Putting a broom through our house of law

If Australia’s corporations and financial services statutes were likened to a house, it would be a large and disordered one.

It would be a house in which new annexes have been added with little thought to overall design, and in which objects are scattered and hidden – a house that needs re-design and serious tidying.

Today, the Australian Law Reform Commission has launched Interim Report B as part of its Review of the Legislative Framework for Corporations and Financial Services Regulation. The report focuses on the role of legislative design and hierarchy in ensuring that the law is coherent and navigable — so that our house of law remains habitable into the future.

The current problem

Over several decades, corporations and financial services legislation has developed in an ad hoc manner. Amendments spurred by crises, and schemes underpinned by differing approaches to regulation, have slowly accumulated. The law as it stands today is the work of many architects.

Unfortunately, this history means that the law today is disorganised, and difficult to navigate or comprehend. For example, core obligations are currently scattered across different layers of the legislative hierarchy — the Act, regulations, and other legislative instruments. This makes the law unnecessarily complex, and reduces the likelihood that it will be understood and followed.

In the ALRC’s view, the introduction of a more rational legislative design and hierarchy is key to resolving much of the current complexity. It is time to put our house in order.


What goes where (and why)

Architects know that rooms should serve a purpose, and that it doesn’t make sense to put the stovetop in the bathroom. In other words, a plan as to what goes where, and why, is essential in matters of design. The ALRC proposes such a plan for key financial services legislation, in which the law would be located in:

  • the Act
  • a Scoping Order, and
  • thematically consolidated rules.

Under the ALRC’s proposed model, Parliament would continue to set the core policy of the regulatory regime in the Corporations Act. The Act should establish the broad parameters and key objectives of regulation. It should not be filled with prescriptive detail, as it currently is.

A Scoping Order would contain the vast majority of exclusions and exemptions from the Act. Currently, exclusions and exemptions are spread across numerous locations. In comparison, a Scoping Order would provide a single and clearly identifiable ‘home’ for detail defining the Act’s scope.

Finally, prescriptive detail should be located in thematically consolidated legislative instruments — or ‘rulebooks’. Rulebooks would be readily adaptable to meet the needs of changing circumstances, and organised by topic to ensure navigability. Rulebooks would contain detail that is consistent with, and controlled by, the Act.

As experience teaches, it is easier to find things if they’re put where you expect to find them. Shoes are best placed on a shoe-rack, and keys placed in a drawer. The ALRC’s proposed legislative model would bring a similar logic to financial services legislation.

Putting (and keeping) things in order

The ALRC also suggests a range of measures to put, and keep, our law in proper order. Broadly, these relate to:

  • how the legislative hierarchy should be used, and
  • the need for a more general tidying-up of legislation.

Making better use of the legislative hierarchy

Given the ever-increasing volume and significance of delegated law-making, it should be guided by sound principles and subject to appropriate review.

The ALRC proposes that consolidated guidance on using the legislative hierarchy would help legislative designers in the future. Draft guidance developed by the ALRC can help determine ‘what goes where’, and how powers to create delegated legislation should be expressed. Further, the ALRC suggests improvements to the processes for making delegated legislation — such as in relation to consultation.

Tidying-up the existing stock of legislation

The existing stock of legislation needs substantial tidying-up. Over time, countless errors and infelicities have crept in. For example, the ALRC has identified over 100 spent provisions and cross-references to repealed provisions. As Simoes da Silva and Isdale have observed, this is a house of law in which:

“Lawyers are understandably scared of opening the cupboards. Things will fall out, or be near impossible to find. We have stuffed things in every nook and cranny for years, only rarely bothering to clean our house out.”


The ALRC proposes a program of tidying-up that includes the identification and repeal of spent transitional provisions and instruments, redundant definitions, references to repealed provisions, and redundant regulation-making powers. Further, there is a need to fix unclear and incorrect provisions, and various outdated notes and references.

There is also a need to make our law simpler. A key step to achieving this would be the removal of ‘notional amendments’ as a form of law-making. Notional amendments make changes to the law without those changes being visible on the face of the legislation. Such amendments make it difficult to work out what the law actually is.


The ALRC’s latest report makes the case that Australia’s corporations and financial services legislation would benefit from a consistent design and hierarchy, and from substantial tidying-up.

If implemented, prototype legislation developed by the ALRC would reduce the length of selected portions of financial services legislation by 33% — and help make our house of law much more inviting, for all those required to visit.

To learn more, read the ALRC’s Interim Report B. Submissions in response are welcomed by 30 November 2022.

Dr William Isdale and Christopher Ash are Senior Legal Officers at the Australian Law Reform Commission.

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