Beyond the unwritten law: The limits of statutory unconscionable conduct

The meaning and scope of the statutory prohibition on unconscionable conduct in s 21 of the Australian Consumer Law (and s 12CB of the Australian Securities and Investments Act) have proven consistently uncertain, particularly over the extent to which the prohibition is not ‘limited by the unwritten law’. In its latest iteration, the majority decision of the High Court in Stubbings v Jams 2 Pty Ltd gives weight to a conservative model of statutory unconscionable conduct, based on the equitable doctrine of unconscionable dealing. This approach is perhaps unsurprising given the express invocation of the concept of unconscionability to describe the statutory standard of prohibited conduct. But it is also problematic because the approach neglects the guidance that may be gained from the very provisions of the statute in determining whether conduct is unconscionable. This means the potential of the statutory prohibition in addressing market misconduct, unlimited by the unwritten law, is stifled. In particular, the current conservative approach to statutory unconscionable conduct may be ill-suited to responding to businesses that use insights from their relationship with consumers, rather than an overt flexing of superior bargaining power, to influence outcomes in their favour. If it is thought appropriate to address these more subtle kinds of misconduct, then we suggest that, rather than accepting another round of reforms to the scope of the statutory prohibition, it may be time to recognise its limits.