After a long wait, reforms to the Trade Practices Act (TPA) have been passed by the Senate. The reforms affect the way big mergers are approved and change the enforcement rules so that in some instances executives may not be indemnified if they breach a TPA provision.

Blake Dawson Waldron Partner Mark Radford told Sunrise Exchange News the reforms will have an important effect on the insurance industry.

“The enforcement powers are obviously worth taking note of, and in particular the one where officers of a corporation who are themselves found liable of a TPA convention will not be able to be indemnified by their employers.”

Mr Radford says the Australian Competition and Consumer Commission (ACCC) will have stronger powers as a result of the legislation, and there will be higher penalties for those who engage in anti-competitive conduct.

“The ACCC will have search and seizure powers, broadening its existing ‘dawn raids’ power. The penalties for contravention of the competition provisions have substantially increased to a maximum of $10 million – three times the ‘ill-gotten’ gain or 10% of annual turnover.”

He says officers may be subject to orders disqualifying them from managing corporations.

This bill was defeated in the Senate a year ago by a combination of the ALP, Democrats and Greens and the Federal Government says it is a major breakthrough for it to be passed.

Mr Radford says the reforms represent considerable changes to the TPA. “Companies should be preparing to amend their trade practices training and compliance programs.”