July 1 Ambition for New Code

In the lead up to the State election, the MTA is urging both major parties to move swiftly to implement amendments to the Fair Trading Act that mandates the Motor Vehicle Insurance and Repair Industry (MVIRI) Code of Conduct.

In 2021, the MTA achieved a landmark victory when Parliament passed legislation to introduce enforceable penalties for breaches of the Code.

“This is a major reform that had the support of all sides of politics and so we feel it’s reasonable to expect this to be up and running by the first of July 2022,” said Kaes Cillessen, the MTA’s Industry and Government Engagement Manager.

“What remains is for regulations to be drafted by the government and the offices of the Small Business Commissioner and Consumer and Business Services prepared.

“We are expecting schedule of penalties within the regulations, which will likely be expiation notices and fines that the Small Business Commissioner can issue for breaches of the Code of Conduct.”

Under the Fair Trading Act, expiation notices of up to $6,000 can be issued but in practice, most industry codes only go up to $4,000. The MTA is asking the government to increase these closer to the $6,000 level.

The only other jurisdiction that has the Code mandated is New South Wales, but there are no penalties for breaches. Introducing penalties for breaches makes South Australia a national leader and means that the industry is accountable to the highest standards in Australia for collision repairs.

Where disputes arise between motorists, repairers and car insurance companies, the Small Business Commissioner will have the power to mediate and impose penalties.

The changes will address long-standing problems in the industry that are not in the best interests of consumers and members. Disputes often centre on:

• difficulties in consumers accessing their repairer of choice and claims of insurers steering consumers toward their preferred network of repairers;

• the use of second-hand and/or non-original equipment manufacturer parts in repairs and related safety, warranty and liability concerns when using those parts;

• a lack of transparency of information, with consumers often not being made fully aware by insurers of all the details related to their repairs and/or insurance policies;

• disagreements over the methodology used by crash repairers and insurers to assess the repairs needed, and the cost of said repairs, to restore the motor vehicle back to pre-accident condition, and the quote negotiation process; and

• insurers choosing to provide cash settlements to consumers instead of repairing their vehicles.

“We hope that reforms at both the State and Federal level will improve the quality of repairs, as well as the relationship between insurers and repairers, for the benefit of the motoring public,” said Kaes.