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Thursday, 12 December 2002
Page: 7985


Senator MURRAY (8:43 PM) —I will be as brief as I can, but I think I must respond because this is a particularly important amendment. There has been—and quite rightly so because of the shift in the way in which law is to be expressed—a great deal of concern expressed about the bill in its current form and about the protection that might be lost to consumers unless the bill is passed with amendments. In particular, the inquiry into the bill highlighted consumer concerns that there are no assurances that the recreational service provider will look after their safety; in other words, it depends on trust.

In dealing with this amendment—and our first amendment mirrors part of it—we think that the Labor Party is trying to address particular issues of concern. Currently, recreational service providers cannot contract out of their liability by virtue of section 74 of the Trade Practices Act, which states that in a contract where a corporation supplies services to a consumer there is an implied warranty that services will be rendered with due care and skill. In the event that companies do not provide their services with due care and skill, they will be in breach of the warranty implied in the contracts. A service is deemed to be provided with due care and skill if it is of standard and quality that could reasonably be expected from a competent person in the particular trade or profession—that comes from the ACCC's guidelines on warranties and refunds issued in April 2000.

While this may appear to be an appropriate safeguard for the protection of consumers, if service providers want to rely on waivers and disclaimers then there needs to be greater emphasis placed on the maintenance of high safety standards and minimising risk. Therefore, it is desirable that, if there is any recklessness on the part of the recreational service provider, they will not gain the advantage of the waiver, and this amendment is necessary to emphasise this. Recreational service providers should not be permitted to rely on contractual terms without ensuring that they have taken all reasonable steps within their control to minimise the risk of harm or injury.

A loose acceptance of waivers and disclaimers for a seemingly endless variety of activities is desirable for neither consumers nor high-quality recreational service providers who take pride in their good safety record. Opening up the operation of waivers and disclaimers in this way creates a real risk that less than scrupulous operators will be able to enter the market and skimp on safety in order to undercut safety conscious and more legitimate competitors. This was a concern raised by the Australian Plaintiff Lawyers Association and also shared by the Australian Consumers Association.

Under the bill as it stands, it seems that any provider of a recreational service will be entitled to exclude themselves from the application of the due care and skill requirements of the Trade Practices Act 1974, even where their conduct has been extremely culpable. Therefore, a person will be excluded from liability under the Trade Practices Act where that person has failed to exercise even a moderate degree of care and has disregarded obvious risks. Similarly, the person will not be subject to legal recourse even where their conduct exposes a person to very serious injury. Examples of conduct that could potentially be caught by this bill in its current form include a skydiving operator who fails to pack a parachute correctly, a bungee jumping operator who fails to replace a faulty bungee cord or a ski resort that does not service its chair lifts.

We are certain that the courts would have a particular view as to whether the recreational service provider should be protected by terms of a contract limiting liability. However, the bill does not clearly stipulate what the position would be in relation to a situation similar to those we have described, and we think that the Labor amendment, therefore, deserves support. It does produce additional clarity and additional protection without eroding the principles on which the bill is based and the approach being taken by the government. Consequently, we will support the amendment.