House of Assembly Fifty-First Parliament, Third Session (51-3) 51 3 Parliament of South Australia House of Assembly published Bills Statutes Amendment and Repeal (Fair Trading) Bill STATUTES AMENDMENT AND REPEAL (FAIR TRADING) BILL Second Reading Second Reading Adjourned debate on second reading. (Continued from 14 May 2009. Page 2828.) Mr PISONI House of Assembly Unley Mr PISONI (Unley) (16:05): It is my understanding that an amendment was agreed to in the other place and this bill is being presented to the House of Assembly without amendment. The Deputy Speaker House of Assembly The DEPUTY SPEAKER: Order! Member for Unley, can I establish whether you are the lead speaker? Mr PISONI House of Assembly Mr PISONI: Yes. The bill as amended is being accepted by the government. I believe that the government has an additional minor amendment which the minister will move shortly. In supporting the bill as amended, the opposition acknowledges the numerous important objectives sought by the bill in terms of protecting the rights of both consumers and service providers in reasonable balance. It is the Liberal Party's position that the balance is the most crucial factor in such legislation: the protection of rights and enforcement of responsibilities of both the consumer and, in this case, the potentially injured party, as well as the recreational service provider who needs to be able to access an affordable insurance product to carry on valued services that the public desires. In terms of legal rights, the balance between the rights of the plaintiffs and the defendants is an important consideration which the Liberal Party is satisfied has been achieved in this legislation as it is presented here today. From the Liberal Party's point of view, it is also an important consideration that new or amended legislation does not add significant red tape burden to business; and, by the government agreeing to this amendment, we will come some way to achieving that in this bill. It should be recognised that these businesses provide an important and greatly appreciated role in the community. In modern economies service providers are a growing industry and very much part of our economy and our gross state product. We will also be taking into account that many of the problems associated with insurance liability in this regard were caused not by the behaviour of recreational service providers themselves but by global events. One would notably remember the September 11 situation, which led not only to a great deal of fear and apprehension around the world but also a greater tendency to avoid risk, and insurance companies were no different. This is special reference to those participating in and providing services for recreational and sporting activities with a relatively higher risk factor. The Recreational Services (Limitation of Liability) Act 2002 and the Consumer Transaction Act 1972 are both repealed, their subject matter being transferred to the Fair Trading Act. Penalties under the Fair Trading Act are also increased, as are powers for the Commissioner of Consumer Affairs. Clause 59 of this bill repeals the Recreational Services (Limitation of Liability) Act 2002, which repeal was proposed by the member for Davenport in his private member's bill introduced in June 2008. After the member for Davenport's introduction of his bill, the government issued a discussion paper proposing repeal with the insertion of provisions relating to recreational services. The fact is that the Recreational Services (Limitation of Liability) Act 2002 has never adequately achieved what it was intended to do. As such, and further to the member for Davenport's previous private member's bill, the Liberal Party supports its replacement with better legislation. There has been a desperate need within the recreational service industry for new and updated legislation which allows for the consumer to waive their rights, up to a point. A consumer can still seek legal recourse if a provider of a service has committed an act of recklessness, even though they have signed a waiver. The important point in terms of the opposition's support for the bill is that service providers—that is, businesses—will be able to access public liability and other insurances, and at a price that ensures an ongoing viability of their operation and the public to access the services which they may require and which their businesses provide. Under the previous system, some providers have been unable to access any insurance. Indeed, since the 'insurance crisis' of 2002, the inability to obtain public liability insurance or the greatly inflated cost of premiums has forced many out of business or to cease trading. The most contentious issue involved in this legislation has been whether the provider of sports and leisure activities which involve a 'significant risk of harm' can avoid paying damages to a minor who is injured as a result of a provider's negligence. A significant amendment allows the bill to be 'silent' on the issue as to whether a waiver can be granted by a parent or guardian on behalf of a minor, but is in no way a blank cheque, as this will be covered by common law—and I refer members to the speech by the Hon. Robert Lawson in the other place on this bill explaining the details of how that will work. The removal of the clause removes the explicit provision that a waiver is only effective if given by an adult. With waivers being able to be signed on behalf of children, South Australia will also be in line with other jurisdictions around the nation which allow this. Advice from the Insurance Council of Australia was that consistency with other states would avoid creating an additional class of consumer in South Australia. With the modification, the bill will allow for insurers to 'price the risk' and offer competitive cover and, as in the Victorian system, allow for a satisfactory and equal balance for both consumers of 'risky' products in sport and recreation and the providers of these services. Significantly, providers of services, under the terms of this legislation, will be unable to modify or minimise their liability for significant injuries that are caused by reckless conduct of which they are or should be aware. Other aspects of this bill also worth noting include new powers for the commissioner in relation to enforcement under provisions of the Fair Trading Act, including to require traders to participate in conciliation where the value of goods is up to $1,000. This is most sensible. If conciliation is not successful, the agreement will be enforceable in the Magistrates Court. I think that is an important point. As someone who spent 22 years in my own small business, both consumers and business owners, particularly those providing services directly to the public, will welcome the fact that a less bureaucratic and cost-effective mechanism is available to deal with small claims, because, believe me, many happen in small business and it is difficult to have a policy covering every single scenario. It really is a learn as you earn situation, I suppose, when it comes to small business and dealing with customers' expectations, as opposed to what they actually receive. I can see that this change to the act will make it easier to resolve these situations. Of course, conciliation is always a preferable option in terms of seeking redress, though, of course, we all accept that this is not always possible. New powers also for the commissioner to suspend the licence of certain traders whose conduct would cause consumers to suffer significant harm or damage is a positive step welcomed by the opposition. Hopefully, this will alleviate criticisms that the Office of Consumer and Business Affairs has not had sufficient powers to assist consumers adequately with their grievances. I know how frustrating that can be for consumers, particularly those who do not have the time or the resources to pursue a retailer who may know the law very well and know that the Office of Consumer and Business Affairs can be a bit of a toothless tiger at times. They certainly push the limits, and I have experienced that in helping some of my constituents to deal with retailers who perhaps do not understand the value of return business and will push the boundaries in order not to honour a warranty or stand by their products. I know the frustration that people can experience in that situation. The bill also increases some penalties, which in our view is overdue, and the updating of these provisions is supported by the opposition. The Hon. J.M. RANKINE House of Assembly Wright Minister for Families and Communities Minister for Northern Suburbs Minister for Housing Minister for Ageing Minister for Disability The Hon. J.M. RANKINE (Wright—Minister for Families and Communities, Minister for Northern Suburbs, Minister for Housing, Minister for Ageing, Minister for Disability) (16:15): I thank the member for Unley for his contribution. Obviously, recreation and sporting organisations here in South Australia are of great benefit to our community and state, and this is a very important and complex area of law. The guiding principles throughout the development of this bill have always been the government's desire to ensure that we have a balance between the rights of the recreation providers and consumers but also that we actively promote sporting and recreational activities. The community will benefit from the provisions of the bill which also, as the member for Unley said, update and strengthen the South Australian fair trading law. Bill read a second time. Committee Stage Committee Stage In committee. Clauses 1 to 35 passed. Clause 36. The Hon. J.M. RANKINE House of Assembly The Hon. J.M. RANKINE: I move: Page 17, line 21 [clause 36, inserted section 74H(4)]—Delete 'section' and substitute: act or any other act or law The circumstances in which the requirement to provide services with due care and skill can be modified or excluded has been the subject of some debate. The bill that was introduced in the other place originally contained an express provision that stated a modification or exclusion of liability would be void unless 'the consumer and any third party consumer are each of full age and capacity'. That provision was removed from the bill by an opposition amendment. Despite that amendment, neither a child nor parents will be able to modify or exclude the child's right to have services supplied with due care and skill. That is the effect, as the member for Unley said, of the common law. However, as a result of the opposition's amendment, it is now possible for service providers to enter into an agreement known as an indemnity that requires a third party to compensate the child. The Independent Schools Association is concerned about this change and points out that schools may end up having to pay for the actions of service providers who failed to render services with due care. This amendment rectifies that situation. Mr PISONI House of Assembly Mr PISONI: The opposition supports the amendment and the intention of the amendment as agreed to in the upper house, which is to remove the clause enabling common law to be used to settle such a claim or dispute. This is an unintended consequence of that amendment, so we are very pleased that the minister has brought this to the chamber today to ensure that those who are running the risk are held responsible for the risk. This further enhances the intention of the amendment that was agreed to in the other place. Amendment carried; clause as amended passed. Remaining clauses (37 to 60) and title passed. Bill reported with amendment. Third Reading Third Reading Bill read a third time and passed.