ACCAN Informed Consent Project (21 August 2009)

5.1. Intellectual disabilities

Case study 5 – [from ACCC]

Most legal guidance defines an intellectual disability as being either inherent or resulting from injury and the term is used broadly to capture a range of mental illness and cognitive impairment. In the Project Survey, caseworker organisations and regulators reported a low to moderate proportion of consent complaints regarding people with an intellectual disability.

There is surprisingly little information available on the capacity of people with intellectual disabilities to enter into contracts. Most studies and guidance has a focus on their capacity to consent to medical treatment or to participate in medical research. There is also a recognised gap in Australian Law detailing informed consent in the case of the mentally ill.[20]

As a result of the focus on medical settings, the limited guidance that is available assumes that an organisation already knows that it is dealing with a person with an intellectual disability or that the organisation has the ability to make a proper assessment.

In the communications sector, it is unlikely that organisations will know in advance that a consumer has an intellectual disability, especially where consent is obtained by electronic means. Even if a transaction is occurring face to face, the ability for individuals to recognise incapacity may be quite limited. Even trained medical staff performed poorly in recognising incapacity in a blind test in a nursing home setting;[21]

The leading Australian case (Radio Rentals) places a heavy focus on the appearance of the consumer – an approach that may be increasingly ineffective for consumer protection.

Case study 5 – [from ACCC]

The ACCC pursued a claim of unconscionable conduct against Radio Rentals.[22] A consumer (Mr G) had a total of fifteen rental, two loan and nineteen service agreements with Radio Rentals and three rental agreements with Walker Stores. These all related to electrical goods. The payments he made under those agreements totalled $20,700.43.

Mr G’s medical history showed a failure to complete school, a history of incarceration in institutions for behavioural offences, an IQ ranging from 50 to 80, and a confirmed diagnosis of schizophrenia. He had been on the disability pension since the age of 17.

The ACCC argued that Radio Rentals knew or ought to have known ‘from Mr G’s presentation and verbal skills’ that he was a person with an intellectual disability; he could not read the agreements; he could not understand all the terms and conditions of the agreements; he was unable to understand all the rights etc he had under the agreements; and he was unable to make a worthwhile judgment about whether entering into the agreements was in his best interests.

However, Mr G presented well in court (neatly dressed, basic language skills, good memory) so the Court found that there was no overwhelming evidence that staff should have been aware of his disability. In fact Mr G, like most witnesses, was well prepared and rehearsed for the hearing and this appeared to affect the court’s view. Consumer organisations find this case disappointing as it places the onus on people with an intellectual disability to protect themselves, despite obvious exploitation and a lack of consideration of the financial hardship caused by the company’s actions.

It may be important to consider alternatives for dealing with capacity issues where consumers have an intellectual disability. These could include:

Where the organisation is aware of the intellectual disability, consent could be gained through the provision of additional information complemented by testing to ensure that consent is informed. In some circumstances consent may need to be obtained from a guardian;
Where the organisation is not aware of the intellectual disability and a complaint arises, the TIO’s fairness test should continue to be applied, looking at all of the circumstances of the parties and the transaction (rather than relying on a strict legal test of capacity).

Finally, consumer caseworkers also raised concerns about the need to ensure organisations take care in not dismissing consumers with a disability because the consent issue is too hard. There is some useful guidance from the New Zealand health sector:

Where a person is considered incompetent, that person still keeps the right to make informed choices and give informed consent, to the extent appropriate to his or her level of competence. It is important that people with an intellectual disability are not denied treatment or services because of a perceived difficulty in gaining consent. [23]

[20] Human Rights and Equal Opportunities Commission, Report Of The National Inquiry Into The Human Rights Of People With Mental Illness, HREOC, Sydney, 2004, <http://www.humanrights.gov.au/disability_rights/inquiries/mental/Volume 1.txt>.

[21] CD Barton Jr, HS Mallik, WB Orr and JS Janofsky, Clinicians' judgement of capacity of nursing home patients to give informed consent, Psychiatric Services, vol. 47, American Psychiatric Association, Arlington, 1996, pp. 956–960, <http://www.psychservices.psychiatryonline.org/cgi/content/abstract/47/9/956>.

[22] Australian Competition & Consumer Commission v Radio Rentals Limited (with Corrigendum dated 24 August 2005) (2005) FCA 1133, <http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/FCA/2005/1133.html>.

[23] IHC Advocacy, Informed Consent, Wellington, September 2003, <http://www.eqs.co.nz/pictures/Informed consent .pdf>.





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