Competition and Consumer Amendment (Abolition of Limited Merits Review) Act 2017

The Competition and Consumer Amendment (Abolition of Limited Merits Review) Act 2017 is a Commonwealth amending Act. Its purpose is straightforward from the text. It amends the Competition and Consumer Act 2010 to abolish merits review of certain Australian Energy Regulator decisions.

Merits review is different from a court deciding whether the law was followed. A merits review body can reconsider the substance of the decision itself. This Act removes that kind of review for the covered decisions. It does not set up a new appeal system or replacement merits process.

The Act is especially relevant in the energy sector because it is drafted around decisions made under State or Territory energy laws, local energy instruments, and certain uniform energy laws applied as Commonwealth law under the Australian Energy Market Act 2004. So this is not just a narrow local amendment. It is designed to operate across the energy law settings identified in the legislation.

The Act is most relevant to businesses and advisers involved in regulated electricity and gas markets. That includes network businesses, retailers, major users and professional advisers who participate in AER decision-making or who previously relied on merits review rights as part of regulatory strategy.

The wording of the amendments matters. One new provision deals with a decision of the AER under a State or Territory energy law or local energy instrument. The other deals with decisions made under a State or Territory energy law or under a uniform energy law applied as a law of the Commonwealth under the Australian Energy Market Act 2004. That means businesses should not assume the change is confined to one category of energy legislation.

Businesses outside the regulated energy space are usually not directly affected. Even so, some large energy users, infrastructure participants and businesses with significant exposure to regulated network outcomes may still feel the commercial effect of AER decisions becoming more final in the covered review settings.

The amendments work through two inserted provisions in the Competition and Consumer Act 2010.

First, section 44AIA states that a decision of the AER under a State or Territory energy law or local energy instrument is not to be subject to merits review, however described, by a body established under a law of a State or Territory. In practical terms, if a State or Territory review body might otherwise have been used to conduct merits review of a covered AER decision, this provision blocks that pathway.

Second, section 44ZZMAA deals with the Tribunal. It applies if a State or Territory energy law or the Australian Energy Market Act 2004 purports to confer a function or power, or impose a duty, in relation to a decision made under a State or Territory energy law or a uniform energy law applied as a law of the Commonwealth under the Australian Energy Market Act 2004. To the extent that the law would require or permit merits review of the decision by the Tribunal, that conferral or imposition has no effect.

The Tribunal provision is drafted strongly. It says it applies despite anything in any law of the Commonwealth, a State or a Territory. That is an express override for inconsistent laws to the extent they would otherwise require or permit merits review by the Tribunal of the covered decisions.

There is also an express exception built into section 44ZZMAA. The section does not apply in relation to a decision relating to the disclosure of confidential or protected information under the relevant law. Businesses should therefore check the exact character of the decision before assuming the Tribunal prohibition applies in the same way.

The practical trigger point is not simply whether a business dislikes an AER decision. The first question is whether the decision falls within the categories covered by the inserted provisions. Businesses should identify the law under which the decision was made and whether it is a decision under a State or Territory energy law, a local energy instrument, or a uniform energy law applied as Commonwealth law under the Australian Energy Market Act 2004.

The next question is what kind of review is being considered. If the proposed pathway is merits review by a State or Territory body, section 44AIA is the key provision. If the proposed pathway is merits review by the Tribunal under a State or Territory energy law or the Australian Energy Market Act 2004, section 44ZZMAA is the key provision.

Another trigger point is whether the decision relates to the disclosure of confidential or protected information. The Tribunal prohibition does not apply to that category of decision. That does not mean every other review route is automatically available, but it does mean businesses should not read section 44ZZMAA as covering those disclosure decisions.

For older matters, there is one more trigger point that can change the result. You need to check whether an application for merits review of the decision by the Tribunal was made before 21 June 2017. That date is central to the transitional exception.

The Act commenced on 31 October 2017, the day after Royal Assent. But the application provisions are what businesses usually need to focus on.

For section 44AIA, the rule is broad. The amendment applies in relation to a decision made before, on or after commencement. So the no-merits-review rule for State or Territory review bodies is not limited to future decisions only.

For section 44ZZMAA, the same broad starting point applies. The amendment applies in relation to a decision made before, on or after commencement. However, there is a specific exception. The amendment does not apply in relation to a decision if an application for merits review of the decision by the Tribunal was made before 21 June 2017.

That exception is narrow and should be read carefully. It is tied to an application for merits review of the decision by the Tribunal having been made before 21 June 2017. It is not enough that the underlying decision is old, or that a dispute started before that date. The legislation focuses on whether the Tribunal application itself was made before 21 June 2017.

The Act then closes off a possible misunderstanding about remitted matters. Even if the old application preserves the position for the original decision, that does not carry forward to a later decision made after the Tribunal remits the matter. The Act expressly says the exception does not prevent the amendment applying to a decision made on remittal. In practical terms, a later remittal decision is still subject to the abolition.

For most businesses today, these transitional rules matter mainly for legacy disputes with a long procedural history. For current matters, businesses should generally proceed on the basis that covered merits review rights have been abolished unless the legislation clearly says otherwise.

This Act is not a compliance regime with licences, forms or reporting deadlines. Its practical effect is to change how businesses should approach AER decision-making and review risk.

If your business is involved in a covered AER process, the original process becomes more important because the Act removes much of the scope for later merits review. That means submissions, expert evidence, financial modelling, factual assumptions and procedural objections should be prepared carefully and raised at the earliest appropriate stage.

Businesses should also be precise about the type of challenge they are considering. This Act abolishes covered merits review pathways. It does not itself map out every other possible legal avenue. If a business is considering any challenge, it should first identify whether it is really seeking merits review of the substance of the decision or some other form of legal challenge under another law.

Confidentiality issues also need special attention. Because section 44ZZMAA does not apply to decisions relating to the disclosure of confidential or protected information, businesses should isolate those issues and check the exact statutory basis of the decision rather than assuming the same rule applies across all categories of AER decisions.

For older disputes, record-keeping matters. The transitional exception turns on whether an application for merits review by the Tribunal was made before 21 June 2017. Businesses should verify the filing history and identify whether the decision in question is the original decision or a later decision made on remittal.

Before relying on this summary for a live matter, confirm the exact source of the AER decision and the law under which it was made. The Act is tied to specific categories of energy laws and instruments, and the answer may differ depending on whether the decision arises under a State or Territory energy law, a local energy instrument, or a uniform energy law applied as Commonwealth law.

Next, identify the review pathway being considered. The Act separately addresses merits review by a body established under State or Territory law and merits review by the Tribunal. The relevant provision, and any exception, depends on which pathway is in issue.

You should also check whether the decision relates to the disclosure of confidential or protected information. That category is expressly carved out of section 44ZZMAA, so it should not be treated as automatically covered by the Tribunal prohibition.

If the matter is historical, verify whether an application for merits review of the decision by the Tribunal was made before 21 June 2017. If there was a remittal, check whether the decision you are dealing with is the original decision or a later decision made on remittal, because the exception does not carry over to the later remittal decision.

Finally, because this is an amending Act, read it alongside the current consolidated Competition and Consumer Act 2010 and the relevant energy law framework. This page explains the amendment and its practical effect, but the operative position in a live matter should always be checked against the current legislation.

The Act received Royal Assent on 30 October 2017 and commenced on 31 October 2017. It is in force.

The key historical date in the transitional rules is 21 June 2017. That is the cut-off date for whether an application for merits review of a decision by the Tribunal can fall within the exception to the section 44ZZMAA amendment.

Because this is an amending Act, businesses usually need to read it together with the current text of the Competition and Consumer Act 2010 and the relevant energy laws to understand the present-day legal position in full.

This page is based on the Federal Register of Legislation version of the Competition and Consumer Amendment (Abolition of Limited Merits Review) Act 2017. The key operative material is in Schedule 1, including the inserted sections 44AIA and 44ZZMAA and the application and transitional provisions.