On 23 August 2018, changes increasing penalties under the Australian Consumer Law (ACL) were passed by the Federal Parliament.
The Treasury Laws Amendment (2018 Measures No. 3) Bill 2018 (Cth) amends the Competition and Consumer Act 2010 (Cth) (Act) to increase the maximum civil pecuniary penalties that a court may impose for breaches of the ACL.
For a body corporate, the maximum penalty will increase from $1.1 million to the greater of:
For persons other than body corporates, the maximum penalty will increase from $220,000 to $500,000.
The changes follow recommendations by Consumer Affairs Australian and New Zealand in its final report on the ACL Review, and brings the maximum penalties for consumer law breaches into line with existing penalties for competition law breaches.
The increases are designed to deter large companies from breaching consumer laws in circumstances where, prior to the changes, the potential benefits of the breach might outweigh the penalties. The changes were welcomed by the Chair of the Australian Competition & Consumer Commission, noting “[w]e have strongly advocated for higher maximum penalties to enable courts to impose more substantial penalties…penalties need to be high enough to be noticed by boards and senior managers so that compliance with the law is a higher priority.”
To date, the highest penalty for a consumer breach under the ACL was $10 million, awarded by the Federal Court against Coles and Ford in actions brought by the ACCC. This can be compared to the highest penalty for breaches of competition law, being $46 million in an ACCC action against Yazaki.
Which provisions of the ACL are affected by the increased maximum penalties?
Authors: Darren Pereira & Olivia Pasternak
Darren Pereira, Partner
T: +61 2 8083 0487
Dan Pearce, Partner
T: +61 3 9321 9840
Trent Taylor, Partner
T: +61 7 3135 0668
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Published by Darren Pereira, Olivia Pasternak