Authors: Ben Hall, Partner, Luke Bush, Senior Associate & Amanda Le, Law Graduate
On 30 July 2019 Treasury released an exposure draft of the Treasury Laws Amendment (Unfair Terms in Insurance Contracts) Bill 2019 (Bill), which extends the unfair contract terms (UCT) regime to cover insurance contracts.
The deadline for submissions closed on 28 August 2019. It is likely that the Bill will be introduced into Federal Parliament in the coming months. The proposed commencement date for the amendments is 18 months after the Bill receives Royal Assent, and will apply to contracts of insurance made or varied after the commencement date.
Background
The UCT regime was introduced as part of the Australian Consumer Law, which was the key recommendation from the Productivity Commission’s 2008 Review of Australia’s Consumer Policy Framework.
The UCT regime was implemented in 2010 to provide consumers with protection from terms in standard form consumer contracts. These contracts are generally presented in a ‘take it or leave it’ manner, that is, there is little room for consumers to negotiate a variation to the terms of the contract if they consider it to be unfair. The UCT regime was extended to cover standard form small business contracts in 2016 in recognition that small businesses, much like consumers, also have difficulty negotiating terms in ‘take it or leave’ contracts.
