Review of the Amended Unfair Contract Terms Protections
Submission Date: 23 March 2026
This submission has been prepared by the Australian Consumer Law Committee of the Law Council of Australia’s Legal Practice Section (Consumer Law Committee) and the Financial Services Law Committee of the Law Council of Australia’s Business Law Section (Financial Services Committee) in response to the consultation paper titled Review of the Amended Unfair Contract Terms Protections, which Treasury released on 24 February 2026 (Consultation Paper).
Each respective Committee of the Law Council seeks to respond on specific aspects of the Consultation Paper.
Consumer Law Committee submissions
The Consumer Law Committee confines its submission to commentary in respect of the provisions of the Australian Securities and Investments Commission Act 2001 (Cth) (the ASIC Act) that were amended and which relate to insurance contracts.
The Unfair Contract Term (UCT) regime insofar as it relates to insurance contracts was a reform sought by the consumer movement over a long period of time, but which only came into effect in relation to insurance in 2021 due to the Financial Sector Reform (Hayne Royal Commission Response—Protecting Consumers (2019 Measures)) Act 2020 (Cth).
The Committee notes that this consultation arises at a time when ASIC’s appeal of the Federal Court’s decision in Australian Securities and Investment Commission v HCF Life [2024] FCA 1240 has begun to be heard by the Full Court but has yet to be decided.
Significantly, in that decision at first instance the Australian Securities and Investments Commission (ASIC) was not successful in arguing that the term in the relevant contract was an “unfair contract term” within the meaning of the ASIC Act.
In another test case before the Full Court, ASIC was unsuccessful in arguing that a term in a general insurance contract was an unfair contract term (see Australian Securities and Investment Commission v Auto and General Insurance Company Limited [2025] FCAFC 76).
The above cases tend to suggest that there is an insurance specific issue in relation to the UCT regime, in that the courts are relying on provisions of the Insurance Contracts Act 1984 (Cth) (the ICA) to ameliorate unfairness and cure unfair contract terms. The concern of the Consumer Law Committee is that the average consumer has no knowledge of the various consumer protection mechanisms contained within the ICA (such as s.47 or s.54 of the ICA). That is, a consumer who purchases a contract of insurance will in all likelihood rely upon the provisions of the policy they have purchased for protection as opposed to any other existing consumer protections (of which they are unaware).
It is understood by the Consumer Law Committee that it was always the intent of the UCT regime to be standalone consumer protection in addition to other consumer protections, including those contained within the ICA. It is therefore the view of the Consumer Law Committee that the UCT regime ought to be amended so as to ensure that an Unfair Contract Term cannot be found to not be unfair simply because another consumer protection, in the ICA or otherwise, ameliorates the unfairness.
The Consumer Law Committee’s responses to questions 1, 3 and 4 of the Consultation Paper are set out in the submission.
Last Updated on 27/03/2026
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