Sydney Law School, with support especially from its Ross Parsons Centre, is pleased to host this year’s Roundtable, in hybrid format on 1 December 2021, to discuss recent or emerging research and topics in consumer law and policy. In an informal interactive format, for the last fifteen years the Roundtables invite together experts in consumer law mainly from universities across Australia and New Zealand, but sometimes more widely including from Japan and other parts of Asia or even further afield, as well as some consumer regulators or peak NGO representatives. The event is open to other staff and HDR students from USydney, as the host, and any consumer law academics from Australian, NZ or Asian universities are also welcome to seek permission to attend by emailing firstname.lastname@example.org
Short presentations for discussion at this year’s Roundtable include the following [not necessarily in the order listed below]. Several involved recent or forthcoming publications that may be made available to the wider public already or after the event.
|Samuel Becher (VUW)
|“Dark Contracts” (https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3911528)
|Firms design non-transparent consumer contracts. This article documents the multiple non-transparent contractual mechanisms and practices that firms employ in their consumer contracts. Specifically, it delineates how firms use non-transparent tools in almost every possible contractual juncture: from the contract’s nature, scope, and language to contract performance, dispute resolution, change, and termination. The article first documents this non-transparency. Thereafter, it argues that the sum of these non-transparent components is greater than its parts. The aggregated impact of these non-transparency practices undermines fundamental contract law notions and leaves consumers disinformed and disempowered. While firms have a profit incentive to employ non-transparent contracts, bounded ethicality makes it even more unlikely that firms fully realize the harmful consequences of their contracts. Against this backdrop, the article dubs these highly non-transparent consumer contracts “Dark Contracts.” To better tackle the problem of Dark Contracts, the article proposes introducing transparency-related instruments to the law of consumer contracts to tackle this thorny challenge. It further argues that policymakers should design such concepts to (1) allow better scrutiny over firms’ practices and (2) empower consumers to make better-informed decisions.
|Jason Harris (Sydney Law School)
|“Liability for ACL Breaches Within Corporate Groups and Franchise Systems”
|An emerging issue in corporate law concerns contribution orders for underpaid workers whereby the court can deem several entities to be within a ‘contribution order group’ and make another company liable for the unpaid entitlements where they have received the benefit of the work. There are broader contribution order regimes (not just for employee entitlements) in NZ, Ireland and Germany. I wonder whether ACL compensation orders had given rise to problems with corporate groups (i.e. assetless shell companies misleading, while the parent company benefits) and whether accessorial liability under ACL s236 is sufficient to address this? In other words, could contribution orders within corporate groups (loosely defined to include franchise systems) benefit consumers and are they worth looking at? I’ve done a bit of work within corporate law looking at veil piercing doctrines, and there is at least 1 TPA case on making a parent co liable for misleading conduct that was argued on veil piercing grounds (which I argued should have been decided on accessorial liability under the TPA instead).
|Jeanne Huang (Sydney Law School)
|“The Latest Generation of SEZs: Consumer-Oriented Unilateralism in China’s E-commerce Trade” (https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3875223)
|WTO multilateralism is driven by manufacturers. However, in China, Cross-border E-commerce Retail Import (‘CERI’) has spurred a new, consumer-oriented trade unilateralism. CERI prospers within China’s National Cross-Border E-commerce Pilot Cities, which are Special Economic Zones aimed at using unilateral trade liberalization to meet consumers’ growing demands for high-quality foreign products. CERI enhances consumer benefits beyond reducing customer formalities and tax rates and lowering product prices. It re-conceptualizes consumer protection by treating consumers as diverse individuals rather than as a homothetic group. It also empowers consumers by making them ‘importers’ to minimize behind-the-border trade barriers. CERI warrants a rethinking of WTO multilateralism from its initial focus on corporations and capital owners to a revised focus on consumers.
|Mary Keyes and Therese Wilson (Griffith U)
|“Protecting Consumers in International Disputes: Arbitration and Jurisdiction Agreements in Australian Law”
|The globalisation of markets for consumer goods and services means consumers regularly purchase goods and services from international suppliers. These agreements typically stipulate that consumers must litigate or arbitrate, if a dispute arises, in the suppliers’ home jurisdiction. As in other common law jurisdictions, in Australia there are no rules that deal specifically with the effect of arbitration and jurisdiction clauses in consumer contracts; their effect falls to be determined under the general principles that have been developed in the context of commercial transactions. This article investigates the use of arbitration and jurisdiction agreements involving Australian consumers through an empirical study and evaluates the Australian laws which regulate these agreements. It demonstrates that, while aspects of the current legal regime may have the capacity to protect consumers, such protections will not necessarily be applied. We review a number of recent cases that demonstrate this problem and suggest that changes to the Australian law are required to more explicitly protect consumers.
|Benjamin Hayward (Monash Business School)
|“‘Free Your Mind’: Using ‘The Matrix’ to Explain the Interaction Between the Australian Consumer Law and the CISG”
|For those of a certain age, the conflict between the characters Neo and Agent Smith depicted in ‘The Matrix’ trilogy of movies is well-known and is one of the great rivalries of cinema history. What is not well-understood in the Australian legal context, including amongst lawyers who would be familiar with this Neo/Smith conflict, is the way in which the Australian Consumer Law interacts with the United Nations Convention on Contracts for the International Sale of Goods (the ‘CISG’). Though the CISG excludes consumer transactions from its scope, the fact that it defines those excluded transactions differently to the way in which the Australian Consumer Law defines consumer supplies provides scope for the CISG to displace the otherwise-mandatory ACL consumer guarantees. Analogy with ‘The Matrix’ trilogy provides an excellent basis for explaining this interaction, and ensuring that its implications are understood by the legal profession. Young lawyers and law students are today provided more means than ever to acquaint themselves with the CISG, and to understand its place in Australian law. Anecdotal evidence suggests that a knowledge gap still exists, however, amongst older lawyers – including those who may have grown up watching Neo and Smith’s conflict play out on the silver screen. This presentation is directed at helping address this knowledge gap, and in turns, seeks to contribute to a better professional understanding of the interaction under analysis.
|Victoria Stace (VUW)
|“Bills, bills, bills. What recent research has revealed about debt collection practices in New Zealand and how the law might respond” (Powerpoints here)
|Recent research conducted by Victoria University of Wellington has given insight into the experiences of debtors who find themselves facing debt collection. Financial mentors across the country, who see clients daily in unmanageable debt situations, were asked questions around the conduct of debt collectors, the addition of fees and interest, and use of attachment orders. Particular issue emerged such as the use of intimidation, and use of attachment orders to benefits to collect old debts. This paper discusses the findings of that research and considers how the law can assist to improve standards of behaviour.
|Vivien Chen (Monash Business School) with
Lucinda O’Brien, Ian Ramsay and Paul Ali
|“An Impending “Avalanche”: Debt Collection and Consumer Harm After COVID-19” (https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3917247)
|Debt collection activity is expected to rise significantly in 2021, as financial hardship becomes more prevalent due to the economic impact of the COVID-19 pandemic. Consumer advocates have warned of an impending “avalanche in debt collection” and have called for better enforcement of laws designed to protect consumers from harassment as well as unfair, misleading and deceptive conduct by debt collectors. Women’s groups have also pointed to a rise in economic abuse, and resulting indebtedness, in the context of a general escalation in family violence during the pandemic. This article examines the legal framework governing the Australian debt collection industry. Drawing on recent case law and a series of focus groups conducted by the authors, it outlines law reform and enforcement measures that would better protect consumers from harmful debt collection practices. These include specific measures to address the financial, social and psychological impacts of family violence and economic abuse
|Sagi Peari (UWA)
|“Consumer Protection Law, Judge Made Law and the Concept of Coherence: Can They Co-Exist?”
|Consumer protection law intervenes into the traditional doctrines, principles and concepts of the backbone categories of private law: contract and tort. For instance, consumer law challenges the longstanding limited scope of “unconscionability” and the “implied terms” doctrines of contract law. Within the tort law category, consumer law reconceptualises the fundamental elements of the law of negligence. While significant parts of private law categories remain to be subject to the domain of the judge-made law, the consumer laws operate through legislation. The paper tackles the following two interrelated aspects of the interplay between consumer law legislation and the traditional private law categories: (1) the impact of consumer law legislation on the judge made law; (2) the relation of this legislation to a key philosophical concept of private law- “coherence”.
|Catherine Niven (QUT)
|“Proposals to Modernise the EU’s General Product Safety Directive: A Blueprint for Australian Reform” [pre-recording of presentation here]
|There has been little progress on Australian product safety reforms since the 2019 public consultation on the regulatory impact assessment of introducing a General Safety Provision (GSP). Since this time, the global COVID pandemic has accelerated growth in online shopping, exacerbating the key weakness of the Australian regime: its lack of a GSP. The European Commission (EC) has identified that the growth of e-commerce has decreased the effectiveness of its General Product Safety Directive due to its lack of specificity to online selling and applicability to new e-commerce actors in the product supply chain. In June 2021, the EC commenced public consultation on significant reform proposals aimed at modernising its framework. These include dedicated reforms for online marketplaces with obligations focussed on their place in the product supply chain, specific provisions related to online sales, widening the mandatory incident reporting obligation and using new technologies to conduct product safety recalls. There appears to be significant momentum behind these reforms to be delivered under the New Consumer Agenda of 2020. Could the developments in Europe be an opportunity for Australia to build on the last decade of reform discussion by incorporating key European reform proposals to its product safety regime to elevate the level of consumer protection and create a fairer playing field for Australian businesses?
|Geraint Howells (Galway) [Keynote]
|“Consumer Product Safety and Online Platform Liability” (Powerpoints here)
|Platforms play an increasingly important role in e-commerce. This paper highlights different approaches to making them responsible and potentially liable for dangerous goods. Voluntary, regulatory and civil liability are all potential options being explored in Australia, the EU and US. This paper hopes to prompt discussion about the appropriate way forward.
|Jeannie Paterson and Yvette Maker (UMelbourne)
|“The Role of Consumer Protection Law in Responding to the Risks of ‘Intelligent’ Consumer Products”
|Intelligent consumer products like voice-activated digital assistants potentially offer tremendous benefits to many consumers. They are labour-saving devices that create opportunities to free consumers from mundane tasks and assist them to make more informed and rational decisions. They have also been promoted for their potential to facilitate the activities of daily living for older people and people with disability. Yet while intelligent consumer products may offer convenience and enhanced accessibility, they also carry risks of harm to consumers in relation to violation of privacy, bias and discrimination and interference with decision-making autonomy. This presentation will explore the role of consumer protection law in responding to these risks, with a particular focus on issues of accessibility and equity. It will also consider the role of codes of AI ethics, and the complementary contribution of other fields of law and policy, in addressing matters on which consumer protection law has less to say.
|Nicola Howell (QUT) and Jeannie Paterson (Melbourne)
|“Remedies for emotional harm in Australian consumer credit law”
|Emotional harm is a highly foreseeable outcome of financial stress – whether this arises from borrowing more than is manageable (unsuitable credit), difficulties in repaying credit arising from unforeseen life contingencies (hardship) or not being able to access credit (financial exclusion). Together with co-regulation (AFCA) and self-regulation (eg, Banking Code of Practice), the National Consumer Credit Protection Act now provides an extensive regulatory framework that should help to prevent or reduce financial stress for Australian credit consumers, however, the extent to which this framework can facilitate remedies for emotional harm (and not just financial harm) has not yet been subject to academic consideration. In this paper, we seek to address this gap by examining the current and potential scope for remedies for emotional harm arising from credit law contraventions. We begin by considering the emotional harms which may arise from over indebtedness. We then identify the key statutory provisions specifically aimed at alleviating the effects of unsuitable credit and financial hardship, and the associated remedies for breach. We argue that given the purpose of these regimes it should be open to courts to award remedies aimed at responding to emotional harm. We consider the role of regulators and AFCA in remedial relief responding to emotional harm. We scrutinise the value to consumers of such responses before turning the final part to consider remedies for failure by lenders to engage with the hardship regime and the gaps in this regime in providing real obligations and remedies/redress for breach.
|Zofia Bednarz (UNSW)
|“Using Consumers’ Data to Determine the Target Market for Financial Products: The Difficult Marriage between Financial Law and Data Protection”
|Digitalisation has had a profound impact on financial services, with increasingly precise data profiling of consumers being one of the drivers of profit for the industry in the digital age. However, data profiling may also result in consumer harm that could range from data breaches to unfair pricing, digital manipulation, discrimination, and exclusion of vulnerable consumers. This can be particularly problematic in financial services context due to the consequences it has on consumers’ access to financial products. In this paper I focus on the requirement to determine the target market for financial products and its interplay with privacy and data protection rules. I argue that financial product governance rules requiring target market determination for products will further incentivise data profiling of consumers by financial services providers. I analyse ways in which financial firms may collect and use consumers’ data for the purpose of constructing the target market and confirming that clients who receive offers of products are within this target market. There is a real risk that financial law and data protection frameworks have failed to strike a balance between (surprisingly) competing interests of consumer protection regarding the provision of appropriate financial products and the use of consumers’ data in digital profiling. This means that the new rules on financial products governance may backfire, resulting in unintended consumer harms.
|Kate Tokeley (VUW)
|“The Power of the ‘Internet of Things’ to Mislead and Manipulate Consumers: A Regulatory Challenge”
|The “Internet of Things” revolution is on its way, and with it comes an unprecedented risk of unregulated misleading marketing, and a dramatic increase in the power of personalized manipulative marketing. IoT is a term that refers to a growing network of internet-connected physical “smart” objects accumulating in our homes and cities. These include “smart” versions of traditional objects such as refrigerators, thermostats, watches, toys, light bulbs, cars, and Alexa-style digital assistants. The corporations who develop IoT are able to utilize a far greater depth of data than is possible from merely tracking our web browsing in regular online environments. They will be able to constantly collect and share real-time data from inbuilt IoT sensors and trackers such as microphones, cameras, GPS sensors, and temperature sensors. Artificial intelligence (AI) can be used to analyze this raw data in order to gain insights into consumer preferences and behavior, and deliver individualized marketing messages via our IoT devices. The persuasiveness of these marketing messages is likely to be further enhanced if future IoT household assistants are developed to have human-like mannerisms and appearances. This article explains how current laws that prohibit businesses from misleading and deceiving consumers will struggle to operate effectively in an IoT marketing landscape, where questions of who can be held liable, who should be held liable, what communication should be prohibited, and how to ensure enforcement, all become more complicated. It argues that current legal frameworks will need to be re-formulated in order to maintain the ability to prevent deceptive and misleading communication. It also tackles the wider question of whether legal frameworks should be re-formulated so as to add in protections against excessively manipulative marketing. The article points to several potential ways to achieve such re-formulations. Redesigning legal regimes to effectively protect consumers in a new IoT marketing landscape will no doubt be a challenge. The starting point is to confront the fact that there are genuinely difficult problems for which existing regulatory toolkits are ill-equipped to handle.
|Kayleen Manwaring (UNSW)
|“Enforcement-in-a-box: Computational Implementation of Private Rights”
|The rise in use of smart devices and cyber-physical systems has also seen a rise in attempts at technological implementation of methods of enforcement of private rights (such as contract or copyright) by suppliers of services and software supporting those devices and systems. Many of these devices and systems are hybrids of physical object, software, hardware, data and services, and often are capable of being remotely disabled or modified by the software or service provider. This capacity for remote disablement or modification has the potential to be a potent tool for service and software suppliers to regulate an individual’s use of smart devices and cyber-physical systems. These methods may be used to enforce penalties against alleged breaches of private rights without recourse to a judicial or other dispute resolution process. This presentation will report on a work-in-progress project intended to examine these issues. Brownsword has warned that ‘full-scale technological management’ by regulators of prohibited conduct (eg a regulator technologically limiting the speed of a car or disabling it) is the ‘thick end of the wedge’ in relation to ‘destabilising’ the rule of law and degrading the importance of human ‘agency and autonomy’. Pasquale has additionally cautioned that even in circumstances where automated enforcement is efficient, ‘critically important publicly legal values risk being lost or marginalised when dispute settlement is automated.’ This project will examine if this conceptual analysis can be extended to business entities utilising technological management to directly enforce private rights, discussing research questions along the following lines: (1) What harms to individuals, and consequently what detrimental effects on public legal values (such as protection of consumers from abuse of corporate power), might arise from technological implementation in smart devices of private law enforcement methods, such as enforcement of debts, contractual conditions or intellectual property rights? (2) To what extent do existing laws in Australia regulate these harms and detrimental effects? (3) Do legal problems arise in relation to these existing laws? That is, are any of these laws under- or over-inclusive or uncertain? Are there any new harms or detrimental effects arising that are completely unregulated by existing law? (4) How can these harms and detrimental effects be mitigated from a legal (and potentially technological) point of view?
|May Fong Cheong (ACU)
|“Remedies for Purchasers of Forged Art: The Potential in Section 18 ACL on Misleading Conduct”
|Art is acquired for its aesthetic value, for the beauty of that art piece as communicated by the artist. However, art is also increasingly acquired for the authorship of the art – buyers desiring not only art, but the work of a recognised “artist”. The authorship value of well-known artists has seen art pieces fetching skyrocketing prices transforming art as objects of aesthetic expression to art as an investment tool. The ‘commodification’ and ‘financialisation’ of art provide opportunities and economic incentives to produce counterfeits and forgeries posing unseen risk to purchasers of art. Both the art enthusiast and the art investor who pays a price for a work of art are entitled to enjoy, and obtain, that which they were led to believe – that the work is authored by the artist who painted that landscape, that object on the framed canvas piece he or she had paid for. They are entitled to the goods as described, to the attribution given of the art piece and to statements warranting the authorship and authenticity of the art. However, art authentication is a complex process: at the intrinsic level to search the truth to determine its cultural and historic value and at a practical level to protect the economic value of art and the functioning of the art market. The purchaser’s challenge to acquire authentic art pieces is further compounded by the intricacies and anomalies in the art industry; one concerning aspect is the questionable practices of auction houses. As a result, art purchasers find themselves in the precarious position of not knowing if the art pieces hanging in their walls are forged. This paper first considers two legal avenues that a disgruntled art purchaser might pursue: (i) implied conditions of goods corresponding to description in the Sale of Goods legislation; and (ii) consumer guarantees of acceptable quality, and of goods as described, under the Consumer Guarantee Law. It then considers how certificates of authenticity of authorship have been decided under the Uniform Commercial Code and under the New York Arts and Cultural Affairs Law. Finally, the paper investigates recourse to art buyers under the misleading conduct provision in section 18 of the Australian Consumer Law and argues that despite some limitations, this avenue offers the best potential for success for purchasers of forged art.
|Luke Nottage (USydney), Jeannie Paterson (UMelbourne) & Erin Turner (Choice)
|“Post-Pandemic Rights to Repair and Other Remedies Under the Australian Consumer Law” (PDF of Powerpoints here)
|Recent survey evidence from Australia’s peak consumer NGO, for a current inquiry by the Productivity Commission into rights to repair, confirms anecdotal accounts of considerable problems faced by individuals in obtaining Australian Consumer Law remedies for suppliers’ violations of mandatory consumer guarantees (eg of “acceptable quality”, including reasonable durability). Over the last decade, suppliers may have learned not to expressly disclaim ACL obligations (risking enforcement action and fines), but also that consumers need to prove a product defect, and may be particularly prone therefore not to provide remedies since the lockdowns and other impediments to accessing justice since 2020. Our presentation looks at the extent and types of problems experienced, analyses the current ACL regime, and proposes various substantive and procedural reforms to generate better consumer redress and therefore supplier behaviour.