A critique of the CCAAC Report of 2009 and the statutory guarantee of acceptable quality in the Competition and Consumer Act 2010 (Cth)

The National Education and Information Advisory Taskforce Baseline Study on Warranties and Refunds (the NEIAT study) of 2009 revealed significant difficulties faced by consumers seeking remedies after purchasing goods of unacceptable quality. However, the subsequent report by the Commonwealth Consumer Affairs Advisory Council (CCAAC) on consumer guarantees and the provisions of the new Australian Consumer Law which were based upon it, failed to address several of these. Most significantly, because the new Australian Consumer Law, like the Trade Practices Act 1974 (Cth) which preceded it, continues to determine the period for which goods must meet the guarantee of acceptable quality by imposing on the consumer the onus of proving that goods failed a test of reasonable durability, and because consumers lack the money, time and persistence to take such matters to court, suppliers are effectively left free to determine the duration of statutory guarantees. The paper discusses the data obtained from the NEIAT study and then critically examines the recommendations contained in the CCAAC report and the guarantee of acceptable quality contained in the Australian Consumer Law. After identifying shortcomings in the report and in the legislation, it concludes with a proposed model code which, it is suggested, would better balance the rights of consumers and suppliers. Under this code, where a consumer brought an action against a supplier for breach of the implied term, the onus would be on the supplier to prove that it was unreasonable for the goods to be durable for the period as the consumer asserted they should be. By imposing the burden of litigation on suppliers wanting to prove the inapplicability of the guarantee, the law would alter the behaviour of suppliers by extending the period during which they would be prepared to give redress to consumers in order to avoid litigation.