The AADA supports the ongoing process of reform of the ACL. Nevertheless, the AADA stresses that reform proposals must be balanced given the high-value and complexity of a modern motor vehicle.
The Australian Consumer Law (ACL) (contained in Schedule 2 of the Competition and Consumer Act 2011) came into operation on 1 January 2011 and provides a single generic consumer protection law including a system of consumer protections and remedies in relation to defective goods and services known as ‘consumer guarantees’. These include:
- a national unfair contract terms law covering standard form consumer and small business contracts;
- a national law guaranteeing consumer rights when buying goods and services;
- a national product safety law and enforcement system;
- a national law for unsolicited consumer agreements covering door-to-door sales and telephone sales;
- simple national rules for lay-by agreements; and
- penalties, enforcement powers and consumer redress options.
Car manufacturers and Dealers are under a legal obligation to comply with the requirements of the ACL’s consumer guarantees. Unlike nearly all car manufacturers, Dealers are customer facing and as suppliers of goods and services, must uphold their obligations under the ACL regardless of a manufacturer’s warranty policy.
Manufacturers for their part are required to indemnify Dealers who are required to honour consumer guarantees, however often Dealers are denied indemnification due to prohibitively complex and burdensome claims procedures and prescriptive compliance and audit processes.
It is critical that in the process of manufacturers managing a Dealer’s response to an ACL issue, the obligation to indemnify Dealers for performing repairs under the ACL is honoured.