Senate

Revised Explanatory Memorandum

(Circulated by authority of the Assistant Treasurer and Minister for Financial Services, the Hon Stephen Jones MP)

Chapter 2: Virtual hearings and examinations

Outline of chapter

2.1 Part 2 of Schedule 1 to the Bill amends the APRA Act, ASIC Act, CCA, NCCPA and TASA to ensure that bodies established under these Acts (the regulator) can use technology for hearings and examinations. The amendments are technology neutral and ensure regulators can continue to conduct hearings and examinations in an efficient and expeditious manner.

Context of amendments

2.2 Regulators are empowered under the APRA Act, ASIC Act, CCA, NCCPA and TASA to hold hearings or examinations. These Acts, however, are largely silent on whether the regulator can use technology for all or part of a hearing or examination.

2.3 This issue was highlighted during the COVID-19 pandemic, when regulators were unable to hold in-person hearings or examinations due to public health orders and restrictions. While regulators were able to make some adjustments to their practices during the pandemic, the rules for statutory hearings and examinations did not provide sufficient flexibility for regulators to conduct hearings and examinations in an efficient and expeditious manner.

2.4 For Acts with no express provisions allowing for the use of technology at hearings and examinations, some regulators adopted the approach of first seeking consent from participants before holding them virtually. In these cases, obtaining consent from participants often resulted in delays to the conduct of hearings and examinations. In other cases, hearings and examinations were simply delayed until they could occur face-to-face.

2.5 The amendments in Part 2 of Schedule 1 to the Bill build upon the flexible regulatory practices adopted by regulators before and during the pandemic by removing unnecessary barriers to the use of technology at hearings and examinations. These changes ensure that regulators can hold hearings and examinations in an efficient and expeditious manner for the benefit of all parties.

Summary of new law

2.6 Part 2 of Schedule 1 to the Bill inserts express provisions in the amended Acts to ensure that regulators can use virtual enquiry technology at hearings and examinations.

2.7 The regulator has the discretion whether to hold a hearing or examination in a physical, hybrid or virtual form, but if they hold a hearing or examination using virtual enquiry technology, they must ensure that the use of the technology is objectively reasonable. This obligation is designed to protect the person's rights, while also giving the regulator the necessary flexibility to hold hearings or examinations efficiently.

2.8 If a hearing is to take place in public using the technology, the regulator must ensure that members of the public have a reasonable opportunity to observe the hearing using technology.

Detailed explanation of new law

Definition of 'virtual enquiry technology'

2.9 The definition of 'virtual enquiry technology' is not prescriptive and does not limit the regulator to using a single type of technology. The technology must be capable of allowing a person to appear at all or part of a hearing, examination or other enquiry without being physically present at the hearing, examination or other enquiry. [Schedule 1, item 61, subsection 3(1) of the APRA Act; item 63, subsection 5(1) of the ASIC Act; item 69, subsection 4(1) of the CCA, item 73, subsection 5(1) of the NCCPA; item 77, subsection 90-1(1) of the TASA]

Hearings and examinations may be physical, hybrid or virtual

2.10 Part 2 of Schedule 1 to the Bill amends the APRA Act, ASIC Act, CCA, NCCPA and TASA by inserting express provisions to ensure that the regulator can hold a hearing or examination:

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at one or more physical venues (a physical hearing or examination); or

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at one or more physical venues and using virtual enquiry technology (a hybrid hearing or examination); or

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using virtual enquiry technology only (a virtual hearing or examination).

[Schedule 1, item 62, subsection 58A(3) of the APRA Act; items 64, 65, 67 and 68, subsections 22A(1), 59A(1), 159A(1) and 218A(1) of the ASIC Act; item 71, subsections 158A(2) and 158B(2) of the CCA; items 74 and 75, subsections 256A(1) and 285A(1) of the NCCPA; item 76, subsection 60-105(4) of the TASA]

2.11 The relevant regulators are APRA, ASIC, FSCP, CADB, ACCC, AER and TPB, which hold hearings or examinations under the relevant legislation. The types of hearings and examinations covered by the new regime are listed in the table below. [Schedule 1, item 62, subsections 58A(1)-(3) and (7) of the APRA Act; items 64, 65, 67 and 68, subsections 22A(1), 22A(5), 59A(1), 59A(6), 159A(1), 159A(6), 218A(1) and 218A(6) of the ASIC Act; item 71, subsections 158A(1), 158A(2), 158A(7), 158B(1), 158B(2) and 158B(7) of the CCA; items 74 and 75, subsections 256A(1), 256A(5), 285A(1) and 285A(6) of the NCCPA; item 76, subsections 60-105(4) and (8) of the TASA]

Table 2.1 Hearings and examinations covered by the new regime

2.12 For Acts that permit the use of certain technology at hearings and examinations, Part 2 of Schedule 1 to the Bill repeals those provisions so that consistent rules apply across Treasury laws to the greatest extent practicable. [Schedule 1, item 66, subsections 159(3) and 159(4) of the ASIC Act; item 70, subsection 44ZF(4) of the CCA]]

Place and time of a hearing or examination

2.13 If the hearing or examination is held:

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at more than one physical venue; or

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at one or more physical venues and using virtual enquiry technology; or

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using virtual enquiry technology only;

the regulator or authorised person (as applicable) may appoint a single place and time for the hearing or examination. This ensures that a single place and time for the hearing or examination can be determined for legal purposes, such as dispute resolution, even if participants are attending from multiple locations in different time zones.

2.14 Under the APRA Act, ASIC Act, NCCPA and TASA, the regulator may appoint a single place and time for the hearing or examination after the hearing or examination has been held. This avoids interaction with any notice provisions that operate before the hearing or examination is held. The rules to determine the single place and time for hearings and examinations under these Acts are summarised in the table below. [Schedule 1, item 62, subsection 58A(6) of the APRA Act; items 64, 65, 67 and 68, subsections 22A(4), 59A(5), 159A(5) and 218A(5) of the ASIC Act; items 74 and 75, subsections 256A(4) and 285A(5) of the NCCPA; item 76, subsection 60-105(7) of the TASA]

Table 2.2 Place and time of different types of hearings and examinations

2.15 Specific rules are needed to determine the single place and time for proceedings under the CCA because some proceedings are initiated by notice and the single place and time must be set out in the notice. The rules are summarised in the table below. [Schedule 1, item 71, subsections 158A(1), 158A(6), 158B(1) and 158B(3) of the CCA]

Table 2.3 Place and time of proceedings under the CCA

2.16 When appointing a single place for a wholly virtual hearing or examination, the regulator should appoint one of its offices (whether the virtual enquiry technology is being used at that office or another location, such as a home address). Use of technology must be reasonable

2.17 If the regulator decides to use virtual enquiry technology at a hearing or examination, the regulator must ensure that the use of the technology is objectively reasonable. This obligation is designed to protect a person's rights (including their existing rights to procedural fairness) if they appear at a hearing or examination using virtual enquiry technology, while also giving regulators the necessary flexibility to hold hearings or examinations efficiently. The obligation ensures that persons are not unfairly disadvantaged if the hearing or examination occurs virtually. It also ensures that regulators only hold virtual hearings or examinations if they permit genuine, realistic and proper consideration of all relevant issues, and do not interfere with the person's existing rights to respond to adverse information. [Schedule 1, item 62, subsections 58A(4) and (5) of the APRA Act; items 64, 65, 67 and 68, subsections 22A(2), 22A(3), 59A(2), 59A(3), 159A(2), 159A(3), 218A(2) and 218A(3) of the ASIC Act; item 71, subsections 158A(3), 158A(4), 158B(4) and 158B(5) of the CCA; items 74 and 75, subsections 256A(2), 256A(3), 285A(2) and 285A(3) of the NCCPA; item 76, subsections 60-105(5) and (6) of the TASA]

2.18 The regulator's use of virtual enquiry technology does not limit or expand the person's existing rights to procedural fairness under statute or common law in relation to a particular hearing or examination. All of the person's existing rights to procedural fairness continue to apply, whether they appear at a physical, hybrid or virtual hearing or examination.

2.19 In some cases, it may be preferable for both the regulator and the person who is appearing to use virtual enquiry technology due to the person's individual circumstances, such as where the person lives in a regional or remote area and a virtual hearing or examination is preferrable due to reduced costs associated with travel and accommodation.

2.20 The following examples provide guidance on what is reasonable when using virtual enquiry technology. They are not intended to prescribe specific steps that a regulator must take in similar circumstances, or provide guidance to regulators on selecting the most appropriate method for holding a hearing or examination.

Example 2.1 Taking steps to ensure using technology is reasonable

The Chair of the committee lives in Sydney, New South Wales. The person required to appear before the committee lives in Adelaide, South Australia. The person speaks limited English and requires the use of an interpreter to be able to appear before the committee. Due to the distance between the Chair and the person, a physical hearing would not be practicable. The Chair decides to hold the hearing using virtual enquiry technology only. The technology is a video conferencing platform.

To ensure that the use of virtual enquiry technology is reasonable, the Chair arranges for an interpreter to be available at the hearing, who also uses the technology. The Chair provides instructions to both the person and interpreter on how to use the technology before the hearing. The Chair also gives the person and the interpreter an opportunity to test the technology before the hearing. There are no connection issues during the test and the Chair, the person and the interpreter can communicate with each other using the technology. The Chair proceeds to hold the hearing using the technology.

Example 2.2 Technical issues when using technology

The regulator requires a person (the examinee) to appear before an authorised officer to be examined. The authorised officer decides to hold the examination using virtual enquiry technology only. The technology is a video conferencing platform.

During the examination, there is a temporary, one-off network problem that affects the virtual enquiry technology. This causes a temporary disruption to the examination while the examinee was responding to a question asked by the authorised officer. The examinee and authorised officer are unable to hear each other clearly for a short period of time during the disruption. The connection restores quickly, and all parties are able to hear and see each other perfectly.

To ensure that the use of the virtual enquiry technology continues to be reasonable, the authorised officer checks that both parties can hear and see each other before proceeding further with the examination. The authorised officer repeats the question and the portion of the examinee's response to that question before the disruption occurred. The authorised officer gives the examinee another opportunity to respond to the question. The examinee states that the response repeated by the authorised officer is correct and completes their response to the question. The authorised officer continues to carefully monitor the network connection and notes that no further network problems occur.

Reasonable opportunity to observe public hearings

2.21 If the regulator holds hearings in public and uses virtual enquiry technology for such hearings, the regulator must ensure that the technology provides the public with a reasonable opportunity to observe the hearing. The regulator must also ensure that information sufficient to allow the public to observe the hearing using the technology is made publicly available in a reasonable way. [Schedule 1, items 65, 67 and 68, subsections 59A(2), 59A(4), 159A(2), 159A(4), 218A(2) and 218A(4) of the ASIC Act; item 71, subsections 158A(3), 158A(5), 158B(4) and 158B(6) of the CCA; item 75, subsections 285A(2) and (4) of the NCCPA]

Application provisions

2.22 For proceedings with an initiation notice under the CCA, the amendments apply in relation to proceedings for which notice has been given on or after the commencement of Part 2 of Schedule 1 to the Bill. [Schedule 1, item 72, section 158B of the CCA]

2.23 For all other hearings and examinations, the new rules commence and apply on the day after Royal Assent. [Section 2, table item 2]