Parliamentary Committee To Examine Lemon Laws

The Queensland Legislative Assembly has ordered an inquiry into consumer protections provided by current legislation and determine whether there is a need for ‘lemon laws’ to protect consumers when a new car they have purchased turns out to be severely faulty.

A ‘lemon’ is defined as a car that has a significant fault, numerous and/or severe defects, which recur despite multiple repair attempts, or a new motor vehicle that defects have caused to be out of service for a prolonged period of time.

Lemon laws per se do not currently exist in Australia, as the consumer is adequately protected under Australian Consumer Law (ACL) and by car warranties when such incidences arise. However, the Queensland Attorney-General has stated that “Australian consumer law does provide consumer protection, the issue is whether those protections are providing sufficient coverage for this issue”.

In July this year, the Legislative Assembly of the Queensland Parliament directed the Legal Affairs and Community Safety Committee to launch an inquiry into current consumer protections, and identify potential remedies for buyers of new motor vehicles with numerous and severe defects in Queensland.

Public hearings are scheduled in Mount Isa, Weipa, Cairns and Brisbane later this year.

The committee has set out terms of reference, with number one being to record the experience of consumers who have purchased a so-called lemon. While automotive manufacturer dealerships and other key stakeholders are invited to provide their comments, it’s clear that input from the public will play a big role in the debate. The Queensland Office of Fair Trading has set up a section on its website through which consumers can share personal stories anonymously.

The AADA is concerned that the terms of reference do not include used cars (with limited warranties) and other consumer goods, in order for the committee to reach a balanced conclusion of a need for any change.

The AADA believes that with consumers able to express their feelings so freely on the matter, the committee will become bogged down by the emotional stories with used vehicles rather than new vehicles. Moreover, the veracity of complaints is an issue, with no opportunity for the other party to respond and clearly identify the vehicle in question. The focus should instead be on whether the ACL protections are adequate rather than a gathering of information.We are concerned that the forum will simply become a ‘whinge fest’ for disgruntled customers, rather than a means of accurate data collection that is authentic, reliable and credible.

Without being properly informed, the committee will not get an accurate view of the issues (if any), and ill-informed decisions may be made.

The committee will explore community expectations as to what constitutes a lemon, as well as the emotional and financial impact on the consumer. But there is no way to know whether the website stories are legitimate and the owner and vehicle clearly identified, which leaves the door open for decisions to be made on the basis of emotion rather than fact.

The committee will also examine the remedies and protections that exist under current legislation, as well as ACL and state-based legislation and whether they can be improved. The AADA believes this is a discussion that definitely needs to involve manufacturers and car Dealers.

Submissions are required to be lodged on Thursday, 8 October 2015. AADA is considering its position and the prospect of participating in an inquiry based on data that is not authentic, reliable or credible is lacking in appeal.


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