New penalties for misrepresentations
There has been a recent change in the law regarding penalties for making false or misleading statements about goods and services. Maximum penalties have dramatically increased from $1.1 million for companies to a maximum of the greater of:
- $10 million; or
- 3 times the value of the benefit received by the company from the breach; or
- if the value of the benefit cannot be determined, 10% of the company’s turnover for the previous 12 months.
The law covers a wide range of misrepresentations including false representations:
- that goods or services have a particular standard, quality, value, grade or performance characteristics;
- that goods are new or have a particular composition or place of origin;
- regarding testimonials for goods or services;
- regarding the availability of spare parts;
- regarding the existence or effect of any warranty, guarantee or remedy;
- regarding the sponsorship or approval of goods or services or of the supplier.
Thus it is more important than ever that claims on websites, contractual material and the packaging and advertising of products and services are correct.
I can provide advice on product and service claims before publication to assist clients in minimising the risks of liability for misleading statements.
11 November 2018