Thursday, 12 September 2019
Volume 47, Part 3 of the ABLR has just come out. Four excellent articles and a timely section note: * Utmost Good Faith and Accountability in the Spotlight of the Banking Royal Commission – Time to Revisit the Scope, Applicability and Enforcement of the Duty by Julie-Anne Tarr, Jeanette Van Akkeren, Amanda-Jane George and Sue Taylor * Blowing the Whistle: A Critical Analysis of the Treasury Laws Amendment (Enhancing Whistleblowing Protections) Act (Cth) 2019 by David A Chaikin * A Game-changer or a Routine Drill? Cooperation in the Indo-Pacific Securities Markets by Sonia Khosa * The “National Interest” and Australian Agriculture by Leopold Oscar Bailey * Australian Competition and Consumer Commission v Pacific National Pty Ltd (No 2)  FCA 669: Access Undertaking Derails ACCC Case Under S 50 by Brent Fisse
I think the ACCC may have missed the boat on this one. A few years ago, the banks started effectively closing down most of the small ethnically based FX dealers. It was common in many ethnic communities for there to have been between 10 - 20 FX brokers running their businesses at very low margins. They saw the provision of FX services as more of a community service rather than a money making venture.
The banks started closing down these operations under the guise of anti-money laundering and anti-terrorism laws. I recall that virtually all Nepalese FX dealers in Australia had to close down because the banks refused to deal with them. It was particularly problematic as Nepal was at that time trying to rebuild after the Gorkha earthquake. I was also puzzled by this as I have never associated Nepal with global terrorism! Having said that, maybe it isn't too late for the ACCC to go back and investigate the conduct of the big banks under section 46 the misuse of market power provisions.
I've been thinking about the legal position of the former franchisee if a prospective franchisee approaches them to ask for what could be considered business and financial advice about a franchise system. Could the former franchisee be liable for their advice, even if given gratuitously? I think that is a definite possibility, which then raises the question of whether former franchisees should refuse to provide any assistance unless they get some form of waiver from the prospective franchisee. I am also wondering whether the ACCC is effectively encouraging franchisors to transfer risk from themselves to former franchisees. The ACCC needs to think through these legal issues before encouraging prospective franchisees to approach former franchisees for business advice.
Another shipping company has been charged over the alleged ro-ro cartel - Wallenius Wilhelmsen. Interesting to see if they decide to fight the case or settle. The main thing to avoid is that bizarre half way house between an immediate guilty plea and a fight to the end which inevitably results in a low cooperation discount and a very high criminal fine. Given that two companies have already tapped the mat on this cartel , you would think that a guilty plea is likely.
Big changes ahead for the franchising sector, including potentially a new "single body to manage franchising disputes through mediation or mandatory arbitration which could be funded through a levy paid by the franchisors". I think that is a good idea, particularly as I suggested that idea in my own submission to the Franchising Enquiry (although admittedly I was not the only one to make that suggestion!)