Consumer advocacy and remedies

If a consumer does fall victim to illegal business practices, then there are a number of avenues that he or she can pursue in order to resolve the situation, both in and out of court.

Government help

At state level, the office of fair trading, consumer or business affairs provides advice and assistance for consumers who have issues with a business. These offices help consumers to redress their disputes and act as watchdogs for scams and unsound business practices in the wider community. They are also responsible for ensuring that products meet safety standards and that operational apparatus, such as measuring equipment, is accurate and in good working order.

Each State also has an ombudsman office, ombudsman being a Swedish word meaning 'representative of the people', which deals with complaints made by the public about government departments under their jurisdiction. Some ombudsman offices also deal with businesses in the private sector so you would be wise to check where to direct your complaint.

The federal government has two departments concerned with the conduct of businesses toward consumers. The Australian Competition and Consumer Commission (ACCC) looks after the marketplace, ensuring that consumers have access to a healthily competitive market, and also presides over any breach of the Trade Practices Act 1974 (Cth). The ACCC also provides information to consumers about their legal rights.

The Australian Securities and Investments Commission (ASIC) is a special body that presides over the conduct of businesses that provide financial services such as banking, investment and insurance. They look after the financial marketplace, ensuring that consumers can access fair and competitive financial services and guarding the market against fraud.

Other groups

There are a number of formal and informal consumer advocacy groups that may be able to help consumers deal with illegal business practices. The Australian Consumers' Association (ACA) is an independent, not-for-profit organisation that preceded the government bodies, and supported the introduction of legislation to protect consumers from unsound business practices. As well as lobbying for consumer rights, the ACA also conducts research on products and services in order to provide consumers with accurate information.

The media is also a helpful tool that consumers can use to raise awareness of unfair or illegal business practices, provided the issue is newsworthy, that is, has a significant impact on people or is of interest to others. Media outlets inform and influence people. Negative media attention is bad for business.

The role of the community may also help a consumer redress an issue, working in a similar way as negative media attention. If you have the support of the community, you may be able to persuade a business that it is in their best interest to rectify a situation or risk a community backlash.

Do-it-yourself

Sometimes businesses make mistakes, so one of the simplest methods of resolving the issue is to address it directly with the vendor. In most cases, a vendor with good customer service will recognise the mistake and rectify it immediately. Most merchants do not want an unhappy customer spoiling their reputation and it is often better for them to admit their mistake and retain goodwill.

Out of court

Every State and territory has a consumer protection and advocacy service, either a small claims tribunal, access to legal advice or a dispute resolution service. A small claim is any amount up to $25 000. A claim lodged through the tribunal is inexpensive compared to the cost of going to court, so it makes sense to pursue this avenue if the outcome is likely to be relatively minor.

Beyond addressing the situation via a tribunal, the parties may agree to involve another, neutral party to resolve the dispute. Mediation and conciliation are two forms of negotiation undertaken assisted by a neutral party. Mediation involves a face-to-face meeting of the parties until the situation is resolved, while conciliation achieves the same level of compromise without a face-to-face meeting.

An impartial commercial arbitrator can make this process more like a court proceeding, without the need to go to court. In this case, each party will present their arguments and give evidence and the arbitrator will make a legally binding decision.

Another avenue is to enlist the help of an independent expert. An expert appraisal involves each party presenting their side of the dispute and the expert suggesting an outcome that may satisfy all. In an appraisal, the parties do not need to follow the suggestion given - the suggestion is a guideline toward an outcome. There is also a process of expert determination where the expert acts as an arbitrator and determines a legally binding outcome.

Litigation

Litigation is the process of bringing a dispute to court. Litigation is often expensive. The party that initiates the claim is the plaintiff. The other party is the defendant.

If the plaintiff sues for damages, the result should reflect the financial position that the plaintiff should have been in, had the contract been performed. This includes consequential losses through inability to trade as a result of a breach. Just say you purchase a computer for your business and the retailer assure you that it will arrive on Monday. If the computer does not arrive until Friday, you may have a case for loss of business, equivalent to having the computer for the four days that it was absent.

Plaintiffs can also sue for specific performance. Instead of money, specific performance is an order of a court that compels the other party to fulfil the obligations of the contract. This usually occurs if the agreement is highly specific. The more common the subject matter of the contract is, the less likely one is to be granted specific performance.

As a general rule, a plaintiff will be entitled to specific performance where monetary damages would not be an adequate remedy. Imagine if someone agreed to purchase the Australian cap worn by Don Bradman in his last Test Match. It is unique, so no amount of money can compensate the buyer if the seller breaches the contract by keeping the cap. The most common example of specific performance concerns real estate.

Consider the situation where a purchaser has agreed to buy a house from a vendor (seller). Both parties have agreed to the contract of sale ('exchanged contracts') but the owner has received a better offer from someone else. If the owner then sells the property and transfers the title to the third party (the one with the higher offer), the owner has breached the contract. The original purchaser can sue the vendor (seller). The original purchaser will ask for specific performance so that the vendor (seller) must sell it to the original purchaser (and transfer the title deed) at the agreed price. This is because the common law considers that every parcel of land is unique.