In a world full of bullies, the ‘little’ person must have the power to stand up against aggressors. If bullies rule, our democracies, the rule of law, justice and fairness are simply empty, meaningless terms thrown around like useless confetti.
In Australia we are lucky to have a government and a parliament that are finally moving hard to stop big business bullies in their dealings with consumers and small business people.
There is a Bill before Parliament at the moment, ready to be passed, that gives real teeth to unfair contract laws. What might seem like technical change to obscure law known only to a few people is, in fact, a huge step for fairness in how the Australian economy works. Everyone is affected, even if few understand how.
Simply put, when this Bill becomes law:
- It will be illegal for big business to have unfair contract terms in their standard form contracts with consumers and small business people.
- Fines will apply to anyone who tries to push an unfair contract on to consumers/small business. (Up to $500,000 for individuals and $10,000,000 for corporations.)
The implications of this are massive. Businesses that want to screw over consumers and/or small businesses with unfair contracts will be forced to dump those contracts. (Think phone, internet, car and other equipment leasing, land sales and on and on.) This is a huge economic reform that will make for a fairer and stronger Australian economy. More people will be able to do business and buy things with real protections against unfair contracts.
For us, this journey started in 2009. At Self-Employed Australia we believe we played a pivotal role in making this happen—along with many others that we need to thank. The sequence of events was as follows:
- 2009: SEA started reporting small business unfair contract cases.
- 2010: Unfair contract laws for consumers were introduced.
- 2010 (Nov): We started our campaign for the consumer unfair contract laws to be applied to small business people with our Charter of Contractual Fairness.
- 2016: Partial success. After seven years of campaigning, small business unfair contract laws started. BUT, these were a compromise, achieving only about 70 per cent of what we wanted. Problems were (a) the size of the contracts and the size of small business were limited and (b) the enforcement mechanisms were weak.
- 2016 on: The Australian Consumer and Affairs Commission, headed by Rod Sims, were in charge of ‘enforcing’ the law. The ACCC (and Rod) become openly frustrated by big business’ ignoring the laws.
- 2018: A review of the laws took place.
- 2019: The Morrison government committed to ‘beefing up’ the laws.
- 2020: State governments agreed to the ‘beefing up’.
- 2021: Unfair contract laws extended to insurance products.
There are many people to thank, reflecting the very best of the Australian parliamentary process and the public service:
- The Abbot government committed to the laws for small business.
- The ALP, Greens and Senate independents ensured that the laws had reasonable meaning.
- SEA played a pivotal advocacy role to this point (2016) against opposition and dirty play by ‘big end of town’ types.
- Rod Sims and the ACCC were champions in highlighting the weaknesses in enforcement and pushing for ‘beefing up’.
- The Morrison government has worked through to ensure that the ‘beefed up’ laws are now before parliament.
- The ALP, Greens and independents all seem clearly supportive of the new laws.
The ‘beefed up’ Unfair Contract Bill is now before parliament.
- Here’s a copy of the Explanatory Memorandum to the Bill. (We’ve highlighted the important bits.)
- Here’s our summary of the important bits. This includes a summary of the current laws PLUS examples of contract clauses that are ‘unfair’ under the laws.
For the ‘big end of town’ lawyers who say that these laws break contract integrity, we reply as follows: The Unfair Contract laws embed or codify the ‘structural’ principles of commercial contract in statute. They ensure that standard form contracts have a measure of power balance such that they engender contract trust—that is, the contracts have integrity.
We do, however, have one major concern. Australian governments, state and federal, routinely break the unfair contract laws. They reckon they are exempt. And most often they are. We need all Australian governments to amend laws to hold government agencies accountable to the same contract laws they expect of the rest of the community.
There’s more work to be done.