The Australian Competition and Consumer Commission has accepted a court-enforceable undertaking from a Perth law firm over representations about the effect of the New Tax System on legal fees.
The ACCC was concerned about representations by DCH Legal Group partners in an article published in a Perth newspaper regarding the effect of the New Tax System on legal fees.
"The statements created the impression that consumers could expect the cost of divorce proceedings to increase by ten per cent from 1 July 2000 and that consumers could avoid paying the Goods and Service Tax by acting quickly to seek legal advice", ACCC Chairman, Professor Allan Fels, said today. "This impression had the potential to breach the provisions for misleading and deceptive conduct under s.52 and s.53(e) of the Trade Practices Act 1974.
"In fact, the cost to consumers of legal fees for divorce proceedings should not rise by a full ten per cent.
"The ACCC expects savings associated with introduction of the New Tax System to be passed on by professional advisers to consumers.
"The ACCC was also concerned to ensure that consumers were not misled into believing that divorce proceedings would have been completed before 1 July 2000 if commenced as a result of representations made in the article published on 22 April 2000".
The ACCC acknowledges the cooperation of DCH Legal Group to resolve the matter by offering a court-enforceable undertaking by which the firm agrees to:
- acknowledge that the representations may have misled consumers
- avoid engaging in similar conduct in the future;
- place a corrective notice in the relevant newspaper offering compensation to consumers affected by the misrepresentations; and
- have partners of the firm take part in a trade practices compliance program.
"This action against the Perth law firm follows on from the ACCC instituting proceedings against a Melbourne accountant. The ACCC is concerned to ensure that professional advisers comply with the requirements of the Act, particularly in relations to the New Tax System, when promoting their services or advising the clients", Professor Fels said.