The High Court decision today to refuse special leave to appeal in the Medibank Private matter has wide implications for the Australian Competition and Consumer Commission's ability to ensure that companies do not profit from breaking the law, Acting ACCC Chairman, Mr Sitesh Bhojani, said today.
The High Court refused the ACCC's special leave application to appeal the decision of the Full Court of the Federal Court. The Full Court upheld Medibank Private's appeal from the decision of Justice Ryan refusing to strike out orders sought by the ACCC that would have required Medibank to do what they promised consumers they would do in advertisements published by Medibank in 2000.
"Today's High Court decision means that there continues to be a question whether the Federal Court has the power under section 80 of the Trade Practices Act 1974* to make companies do what they say to consumers that they are going to do", Mr Bhojani said. "It is disappointing that the High Court denied the special leave application".
The High Court refused the ACCC's special leave application because it did not consider the ACCC's original application considered by Justice Ryan to be a suitable vehicle to determine the power of the Court to order companies to honour their advertised promises.
While the Court can order companies to pay compensation to consumers under sections 82 and 87 of the Act, the High Court's decision means that the issue whether the ACCC can seek orders in the nature of specific performance under section 80 will need to be determined at a later date. If the Court does not have power to make such orders, the ACCC or consumers themselves will have to make individual applications to the Court for compensation on behalf of each consumer affected by the conduct of a company that has broken the law. This will mean ensuring that companies do not profit from breaking the law will be more difficult than it might otherwise have been.
"It is very important to note that the ACCC’s action in the Federal Court, against Medibank Private alleging that Medibank Private misled or deceived consumers in the run up to the introduction of lifetime health cover is continuing", Mr Bhojani said. "The ACCC is seeking other orders from the Federal Court to address the misleading representations alleged to have been made by Medibank Private".
The case is listed for further directions before Justice Ryan of the Federal Court on 21 July 2003 at which time the ACCC will ask the Court to set a hearing date.
If the ACCC is successful in establishing the unlawful conduct and cannot seek orders in the nature of specific performance under section 80, it will give serious consideration to bringing proceedings on behalf of the consumers seeking compensation for loss resulting from Medibank Private's unlawful conduct.