Leg­is­la­tion: keep it sim­ple and to the point

Business Day - Business Law and Tax Review - - BUSINESS LAW & TAX REVIEW -

Con­sumers could do with­out hav­ing to wade through War and Peace to find a law’s pur­pose and con­text

WHEN par­lia­ment makes new laws it should fo­cus on the pur­pose it wants to achieve in the real world. We are told by the courts that we must in­ter­pret the words of a law hav­ing re­gard to its pur­pose and con­text. That should be the start­ing point, not the end re­sult of leg­is­la­tion.

Take, for in­stance, the Pro­tec­tion of Per­sonal In­for­ma­tion Act that will soon be thrust on the busi­ness world con­sist­ing of 115 sec­tions, plus a long sched­ule plus reg­u­la­tions yet to ap­pear. The pur­pose of that leg­is­la­tion is to see that per­sonal in­for­ma­tion is not used for a pur­pose for which con­sent was not given (such as di­rect mar­ket­ing) and to en­sure that per­sonal in­for­ma­tion held by any­one is not, with­out con­sent, re­vealed to peo­ple who will use it to the detri­ment of the owner of that in­for­ma­tion.

The con­text of the law is a world in which hardly any­thing is pri­vate. In the age of Face­book and other so­cial net­works and Google and other search en­gines it is overkill to make it un­law­ful to keep some­one’s name and ad­dress in your e-mail sys­tem when you no longer re­ally need it and have the in­for­ma­tion reg­u­la­tor chase you down.

But for the fact that we have to match our pri­vacy leg­is­la­tion to that in for­eign ju­ris­dic­tions, all we re­ally need (and all they re­ally need over­seas) is leg­is­la­tion that says you must not use any per­sonal in­for­ma­tion for a rea­son which the owner has not con­sented to; and if you have the per­sonal in­for­ma­tion of third par­ties, keep it pri­vate and se­cure. That does not need a law 115 sec­tions long.

The laws re­lat­ing to fi­nan­cial ad­vis­ers is con­tained in a hand­book which runs to two large vol­umes. What it deals with is the fact that any­body act­ing as an agent for another in pro­vid­ing fi­nan­cial ser­vices should not take ex­ces­sive or se­cret earn­ings and must not al­low them­selves to have their own in­ter­ests con­flict with those of the client. There is now so much leg­is­la­tion gov­ern­ing these fi­nan­cial ad­vi­sory ser­vices that the es­sen­tials are of­ten over­looked. And can you think of any real so­cial im­pact that the Con­sumer Pro­tec­tion Act with all its sub­or­di­nate leg­is­la­tion (about 500 pages in my copy) has had in the real world?

Our in­sur­ance laws are start­ing to get it right. These laws are fo­cus­ing on the real pur­pose of in­sur­ance leg­is­la­tion, namely to treat cus­tomers fairly. Let’s hope that any fu­ture in­sur­ance mar­ket con­duct leg­is­la­tion deals with those prin­ci­ples with­out con­fus­ing overe­lab­o­ra­tion.

We used to have the 1992 Cor­rup­tion Act that con­sisted of five sec­tions in­clud­ing the short ti­tle. Now we have the Pre­ven­tion and Com­bat­ing of Cor­rupt Ac­tiv­i­ties Act, 2004. It runs to 37 sec­tions and the ti­tle and pre­am­ble are al­most as long as the pre­vi­ous act. Cor­rup­tion, like the prover­bial ele­phant (in or out of the room), is some­thing that you recog­nise as soon as it ar­rives with­out hav­ing it de­fined in 20 sec­tions of leg­is­la­tion.

The courts, af­ter all, had no dif­fi­culty in putting Sch­abir Shaik in jail un­der the short 1992 act. And it is hard to think of any­one jailed un­der the long 2004 ver­sion.

We need de­tailed leg­is­la­tion deal­ing with com­plex en­ti­ties like com­pa­nies. But when it comes to laws af­fect­ing the day-to-day ac­tiv­i­ties of or­di­nary peo­ple, it would help the con­sumers (that is, you and I) as well as the goods and ser­vices providers (that is, also you and I) if the laws could fo­cus on the bull’s-eye so that we can all eas­ily know who is the tar­get and where the ar­rows are com­ing from.

Pa­trick Bracher (@PBracher1) is a direc­tor at Nor­ton Rose Ful­bright.

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