A Brave New World - Consumer Protection And The Legislature

INTRODUCTION

The Consumer Protection Bill of 2008 is a wide ranging

document, the purpose of which is to promote a fair, accessible

and sustainable market place for consumer products and

services.

There are few commercial transactions that the Bill would

not apply to. Only transactions with the State, or those that

exceed the value threshold to be determined and are part of a

supply train transaction or which are specifically exempted by

the Minister fall outside the general purview of the Bill. The

definitions of "Goods" and

"Services" also effectively exclude certain

service providers.

Consumers, (a term which is broadly defined), benefit from

the provisions of the Bill and includes a person to whom

particular goods or services are marketed in the ordinary

course of the supplier's business or a person who has

entered into a transaction, (which is equally broadly defined),

and where the context requires or permits, the user of

particular goods or services even if they were not party to the

particular transaction.

Goods are also broadly defined to include anything

marketed for human consumption or any other tangible object and

service includes any work or undertaking performed by

a person for the direct or indirect benefit of another.

Medical and hospital services will fall within the tentacles

of the Bill subject to the general exclusions referred to

earlier.

There are two significant areas in which stakeholders in the

health industry will be affected by the provisions of the Bill

namely:

Contracts including contract terms and format including

the use of disclaimers and indemnities; and

Product liability

CONTRACTS

Ability To Contract

While the age of majority has been reduced to 18 years,

there are provisions in the Children's Act 2005, which are

not yet in force, which provide in general terms for the age of

12 to be the yardstick for determining the ability of children

to consent to medical and surgical treatment. The Child Care

Act and the National Health Act remain silent about the ability

of a minor, who has capacity to consent to surgical/medical

treatment, to assume contractual obligations to the healthcare

provider including the obligation to make payment of that

healthcare provider's account.

Section 39 provides that an agreement to enter into a

transaction for the supply of any services to a consumer is

voidable at the option of the consumer if at the time the

agreement was made, the consumer was an un-emancipated minor

and made without the consent of an adult responsible for that

minor and the agreement has not been ratified by the adult or

the consumer on becoming emancipated or an adult.

Section 9 confirms that there is nothing objectionable about

a supplier refusing on reasonable grounds to enter into an

agreement with a minor for the supply of services unless the

supplier has reason to believe that the minor is

emancipated.

On the face of it the bizarre circumstance will exist where

a minor consents to treatment, and for reasons of

confidentiality owed by the healthcare provider to the consumer

as patient, the healthcare provider may not disclose the fact

of the treatment to the parents so that the parents are not

placed in a position where they can consent to that contract to

treatment (or they may actually have refused the treatment to

the minor patient) and the minor then avoids the contract and

refuses to pay for the services.

The argument may be, although it is untested, that implicit

in the consent provisions under the Child Care Act and Section

39 of the Bill that for the purposes of the medical service

transaction the minor is to be considered emancipated. The

minor contracting will then have all the benefits and

protections available to them under the Bill, and all the

contractual obligations, that go with it.

Written Consumer Agreements

The Minister may prescribe that categories of consumer

agreements be required to be in writing. The terms of any

consumer agreement that is in writing, whether required by the

Act or voluntarily, applies irrespective of whether or not the

consumer signs the agreement.

The supplier must provide a free copy or free electronic

access to a copy of the terms and conditions of the agreement.

The agreement must satisfy the requirements of Section 22 and

must set out an itemised breakdown of the consumer's

financial obligations under such agreement.

The National Health Act does contemplate and give authority

to the Minister to make regulations regarding the contents of

reports and forms but not contracts. To the extent the National

Health Act and its regulations overlap and duplicate provisions

in the Bill, because no regulatory authority or scheme is

created by the National Health Act, the opportunity for

application for exemption from the ambit of the Bill does not

present itself.

Accordingly section 22 provides a consumer has the right to

information in plain and understandable language. It requires

the contract to be in prescribed form, if any, or in plain

language if no form has been prescribed. The test for plain

language is, amongst others, whether it is reasonable to

conclude that an ordinary consumer of a class of persons for

whom the document is intended, with average literacy skills and

minimal experience as a consumer of the relevant goods or

services, could be expected to understand the content,

significance and import of the document without undue effort

having regard to:

The context, comprehensiveness and consistency of the

document;

The organisation, form and style of the document;

The vocabulary, usage and sentence construction;

The use of illustrations, examples, headings or other

aids to reading and understanding.

Guidelines may be published for methods of assessing whether

a document satisfies those requirements.

Hospitals, for example, would have to re-look at bed letters

and other contracts with patients as will any other roleplayer

in the health industry who contracts in writing with a

consumer. The requirement that an itemised breakdown of the

consumer's financial obligations under the agreement be

recorded, unless reasonably interpreted, could be extremely

onerous.

For some healthcare providers the answer may be not to

record an agreement in writing (provided the agreement is not

one of those consumer agreements required to be in writing) and

the...