from an unfair bargain, the purchaser must be able to show that she or he was unable to protect her or his own interests when making that bargain. Most of the larger traders will not be able to demonstrate any vulnerability to an unfair bargain. However, smaller traders and individual consumers often have limited bargaining power and are more likely to be disadvantaged, and will benefit from this provision.
Clauses 14 to 29 specifically prohibit particular types of misleading conduct. These include well-known unfair trading practices such as bait advertising, pyramid and referral selling, and various similar kinds of misleading conduct. Traders can be prosecuted for a breach of one of these clauses, but may rely on a defence of due diligence provided they can show that they have taken reasonable steps to avoid the breach. In addition, under clause 50, when a court is hearing prosecution proceedings, it can make a range of remedial orders, either alone or in conjunction with a monetary penalty. For example, the court can make an order to compensate a person for any loss or damage he or she may have suffered because of the breach.
Of course, it is the Government's sincere hope that prosecution will be a big stick that will have to be used upon only the most recalcitrant or refractory traders. However, because consumers bargain in the shadow of the law, the possibility of prosecution is sometimes their biggest and most effective weapon. Therefore, whenever a prosecution is necessary as a deterrent or as a punishment, it will be used. Wherever possible, it is my view that a compensatory order, which benefits the consumer directly, creates a better culture for compliance than a prosecution which results in a fine. Either way, the unfair trader pays the price. The maximum fines for a breach of this legislation are high, but they are the same as for those in the Trade Practices Act and fair trading legislation elsewhere. Corporations can be fined up to $100,000 and individual traders can be fined up to $20,000. In addition to being liable to be prosecuted for a breach of these provisions, traders may also be sued by consumers. Clause 46 provides that anyone who suffers loss or damage as a result of a breach of the unfair practices provisions can bring an action in the Magistrates Court to recover that loss. If the claim is less than $5,000, consumers can use the less formal procedures available in the Small Claims Court, which means that access to remedies is simple and accessible to all consumers.
Finally, I come to what I consider to be the most important part of the Bill, Part III. As I have indicated, this part permits codes of practice for fair dealing to be developed for particular types of trading situations. The development and prescription of codes of practice for fair dealing is an important tool for encouraging fair trading. Although the unfair practices provisions of the Bill provide the foundation for a framework within which the rights and responsibilities of the parties to the codes must be developed, codes of practice serve a special purpose which cannot be performed by the general legislative provisions of the kind I have just outlined.
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