Future-Proofing Australia’s Automotive Laws: Dr Jenny Buchan’s Review of the Australian Consumer Law and Franchising Code

UNSW Emeritus Professor Dr Jenny Buchan, Senior Advisor at H & H Lawyers, has completed a comprehensive review of the operation of the Australian Consumer Law and the Franchising Code of Conduct in Australia's new car market commissioned by the Australian Automotive Dealer Association.

The Root and Branch Review of the Australian Consumer Law (ACL) and the Franchising Code of Conduct (Code) as they apply to Buyers of New Cars (Consumers), Manufacturers (Franchisor/OEMs) and New Car Dealers (Franchisees), examines how Australia's consumer protection and franchising laws operate across the relationships between consumers, car manufacturers and franchised dealers.

Commissioned by the Australian Automotive Dealer Association (AADA), the Issues Paper constitutes Stage 1 of a broader project examining the legal and practical challenges experienced in the new car sector. Its scope includes identifying current consumer and dealer harm, examining where the ACL intersects with franchised motor car dealerships, and considering areas in which the existing legal framework may not adequately address those harms.

Why the review matters

Australia's automotive industry is undergoing substantial technological and commercial change.

Modern cars are highly sophisticated products incorporating integrated software, electronic systems, advanced driver-assistance technology and, increasingly, electric vehicle components. In some cases, faults can only be addressed by a manufacturer or its suppliers through measures such as software redevelopment or the redesign of components.

These developments raise important questions about whether legal responsibility, operational control and the cost of providing consumer remedies are appropriately allocated across the automotive supply chain.

The review considers these questions within the framework of the ACL and the Code, while recognising the different roles played by consumers, manufacturers, distributors and franchised dealers.

Five key takeaways

The existing framework provides important protections, but its practical operation can create friction

The ACL provides consumers with significant statutory protections. However, difficulties may arise when the business legally responsible for responding to a consumer is not the business that controls the design, engineering, software, technical data or supply chain necessary to resolve the underlying issue.

Legal responsibility and operational control are not always aligned

Dealers are frequently the first point of contact for consumer complaints and may be required to diagnose faults, arrange repairs, provide interim assistance and manage disputes.

Manufacturers, however, generally have control over vehicle design, engineering, software updates, systemic defect information and parts supply. The review identifies this as a potential structural mismatch between liability and control.

Dealer indemnification may not operate effectively in practice

Although the ACL contains provisions under which dealers may seek indemnification for losses associated with manufacturing defects, the review records concerns that reimbursement may be delayed, disputed or affected by manufacturer warranty processes and administrative requirements.

Dealers may also incur costs associated with diagnostics, storage, loan vehicles, technical training, labour and electric vehicle infrastructure that are not always fully recovered.

Manufacturer participation may assist in resolving technically complex disputes

Consumer disputes are often brought against dealers in state and territory tribunals, including where the underlying issue concerns manufacturing, software or systemic defects.

The review considers the difficulties that can arise when a dealer must respond to a technically complex claim without the manufacturer's direct participation or access to the manufacturer's engineering information, data or decision-makers.

The legal framework must continue to adapt to technological change

Electric vehicles, connected systems, software updates, batteries and long-term warranty and recall obligations are changing the nature of car ownership and after-sales support.

The review highlights the importance of ensuring that Australia's consumer protection and franchising frameworks remain suitable for the evolving technologies and their commercial arrangements.

Research informed by industry and regulatory experience

The review was informed by consultation with a broad cross-section of stakeholders.

Participants included manufacturers, metropolitan and regional franchised dealers, the Australian Competition and Consumer Commission, the Queensland Civil and Administrative Tribunal, the NSW Civil and Administrative Tribunal, industry organisations, consumer groups, a consumer advocate and an academic consumer law expert.

This consultation enabled the reviewer to consider how the relevant laws operate in practice, rather than examining their provisions only at a theoretical level.

Areas for further consideration

The review examines potential areas in which greater clarity or reform may improve the operation of the legal framework, including:

• better alignment between legal responsibility and operational control;
• clear definitions in the ACL of concepts that are open to subjective interpretation;
• clearer, fairer and more effective indemnification arrangements;
• greater manufacturer involvement in technically complex consumer disputes;
• the allocation of costs associated with diagnosing and remedying manufacturing-related defects;
• the interaction between the ACL and the Code;
• the treatment of software-enabled vehicles, electric vehicles and long-term after-sales obligations; and
• mechanisms for reducing delay, duplication and unnecessary disputes.

The review is intended to contribute to informed discussion among government, regulators, consumers, manufacturers, dealers and other industry stakeholders.

A contribution to legal and industry policy

Dr Jenny Buchan

"Modern cars are no longer simply mechanical products. Their performance increasingly depends on software, integrated technology and globally controlled supply chains. It is therefore important to consider whether legal responsibility and the practical capacity to provide a remedy remain appropriately aligned as the industry evolves."

Kenneth Hong, Managing Partner

"Jenny's appointment by AADA reflects the depth of her expertise in franchising, consumer law and commercial regulation. This review makes a valuable contribution to informed discussion about how Australia's legal framework can continue to protect consumers while responding effectively to the commercial and technological realities of the modern automotive industry."

About Dr Jenny Buchan

UNSW Emeritus Professor Dr Jenny Buchan is a Senior Advisor at H & H Lawyers.

Jenny is a recognised authority on franchising law, consumer law and commercial regulation. Her work combines legal scholarship, industry knowledge and extensive experience examining the practical operation of regulatory frameworks.

Her appointment to conduct this review reflects her longstanding contribution to franchising research, legal policy and regulatory discussion.

Accessing the review

Root and Branch Review of the Australian Consumer Law and the Franchising Code of Conduct

Prepared by Dr Jenny Buchan for the Australian Automotive Dealer Association.

Download the full review on the AADA website

How H & H Lawyers can assist

H & H Lawyers advises Australian and international businesses on matters involving:

• the Australian Consumer Law;
• franchising and distribution arrangements;
• competition and consumer regulation;
• commercial agreements;
• regulatory compliance;
• commercial dispute resolution.

For further information, please contact Dr Jenny Buchan or Kenneth Hong.