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What is a Stock Option?

Understanding stock options is an important piece of knowledge for any employee or investor to have. To find out more, keep reading here.
The post What is a Stock Option? appeared first on Lawpath.

What Happens to Shares when a Shareholder Dies?

When a shareholder dies, their shares are distributed according to their will. However, complications can arise if there is no will.
The post What Happens to Shares when a Shareholder Dies? appeared first on Lawpath.

National Roads and Motorists’ Association Limited v Construction, Forestry, Maritime, Mining and Energy Union [2019] FCA 1491

TRADE MARKS – infringement proceeding under ss 120(1) and (3) of the Trade Marks Act 1995 (Cth) – where a trade union is using a sign depicting the applicant’s brand or logo as part of an industrial campaign against the employer – where the employer is a wholly owned subsidiary of the applicant – whether the union’s sign is being used as a trade mark – no use of the sign as a trade mark
CONSUMER LAW – claims of misleading or deceptive conduct arising from representations made during the course of an industrial campaign – whether impugned conduct is “in trade or commerce" – principles derived from Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 considered – conduct not "in trade or commerce"
TORTS – claims of injurious falsehood arising from statements and representations made during an industrial campaign – malice – necessity to establish actual damage – no malice or actual damage

Does a duty of care exist to the Plaintiff if both the Plaintiff and the Driver were on illicit drugs at the time of the accident?

It is well established that no duty of care is owed between the participants in the theft and illegal use of a motor vehicle. But does the defence of joint illegal enterprise apply to those engaged in the taking of illicit drugs and the associated use of a motor vehicle? The NSW Court of Appeal considers that issue and also decides whether the common law defence is displaced by s54 of the Civil Liability Act 2002.
 
Author: Helen Huang
Judgment date: 5 September 2019
Citation: Bevan v Coolahan [2019] NSWCA 217
Jurisdiction: Supreme Court of New South Wales – Court of Appeal*
Principles

Section 54 of the Civil Liability Act 2002 does not displace the common law principles governing joint illegal enterprise. By reason of subsection 2, the provision has doubtful application to motor accidents.
For participation in a  joint illegal enterprise to oust a duty of care, it is sufficient if the plaintiff’s conduct was incidental to that enterprise.

Background
The Plaintiff was seriously injured when the vehicle in which she was a passenger, left the road colliding with a telegraph pole. There were four occupants of the vehicle and all had consumed cannabis and crystal methamphetamine. Having exhausted the supply of drugs earlier that night, they drove to a dealer from whom a fresh supply was obtained. After consuming the drugs in a carpark, they were on the return journey when the driver negligently lost control of the vehicle.
The Plaintiff sued both the driver and the owner of the car (who was also a passenger) for damages.
The Trial Judge dismissed the claim on the basis that all occupants were involved in a joint illegal enterprise, as a consequence of which, no duty of care was owed to the Plaintiff.
Decision
Duty of Care
The primary issue on appeal was whether the defence of joint illegal enterprise extends to circumstances where the illegality in question is removed from the very use of the vehicle, unlike the common scenario (as in Miller v Miller (2011) 242 CLR 446 ) where the vehicle was stolen.
The Court of Appeal (Basten and Leeming JJA) accepted the finding by the trial judge that a joint illegal enterprise existed:
[33]: “There was… a joint illegal enterprise involving the purchase, consumption and possession of crystal methamphetamine. The use of the car to travel to the place of purchase, and back home carrying some of the purchased drugs, having consumed the rest, was an essential element in the enterprise. The possibility that the driver would, after consuming drugs, drive negligently or dangerously, and thereby commit further offences, must have been foreseen in circumstances where the very act of driving under the influence of drugs was illegal”.
McCallum JA, dissenting, would have allowed the appeal on the basis that illegality ought not to have displaced the duty of care. She explained:
[148] “… there was nothing unlawful in the plaintiff’s conduct in being a passenger in the car. The fact that she remained a passenger knowing that the driver had consumed drugs sounds in contributory negligence or assumption of risk but, not being unlawful, is not incongruous with the existence of a duty of care owed to her as a passenger”.
Section 54 CLA
Section 54 of the Civil Liability Act 2002 provides that damages are not recoverable for death or injury where the conduct of the plaintiff constitutes a serious offence. However, subsection 2 excludes operation of the provision where the conduct of the defendant constitutes an offence (whether serious or not).  The question for the Court of Appeal was whether s54 displaces the common law defence of joint illegal enterprise. In finding that it does not,  Basten JA explained:
[24] “Section 54, being directed to the existence of a duty of care, and in fact assuming the existence of such a duty, is not engaged at the very point at which the general law principles apply, namely denial of the existence of a duty….Section 54 has quite a limited area of operation and is unlikely to apply to most motor vehicle accidents. That being so, there is no reason to suppose that it was intended to exclude the operation of the general law principles in these areas.”
Contributory negligence
The Court addressed the issue of contributory negligence which would otherwise have arisen had a duty of care existed.  Basten and Leeming JJA agreed the Trial Judge’s assessment of 25% was too low, increasing it to 50% because:
[127] “All four individuals had ingested crystal methamphetamine that afternoon, and had driven in order to obtain more of the drug. Ms Bevan was found to be their “ringleader”. It was she who had paid for the illicit drugs. It was she who provided the pipe by which they were consumed. True it is that Ms Bevan did not own the car nor was she driving it, but she was in a real sense the cause of the expedition to acquire more drugs. Senior counsel for the respondents proposed a finding of 50% contributory negligence, stating that “50% is frankly a finding that would err in generosity to the appellant.”
Why this case is important
For a defence of joint illegal enterprise to succeed, it is sufficient if the plaintiff’s conduct was incidental to the criminal enterprise. Here, the use of a car to travel to and from the place of purchase of illicit drugs was an essential element in the enterprise. The possibility that the driver would, having consumed drugs, drive negligently, must have been foreseen. Arguably, the principle would not be invoked if the illegal activity was limited to a purpose and with consequences unconnected to the use of the vehicle, such as an assault.
Section 54 of the Civil Liability Act 2002 does not displace the common law principle and by reason of subsection 2, has doubtful application to motor accidents.
If this case was being considered in the context of the Motor Accidents Injuries Act 2017 the Plaintiff:

would be entitled to statutory benefits for at least 26 weeks pursuant to section 3.1(1);
would be entitled to statutory benefits after 26 weeks (subject to the “minor injuries test”) because she was not ‘mostly at fault’ (given the assessment of 50% contributory negligence”); and
would not be entitled to damages because the owner and driver did not owe her a duty of care.

The serious driving office exclusion in s 3.37 does not apply because, while the plaintiff was engaged in criminal activity, the plaintiff was a passenger and therefore not engaged in any activity which would result in a conviction for a driving offence.
*Basten JA, Leeming JA & McCallum JA
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CFG17 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2019] FCA 1495

MIGRATION – appeal of a decision of the Federal Circuit Court of Australia dismissing an application for judicial review of a decision of a delegate of the respondent (“delegate") – whether the delegate failed to deal with a material claim made by the appellant – where it was alleged that the delegate failed to make inquiries – whether the delegate had an obligation to make inquiries – appeal dismissed.

Atkins v Minister for Home Affairs [2019] FCAFC 159

MIGRATION – appeal from a decision of the Federal Circuit Court of Australia – protection visa – where visa was cancelled on the basis that the appellant provided incorrect answers in his visa application – whether the Tribunal failed to consider that, on cancellation of the visa, the appellant was at immediate and ongoing risk of being removed to Iran or taken to a regional processing country pursuant to s 198AD of the Migration Act 1958 (Cth) – whether the Tribunal failed to give reasons for concluding that the appellant was not at real risk of significant harm – whether the Tribunal’s decision was legally unreasonable insofar as it made adverse credibility assessments which were perfunctory, emphatic and unsustainable on their own terms – appeal dismissed

AJZ17 v Minister for Home Affairs [2019] FCA 1485

MIGRATION – appeal from Federal Circuit Court of Australia – protection visa – where appellant was from Kenya and made claims based on (among other things) membership of a particular social group, namely mentally ill persons in Kenya – where Tribunal reasoned that the appellant would not be subject to discrimination because the Kenyan authorities do not recognise mental illness – whether the Tribunal erred in its consideration of the concept of discrimination – consideration of the nature of the causal link required by the words “for reasons of" in the Refugees Convention and s 5J(1)(a) of the Migration Act 1958 (Cth) – whether the Tribunal erred by focussing on the intention of the perpetrator rather than the predicament of the visa applicant – whether the Tribunal erred by failing to evaluate an integer of the appellant’s claims under the refugee criteria (as distinct from under the complementary protection criteria)

BSV15 v Minister for Immigration and Border Protection [2019] FCA 1499

MIGRATION – appeal from orders of the Federal Circuit Court of Australia dismissing the applicant’s application for leave to amend – leave granted to add new ground 2 relating to the issue of a certificate under s 438 of the Migration Act 1958 (Cth) – incorrect, and therefore invalid, notification that s 438 applies – thus an unauthorised act in breach of a limitation within the statutory procedures which condition the performance of the overarching duty of the Tribunal to conduct a review – whether jurisdictional error on the part of the Tribunal, that is, whether breach material so that legal force is denied to the Tribunal’s decision – whether denial of procedural fairness – whether a document the subject of the s 438 certificate was adverse information that was credible, relevant and significant – Held: appeal dismissed

News | Lionel Hogg delivers lecture at the Selden Society

Held in the Sir Harry Gibbs Legal Heritage Centre in July, Lionel Hogg delivered a Selden Society lecture on Oliver Wendell Holmes and the First Amendment. 
A Civil War hero, Holmes’ contribution to legal scholarship started with The Common Law, the foundation of the realist school of jurisprudence and the revolt against formalism. His contribution extended for over fifty years, including thirty as an Associate Justice of the Supreme Court during which he authored more opinions than any other Justice has ever written. A lifelong sceptic and model of judicial restraint, his legacy nevertheless included validation on many of the great issues of his time, particularly protection of freedom of expression and the permissibility of social welfare legislation.
In the centenary year of his most famous dissent, this lecture examines a man of complexity and apparent contradictions through the prism of his approach to freedom of speech cases and seeks to identify what contemporary lawyers can learn from Holmes’ life experience, philosophy and eloquent contributions to the law.
The lecture was recorded in full and can be viewed online. 
The post News | Lionel Hogg delivers lecture at the Selden Society appeared first on Gadens.

What is Collective Bargaining?

Collective bargaining involves groups of people or businesses that use their numbers to increase their bargaining power. In some instances it can be good and others, illegal.
The post What is Collective Bargaining? appeared first on Lawpath.

What is a Price-to-Book (P/B) ratio?

A Price-to-Book (P/B) ratio can help you determine whether a company is undervalued or overvalued. Read more to find out how it works.
The post What is a Price-to-Book (P/B) ratio? appeared first on Lawpath.

End of the IP exemption era: repeal of the IP exemption from competition laws

Section 51(3) of the Competition and Consumer Act 2010 (CCA) contained an exemption for transactions involving licensing or assignment of certain intellectual property rights from certain prohibitions against anti-competitive conduct.
Legislation has been passed that repeals the intellectual property exemption from section 51(3), effective from 13 September 2019. The repeal comes from recommendations made by the Productivity Commission’s Intellectual Property Arrangements Inquiry Report in December 2016 and the Harper Competition Policy Review (March 2015).
How will the repeal affect you?
The result of the repeal is that any conditions of licences, assignments, contracts, arrangements or understandings relating to intellectual property will now be subject to competition laws in the same manner as any other commercial transactions.
It is important to note that the removal of section 51(3) does not only affect IP related arrangements entered into on or after 13 September 2019. It also includes those entered into before the repeal is effective. This means that conditions in arrangements relating to IP that were in place before 13 September 2019 may expose a business to substantial fines for being in breach of the CCA.
Businesses should review their IP arrangements to ensure that any restrictions or conditions do not contravene the anti-competitive conduct prohibitions in the CCA.
If it is not feasible to amend an offending provision, it is possible for affected businesses to apply to the ACCC for authorisation of conduct that could contravene the CCA. In doing so, notification and authorisation can provide immunity from competition law in cases where the particular arrangement or conduct is likely to result in a net benefit to the public. However, the ACCC may take up to six months to make a decision, so there is a risk that offending conduct will be unlawful during any period that it subsists without authorisation.
The ACCC have published guidelines on the repeal that set out general principles that the ACCC will consider when proceeding to investigate and enforce Part IV in relation to conduct involving intellectual property rights. The guidelines also set out the types of previously exempt conduct and provide examples of conduct the ACCC considers is likely or unlikely to contravene the CCA.
Penalties
The repeal may impact the lawfulness of existing IP arrangements. For each breach of the competition provisions in the CCA, the maximum civil penalties are:

for individuals – $500,000
for corporations – the greatest of:

$10 million
if the Court can determine the ’reasonably attributable‘ benefit obtained from the conduct – three times that value
if the Court cannot determine the size of the benefit – 10% of annual turnover in the preceding 12 months.

Other penalties, such as criminal penalties, may also apply for certain conduct.
What you need to do
In light of the repeal, it is important that businesses consider any IP arrangements that involve conditions that were not contrary to the CCA because of the application of the exemption in section 51(3) – for example, provisions that:

prevent, restrict or limit the supply of intellectual property
fix, control or maintain the price of intellectual property
restrict a licensee from the resupply of intellectual property to certain customers or in certain territories
restrict a licensor from supplying intellectual property to certain persons or territories
limit use of patented inventions in a defined field
divide or allocate customers, suppliers, or territories among the parties to the arrangement
seek to settle intellectual property dispute arrangements by requiring a competitor to delay the entry of their products into the market or to grant a licence over the intellectual property rights.

Please contact the team at Cooper Grace Ward if you would like our assistance in this regard or have any further questions.
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“It’s a Discretionary Trust…I Can Do What I Want”

“It’s a discretionary trust… I can do what I want”
Trusts law. Just uttering those words to some people and you see their eyes start to glaze over.
Trusts are in abundance in Australia. 
Only a few years ago, national income from trusts in one year alone exceeded $340 billion. It’s estimated that there will be over one million trusts in existence in Australia within the next 2 – 3 years.*
As prevalent as they are, it would be a fairly safe bet that most Trustees and beneficiaries have a fairly limited understanding as to exactly what the Trustee can and cannot do. 
A significant proportion of the trust disputes we see come about due to that lack of understanding.**
For example, let’s take a trust where the Trustee has the discretion to decide which beneficiary will receive income from the trust. 
It is a common misconception that the Trustee (particularly of family trusts) can do ‘whatever they want’, so long as the trust deed permits it.
Wrong.
Even Trustees with discretionary powers have several duties, including:

The duty to act in good faith: The Trustee must put the interests of the beneficiaries first, and act without regard to self-interests.
The duty to consider how best to exercise their discretion: This includes obtaining relevant information and considering for example why the trust was made in the first place, or any new circumstances that might have arisen. 
The duty to avoid dictation: The Trustee must resist being dictated to by, for instance, certain beneficiaries.

In the past, there was a general view that courts were reluctant to interfere with an exercise of a Trustee’s discretionary power, but that’s not necessarily the case today. 
Take for instance the recent court decision in Re Marsella** which involved a blended family. There, the trust was a superannuation fund established for Mrs Marsella. She and her Daughter were Trustees. 
Mrs Marsella passed away, survived by a husband from a second marriage (“the Husband”). At that time, the fund had a balance of around $450,000.
The Daughter (who was now sole Trustee) put her own husband in as co-Trustee and they proceeded to ‘exercise their discretion’ by paying all death benefits to the Daughter. 
The Husband argued that the Trustees breached their duty to give proper consideration of how best to exercise their discretion, and the Court agreed. The Trustees were removed and the Daughter was ordered to return funds to the Trust.
Being Trustee of a discretionary trust does not mean the Trustee has been given carte blanche to do what they like.
If there are beneficiaries with concerns as to how a Trust is (or was) administered, they should seek legal advice as there could be remedies available to them, depending on the circumstances.
Meanwhile, Trustees (and their advisors) need to be very careful. If a Trustee is unsure whether a possible action might be in breach of their duties, legal advice should be sought. Otherwise, if a court finds that the Trustee breached their duty, they could have their decision reversed, powers removed and be hit with a very large costs order.
 
 

* https://www.ato.gov.au/About-ATO/Research-and-statistics/In-detail/General-research/Current-issues-with-trusts-and-the-tax-system/
**The next most common reason for the trust disputes we see relate to the trust deeds, due to them being decades old and/or having been drafted by some ‘clever’ person doesn’t know trust law from a can of beans.
** Re Marsella; Marsella v Wareham (No.2) [2019] VSC 65
Individual liability limited by a scheme approved under professional standards legislation (personal injury work exempted).
The post “It’s a Discretionary Trust…I Can Do What I Want” appeared first on Bennett and Philp Lawyers.

Kimberley College Ltd v Thomson & Ors [2019] QSC 227

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – PLEADINGS – STRIKING OUT – GENERALLY – where the plaintiff alleges a variety of types of misconduct against the defendants – where the defendants contend that the statement of claim is insufficiently particularised and should therefore be struck out – where the plaintiff contends in reply that there are matters solely within the knowledge of the defendants or unknown third parties – where the plaintiff otherwise relies upon lengthy and detailed financial reports created by forensic accountants – whether the plaintiff’s statement of claim is insufficiently particularised – whether the statement of claim should be struck out in whole or part – whether the plaintiff should provide further and better particularsPROCEDURE – STATE AND TERRITORY COURTS: JURISDICTION, POWERS AND GENERALLY – INHERENT AND GENERAL STATUTORY POWERS – TO PREVENT ABUSE OF PROCESS – GENERALLY – where the plaintiff alleges a variety of types of misconduct against the defendants – where the plaintiff further alleges that the defendants have been attempting to dispose of certain chattels and real property – where the plaintiff contends that a commercially prudent person would infer a danger of default on behalf of the defendants – whether a freezing order should be made

MacGowan v Klatt [2019] QSC 222

SUCCESSION – FAMILY PROVISION – PROCEDURE – TIME FOR MAKING APPLICATION – EXTENSION OF TIME – ELIGIBLE APPLICANTS – CHILD – where the applicant seeks an extension of time, pursuant to s 41(8) of the Succession Act 1981 (Qld), in which to claim family provision – where the applicant’s claim is made on the basis that she is the adopted child of the deceased testator as the result of a customary adoption in Vanuatu – whether a ceremony in which the testator took part with the applicant’s mother and her extended family amounted to a customary adoption in accordance with the customary law of Tongoa Island and recognised by Vanuatu law – whether the testator as a foreign national could adopt an indigenous child in custom – whether any adoption was effective under Vanuatu law and capable of being recognised under s 293 of the Adoption Act 2009 (Qld)SUCCESSION – FAMILY PROVISION – PROCEDURE – ORDERS AND OTHER PROCEDURAL MATTERS – COSTS – GENERALLY – where the applicant was unsuccessful in her application for an extension of time in which to make a claim for family provision – where the applicant was not eligible to make the claim – where the estate’s worth is in excess of $5,000,000 – where the applicant had a moral claim arising out of her relationship with the testator, although not a legal one – where the applicant has three young children, limited ability to earn income, and lives in poverty – where an adverse costs order is likely to mean the loss of the modest property devised to her – where the testator in his will had asked that his executors consider the applicant’s well-being – whether costs should follow the event or another order should be made

Regulations for WA Work Health and Safety

The public consultation phase for the Work Health and Safety Act for Western Australia (WHS Act (WA)) ended on 31 August 2018.
On Tuesday 27 August 2019, Western Australian Industrial Relations Minister Bill Johnston announced that they are now seeking submissions on the introduction of three sets of Work Health and Safety (WHS) regulations to support the WHS Act (WA). These regulations are:

WA WHS Regulations – this will be based on the National Model WHS regulations and will apply generally to workplaces (including the mining industry and petroleum and geothermal operations);
WHS (Mines) Regulations – this will apply to mines only; and
WHS (Petroleum and Geothermal Energy Operations) Regulations – this will apply to petroleum and geothermal energy operations only.

The public consultation period will end on 26 November 2019.
The proposed regulations will include unique provisions from the existing Occupational Safety and Health Regulations 1996 but will exclude union right of entry provisions which will be left in the Industrial Relations Act 1979 (WA).  Dangerous goods and major hazard facilities will also be excluded and instead will remain under the dangerous goods legislation. This approach will be reviewed within two years of the WHS Act (WA) being introduced to see whether dangerous goods, including major hazard facilities, should be brought under the WHS Act (WA).
Minister Johnston encourages ‘the community to have their say on the modernisation of WA’s work health and safety laws, which is long overdue’.
In addition, the Western Australian government proposes to invest $12.9 million to increase the amount of full time equivalent staff by 24, this will include an introduction of another 21 inspectors. Western Australia will match New South Wales and Queensland’s ratios with one full time equivalent inspector per 10,000 employees. Inspectors will also be able to carry out more workplace inspections with the government announcing it will fund 16 new vehicles.
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Deferring Add-on Insurance – Treasury releases proposal paper

The Financial Services Royal Commission recommended in February that Treasury develop an “industry-wide” Deferred Sales Model for the sale of all Add-on Insurance products. Treasury’s Proposal Paper, released on 9 September 20191, sets out details of the model.
 
Treasury’s proposal is to apply a simple, uniform Deferred Sales Model to all types of Add-on Insurance across all channels through which they are distributed, and subject to very limited exceptions.
The Model will operate as follows:

Insurance information is not to be put to the consumer until they have made a financial commitment to purchase the primary good or service, or to arrange finance over that good or service.
The distributor can then provide prescribed information about the Add-on Insurance product to the customer.
A four-day deferral period must then pass before the distributor is able to contact the customer.
The customer will be entitled to reduce the deferral period to a single day at their initiative. In order to do so, the customer would need to contact the distributor to complete the purchase of the insurance product.

Let’s look at some of the points coming out of this.
What products are caught?
The Model is to apply to all “Add-on Insurance”, other than where it has been expressly exempted. As such, it is important that we have clarity on what is meant by Add-on Insurance. Treasury suggests the following definition:
“Those insurance products that are offered or sold at the same time as when a consumer purchases the primary product or finance for which the insurance covers associated risks.”
The Code Governance Committee’s June 2018 report into general insurance2 provides a good analysis of what might fall within such a definition. It identified 28 different types of Add-on Insurance products. Examples of those sold outside of motor vehicle dealers and financial institutions included:

travel insurance;
ticket event/cancellation insurance;
mobile phone insurance;
pet insurance;
marine pleasurecraft insurance;
rental bond insurance;
rental vehicle excess insurance;
transit insurance; and
jewellery insurance.

Distribution channels for these products could take a wide variety of forms. Examples would include travel agents, airlines, ticket sellers, mobile phone retailers, real estate agents and transport companies. Significantly, Treasury refers to it including online sales, where that sits alongside the sale of the primary product or service.
Obviously, some of the products referred to above are also sold in circumstances where they would not be Add-on Insurance, for instance through direct sales. Treasury accepts that this will occur and provides an example in its paper. It notes that pet insurance will be Add-on Insurance if it is offered “at the same time or in conjunction with” the purchase of a pet that it covers, or services provided in relation to that pet (eg. veterinary services), but not if it is sold on a standalone basis.
Are any Add-on Insurance products exempt?
Treasury envisages that some Add-on Insurance products will be exempt from a deferred sales period3, though it warns that that will only be the case where there is strong quantitative evidence of product value and consumer understanding. Treasury proposes that ASIC will take the lead role in determining exemptions, having regard to matters such as:

historical good value for money;
strong competition;
high risk of underinsurance; and
well understood by customers.

The Royal Commission expressly noted that comprehensive motor insurance should not be subject to a deferred sales period. Any other exemptions would presumably need to have similar characteristics.
How will the customer’s “financial commitment” trigger work?
Treasury’s proposal to use the customer’s “financial commitment” to purchase the primary product or service, or to take out finance, as the trigger for providing insurance information is a middle ground between options previously put to and considered by ASIC. What constitutes that “financial commitment”, though, needs to be clear.
Overall, Treasury says that what is needed is a “concrete” decision by the customer. Plainly, payment for a product or service would meet the test. Treasury states that paying a deposit would also be enough. In relation to finance, it says that lodging an application form would be an appropriate trigger. No doubt there will be other situations which might need clarification; for instance, would the reservation of a flight, held for a period without payment, trigger the right to provide insurance information?
What “prescribed information” will need to be given?
Treasury has proposed that ASIC would also determine what needs to be given to the customer, though it states that this could include:

basic product information such as premium, policy duration and details of significant features and benefits, significant and unusual exclusions or limitations;
information regarding when the customer can purchase the product;
the product claims ratio;
a notice that the product is sold by other distributors; and
a link to the ASIC MoneySmart website page on the product if available.

I would expect that development of a useful and uniform approach to presenting this summary information will take some thought; past attempts to provide valuable summaries of insurance product terms have proved challenging.
Whether the Product Disclosure Statement and Financial Services Guide (or policy wording for non-retail products) are also to be provided at this point is unsaid. Presumably, it would be useful for consumers to also have those documents made available to them during the deferral period.
If a claims ratio is to be included for the product, customers would likely benefit from an explanation of what it means in the context of the product concerned.
How is the four-day deferral period to be counted?
Based on a diagrammatic representation of the Model in Treasury’s paper, the day on which the consumer is given prescribed information about the product will be counted as day one. The distributor will be entitled to contact the customer on day four so, in fact, the deferral is for two clear days.
It is noteworthy that the four-day deferral period is less than the seven-day period recommended by the Productivity Commission4, and considerably less than other proposals considered. Treasury’s position on this recognises the risk that, if left for too long, customers might disengage altogether from the decision whether to purchase insurance, with the risk that they will end up without insurance that they need.
How can the customer be contacted after the deferral period?
Treasury has proposed that contact with the customer after completion of the deferral period be limited to one approach in writing. This might be done, for instance, through an email. If this does not evince a response, no further approach can be made.
The UK experience
The proposed model is similar to the one implemented in 2015 for guaranteed asset protection (GAP) insurance in the United Kingdom. The Financial Conduct Authority carried out a review of that model’s effectiveness in 20185 and found:

The model reduced Add-on Insurance sales materially, though with evidence of improved customer outcomes.
Standalone market sales increased, though by less than expected. Consumers did not seek out alternatives as much as had been hoped.
Product prices fell and loss ratios rose, though again by less than expected.

This is not to say, of course, that the Australian experience will be the same.
Observations
To finish, here are a few thoughts on the implications of the Model:

The Model will be easier to implement in situations where the process for purchasing the primary product or service takes at least a few days, as would normally be the case for new motor vehicles, than where the sale is made on a single occasion.
Its impact is likely to be material for online sales, where many transactions are instantaneous. Consumers who know they want insurance are unlikely to wait for a deferral period when other providers are only a click away.
It may be challenging to comply with the Model at all for some Add-on Insurance products (for instance, travel insurance benefits attached to credit cards).
It will likely become more difficult for consumers to include insurance premiums in their finance arrangements. To do so would presumably involve an adjustment to the loan (or at least the loan application) after completion of the deferred sales period.
Insurers and distributors will need systems capable of capturing the key elements of the Model, including the occurrence of a financial commitment trigger, provision of prescribed information and records of subsequent consumer communications. These may form part of the broader systems and processes currently being implemented to meet Product Design and Distribution requirements.
Compliance with distribution conditions needed to meet Product Design and Distribution requirements, such as asking consumers knock-out and qualifying questions, will in many cases need to follow completion of the deferred sales period. This could result in some consumers being advised that they are outside of the target market for the product after completion of that period.
It is possible that implementation of the Deferred Sales Model will result in the growth of direct competition to some products which traditionally have only been sold as Add-on Insurance. Based on the UK experience, though, this might need an innovative approach to distribution.

Next steps?
Treasury has invited submissions on its proposal, though has offered only a short period, asking for them to be made by 30 September 2019. Treasury notes that feedback should be focussed on how the measure can best be implemented, not on whether it should be implemented.
Draft legislation is to be introduced into Parliament by 30 June 2020. Treasury has signalled that that will include a transition period, though without stating how long that will be.
For more information on how Treasury’s proposed Deferred Sales Model will apply to Add-on Insurance products, please contact insurance advisory principal, Mathew Kaley.

1 Treasury Proposal Paper, Reforms to the sale of add-on insurance products, 9 September 2019
2 General Insurance Code Governance Committee, Who is selling insurance?, June 2018, pp 20-22
3 Treasury refers to these as Tier Three products. Tier Two products will be subject to the Deferred Sales Model. Tier One products are those which cause “significant consumer detriment”, so are to be addressed by ASIC using its product intervention power.
4 Productivity Commission Inquiry Report, Competition in the Australian Financial System, 29 June 2018
5 FCA Report, Evaluation Paper 18/1: An evaluation of our guaranteed asset protection insurance intervention, July 2018
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