Insurers, franchisors, construction contracts in enforcement firing line for 2024
Both the ACCC and ASIC are poised to seize on reforms making unfair contract terms illegal and giving regulators powers to levy multi-million dollar fines against companies writing them.
Competition and dispute resolution lawyers are bracing for an outbreak of enforcement action in 2024, as both the consumer and corporate regulators look to seize on new penalty powers and clamp down on unfair contract terms in commercial agreements.
Under reforms that took effect in November, unfair contract terms were made illegal and could now attract multi-million dollar penalties. In the case of ASIC, it can fine companies up to $15.65 million while breaches under consumer law can result in a $50 million penalty from the ACCC.
Alyssa Phillips, a competition partner at law firm Ashurst, told Capital Brief that she expects both the ACCC and ASIC "to really prioritise investigating and bringing cases" this year. "I think it won't be very long before we see the first enforcement activity particularly out of the ACCC."
Shortly after the legal updates took effect in November, the ACCC said that in a review of franchising contracts, every agreement it had looked at "contained potentially unfair contract terms."
