Warning to abide by the Act

Press, 16 July 1986, Page 37

Warning to abide by the Act

PA Wellington Businesses should develop procedures to make sure they abide by the restrictive trade practices provisions of the Commerce Act 1986, the Commerce Commission has warned.

Failure to do so could be costly, said the chairman of the commission, Mr John Collinge.

Any individual who had suffered loss as a result of an illegal practice could claim compensation in the courts.

The Commission could also proceed in the courts for a monetary penalty against an offending company of up to $300,000.

Court proceedings could include an action for an Injunc-

tion by either the Commission or private individuals which, if successful, could involve the company in the costs of stopping or delaying a course of conduct Also, staff of the company responsible for Illegal practices could find themselves liable to fines if their actions were responsible for the noncompliance. The legal costs involved in what were often complicated actions were also likely to be significant Mr Collinge said that it was important to realise that the Commerce Act 1986 was different from the 1975 Act where action could only be taken by the Examiner of Commercial Practices. The threat of both public and private action overseas

had led to a common practice of companies developing procedures, so that a wide range of their staff considered the implications of the Act and responsibilities under it in relation to the decisions and actions of the company. Such procedures usually took the form of regular training sessions, manuals of conduct in dealing with competitors and customers, and automatic review of restrictive clauses in agreements, Mr Collinge said. By imposing considerable penalties, and by the remedies provided for competitors, customers and suppliers, the Act put a strong onus upon Individual companies to take steps to comply with the Act in advance, rather than simply to wait and see.