My review essay [manuscript via http://ssrn.com/author=488525] assesses the detailed, authoritative and thought-provoking first three of six proposed volumes in the series on “Studies in the Contract Laws of Asia” published by Oxford University Press. Lead-edited by Mindy Chen-Wishart, these excellent volumes span remedies for breach (2016), formation of contract and third-party beneficiaries (2018), and contents of contracts and unfair terms (2020, thus extending to an important area of consumer law). The respective editors argue quite compellingly for significant functional convergence even among Asian legal systems from quite divergent legal traditions. However, such convergence arguably becomes less obvious especially by the third volume. The functional analysis also focuses primarily on what decisions would be rendered by courts in stylised fact scenarios rather than whether and how such outcomes are reflected in contracting practices or law reform processes. Closer examination of these aspects may make future volumes even more valuable for researchers, practitioners and policy-makers.
Sydney Law School, with support especially from its Ross Parsons Centre, is pleased to host this year’s Roundtable, in (hopefully!) 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 email@example.com
Short presentations for discussion at this year’s Roundtable include the following [TBC and re-ordered if needed, closer to 1 December]. 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”||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”||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”||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”||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”||TBC|
|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.|
The Australian Network for Japanese Law (ANJeL) in collaboration with the Japan Studies Association of Australia (JSAA) and thanks to Mini-Grant funding from the Japan Foundation Sydney awarded in November 2020, has completed 20 podcasts introducing Japanese Law in comparative and socio-economic contexts. The interviews include segments on the current or likely impact of the COVID-19 pandemic across the diverse sub-fields of Japanese law and society. The podcast “playlist” is here on Youtube and a report is here on the design and some key points from the podcasts, written by Melanie Trezise (PhD candidate and research assistant at the University of Sydney Law School, and past ANJeL Executive Coordinator).
The expert interviewees have taught in the Kyoto and Tokyo Seminars in Japanese Law, co-organised by ANJeL and Ritsumeikan University‘s postgraduate Law School since 2005 for Japanese, Australian and other international students, and/or the interviewees have been ANJeL visitors or advisors. Interviewers are ANJeL co-directors Prof Luke Nottage (University of Sydney Law School) and A/Prof Leon Wolff (QUT), along with Micah Burch (Senior Lecturer at Sydney Law School) and Melanie Trezise (who was also primarily responsible for the editing). Others who helped make this possible include Dr Nobumichi Teramura (now Assistant Professor at the University of Brunei) and the terrific tech team from Sydney Law School (Lana Kolta, Andy Netherington and Ross West).
ANJeL and JSAA are very grateful to all who supported this project. We hope that these resources available via their websites (or directly via Youtube) will be useful for the wider public when engaging with the fascinating and ever-changing world of Japanese law. The sub-topics and interviewees are listed below, with video-recordings edited to around 15-20 minutes each. There are also several mostly longer Bonus Features as well as a shorter introduction (by Luke Nottage), such as reflections about the innovative Kyoto and Tokyo Seminar program from some of its key architects (including past ANJeL Co-Director Kent Anderson and Ritsumeikan University Professor Naoya Yamaguchi). Other Seminar program organisers over the years include Professors Makoto Ibusuki (Program Convenor: ASEAN-in-Japan), Tsuneyoshi Tanaka and Chihara Watanabe.
- Introduction to the Podcast Series – Luke Nottage (USydney)
- Pop Culture – Leon Wolff (QUT)
- Comparative and Theoretical Perspectives- Tetsuro Hirano & Chihara Watanabe (Ritsumeikan) with Luke Nottage
- Mediation – James Claxton (Rikkyo / Waseda U) & Kyoko Ishida (Waseda U)
- Arbitration – Giorgio Colombo (Nagoya U), Tatsuya Nakamura (Kokushikan U) & Nobumichi Teramura (UBrunei)
- Civil Procedure – Yoko Tamura (Tsukuba U)
- Lawyers – Jiri Mesteky (Kitahama Partners) & Yoshihiro Obayashi (Yodoyabashi & Yamagami)
- Criminal Justice – Kent Anderson (ANU / Advisor to Australia’s Education Minister) & Makoto Ibusuki (Seijo U)
- Government – Narufumi Kadomatsu (Kobe U)
- Gender – Kyoko Ishida (Waseda U)
- Labour – Takashi Araki (U Tokyo)
- Contracts – Veronica Taylor (ANU/ ANJeL Advisor) & Tomohiro Yoshimasa (Kyoto U)
- Consumers – Marc Dernauer (Chuo U)
- Corporate Governance – Souichirou Kozuka (Gakushuin U)
- Finance – Akihiro Wani (Morrison & Forster)
- Tax – Justin Dabner (formerly JCU) with Micah Burch (USydney)
- Bonus: Sports – Matt Nichol (CQU) with Micah Burch
- Bonus: Gender, Past & Present – Masako Kamiya (Gakushuin U)
- Bonus: Pandemic & Japanese Law – Compilation
- Bonus: Kyoto and Tokyo Seminars – Kent Anderson, Leon Wolff & Naoya Yamaguchi (Ritsumeikan) with Luke Nottage
[This is the original draft for a posting that was significantly revised and published under a different title on 29 October 2020 by The Conversation, prompting also interviews/podcasts with ABC National Radio “Life Matters” on 5 November 2020 and “Counterpoint” on 14 December 2020. This work is related to my ongoing ARC-funded joint research project DP170103136 and a JCP article published earlier this year (manuscript on SSRN.com here). A version will be presented and then discussed in the 1 December 2020 webinar for the International Association of Consumer Law (pre-recording available here) and the Consumer Law Roundtable hosted this year by QUT on 3 December. (Last updated: 1 December 2020.)]
The COVID-19 pandemic has heightened our awareness of safety risks, but also the socio-economic costs needed to reduce them. Public health interventions can also collide with human rights and constitutional principles, and undermine state capacity. Australia’s policy-makers and regulators are still facing many difficult choices to manage this new disease.
In consumer law, they and peak NGOs like Choice have also been busy grappling with a range of pandemic-related issues. These range from hand sanitiser quality through to refunds for airfares and other travel services. Nonetheless, hopefully policy-makers can now get back to some unfinished business, as we learn to live with COVID-19 while praying for a vaccine or cure.
In October 2019 the Treasury released its Consultation Regulatory Impact Statement (RIS) entitled “Improving the Effectiveness of the Consumer Product Safety System”. This was part of a suite of reform initiatives agreed after the 2016-7 review of the Australian Consumer Law (ACL), which re-harmonised consumer rights and regulatory powers nationally from 2011.
The review’s Final Report and now the RIS considered adding to the ACL an EU-style “general safety provision”. European countries (such as the UK in 1987, then the EU from 1992), as well as Hong Kong, Macau, Malaysia (1999), Canada (2010) and Singapore (2011, partially), have introduced such a GSP. It was discussed in several earlier government inquiries, notably by the Productivity Commission in 2006 and 2008, but the Commission concluded that the ACL should try some other measures first. A GSP would require manufacturers and importers to ensure that they only supply safe consumer products, otherwise risk public law sanctions from regulators.
Choice found that many Australians wrongly assume we already have this requirement. Yet the ACL currently only allows mandatory safety standards to be set pro-actively for specific types of general consumer products (currently around 40, many involving higher-risk children’s products). These specific standards take a long time to develop, usually only after serious injuries or deaths particularly within Australia. A recent example is renewed efforts to introduce a mandatory standard around button batteries, after a third child died in July and the AFL withdrew thousands of bracelets in October 2020. Regulators can also issue bans (around 20) for products found unsafe, but this is an even more reactive response.
Also only after harm arises, manufacturers can be indirectly incentivised to supply safe products by harmed consumers potentially bringing strict liability compensation claims. But such ACL product liability claims, requiring individuals to prove a “safety defect”, are becoming proportionately fewer. Even large class action law firms prefer focusing resources on more straightforward and large-scale claims by shareholders against listed companies for misleading conduct.
The Treasury’s draft RIS invited public comment on various reform options and three perceived problems with Australia’s consumer product safety system. One problem was misunderstanding about the current ACL regime. A second was its largely reactive nature, impacting on regulatory interventions and supplier behaviour. A third was considerable harm from unsafe consumer products. The ACCC identified 780 deaths and 52000 injuries annually. It also estimated at least a $4.5 billion annual economic cost, assuming around a $200,000 “value of a statistical life year” for premature deaths and disability. There were also costs of $0.5 billion in direct hospital costs for governments, and further costs associated with minor injuries and consequential property loss. (These seem conservative estimates, especially as the US consumer safety regulator recently US$1 trillion costs annually for that country – although the methodology and assumptions for that estimate are not set out in the UNCTAD report.)
My own Submission and a related peer-reviewed article added comparative empirical data in support of a GSP. First, the OECD Global Recalls portal shows that Australia reported higher per capita voluntary recalls over 2017-9 than Korea, the UK, Japan and the USA. Australia reported a rate similar to Canada, at least on the OECD data, but Canada’s legislation has a more expansive duty on suppliers to report product accidents to regulators compared to that added to the ACL. A large proportion of our recalls involve child products, mostly from China.
[Table 1: Comparing Australia’s Recalls (2017-9)]
Secondly, annual recalls have been growing in Australia, as pointed out by Dr Catherine Niven et al (co-researchers for our ARC-funded project comparing child product safety) and various submissions by Choice. The uptick is noticeable from around 2012, tracking burgeoning e-commerce and more importers dealing with more manufacturers abroad. We can anticipate more more consumer product safety problems due to further online sales during the pandemic, and the ACCC issued warnings in April 2020. So far this year, though, annual recalls are down, according to the around 240 by end-October (excluding automobile recalls), compared to around 400 over all of 2019. This drop is likely to be temporary and caused by: (a) pandemic-related recession causing less consumer spending, (b) less time and energy for consumers to complain about unsafe products, (c) businesses struggling with finances and staff so not checking products and conducting or reporting recalls as much, and (d) less regulatory capacity to sweep bricks-and-mortar shops for unsafe products or monitor online platforms (except perhaps the larger ones).
[Figure 1: Australia’s Recalls (1998-2019)]
Perhaps for similar reasons, the Canadian government website shows a drop in recalls reported there this year too: about 130 by end-October compared to 251 over 2019. That website also curiously records fewer recalls annually for “consumer products” (excluding vehicles, foods and healthcare products) than reported on the OECD portal, suggesting Canada’s recall rate per capita may instead be significantly lower than Australia’s. Importantly, it shows a significant drop in annual recalls from 2009 (306) and 2010 (299) to 2011 (258) and 2012 (236), followed by annual recalls averaging around 250 consistently from 2013-2019. The GSP introduced by the Canada Product Safety Act 2010 therefore seems to have had a positive impact, shifting supplier mindsets towards adopting a more pro-active approach including better safety assessments before putting goods onto the market. Singapore also reported a drop in unsafe children’s products found there the year after it introduced a form of GSP through 2011 Regulations.
In further contrast to Australia, the USA reported significantly fewer recalls following the introduction of third-party conformity assessment for toy exporters after problems emerged particularly with China-sourced products around 2008. Dr Niven et al further note that Australian recall notices do not need to include some significant information, eg regarding (even de-identified) injuries. Many Australian recalls of child products also involve breaches of the mandatory standards that have actually been set. (For more details, see her PhD thesis now available here.)
Our regulators could try to sanction local suppliers more for such breaches. But introducing a broader GSP would encourage a “paradigm shift” needed among Australian firms. As discussed in my article, this ACL reform could complemented (but not replaced) by some of the other RIS options, and/or a “product safety substantiation notice” power (mirroring ACL s219, allowing regulators to require suppliers to substantiate claims or misrepresentations that might be misleading).
Introducing a GSP would make Australian suppliers think more carefully about (and document) safety assessments before putting consumer products on the market. This is more efficient and safer than releasing products and then trying to recall them after problems start to be reported, hoping not too many (more) consumers get harmed. It would also encourage Australian firms to “trade up”, like counterparts overseas, to the standards expected in many of our trading partners.
[Luke Nottage receives funding from the Australian Research Council: DP170103136, “Evaluating consumer product regulatory responses to improve child safety”. He provides occasional pro bono advice to Choice regarding consumer law and policy reform, and acknowledges assistance from them in compiling from government recalls data what is reproduced here as Figure 1.]
[Ed: These are remarks kindly added by Sydney Law School Adj Prof Donald Robertson (and former HSF partner), after those from Chief Justice Bathurst, at the 27 November 2019 CAPLUS seminar and launch of two Asian Law books hosted by Herbert Smith Freehills, focusing on: Hiroo Sono, Luke Nottage, Kenji Saigusa and Andrew Pardieck, Contract Law in Japan (Wolters Kluwer 2019)]
- It is my pleasure this evening to assist in the launch of this fine book, Contract Law in Japan.
- To do so, and hopefully to stimulate some questions and debate, I want in the short time available to me to raise 2 issues:
- Why do we study foreign law at all? After all, as some say – ‘we do not cite foreign laws – we have our own laws’. I will give 2 reasons why that attitude is wrong.
- What can we learn from a study of foreign law? I will give 2 examples of areas which require some further study, from a comparative perspective.
- The book we launch today provides a helpful summary of the background and sources of Japanese contract law, the first English-language commentary on the Japanese Civil Code of 2017 coming into force on the inauspicious date of 1 April 2020. The introductory chapter teaches us much about the background which is relevant to the examples I raise.
The background to Japanese Contract Law
- There has been a strong influence on Japanese law of Chinese, German and American law, and more recently European Union law. (1-3, 5) Codifications have been central in the development of Japanese law and hence legislation is a primary source of law. (7)
- Japanese law is more open to ‘substantive reasoning’ compared to Anglo-Australian common law. Like US law, it is open to moral, economic, and political reasoning. (6)
- The 2017 reforms are intended to make the Civil Code more ‘modern’ and ‘transparent’ and to align contract law with that of ‘influential jurisdictions’ and international instruments like the UN Convention on International Sales of Goods (CISG) and the UNIDROIT Principles of International Commercial Contracts (UNIDROIT Principles). (4)
- Japanese contract law has some particular
characteristics worth noting:
- There is an emphasis on continuity in long-term or relational contracting. (8)
- There is no doctrine of stare decisis. There is a large and growing influence of case law due to the career judiciary system and a shared vision of the rule of law that emphasises uniformity and predictability of outcomes. (8-12)
- There is no strong distinction between public and private contracts. (13-16)
- There is a role for secondary ordering of outcomes based on Japanese analogues to equity or reasonableness. (28-33)
Why study foreign law
- Given these differences in the way that contract law is perceived in practice, why should Australian lawyers or judges care about Japanese law – or any foreign law at all?
- The first reason, of course, is that Japan is an important trading partner of Australia. Japan is our second largest destination for exports of manufactured goods, and ninth largest in services. It is our third largest importer of goods and fifth largest in services.
- We have deep and important bilateral and
multilateral trade relationships, importantly:
- The 2015 Japan Economic Partnership Agreement.
- Both Japan and Australia played a critical role in implementing the Comprehensive and Progressive Agreement for a Trans-Pacific Partnership (CPTPP).
- The agreed but not yet signed Regional Comprehensive Economic Partnership (RCEP).
- The mega-regional agreements are hugely significant. The CPTPP covers 14.4% of world trade and has a market size of $10.6 trillion. There is a standing invitation for the US to return to the original TPP. RCEP is more than twice that size, with a market of $27.3 trillion. And it includes China! They will transform our place in the global economic community.
- The mega-regional agreements (CPTPP and RCEP) highlight the second reason why we should be interested in the legal system of Japan and other regional powers. We live in a globalised economy, but one where the form of globalisation takes a radical new form.
- The previous forces of globalisation (largely, a reduction in transport costs) lead to increased bilateral trade. The new forces (modern information and communications technology) lead to a new paradigm of competition and trade in which it is possible to perform economic functions at long-range:
- The old paradigm of global competition was trade in goods made in factories in different nations. The new paradigm of global competition is trade in tasks, with competition occurring between workers performing the same task in different countries.
- Economists[DR1] call this ‘vertical disintegration’ leading to global value chains (GVCs) in which production occurs in many production stages in different countries.
- The pattern of trade shows that production occurs in clusters. The Asia-Pacific region is one of those clusters – hence the economic logic of the CPTPP and RCEP. They are not so much free trade agreements as a constitution for the governance of transnational markets, covering topics such as: e-commerce, IP, State-Owned Enterprises, competition rules, and investment protections allowing international arbitration.
- All of this means economies (and legal issues) are inextricably linked and intertwined:
- Foreign laws and international law are inherently interesting in every economic transaction that has a transnational characteristic. We need to understand the legal regimes (contract laws and regulations generally) of our trading and production partners, for their regime (often multiple regimes) will often apply directly and, if not, indirectly.
- The distinction between private and public international law breaks down – international law is part of modern commercial practice. Private international law (conflict of laws) is a central topic in modern commercial practice. The issue of the coherence of laws and regulations also becomes central. Hence the mega-regional agreements have chapters on regulatory best practice.
- This is also why we have seen the new generation of international instruments – adding to the 1958 New York Convention on Recognition and Enforcement of Foreign Arbitral Awards. This new generation of documents (treaties and statements of principles of law) encourages a global mindset and will transform the international disputes landscape:
- Convention of 30 June 2005 on Choice of Court Agreements;
- 2015 Principles on Choice of Law in International Commercial Contracts, allowing, subject to conditions, the use of ‘rules of law’ (soft law) as a valid choice of law;
- 2018 UN Convention on International Settlement Agreements; and most recently,
- Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters
- Within this changing economic and legal environment, a number of concepts compete for attention:
- Codification (even in Australia – 2012, but still-born);
- Restatements (the US Restatement, Second, Contracts; Burrows; Andrews);
- Statements of general principles of law for international commercial contracts (UNIDROIT Principles, Trans-Lex).
- Of course, private international law – now reinforced by the 2015 Hague Principles on Choice of Law in International Commercial Contracts – keeps whispering: ‘You are autonomous. Choose your own law. Think about rules of law as a valid alternative’.
- The Japanese Civil Code has continued in its tradition of codification, even though that course may (in my view) actually undermine the ability of law to respond to modern complex, transnational issues. The uncertainty and obscurity of sources of law is overstated. But law reform may still be needed. I will mention 2 areas where we could think of more deeply about law reform.
Two areas that could benefit from reform
First area – Good Faith
- There is a long-standing (and somewhat sterile) discussion of the role of good faith. Even the English courts are introducing the concepts in a more nuanced way, especially in long-term, relational contracts.
- We know that good faith pervades all of contract law rules. If the debate about implied terms of good faith was sterile, it was because of a failure to see what ‘contract’ is. Contracts are not just pieces of paper and an agreement about terms. ‘Contract’ is an institution. Wim Decock, reminds us that the foundational principles of contract law were about maintaining relationships. Contract law was Trinitarian in nature and good faith was about maintaining a relationship with God and with each other (a vertical and horizontal dimension).
- It is interesting to see, therefore, the observation in this book (6) that Japanese law puts greater emphasis on maintaining contractual relationships (62-65), in line with more long-term or relational contracting in business practice, and that therefore good faith plays a major role in Japanese law, more like German law. (64)
- It would be helpful to Australian contract law to perceive contract as an institution and articulate rules about good faith for the support and protection of that institution, particularly as it weathers the greater volatility that we see in global commercial practice.
Second area – Change of Circumstances
- The doctrine of frustration is notoriously unsatisfactory in Anglo-Australian common law. It is far from an obsolete doctrine but deals with the problems of the everchanging transnational commercial world. Brexit (or not) is just one of the current issues giving rise to the question of what should happen when circumstances radically change.
- Putting to one side the issue of what exactly is a sufficiently radical event to call frustration into play, the seriously deficient Anglo-Australian response (termination as a matter of law without recourse to either party) seems hardly satisfactory in a modern commercial contracting environment of Global Value Chains and relational contracts.
- The judgments in the High Court in Codelfa Construction Pty Ltd v State Rail Authority of NSW  give hints of a broader approach. Both in this and the leading English case of Davis Contractors Ltd v Fareham UDC, the parties proceeded with the work and claimed a restitutionary remedy for the different work done after the frustrating ‘event’. As Jane Swanton has noted, the continued performance and restitutionary remedy was in effect a variation of the contract. This was appropriate given the subject matter of the contract in Codelfa was with a government entity concerning important public infrastructure.
- The UNIDROIT Principles (see Art 6.2 Hardship and Art 7.1.7 Force Majeure) and before them the Contract Code drafted by Harvey McGregor for the English Law Commission, suggests another, more direct, way of achieving a just result: a legal requirement (or, at least, a precondition of relief) to negotiate in good faith to restore the ‘equilibrium’ of the contract, failing which there is a possibility of a tribunal intervening to itself adapt the contract to the new circumstances.
- Japanese law, like German law, recognises a right of adjustment. (426-431) Although drawing back from a full adoption of the UNIDROIT Principles in the 2017 Civil Code, the issues surrounding changed circumstances are informed by the greater predilection of Japanese courts to keep the contract alive. A generalised duty to renegotiate in good faith is still being debated. (431)
- Australian lawyers would do well to participate in this debate, given the importance in modern commercial practice of long-term, relational contracts. It would help inform an Australian attitude to radical changes of circumstances, which changes are more and more likely in a volatile global economy.
- In the context of where it fits in a world community, there is a long and sometimes acrimonious debate in the United States (and sometimes Australia too – although we are much more used to citing foreign case law) as to the permissibility of citing and relying on foreign law.
- A study of this work shows that much can be learnt about the suitability of our own legal system by studying foreign laws and applying the comparative method. The articulation of laws and their reform is part of the art of statecraft, as Justinian describes in his opening paragraphs to his monumental Digest. More attention should be paid to this important public task.
- Books like the one we launch today are valuable guides along the way. I commend it to your reading.
Adjunct Professor of Law, University of Sydney
 References are to paragraph, not page, numbers.
 Paul R Krugman, Maurice Obstfeld and Marc J Melitz, International Economics: Theory and Policy (Pearson, Harlow, 11th ed, 2018), 46; Pol Antràs, Global Production: Firms, Contracts, and Trade Structure (Princeton University Press, Princeton, 2016).
 Richard Baldwin, The Great Convergence: Information Technology and the New Globalization (Harvard University Press, Cambridge, Mass., 2016).
 Sir George Leggatt, ‘Negotiation in Good Faith: Adapting to Changing Circumstances in Contracts and English Contract Law’  Journal of Business Law 104.
 Theologians and Contract Law: The Moral Transformation of the Ius Commune (ca 1500-1650 (Martinus Nijhoff, Leiden, 2013), 608.
 Canary Wharf (Bp4) T1 Ltd. v European Medicines Agency  EWHC 335 (Ch).
 (1982) 149 CLR 337.
  AC 696.
 ‘Discharge of Contract by Frustration: Codelfa Construction Pty Ltd v State Rail Authority of NSW’ 57 Australian Law Journal 201 at 213, 217.
 §595, Contract Code: Drawn Up on Behalf of the English Law Commission (1966, – the first project of the then new English Law Commission, but published only in 1993 by an Italian publishing house).
 Jeremy Waldron, “Partly Laws Common to All Mankind”: Foreign Law in American Courts (Yale University Press, New Haven, 2012).
 Stephen Breyer, The Court and the World: American Law and the New Global Realities (Knopf, NY, 2015).
 Digest of Justinian, 533 AD (English translation edited by A Watson, University of Pennsylvania Press, Philadelphia, 1985), p xlvii.
[Ed: The Hon TF Bathurst AC, Chief Justice of New South Wales, kindly launched two Asian law books at a CAPLUS seminar hosted by Herbert Smith Freehills in Sydney on 28 November 2019: ‘Contract Law in Japan‘ by Hiroo Sono, Luke Nottage, Kenji Saigusa and Andrew Pardieck (Wolters Kluwer 2019) and ‘ASEAN Consumer Law Harmonisation and Cooperation‘ by Luke Nottage, Justin Malbon, Jeannie Paterson and Caron Beaton-Wells (CUP 2019). Other discussants included Sydney Business School Adjunct Professor Donald Robertson (expert in international contract law) and Sydney Business School Professor Gail Pearson (expert in comparative consumer law). The Chief Justice’s remarks are uploaded on the Supreme Court website and are reproduced below with permission.]
1. I would like to begin by acknowledging the traditional custodians of the land on which we meet, the Gadigal people of the Eora nation, and pay my respects to their Elders, past, present and emerging. It took a long time for our legal system to recognise the unique connection with this land which they have under their ancient law and customs. When it did, a door was opened to a greater understanding which had the potential to enrich both traditions and heal some of the wounds within our community inflicted by more unjust times.
2. In this way, our history demonstrates, rather starkly, the necessity for a dialogue between different systems of law.1 A dialogue offers us the opportunity to take a glimpse into the workings of an unfamiliar system, and, in so doing, see our own in a different light. It may help us better appreciate the shortcomings and deficiencies of our own approach to important legal questions, and benefit from an understanding of how others have approached them. In short, it is never enough to compare two systems simply by pointing out the differences. It is necessary to go further, and reflect on how and why those systems differ, and what they can learn from each other.
3. The two books which we have gathered to launch today are fine examples of scholarly works within this tradition. Neither could be described solely as a work of “comparative law”, since neither has a narrow, solely comparative focus. For example, Contract Law in Japan2 seeks to present Japanese contract law largely on its own terms, although this inevitably involves occasional reference to its French, German, and even American progenitors. In the same vein, ASEAN Consumer Law3 aims to treat the consumer law of ASEAN as a unified, or at least, unifying, entity, rather than as a simple agglomeration of the laws of its member states – although, as I quickly learned while reading, this is something much easier said than done.
4. On their own merits, both works would stand as comprehensive guides to the substantive law of the jurisdictions which they cover. However, it would be disingenuous for me to deny that both works invite and encourage the uninitiated reader, such as myself, to whom the contract law of Japan and the consumer law of the members of ASEAN has long remained a mystery, to draw their own comparisons with the law in their home jurisdiction, which in my case is, of course, Australia. In my brief remarks this evening, I would like to touch on some of the connections and contrasts between Australian, Japanese, and ASEAN law which appear from both works. To make such a large task feasible given the scope of the coverage in each book, I will focus on only two themes which I think have particular relevance to Australian law at present.
5. The first theme is concerned with the extent to which it is appropriate for a legal system to define causes of action, or otherwise enforce or restrict legal rights, based on broad, normative standards of conduct. In Australian law, we might take as an example the statutory prohibitions on “conduct that is, in all the circumstances, unconscionable”.4 No further explanation of the nature of “unconscionable” conduct is given, although the legislation does list a sizeable number of factors which might be relevant.5 Ultimately, it is left to the court to determine whether the conduct in a particular case is “against conscience by reference to the norms of society”,6 or more prosaically, whether it was contrary to “accepted community standards”.7
6. Now, while this does not simply amount to allowing a judge to proscribe conduct which they deem to be “unfair” or “unjust”,8 it may be thought to come closer than many other areas of law permit. We can see the consequences in the recent decision of the High Court in ASIC v Kobelt,9 where the Court split 4:3 on the issue of whether the provision of an informal system of credit by the owner of a general store in a remote, Indigenous community was “unconscionable”. The breadth of the standard makes it difficult to attribute the difference in opinion between the members of the Court to any legal error. Rather, the distinction between the majority and the minority appears to lie in their contrasting views about what the “norms of society” or “accepted community standards” actually require.10 Put this way, difference in opinion ceases to be unexpected, and perhaps, becomes inevitable.11
7. This creates something of a dilemma for the law. If the “norms of society” or “accepted community standards” are so subtle and esoteric in their application to a particular set of circumstances that even some of the most experienced legal minds in the country cannot agree, then ought the final decision to really remain in their hands? In these circumstances, it would not be out of the question to believe that the legitimacy of the conduct should really be the subject of consideration by the representatives of the people in the legislature. A provision which is clearly directed to address a particular situation puts beyond doubt that a matter has been considered by the legislature. It defines its own standard by which the relevant conduct is to be judged. To be sure, any statutory provision may be capable of giving rise to its own difficulties of interpretation, but at least these problems are susceptible to the application of more familiar legal reasoning.12
8. It seems to me that this is an approach which has, to some extent, been adopted by Japanese contract law in analogous circumstances. Rather than relying on a broadly-expressed criterion of “unconscionable conduct” to define the situations in which a court would be prepared to set aside a consumer contract, it instead states the particular circumstances which will give rise to such a claim.13 One such example, which seems to reflect the narrower, general law doctrine of “unconscionable conduct” in this country,14 is where “a business stirs up [the] excessive anxiety of a consumer without enough ability to judge due to [their] old age or mental disorder about [their] health or living conditions”.15 There are other similar examples, which spell out in some detail the types of conduct which are not regarded as acceptable business practice in Japan when it comes to consumer contracts.16
9. It is worth noting that these exceptions for consumer contracts were introduced even though Article 90 of the Japanese Civil Code provides that a contract is void if it is “against public policy”,17 perhaps a phrase of even wider import than “unconscionable conduct”.18 Even though the express exceptions for consumer contracts could very well have been analysed as being “against public policy”,19 it was still felt necessary to craft particular provisions to deal with these situations. It could well be thought that such an approach improves certainty, and promotes greater democratic legitimacy.
10. While there can be a need to resort to general standards of conduct to ensure that unforeseen and undesirable activities do not escape the supervision of the law, it seems to me that there is much to be said for resisting the temptation to make these standards the “first port of call” for regulation.20 I think the Japanese approach to the grounds on which a consumer contract may be set aside for what we might describe as “unconscionable conduct” provides an interesting perspective on this issue. There is much more that could be said about this topic, and, no doubt, Japanese law might have difficulties of its own with overbroad standards of conduct. But the utility of the comparison should be apparent. It illustrates the different approaches which may be taken to a complex issue, and suggests alternative ways of resolving them.
11. The second theme I would like to touch on this evening is concerned with the role which regulatory bodies ought to play in policing and enforcing what might broadly be described as “consumer protection legislation”. Again, this is something that has been a live issue in Australia since the Hayne Royal Commission delivered its Interim Report in 2018, which strongly criticised how ASIC approached the enforcement of the financial services legislation for which it was responsible.21 The Report noted that ASIC’s “starting point” for responding to misconduct appeared to have been to attempt to resolve the issues by agreement and negotiation with the entity concerned,22 with a focus on remediation of harm caused rather than sanction for the misconduct itself.23 In words which bear repeating in full, the Report stated:
“This cannot be the starting point for a conduct regulator. When contravening conduct comes to its attention, the regulator must always ask whether it can make a case that there has been a breach and, if it can, then ask why it would not be in the public interest to bring proceedings to penalise the breach. Laws are to be obeyed. Penalties are prescribed for failure to obey the law because society expects and requires obedience to the law.”24
12. The rhetoric here is certainly characteristic of the direct and forthright attitude of the Commissioner. It is compelling and persuasive, with seemingly inexorable logic. However, I think it has somewhat directed attention away from an important anterior question: to what extent was ASIC conceived to be a “conduct regulator” prior to the Royal Commission? It must be admitted that now, in light of the Commission, public opinion overwhelmingly favours ASIC taking an active role as a “conduct regulator”. And ASIC has taken heed. Shortly after the publication of the Interim Report, in response to its criticisms, ASIC adopted what has been compendiously described as the “Why Not Litigate?” approach,25 placing enforcement squarely at the forefront of its responsibilities, although it has been quick to point out that this is by no means equivalent to a “litigate first, and ask questions later” approach for any breach, no matter how trivial.26 Was this always intended to be how ASIC operated?
13. Interesting light is shed upon this question by Mr Alan Cameron AO, a former Chair of ASIC and its predecessor from 1993 to 2000, in an address he delivered some months before the delivery of the Interim Report,27 although at a time when many of the shortcomings in the financial services sector had already been exposed in hearings before the Commission. He reflected on the fact that, from its inception, ASIC has never seen itself solely as an enforcement body. It has also regarded itself as having a “market facilitation role”,28 and, I might add, with some justification, because this objective is still reflected prominently in its enabling legislation today.29 Indeed, even as late as 2014, in a “Statement of Expectations for ASIC” published by the Government, enforcement was not mentioned as part of its “key role”, or even as one of its objectives.30
14. It is striking the degree to which the same concerns and ambiguity about the proper role of a regulator appear in the topics discussed in ASEAN Consumer Law. While no single chapter discusses the work of consumer protection regulators as its primary focus, it is a background theme which recurs with surprising frequency in other chapters when discussing the efficacy of the substantive law. Importantly, one gets the sense that this results from much the same concerns which have motivated the discussion about the role of ASIC as a regulator in Australia: despite the introduction of relatively strong protections for consumers “on the books” in most members of ASEAN in recent years,31 there has been little tangible evidence that these protections have translated into better outcomes for consumers.
15. Even for those countries which have had consumer protection legislation for some time, there is often a dearth of filings in courts attempting to utilise these laws.32 Thailand appears to be an exception to this trend, but even then, there are few cases in which a consumer protection claim has proceeded to reported judgment. Most are settled.33 Part of the reason for the slow uptake might be attributed to the lack of an effective and well-resourced regulator to educate the public about their rights as consumers, and where necessary, to step in and take appropriate enforcement action.34 In many countries, it falls to consumer advocacy NGOs to raise awareness about consumer protection issues, in the absence of better-resourced government programs.35 It should be no surprise that Thailand, with its higher filing rate, is also the country with the greatest consumer NGO activity.36
16. Now, it may be accepted that there are significant differences between the level of economic development between most members of ASEAN and Australia. Nevertheless, the experience of ASEAN ought to remind us that legislation needs to be coupled with an appropriate enforcement strategy if it is to be effective. Introducing legislation to prohibit undesirable conduct is one thing. Translating that legislation into practical outcomes for consumers is another. And, ultimately, it is that second step which proves difficult. As we have seen, perhaps there were grounds for believing that ASIC’s former approach was too lenient. But it is a matter of balance. There is always a risk that things may swing too far in the other direction.
17. The themes I have discussed this evening are just two small examples of the way in which contemporary legal debate in Australia can be seen to overlap with those in other jurisdictions. This focus might have given the mistaken impression that I believe that comparative law is only useful for what it can tell us about our own system of law. This could not be further from the truth. But, I firmly believe that the first step in motivating policy-makers and lawyers to engage with comparative law is to highlight the connections and similarities which we have with other systems. It is only then that we can demonstrate that comparison opens a door to a dialogue from which both systems can benefit.
18. Both of the works being launched tonight are excellent examples of how such scholarship can incisively deconstruct unfamiliar legal systems and make them more accessible to a wider audience. And, what is more, each clearly exposes and explains the challenges which each system faces on its own terms. This is an admirable achievement, and one for which the authors deserve our congratulations.
19. Thank you.
1 See also Uwe Kischel, Comparative Law (Oxford University Press, 2019) 46 ff.
2 Hiroo Sono et al, Contract Law in Japan (Wolters Kluwer, 2019).
3 Luke Nottage et al, ASEAN Consumer Law Harmonisation and Cooperation: Achievements and Challenges (Cambridge University Press, 2019).
4 Competition and Consumer Act 2010 (Cth) sch 2 (‘Australian Consumer Law’) s 21(1); Australian Securities and Investments Commission Act 2001 (Cth) (‘ASIC Act’)s 12CB(1).
5 Australian Consumer Law s 22(1); ASIC Act s 12CC(1).
6 ACCC v Lux Distributors Pty Ltd  FCAFC 90 at  (Allsop CJ, Jacobson and Gordon JJ); ACCC v Medibank Private Ltd  FCAFC 235at  (Beach J); ASIC v Kobelt  HCA 18 at  (Kiefel CJ and Bell J),  (Gageler J).
7 Ipstar Australia Pty Ltd v APS Satellite Pty Ltd  NSWCA 15 at  (Bathurst CJ); ASIC v Kobelt  HCA 18 at  (Kiefel CJ and Bell J).
8 Attorney-General (NSW) v World Best Holdings Ltd (2005) 63 NSWLR 557 at 583  (Spigelman CJ); cf ACCC v C G Berbatis Holdings Pty Ltd (2003) 214 CLR 51 at 64  (Gleeson CJ).
9  HCA 18.
10 Ibid – (Kiefel CJ and Bell J), – (Gageler J), – (Keane J), – (Nettle and Gordon JJ), – (Edelman J).
11 Ibid  (Gageler J).
12 Commonwealth Bank of Australia v Kojic (2016) 249 FCR 421 at 436–7 – (Allsop CJ), 442–3 – (Edelman J); cf ASIC v Kobelt  HCA 18 at – (Edelman J).
13 Sono et al (n 2) 79  ff.
14 See Thorne v Kennedy (2017) 263 CLR 85 at 102–3 – (Kiefel CJ, Bell, Gageler, Keane and Edelman JJ).
15 Sono et al (n 2) 80, quoting art 4(3)(v) of the Consumer Contract Act (Japan); cf Blomley v Ryan (1956) 99 CLR 362 at 405 (Fullagar J).
16 See also Sono et al (n 2) 83–4.
17 Civil Code (Japan) art 90.
18 Cf Sono et al (n 2) 81–3 .
19 See ibid 83 –.
20 Attorney-General (NSW) v World Best Holdings Ltd (2005) 63 NSWLR 557 at 583  (Spigelman CJ).
21 See Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, Interim Report (September 2018) vol 1, ch 8.
22 Ibid 277.
23 Ibid 296.
24 Ibid 277 (emphasis original).
25 Australian Securities and Investments Commission, ‘Update on Implementation of Royal Commission Recommendations’ (Paper, February 2019) 3.
26 See, eg, Commissioner Sean Hughes, ‘ASIC’s Approach to Enforcement after the Royal Commission’ (Speech, 36th Annual Conference of the Banking and Financial Services Law Association, 30 August 2019).
27 Alan Cameron, Reflections on Regulators, Without Casting Aspersions’ in Pamela Hanrahan and Ashley Black (eds), Contemporary Issues in Corporate and Competition Law (LexisNexis, 2019) 165. The speech was originally delivered on 26 June 2018.
28 Ibid 167.
29 ASIC Act s 1(2).
30 Australian Government, ‘Statement of Expectations for ASIC’ (April 2014) <https://www.asic.gov.au/about-asic/what-we-do/how-we-operate/accountability-and-reporting/statements-of-expectations-and-intent/statement-of-expectations-april-2014/>; see also Cameron (n 26) 173.
31 See Nottage et al (n 3) chs 3–4.
32 Ibid 163–73,.
33 Ibid 167.
34 Ibid 240–1, 246–7.
35 Ibid 365–6.
36 Ibid 165–7.
In the context of changes in the consumer marketplace and regulatory frameworks locally and internationally, the Australian government is re-initiating public consultations about introducing an EU-style “General Safety Provision”. Although this requirement for suppliers pro-actively assess risks and put or keep only safe products products has also been introduced beyond Europe in Hong Kong, Macau, Malaysia and (partly) Singapore, it has also not yet been introduced in Japan. However, Japan may have a better regulatory framework in other respects (eg mandatory accident reporting requirements on suppliers that extend to some “near misses”, along with public disclosure of such reports) and better enforcement (eg of mandatory safety standards for specific products).
Japanese courts also continue to generate more case law applying EU-style strict product liability, introduced by a 1994 Act, compared to an analogue introduced in 1992 in Australia (and increasingly in other parts of Asia, including many ASEAN states). This helps promote and clarify more indirect incentives on suppliers to source and provide safe products. However, such impact for product liability litigation is still constrained by issues such as effective access to justice / courts. This is evident from a recent book examining major EU and some other countries, reviewed below for the Journal of European Tort Law: Piotr Machnikowski (ed) European Product Liability: An Analysis of the State of the Art in the Era of New Technologies (Intersentia, Cambridge, 2016, ISBN 978-1-78068-398-0, ix+705pp):
This is a very useful reference book especially for academic researchers and legal practitioners, but also policy-makers or law reformers, as it compares product liability law and practice across 12 countries in Europe as well as five other countries. A key question is whether the 1985 product liability (PL) Directive (85/374/EEC), compensating consumers for physical harm as well as certain consequential property losses caused by product safety defects, remains “fit for purpose” – especially given the proliferation of new technologies.
The Introduction by Machnikowski succinctly outlines those as including: mobile internet (smartphones, tablets etc), the automation of knowledge work, the “internet of things” (such as connected home appliances), cloud technology, advanced robotics, autonomous vehicles, next-generation genomics and regenerative medicine, advanced materials (eg through nanotechnology), energy storage, advanced oil and gas exploration and recovery, renewable energy sources, and 3D printing (pp3-8). He explains how these technologies require us to reconceptualise the role of substantive private law, as they often have global reach and prompt calls for public regulation. The new technologies also strain the capacity of the legal system to respond quickly and effectively. They often implicate intellectual property and services rather htan movable or tangible products, and networks of suppliers rather than just manufacturers and some specified intermediaries, as primarily envisaged by the PL Directive. The new technologies raise questions about its focus on product defects linked to physical safety (rather than infringements of privacy or non-economic rights and interests), the exemption from liability usually provided for “development risks” (the no-one-could-have-known defence), attributing causation, and the scope of (potentially catastrophic) damages claimable. The book therefore aims to analyse how conventional PL law is or could be addressing such questions, as well as how PL law interacts with other areas of tort law and public regulation (pp 8-13).
The volume compares the law of European Union member states selected from both the “Old” and “New” Europe (Austria**, the Czech Republic, Denmark*, England*, France**, Germany**, Italy*, the Netherlands*, Norway*, Poland and Spain) and the European Economic Area (Norway) as well as Switzerland. It therefore reviews legal systems in the “Roman, German, common law and Nordic traditions”, along with “two important common law traditions from outside Europe (USA** and Canada*) as well as two mixed jurisdictions (Israel* and South Africa” (pp 13-14). The back cover blurb adds that this hefty book “is the result of an extensive international research project funded by the Polish National Science Centre. It brings together experienced scholars associated with the European Group on Tort law (EGTL) and the European Research Group on Existing EC Private Law (Acquis Group) … The country reports show that the practical significance of product liability differs widely in the various Member States”.
The preceding paragraph above tries to give a sense of this variable significance of PL law by indicating with an asterix (*) or double asterix (**) those countries where there is respectively extensive or very extensive litigation and case law; those without any asterix are countries where lawsuits reportedly remain rare. This rough appraisal is derived mainly from each country report’s concluding Part X (Assessment of Domestic Law), except for the chapter on Spain (lacking Part X), as well as each chapter’s respective Part IX (Alternative Regulations and Remedies) and Part VIII (Procedural and Evidential Issues). The comparison reinforces the well-established general proposition that it is factors beyond reforms to substantive PL law, even the shift from negligence-based to strict liability under the 1985 Directive model (inspired by some earlier US case law), which primarily generate lawsuits and therefore case law that might offer more guidance on what constitutes appropriate safety for consumer products.
The country reports identify (sometimes overlapping) factors arguably impacting on whether or not PL law is extensively litigated:
- effectively enforced public regulation preventing harmful products coming on the market (also in Norway, per Askeland, p 375), and strong social welfare or insurance schemes (eg in Denmark, per Holle and Mogelvang-Hansen, pp 171-2);
- expenses in accessing evidence, and lawyers open to contingency fees, compared to non-legal dispute resolution avenues (in England, per Oliphant and Wilcox, p 203);
- linking of civil with criminal proceedings to ease plaintiffs’ evidentiary burden (in France, per Borghetti, p235);
- scope of claimable damages (with lawsuits under PL Directive implementing legislation only really since a 2002 amendment allowing claims also for pain and suffering in Germany, per Magnus, p 272);
- reversed burden of proof under still more familiar Civil Code negligence provisions in Italy, per Comande, pp 307-8);
- quite predictable law (facilitating settlements), business reputation, products (like mobile phones) bundled with services facilitating claims against direct suppliers rather than manufacturers (in the Netherlands, per Keirse – but noting that general tort law has also become stricter: pp 355-6);
- unpredictability in civil processes and litigation outcomes due to limited legal aid, variability in lawyers’ fees, high litigation costs, the “loser pays principle”, complex and lengthy procedures, problems with experts and judicial methodologies, and unclear standard of proof (p 404, per Baginska);
- “almost impenetrable” commentary with very limited case law (in Switzerland, per Winiger, pp 477-8);
- potential claims versus regulators and perhaps related compensation schemes, as well as class actions (in Canada, per Arbour, pp 513-9);
- no-fault liability schemes precluding personal injury claims for defects in automobiles, and comparative ease of suing actors (eg doctors or employers) than manufacturers of potentially unsafe products (in Israel, per Gilead, p 544).
Each country report also succinctly sets out Parts dealing with “Sources of Law”, “Basic Elements of Liability”, “The Person Liable for Damage”, “The Aggrieved Person and Damage”, “Causality”, “Defences and Exclusions”, and “Remedies”. This structure facilitates easy comparisons on points of interest (eg on the extent to which an intermediate supplier might have contributed sufficiently to be deemed a joint “manufacturer”), although it would have been helpful for the book to add an Index.
Especially for the (many) countries where case law is sparse, the country reporters do not delve into great detail about the potential applicability of especially Directive-based PL law to the various new technologies (but see Austria, per Koch, p 147). However, in his Conclusions, Machinowki nonetheless includes a very interesting analysis that can be seen as challenging the “Adequacy of the European Product Liability Regime for Threats Posed by New Technologies”, focusing on what should now constitute a “product”, “defect”, “development risks”, the “entity liable for composite products”, and appropriate “time limits”, as well as generally the “possible development paths for product liability law” (pp 691-705). Readers familiar with PL law could perhaps begin the book here, at the end. For particular points of interest, they can cross-reference to the detailed and authoritative commentary on the “Product Liability Directive” itself (pp 17-108) co-authored by Fairgrieve, Howells, Machinowski and five others. That will also be essential background reading for those less familiar with PL law. Academics and policy-makers, rather than practitioners, may also find some related insights in the penultimate chapter by Faure, setting out a rather general “Economic Analysis of Product Liability” (pp 619-65).
Overall, this is a very well conceived and executed comparative reference book that can be highly recommended, especially for those interested in PL law in the context of proliferating new technologies. A second edition or companion volume might usefully extend the analysis to other European countries as well as those, especially in the Asian region, that have increasingly adopted the PL Directive approach – often with more pro-plaintiff innovations. However, other than Japan and Australia to some extent, these Asian countries have so far even less case law and related commentary that may help guide them as well in addressing emergent consumer product safety issues.
 Matthias Reimann, “Liability for Defective Products at the Beginning of the Twenty-First Century: Emergence of a Worldwide Standards?”, 51 American Journal of Comparative Law, 751-38 (2003). For a recent illustration, showing almost no lawsuits filed in five Southeast Asian countries that have adopted Directive-style PL legislation, except in Thailand thanks to contemporaneous legislation facilitating consumer claims through regular courts, see Luke Nottage and Sakda Thanitcul, “Economic Integration and Consumer Protection in Southeast Asia: ASEAN Product Liability Law and Safety Regulation” in ibid (eds) ASEAN Product Liability and Consumer Product Safety Law (Winyuchon, Bangkok, 2016), available via https://ssrn.com/abstract=2703130.
 On the synergies between civil and criminal proceedings in medical malpractice and (especially mass tort) PL claims in Japan, see also respectively Robert Leflar, “Medical Error as Reportable Event, as Tort, as Crime: A Transpacific Comparison” 22 Journal of Japanese Law 39-76 (2005) available at https://www.zjapanr.de/index.php/zjapanr/article/view/478/503; and Luke Nottage, Product Safety and Liability Law in Japan (Routledge, 2004) especially ch3.
 See a class action settlement regarding imported soy milk, approved by the Victorian Supreme Court, which might have had otherwise to rule on this point under either Australian or Japanese law (both incorporating variants of the PL Directive since the early 1990s): Erin Downie v Spiral Foods Pty Ltd and Others  VSC 190, available at http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSC/2015/190.html.
 See also Luke Nottage, Justin Malbon, Jeannie Paterson and Caron Beaton-Wells, ASEAN Consumer Law Harmonisation and Cooperation (Cambridge University Press, Singapore, 2020) especially ch3; Geraint Howells, Hans Micklitz et al (eds) Consumer Law in Asia (Cambridge University Press, forthcoming 2021).
[Written by Luke Nottage, Justin Malbon, Jeannie Paterson and Caron Beaton-Wells, for a posting on the blog of Cambridge University Press, which has just published the e-book version of our 8-chapter book on “ASEAN consumer law harmonisation and cooperation: Achievements and challenges”. It will be launched by NSW Chief Justice Bathurst and discussed, with “Contract Law in Japan” co-authored by Luke Nottage, on 27 November 2019 at HSF in Sydney.]
The ten states now comprising the Association of Southeast Asian Nations have collectively become a major part of the world economy, bringing together over 600 million people including a growing middle class. Yet they are highly diverse in socio-economic development, political structure and legal traditions, as outlined in chapter 1 of our book. What hope is there for real legal harmonisation or cooperation, especially for consumer protection?
The “ASEAN Economic Community” project significantly expanded intra-regional trade and investment liberalisation commitments, aiming to raise individual member states’ living standards. But this does not necessarily mean weakening consumer protection. Chapter 2 shows how and why ASEAN, through AEC Blueprints and related law reform and capacity-building initiatives, has tried to “trade up” to higher consumer law standards. It also applies other theoretical perspectives to explore the actual achievements of ASEAN, generally and for consumer protection.
Chapter 3 chronicles national enactments of consumer product safety laws and regulations, often as part of general consumer protection law statutes, as well as (often strict liability based) product liability laws, in three stages including the 2007-2015 AEC phase. It highlights regulatory gaps and demarcation problems among “line ministries” and newer consumer affairs regulators, as well as problems of access to justice for consumers seeking compensation for harm from unsafe products.
Chapter 4 focuses on consumer contracts, contrasting the widespread bans on misleading conduct with more variable treatment of unfair contract terms. A uniform approach is more unlikely but most existing laws may be sufficient if backed by effective education and enforcement.
Chapters 5 and 6 take a regional perspective in examining how ASEAN collectively can deal with pressing issues regarding consumer finance and professional health services. The challenge for consumer finance is having all states apply consumer protection measures at least against abusive lending practices, including debtor harassment. Another challenge reducing the number of people who are financially excluded. New technologies offer opportunities to achieve this, but ASEAN can strengthen knowledge and experience sharing networks amongst government agencies and other key players in this fast-evolving field.
ASEAN’s trade liberalisation agenda needs to be applied in a carefully nuanced way concerning professional health services. These services are not only a consumer product; access to health services is a basic human right. Attuning public policy to meet universal health objectives while also gaining the benefits of being subjected to competitive marketplace disciplines is tricky, especially when national budgets are highly constrained. The challenges may be exacerbated if members implement ASEAN’s commitment to mutual recognition of professional qualifications, so health professionals gravitate from poorer countries to higher income states.
Chapter 7 explores the development of competition policy and associated laws and enforcement institutions in ASEAN, at both the national and regional levels. It explains the interface between competition and consumer protection and examines the implications for substantive and institutional design and operation that have been increasingly recognised around the world. Highlighting the general lack of coordination between competition and consumer protection endeavours in ASEAN to date, it poses some explanations for this and argues that a more coordinated and outcome-focused approach would assist in achieving the economic and social objectives of the AEC.
The book concludes by considering whether transgovernmentalism or “regional shared value” can promote more coordinated and effective consumer law, galvanising the cooperative and consensus-building approach traditionally preferred by ASEAN.
This is the title of my next book, co-authored with Profs Justin Malbon, Jeannie Paterson and Caron Beaton-Wells in Melbourne, which will be published by Cambridge University Press around the end of this year in its series on “Integration Through Law: The Role of Law and the Rule of Law in ASEAN Integration“. It is the first Western-language research monograph detailing significant developments in consumer law and policy across the Association of Southeast Asian Nations, underpinned by a growing middle class and implementation of the ASEAN Economic Community from 2016. Eight chapters examine consumer law topics within ASEAN member states (such as product safety and consumer contracts) and across them (financial and health services), as well as the interface with competition law and the nature of ASEAN as a unique and evolving international organisation. We include insights from extensive fieldwork, partly through several consultancies for the ASEAN Secretariat over 2013-5, to provide a reliable, contextual and up-to-date analysis of consumer law and policy development across the region. The volume also draws on and contributes to theories of law and development in multiple fields, including comparative law (with references also to consumer law developments in Australia, Japan and the EU), political economy and regional studies.
Written by: Prof Sothi Rachagan (Vice-Chancellor, Nilal University, Malaysia)
[Prof Rachagan, doyen of consumer law and policy studies in Southeast Asia, has kindly provided the following review of my conference volume co-edited with Chula Uni Prof Sakda Thanitcul, published by Winyuchon (Bangkok) in 2016 in English plus Thai translation, with a version of the introductory chapter available here.]