STATUTES AMENDMENT AND REPEAL (FAIR TRADING) BILL

Second Reading

Adjourned debate on second reading.

(Continued from 26 November 2008. Page 909.)

The Hon. J.A. DARLEY (17:01): I want to address two issues in relation to this bill, and they both relate to the protection of consumers from being hurt in some way by others. The first is the issue of consumers having no remedy through the Office of Business and Consumer Affairs if they are misled or deceived in some way by a business in relation to the provision of goods and/or services.

Two cases have come to my attention recently where constituents of mine have been on the receiving end of allegedly misleading and deceptive conduct, and there has been no remedy (other than a costly legal battle in court) available through the Office of Business and Consumer Affairs. The first incident involves a person who wanted to buy a cruising yacht. The flier advertising the boat specified that it was a Bayliner hull, and representations were made by the vendor that it had a Mercruiser stern drive and engine.

The yacht broke down within a few days of being purchased by my constituent. The marine surveyor who came out to inspect the yacht discovered that it had an OMC stern drive coupled to a Play Craft kit engine. Not only did the yacht not meet the specifications outlined by the vendor but it needed repairs and it did not work as promised. The matter was reported to OCBA, which investigated the matter and went as far as it could. As OCBA could not pursue the vendor to issue a penalty, there was nothing further it could do. The other case involved a person with a disability who bought a spa for therapeutic use. The spa broke down within months of installation, and it has never worked satisfactorily, been replaced or satisfactorily repaired; nor has a refund been offered by the manufacturer.

I have placed on file an amendment which would allow OCBA to issue a fine to people if they are found to be in breach of section 56 or section 57 of the Fair Trading Act. The amendment would make it an offence to engage in misleading, deceptive or unconscionable conduct in the course of trade or commerce. I think that OCBA needs to take a far more proactive approach when contacted by members of the public who have been misled or deceived. It is most often the case that consumers do not have the resources to fund lengthy and costly litigation against a rogue vendor or manufacturer, and consumers rely on OCBA to take up issues on their behalf. However, under the legislation, it is often the case that OCBA has no power to act in the consumer's interest, and my amendment will go some way to remedy this deficiency.

If the Office of Consumer and Business Affairs has extra powers and the ability to issue fines, it will send a clear message to those engaging in trade that any attempt to mislead or deceive will not only bring with it the right to be sued by the other party but that a significant penalty could be imposed. Some vendors take advantage of consumers because they know that consumers do not have the money to sue and there is no-one else who can hold them to account. I hope that, if my amendment is supported, it will have a deterrent effect on these rogue operators.

Just after Christmas last year, the Minister for Consumer Affairs was heard on the radio urging people to call OCBA to report instances where goods purchased were not as promised or were faulty, and the minister further stated that any corporation found guilty of such conduct would face a fine. Yet, if a corporation falls foul of section 56 or section 57 of the Fair Trading Act, OCBA is powerless to do anything. My amendment will simply ensure that it will be possible for OCBA to issue a fine for all forms of unlawful conduct under the Fair Trading Act.

The second issue I raise in relation to this bill is to do with the effect of waivers of liability and standards of care by recreational service providers. I am sure that many other members have been contacted by representatives of recreational service providers who are concerned about the interpretation of the new provisions and the fact that they will do little to reduce rising public liability premiums, which this legislation is intended to remedy.

I am concerned about the worrying trend to try to codify the well-established and ever evolving common law of personal injury. I have talked to both recreational service providers and those representing people who suffer injuries, and they agree that these matters are best left to common law, where judges can impartially look at each party's submission and come to a decision based on the individual circumstances before them. With those comments, I support the second reading of the bill, and I look forward to the debate on the amendments in the committee stage.

The Hon. M. PARNELL (17:06): This bill deals with a number of issues, but the one that has attracted the most interest in the community and the one that I want to address today is the question of liability for injury or loss that occurs as a result of participation in recreational activities that are provided by commercial service providers, including not-for-profit service providers.

I will start by making the comment that we are, to a certain extent, revisiting the debate of several years ago, where we had to question whether we as a society were becoming too litigious and whether the consequences of that was that insurance premiums were out of reach for service providers. We are back to debating this again because the measures the government put in place to try to deal with that public insurance crisis have been unsuccessful. Most of us accept that things can happen to us and that no-one is to blame. If someone falls off a ladder at home because of their foolishness and not because the ladder is faulty, they simply have to put up with it and they have to deal with the injuries and loss as best they can.

We are always looking for someone else to blame when things go wrong. I think we are much less able to simply write things off to bad luck than perhaps we were in years gone by. Having said that, if a person was in the business of providing services and if those services were dangerous because of some fault, then we would expect that some liability attached to those service providers. For example, if you go on what you believe is a 30-metre bungie jump and you are provided with a 50-metre rope, chances are you will suffer some injury or death, and clearly that is a case where you would expect someone to be liable. If, for example, you go on a bungie jump and the blood vessels in the back of your eyes burst, perhaps not, because as I understand it that is a fairly common occurrence among people who go bungie jumping, which is why it is not for all of us.

If you rent a canoe and it has holes in it—perhaps there are holes drilled into the buoyancy tank, it fills with water and it sinks—most of us would expect that if there was a loss there would be some consequences on the person who rented that faulty canoe. Clearly, we have to strike a balance.

Many people have commented on the fact that, when it comes to our children's play, we are far less adventurous than we used to be. Adventure playgrounds are being closed all over Australia, and I think monkey bars will soon be a thing of the past, if they are not already, but we know that kids need a level of adventure and excitement and we cannot wrap them in cotton wool. There will always be some danger inherent in recreational activities.

In fact, a study that I recall hearing referred to on the radio many years ago looked at children's levels of engagement and attention span in two different scenarios. One was a modern, plastic playground and the other was a creek, and that research showed that the kids were engaged twice as long playing in the creek. Hiding amongst the tree roots and messing around with mud were far more engaging for them than a modern, plastic playground—but we do have to strike a balance.

The current position under the legislation is flawed, and the government has recognised that, which is why it has brought this amendment to us. The main flaw, it seems, is that the safety codes which were seen to be a good idea at the time as a pathway for service providers to reduce their liability have turned out to be too difficult and too expensive to implement and, as a result, they have not worked. Under this bill the implied warrantee or, if you like, the statutory duty of care is to render services with due care and skill; that is the phrase that is used. The bill provides that that standard can be waived, but it cannot be waived in all circumstances. It cannot be waived if the conduct was reckless (and that term is defined), and it cannot be waived for people under the age of 18.

I want to talk a little about the question of waivers. The question for us is: in what circumstances should a recreational service provider be able to invite a client or participant to waive the benefit of their statutory warrantee and, if such an invitation by a participant is accepted, what should be the extent of liability on the part of the provider, if not the statutory warrantee of providing services with due care and skill?

If we accept that waivers are acceptable, what we are saying is that a lower standard of care will be expected of those providers. The standard provided by the bill is that of due care and skill, and the service provider will be liable only if they are reckless, provided they have a signed waiver from the participant agreeing to that lower standard.

We know that many waivers are not worth the paper they are written on. Whilst it was some little while ago that I studied first year torts (in fact, 30 years ago this year), the stuff of the class was waivers and their effectiveness in dry cleaning shops and commercial car parks. Yes; the ticket may have written on it that the car park provider will accept no responsibility, but that is not always valid. If the car park provider drove their car into your car I am pretty sure you would have a good case to claim against them in negligence. There are similar cases with other service providers such as dry cleaners.

The question that has been raised by many of the constituents who have contacted me is in relation to young people, and children in particular. The question is whether we as parents, care givers or guardians should be able on behalf of children in our care to sign waivers agreeing that they should expect a lower standard of recreational service providers. We have to start by accepting that we already put our children through a lot, and we already expose them to a lot of risk. We put our children in harm's way every time we load them into a car.

Most parents take their children swimming at some stage; many go boating, canoeing, fishing, cycling, bushwalking, rock climbing, abseiling and caving. The range of recreational opportunities knows no bounds, and we know there is a level of danger, but we do it ourselves and we involve our children in it because we see that the benefits of those activities outweigh the risks.

The question is: should parents be able to sign waivers on behalf of young people? Should we be able to say to service providers, 'This person is not of an age where they are able to make their own decisions, but we agree that we will not sue you if you breach your statutory obligation to our children, namely, that you warrant that the services you provide will be tendered with due care and skill or that any materials you supply in connection with the services will be reasonably fit for the purposes for which they are supplied'?

One constituent who contacted me drew my attention to the position that government agencies and other bodies take in relation to waivers and young people. I was provided with a copy of the contract, or the terms and conditions of entry, of the most recent Tour Down Under community event, called the 2009 Skoda Breakaway Series. 'Mutual Community Challenge Tour' was one, and the other one was called a 'Mini-tour for Kids'. There is a lengthy document, made up of some 36 paragraphs, entitled 'Terms and conditions of entry'. At the end of this document, clause 36, under 'Acknowledgments', it states:

I acknowledge that cycling involves the real risk of serious injury or even death from various causes, including over-exertion, equipment failure, dehydration, accidents with other competitors, spectators or road users, course or weather conditions and other causes.

That is fairly straightforward and stating the obvious. It goes on to say:

I accept all risks necessarily flowing from my participation which could result in loss of life or permanent injury.

It then goes on to say:

I release all persons or corporations associated directly or indirectly with the conduct of the event from all claims, demands and proceedings arising out of my participation, and I hereby indemnify them against all liability, including liability for their negligence and the negligence of others, for all injury, loss or damage arising out of, or connected with, my participation in this event.

It does not get any broader than that in terms of a waiver. It continues:

This release shall extend to and include the South Australian Tourism Commission—

so there is government—

Tour Down Under, the event manager; Burnside Village; the City of Burnside Council; Barossa Council, the South Australian Ambulance Service; the South Australian Police; Mutual Community; Skoda; The Advertiser—

Basically they have listed everyone who has any role in this event and said that it is a complete indemnity, and it concludes with the words:

This release and indemnity continues forever and binds my heirs, executors, personal representatives and assigns.

Clearly a lawyer has written that and, basically, for anything bad that happens to me that is in any way vaguely connected with this event I will not blame anyone. The signature bar on the bottom of that condition of entry states:

I, the participant named below, hereby agree to all the terms and conditions set out in this form—

including that waiver and indemnity, and it goes on to say:

If the participant is under 18, then a parent/ guardian must provide consent.

In this bill the government is specifically excluding parents and guardians from being able to sign waivers on the part of their children when it comes to any commercial service provider, and that includes not-for-profit service providers. Yet, when it comes to an event the government is promoting or sponsoring, such as the community part of the Tour Down Under—which is an excellent event, and I was disappointed not to be part of it myself—they are more than happy for parents to sign waivers on behalf of their children in relation to releasing the government from liability. That is one question I have of the minister: why the double standards?

Some organisations provide recreational services specifically or primarily for young people, and one such organisation is the Scouts. The Scouts have considered this legislation and I imagine all members would have had a copy of the letter from Mr Dan Ryan, the CEO of Scouts Australia, wherein he basically says that his society's view is that, when people are over 18 years, they themselves should be able to sign the waiver. That is fairly uncontroversial, but they recommend that for a young person under a determined age (which I think they agree is 18 years), a waiver could still operate but be signed by a parent, guardian or carer. Overall the position of the Scouts is that they endorse the waiver system as a potential adjunct to more accessible and affordable insurance premiums for recreational service providers and they encourage the government to consider additional methods to assist the not-for-profit sector specifically. There are some other measures not included within the scope of this bill.

So, here we have probably the biggest provider of recreational services in South Australia saying that they want the right for parents to sign waivers on behalf of their kids. That is not an organisation that takes safety lightly. Anyone who has participated in scouting activities knows that they go to great lengths to make sure activities are safe. Sometimes I have thought that they have gone too far, but at the end of the day its interest is in keeping young people safe while allowing them to engage in adventurous activities.

I have had representations from the horse riding fraternity in particular and I thank Sarita Stratton, who sent through a great deal of material, including some opinions she has received from those involved in the insurance industry in relation to the effect of this legislation on insurance premiums. At the end of the second reading stage I will look at the government's answers to specific questions I will pose in a second, but the way we as a parliament need to approach this is to pose the first question: are we as a community providing a range of recreational opportunities for both adults and children that entertain, challenge, keep us fit and add to our quality of life? That is the first threshold question. Secondly, is the provision of recreational services in South Australia commercially viable? One of the factors that will influence the answer to that question is whether or not recreational service providers are able to get public liability insurance for their activities and whether that insurance is affordable.

The question that we have to ask specifically in relation to this bill is: does this bill help or hinder the provision of recreational services in South Australia? The specific questions that I would like the minister to address in his second reading reply are:

1. What information, if any, does the government have as to the likely effect of this bill on public indemnity insurance premiums for recreational service providers?

2. What is the policy rationale for not extending the benefit of waivers to children, especially since the government seems happy to invite parents to go down that path when it comes to government-sponsored events?

3. What would be the implications of simply removing the need for safety codes in the legislation that is to be repealed by this bill and reverting to the common law of negligence?

With those words, I indicate that I support the second reading of this bill.

Debate adjourned on motion of Hon. J.M. Gazzola.