A 'Damaging Loophole' 'Long Overdue' for Closing: Extending Consumer Protections Against Unfair Contract Terms to insurance

Competition and Consumer Law Journal, Vol 27, No. 3, 2020, pp. 264-294

29 Pages Posted: 6 Jan 2021

See all articles by Evgenia Bourova

Evgenia Bourova

University of Melbourne - Law School

Ian Ramsay

Melbourne Law School - University of Melbourne

Paul Ali

University of Melbourne - Law School

Date Written: October 5, 2020

Abstract

As part of the Australian Consumer Law reforms of 2010, unfair contract terms protections were implemented nationwide across most sectors that use standard form contracts in their dealings with consumers, including financial services. However, until recently, these protections did not apply to general insurance contracts covered by the Insurance Contracts Act 1984 (Cth). Consumer groups, as well as a series of government and independent inquiries and reviews, have long called for reforms to bring insurance within the ambit of the unfair contract terms protections contained in the Australian Securities and Investments Commission Act 2001 (Cth). In February 2020, legislation was passed to remedy the situation. In this article, we examine the history that paved the way to these reforms, and evaluate their impacts for consumers and insurers. We argue that this legislation indicates a move away from the view of insurance contracts as having a ‘unique character’ that renders them ‘unsuited’ to the consumer protections that apply to other financial products and services. We suggest that the application of unfair contract terms protections to insurance contracts has potential to address consumer harm without resulting in prohibitive costs for the insurance industry.

Keywords: consumer protection; insurance; unfair contract terms

Suggested Citation

Bourova, Evgenia and Ramsay, Ian and Ali, Paul, A 'Damaging Loophole' 'Long Overdue' for Closing: Extending Consumer Protections Against Unfair Contract Terms to insurance (October 5, 2020). Competition and Consumer Law Journal, Vol 27, No. 3, 2020, pp. 264-294, Available at SSRN: https://ssrn.com/abstract=3748297 or http://dx.doi.org/10.2139/ssrn.3748297

Evgenia Bourova

University of Melbourne - Law School ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia

Ian Ramsay (Contact Author)

Melbourne Law School - University of Melbourne ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia
+61 3 8344 5332 (Phone)

HOME PAGE: http://law.unimelb.edu.au/about/staff/ian-ramsay

Paul Ali

University of Melbourne - Law School ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia
+61 3 8344 1088 (Phone)
+61 3 8344 5285 (Fax)

HOME PAGE: http://www.law.unimelb.edu.au

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