Professions a high ACCC priority

Compliance by the professions with the Trade Practices Act 1974 was a high priority for the Australian Competition and Consumer Commission, ACCC Chairman, Professor Allan Fels, said today.

"The ACCC has allocated about $1 million to a special Professions Unit, following an increased extra Budget allocation to the ACCC by the Federal Government last year. The unit is examining issues pertinent to all the professions", he said.

"The non-coverage of a large part of the professions from the Act ended in 1995, with all Parliaments of Australia moving to extend coverage.

"Following this, the ACCC decided that it should first educate the professions about their new rights and responsibilities. This education has been extensive with seminars, special guides for particular sectors, numerous speeches and suchlike.

"Now, the ACCC is applying the Act to the professions in the same way as it does for all other sectors of the Australian economy.

"For example, the ACCC has undertaken a series of actions in the medical area, including court actions against the Australian Society of Anaesthetists and four NSW anaesthetists, the AMA (WA), (both of which dealt with allegations of price-fixing) and action against three Rockhampton obstetricians, which is currently in court.

"The ACCC is also considering an application for authorisation by the Royal Australasian College of Surgeons for its training program.

"As with all areas, the ACCC deals with, it needs to be remembered that the Act applies to the professions in full and they must comply with it. On the other hand the professions in general, and each individual profession in particular, has its own special contributions to society and its own characteristics and features that must be carefully considered by the ACCC in any matter concerning them.

"For the most part, the vast majority of professional people and their representative bodies are highly concerned to comply with the law, but there are occasions when individuals do not do so and appropriate action must then be taken.

"Some major professions are heavily regulated â?? usually for good reason - to protect the public but sometimes regulation is used for anti-competitive purposes, and this raises serious issues under the Act.

"In another area of interest to the professions, the ACCC is in the High Court, on several fronts, over the application of legal professional privilege. In one case, the ACCC has sought documents from the Daniels Corporation as part of its investigation of an alleged tender agreement between Daniels and a competitor that may have breached the Act. In the wake of separate investigations, the ACCC is also fighting a claim for legal professional privilege claimed by Woolworths, Coles Myer (and subsidiary Liquorland (Australia) Pty Ltd) for some documents relating to alleged anti-competitive agreements restricting liquor trading.

Professor Fels noted with concern moves by some State governments, in the aftermath of concerns about rising insurance premiums and pay-outs, to ban or restrict advertising legal services or curb contingency fees.

"The ACCC does not support such bans and, in fact, helped break down previous restrictions. It believes that consumers need to know the likely cost of any legal action they may be contemplating and where to go to get advice. A ban on advertising may mean that smaller firms, specialising in this sort of litigation, may be overshadowed by the large 'name' firms, thus lessening healthy competition.

"Contingency fees in themselves do not increase the amount of litigation before any court because if a case is lost in Australia the loser pays and such costs can be substantial.

"International studies have shown that bans on advertising limit price competition by lawyers and lead to higher prices for legal services: when advertising bans are lifted prices have fallen sharply".

Professor Fels was speaking at the annual CPA Congress in Perth today.