The drafters of the revised version of section 46 of the Trade Practices Act have baffled competition lawyers by transferring jurisdiction for the section to the Magistrates Court.
The unpopular Birdsville amendment will also be overturned by the Federal government as part of the reform package proposed for the section.
The proposed shift in jurisdiction may see the rarely used section 46 finally put into action. It is hoped the change will reduce court costs, improve access to justice and provide some much-needed case law in the area.
The Birdsville amendment was introduced in 2007 by the former coalition government, at the behest of Senator Barnaby Joyce, in a pre-election push to gain support from small business. It has since remained untested in the courts and unloved by practitioners.
Freehills partner Bob Baxt applauded the removal of the Birdsville amendment, but questioned whether the Magistrates Court had sufficient expertise for the task of interpreting section 46.
“It takes time for that expertise to be developed and section 46 is a difficult provision at the best of times. You would have thought that unconscionable conduct would be the better candidate for that kind of jurisdiction.” he said.
“My preference would be for us to have a specialist court to deal with competition law. We have it [the expertise] to a certain extent in the Federal Court, and Michael Black, the Chief Justice, has been very successful in creating a panel of judges who hear competition law matters.”
Clayton Utz partner Michael Corrigan, a competition and trade practices lawyer with more than 18 years experience in Trade Practices advice, also expressed doubts about the capacity of the lower courts to deal with the section,
“That’s going to be quite interesting, because it’s usually a case which is run in the Federal Court and a number of them have gone on appeal and are regarded as somewhat complex areas of law.”
Corrigan also acknowledged the potential benefits of the change for small business: “If they [section 46 matters] can be run in the magistrates court, it will certainly open up access to smaller plaintiffs to have a go at trying to prove a breach of the law in a much lower-cost environment, but it could be challenging in that kind of environment to apply the law.”
However, while the volume of cases may increase, it will not reduce the hurdles for proving a breach of the section, believes Senior Lecturer at the Melbourne Law School Dr Caron Beaton-Wells.
“While expanding the guidance given to the court, these amendments are not going to make it any easier to prove a breach of section 46 generally,” she said.
“These changes don’t lower the bar or lower the standard of what the ACCC has to prove. The same difficulties that have been highlighted in the previous cases are going to remain.”