Michael.1
Insolvency and related law and policy, and more

Michael Murray is an Australian author and commentator on corporate and personal insolvency law and related issues, in Australia and internationally. He has a strong law and policy background, is independent of any connections, and his views are his own. He gives no legal advice. 

The Future of Australian Law Reform – the five top priorites?

The Australian Law Reform Commission released its report The Future of Law Reform: A Suggested Program of Work 2020-25 on 2 December 2019. 

The report contains what the ALRC says is an ambitious agenda for law reform over the next five years which it is proposing to government. It follows an extensive community consultation on what Australia’s law reform priorities should be. 

The results are that the 5 priority law reform areas are

  1. principle-based regulation of financial services;
  2. automated decision making and administrative law;
  3. defamation;
  4. press freedom and public sector whistleblowers; and
  5. legal structures for social enterprises.

Other areas

The report describes 8 additional law reform topics that the ALRC considers to be of significance, which it invites the government to consider as potential alternative topics to those suggested above, subject to various considerations discussed.

Insolvency

In my area of interest, these other significant topics include two

  • the rights of creditors of an insolvent trustee, particularly when trust assets may be insufficient to meet creditors’ claims;
  • regulation of debt management services, ‘buy now pay later’ services, and services targeting people at risk of financial hardship.

As to the first, the ALRC notes that although trust law is primarily the domain of states and territories, the significant intersection with federal corporations law, and the desirability of national consistency in the law, suggest that a federal legal review could be appropriate. The ALRC says it could potentially partner with a state law reform agency in conducting such a review.

In relation to debt services, there has been a Senate committee report and recommendations for reform issued, in February 2019, as yet unactioned.

Others

In those 8, the other significant topics are environmental protection; migration legislation; the drafting of statutes to enhance the coherence, readability, and useability of the law, especially in light of the anticipated transition to digital legislation; uniformity or complementarity between state and territory surrogacy laws; nationally consistent human tissue laws. 

The ALRC obtained input by way of its two preliminary research papers, its six public seminars and webinars around Australia, an online survey with over 400 responses, and more.

The Constitution

But the ALRC says that the Australian Constitution looms large in any debate about Australian law reform. As it says,

“the ‘constitutional drought’ of the 21st century does not … reflect the satisfactoriness of current constitutional arrangements”,

referring to a

“range of ongoing debates which raise questions about the need for constitutional amendment”

which have in fact been

“apparent in the work of the ALRC over the past 40 years”.

“Reform options that would require constitutional amendment are liable to be discounted without full consideration of their merits because it is assumed that constitutional amendment is unfeasible, or at the very least would be beyond the scope of the inquiry in question. It is on this basis that the ALRC puts forward an inquiry into the Constitution itself as a potential topic for law reform”.

The ALRC also welcomes comments on the Constitution as a potential reform priority.

Comment

This is a worthy exercise of the ALRC in which I was pleased to participate but it needs to be seen in context.

One, the Constitution is a major factor in any Australian law reform, but in my area of insolvency, where there is clear Commonwealth constitutional power, national law and regulation have not been achieved. The Commonwealth itself and its agencies often operate on a silo basis; then there are the states.

Two, constitutional reform would also be the hardest place to start, with referral of state powers only slightly less difficult.

Third, the level of our political and professional debate does not seem capable of responding to the high standard of recommended reform that the ALRC would provide.[1]

Fourth, reverting to my area of interest, many areas of current legal focus call for more than legal input, insolvency requiring other disciplines – economics, behaviour and technology being some – that a law reform commission may not be able to provide.[2]

Fifth, in the end, having a law enacted does not per se provide an outcome, in particular where it must still operate within imperfect and opaque systems. Current examples are the anti-phoenix laws, which, whatever their merits, must still operate within an imperfect and opaque commercial and legal environment.  

And sixth, and related to the fifth, given the many other competing areas of law reform, alternative non-legal reforms might usefully be considered. For example, in the area of whistleblowing, professional regulation has a place.

[1] See the ‘implementation’ table of all ALRC reports at www.alrc.gov.au

[2] Discussed in Keay’s Insolvency, 2018, ch 1.

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