Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018 - Commentary on Ministerial Responses [2018] AUSStaCSBSD 167 (20 June 2018)

• Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018
• Privilege against self-incrimination139

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Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018

Purpose	This bill seeks to amend the Australian Securities and Investments Commission Act 2001 and the Competition and Consumer Act 2010 Schedule 1 seeks to ease evidentiary requirements for private litigants through expanded 'follow on' provisions Schedule 2 seeks to extend the unconscionable conduct protections to publicly listed companies Schedule 3 seeks to amend the definition of 'unsolicited services' to allow the protections of false billing provisions to apply to false bills for services not provided Schedule 4 seeks to clarify that unsolicited consumer agreements may be entered into in a public place Schedule 5 seeks to increase price transparency by requiring that additional fees or charges associated with pre-selected options be included in the headline price Schedule 6 seeks to allow the ACCC to obtain information concerning product safety Schedule 7 seeks to enable regulators to use existing investigative powers to assess whether or not a term of a standard form contract is unfair Schedule 8 seeks to allow third parties to give effect to a community service order where the trader in breach is not qualified or trusted to do so Schedule 9 seeks to clarify the scope of consumer guarantees where goods are transported or stored Schedule 10 seeks to ensure that the terminology used in the consumer protection provisions is consistent with similar provisions Schedule 11 seeks to clarify that all Australian Consumer Law related consumer protections that already apply to financial services also apply to financial products
Portfolio	Treasury
Introduced	House of Representatives on 28 March 2018
Bill status	Before the House of Representatives

2.264 The committee dealt with this bill in Scrutiny Digest No. 5 of 2018. The assistant minister responded to the committee's comments in a letter dated 29 May 2018. Set out below are extracts from the committee's initial scrutiny of the bill and the assistant minister's response followed by the committee's comments on the response. A copy of the letter is available on the committee's website.^[138]

Privilege against self-incrimination^[139]

Initial scrutiny – extract

2.265 Item 1 of Schedule 6 to the bill proposes to replace existing subsections 133D(1) and (2) of the Competition and Consumer Act 2010 (Competition Act). The new subsections would provide that the Commonwealth minister^[140] or an inspector may give a disclosure notice to a person (the 'notice recipient') if the person giving the notice has reason to believe that the person is capable of giving information, producing documents or giving evidence in relation to the safety of consumer goods or product-related services. A disclosure notice is a written notice requiring the recipient to give such information or evidence, or to produce such documents, as are specified in the notice. This may include a requirement to appear before a person to give the relevant information or evidence, or to produce the relevant documents.^[141]

2.266 The substantive effect of these amendments will be to expand the classes of persons to whom a disclosure notice can be given to include third parties. Existing subsections 133D(1) and (2) only permit the issue of disclosure notices to the suppliers of consumer goods and product-related services.

2.267 Subsection 133E(1) of the Competition Act provides that a person is not excused from giving information or evidence, or producing a document, pursuant to a disclosure notice on the grounds that to do so might tend to incriminate the person or expose them to a penalty. This provision therefore overrides the common law privilege against self-incrimination, which provides that a person cannot be required to answer questions or produce material that may tend to incriminate himself or herself.^[142] The amendments proposed by the bill would expand the classes of persons who may be affected by the existing abrogation of the privilege.

2.268 The committee recognises that there may be certain circumstances in which the privilege against self-incrimination may be overridden. However, abrogating this privilege represents a serious loss of personal liberty. Consequently, in considering whether it is appropriate to abrogate the privilege against self-incrimination, the committee will consider whether the public benefit in doing so significantly outweighs the loss to personal liberty.

2.269 In this instance, the statement of compatibility provides some explanation of why it is necessary to abrogate the privilege against self-incrimination, stating:

Engaging the right against self-incrimination in this way is necessary and justified as the public benefit in removing the liberty outweighs the loss to the individual. It is not always possible or appropriate for the ACCC to obtain this information from other parties voluntarily, particularly where they may be subject to legal or confidential restrictions. Being able to obtain this information in a timely manner enables the regulator to complete safety investigations earlier and ensure consumers are alerted sooner.^[143]

2.270 The committee also notes that a 'use' immunity is provided in subsection 133E(2) of the Competition Act, which provides that information or evidence given, or a document produced, pursuant to a disclosure notice cannot be used as evidence against an individual in any proceedings instituted by the individual, or in any criminal proceedings other than proceedings for an offence against section 133F or 133G. Sections 133F and 133G relate to compliance with disclosure notices and the provision of false or misleading information. The 'use' immunity in subsection 133E(2) of the Competition Act is also acknowledged in the explanatory materials.^[144]

2.271 However, neither the Competition Act nor the bill includes a 'derivative use' immunity. This means that information obtained as an indirect consequence of the giving of information or evidence, or the production of a document, pursuant to a disclosure notice, may still be admissible in evidence against the person to whom the notice is given. Moreover, the explanatory materials do not explain why a 'derivative use' immunity is not included in the existing provisions and why it is therefore appropriate, in the absence of such an immunity, to expand the classes of persons who may be affected by the existing abrogation of the privilege.

2.272 The committee requests the assistant minister's more detailed justification for the expansion of the classes of persons who may be affected by the abrogation of the privilege against self-incrimination, and in particular the appropriateness of not providing a derivative use immunity, by reference to the matters outlined in the Guide to Framing Commonwealth Offences.^[145]

Assistant Minister's response

2.273 The assistant minister advised:

As set out in the Explanatory Memorandum to the Bill, the Competition and Consumer Act 2010 (CCA) contains a power to compel information about product safety from suppliers. Schedule 6 seeks to extend this power so that this information can be compelled from third parties.
This recognises that the Australian Competition and Consumer Commission (ACCC) requires effective powers to obtain timely and complete information about product safety, which could be used for example to decide whether to initiate recall action, to ascertain the location of defective goods or to accurately inform consumers about safety risks. Schedule 6 seeks to allow the ACCC to obtain information of the same type as the power currently allows, but from third party sources.
The limitation of the current power (to suppliers) does not accord with the modernisation of manufacturing and distribution arrangements. The raw material and data relating to the safety of consumer goods or product related services is often held by test laboratories or safety consultants rather than the suppliers themselves.
Further, the current power does not allow the ACCC to obtain information from consumers injured by a consumer good, and who may be subject to a confidentiality agreement as part of a settlement agreement (which prevents them voluntarily providing the information). The result is that unsafe products remain on the market for longer, putting the Australian public at undue risk of death, serious injury or illness.
As the Committee has noted, the existing provision (section 133D) abrogates the common law privilege against self-incrimination, but a limited use immunity is provided for individuals at subsection 133E(2). No derivative use immunity applies. The provision as amended by Schedule 6 would retain these characteristics.
The Committee has sought a more detailed justification for the expansion of the classes of persons who may be affected by the abrogation of the privilege against self-incrimination, and in particular the appropriateness of not providing a derivative use immunity.
Privilege against self-incrimination
The Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers (the Guide) recognises that it may be appropriate to override the privilege against self-incrimination where its use could seriously undermine the effectiveness of a regulatory scheme and prevent the collection of evidence; however, the public benefit to be derived from overriding the privilege must outweigh the loss to the individual.
Schedule 6 recognises the importance of obtaining timely and complete information about product safety risks, including in circumstances where the recipient of a disclosure notice might otherwise claim the privilege against self-incrimination. For example, where a test laboratory holds information disclosing problems with a product it tested, this could present a safety risk to a potentially very large number of consumers, whether or not the laboratory itself contravened the law (e.g. by issuing fraudulent compliance certificates).
I acknowledge that Schedule 6 would allow information obtained from the recipient of a disclosure notice to be used to investigate and take action against another person. This is an appropriate outcome because the question of whether the notice recipient could self-incriminate is irrelevant to the rights of that other person. As already indicated, notice recipients who are individuals are protected by the limited use immunity at subsection 133E(2).
Derivative use immunity
Further, consistent with other information-gathering powers in the CCA, it is not appropriate for the Bill to include a derivative use immunity. As noted in the Guide, more circumscribed immunities have been accepted for legislation governing the ACCC (e.g. section 155), and other agencies who regulate the activities of bodies corporate but exercise information-gathering powers against natural persons. These limited immunities have been accepted due to the particular difficulties of corporate regulation.
I acknowledge the information obtained from a notice recipient protected by the limited use immunity at subsection 133E(2) could be used to obtain further information which could in turn be used against the original notice recipient. This is an appropriate outcome because it represents an acceptable balance between the rights of the notice recipient and the public interest in pursuing misconduct related to product safety.
Importantly, derivative use immunity does not presently attach to comparable provisions in the CCA. There is no compelling reason for section 133D, as proposed to be amended by the Bill, to depart from the treatment of the CCA's information-gathering powers in this respect.

Committee comment

2.274 The committee thanks the assistant minister for this response, and notes the assistant minister's advice that the Australian Competition and Consumer Commission (ACCC) requires effective powers to obtain timely and complete information about product safety to perform a variety of its regulatory functions. The committee notes the advice that Schedule 6 seeks to address a current gap in the ACCC's regulatory powers by enabling the ACCC to obtain information relating to product safety from third parties.

2.275 The committee also notes the assistant minister's advice that the Guide to Framing Commonwealth Offences recognises that it may be appropriate to override the privilege against self-incrimination where its use could severely undermine the effectiveness of a regulatory regime and prevent the collection of evidence.^[146] The committee notes the advice that Schedule 6 recognises the importance of obtaining timely and complete information about product safety risks, including in circumstances where the recipient of a disclosure notice might otherwise claim the privilege against self-incrimination.

2.276 The committee further notes the assistant minister's advice that it is appropriate only to provide a 'use' immunity (and not a 'derivative use' immunity) for the recipients of disclosure notices, and that providing only a 'use' immunity represents an acceptable balance between the rights of notice recipients and the public interest in pursuing misconduct related to product safety.

2.277 Finally, the committee notes the assistant minister's advice that more circumscribed immunities (for example, including a 'use' but not a 'derivate use' immunity) have previously been accepted for legislation governing the ACCC and other agencies who regulate the activities of bodies corporate but exercise information-gathering powers against natural persons.^[147] However, as set out in previous reports,^[148] the committee would still prefer to see an explanation of relevant matters included in the explanatory memorandum, to enable the committee, and the Parliament, to determine whether a more limited immunity is appropriate in the relevant circumstances.

2.278 The committee requests that the key information provided by the assistant minister be included in the explanatory memorandum, noting the importance of this document as a point of access to understanding the law and, if needed, as extrinsic material to assist with interpretation (see section 15AB of the Acts Interpretation Act 1901)

2.279 In light of the information provided, the committee makes no further comment on this matter.

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[138] See correspondence relating to Scrutiny Digest No. 6 of 2018 available at: www.aph.gov.au/senate_scrutiny_digest

[139] Schedule 6, item 1 The committee draws senators’ attention to this provision pursuant to Senate Standing Order 24(1)(a)(i).

[140] 'Commonwealth minister' refers to the minister responsible for administering the Competition and Consumer Act 2010.

[141] See subsection 133D(3) of the Competition and Consumer Act 2010.

[142] See Sorby v Commonwealth [1983] HCA 10; (1983) 152 CLR 281; Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328.

[143] Statement of compatibility, p. 24.

[144] Explanatory memorandum, p. 14; statement of compatibility, p, 24.

[145] Attorney-General's Department, A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, pp. 94-99.

[146] Attorney-General's Department, A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, p. 95.

[147] Attorney-General's Department, A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, p. 98.

[148] See Senate Standing Committee for the Scrutiny of Bills, Report 11/2005, pp. 226-228.