FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Bupa HI Pty Ltd [2025] FCA 1564

ORDERS

THE COURT DECLARES PURSUANT TO SECTION 21 OF THE FEDERAL COURT OF AUSTRALIA ACT 1976 (CTH) THAT:

1.    During the period from May 2018 to August 2023, the Respondent (Bupa), on at least 7,589 occasions, represented that members were not entitled to the payment of benefits towards any part of the treatment the subject of:

(a)    an enquiry by or on behalf of a member, before the member received treatment during a hospital admission, about a member’s eligibility for benefits in respect of a potential claim encompassing treatment that was covered under the member’s policy (Covered Treatment) and treatment that was not covered under the member’s policy (Excluded Treatment) (a Mixed Coverage Eligibility Check); or

(b)    a claim by or on behalf of a member in respect of treatment provided during the member’s hospital admission, which:

(i)    was provided by a medical provider working in the hospital, and included both Covered Treatment and Excluded Treatment (a Medical Mixed Coverage Claim);

(ii)    was provided by the hospital, and included both Covered Treatment and Excluded Treatment (a Hospital Mixed Coverage Claim);

(iii)    was provided by a medical provider working in the hospital, and included at least one treatment that had a Medicare Benefits Schedule item number that did not map to a standard clinical category in Bupa’s claims assessment system (a Medical Uncategorised Item Claim); or

(iv)    was provided by a hospital, and included at least one treatment that had a Medicare Benefits Schedule item number that did not map to a standard clinical category in Bupa’s claims assessment system (a Hospital Uncategorised Item Claim),

when in fact the member was eligible for benefits for the Covered Treatments the subject of those checks and claims, and thereby, on each occasion that it made such a representation, Bupa in trade or commerce, in connection with the supply of private health insurance services to its members:

(c)    engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of section 18 of the Australian Consumer Law (ACL), being Sch 2 to the Competition and Consumer Act 2010 (Cth); and

(d)    made a false or misleading representation that members were not entitled to payment of benefits toward any part of that treatment, in contravention of section 29(1)(m) of the ACL.

2.    During the period from June 2020 to February 2021, Bupa, in trade or commerce, in connection with the supply or possible supply of private health insurance services to its members, engaged in unconscionable conduct which comprised:

(a)    failing to generate and manually review the “zero benefits report” which had previously typically been generated on a weekly basis to identify incorrectly automatically assessed Hospital Mixed Coverage Claims; and

(b)    incorrectly automatically assessing at least 388 Hospital Mixed Coverage Claims of Bupa members,

in circumstances where Bupa:

(c)    did not have other processes in place to ensure that incorrectly automatically assessed Hospital Mixed Coverage Claims were identified and correctly paid in all cases;

(d)    did not advise all potentially affected hospitals and members that its automatic systems were incorrectly assessing certain Hospital Mixed Coverage Claims; and

(e)    knew that manual review was necessary to ensure that it identified and paid benefits for incorrectly automatically assessed Hospital Mixed Coverage Claims, and that improper assessment of certain such claims was a probable (but not certain) outcome of the failure to generate and manually review the zero benefits report,

and thereby engaged in conduct that was in all the circumstances unconscionable, separately contravening section 21 of the ACL on each of the at least 388 occasions on which it incorrectly automatically assessed a member’s Hospital Mixed Coverage Claim in that period.

THE COURT ORDERS THAT:

Pecuniary penalties

3.    Pursuant to section 224(1) of the ACL, Bupa pay to the Commonwealth of Australia within thirty (30) days of the date of this order a pecuniary penalty in the amount of:

(a)    $7 million in respect of the contraventions of s 29(1)(m) of the ACL concerning the making of the representations identified in paragraph 1(a) above;

(b)    $5 million in respect of the contraventions of s 29(1)(m) of the ACL concerning the making of the representations identified in paragraph 1(b)(i) above;

(c)    $5 million in respect of the contraventions of s 29(1)(m) of the ACL concerning the making of the representations identified in paragraph 1(b)(ii) above;

(d)    $3 million in respect of the contraventions of s 29(1)(m) of the ACL concerning the making of the representations identified in paragraph 1(b)(iii) above;

(e)    $3 million in respect of the contraventions of s 29(1)(m) of the ACL concerning the making of the representations identified in paragraph 1(b)(iv) above; and

(f)    $12 million in respect of the contraventions of s 21 of the ACL identified in paragraph 2 above.

Injunction

4.    Pursuant to section 232 of the ACL, Bupa be restrained, for a period of five years from the date of this order, whether by itself, its officers, agents or otherwise, from representing that members are not entitled to the payment of benefits towards any part of a Mixed Coverage Eligibility Check, a Medical or Hospital Mixed Coverage Claim, or a Medical or Hospital Uncategorised Item Claim, when in fact the member is eligible for benefits for Covered Treatment the subject of that check or claim.

Compliance program

5.    Pursuant to section 246(2)(b) of the ACL, Bupa, at its own expense:

(a)    undertake a review of its existing compliance program relating to compliance with the ACL;

(b)    update that compliance program in accordance with the terms and content of Annexure A; and

(c)    maintain that compliance program for a period of 3 years from the date of this order.

Costs

6.    Pursuant to section 43(1) of the Federal Court of Australia Act 1976 (Cth), Bupa pay a contribution of $250,000 to the Applicant’s costs of the proceeding.

Confidential exhibit

7.    Pursuant to rule 2.32(3)(a) of the Federal Court Rules 2011 (Cth), confidential exhibit A3 be marked as confidential and not be made available for inspection by a person who is not a party to the proceeding.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011 (Cth).

ANNEXURE A

Unless specified otherwise, defined terms in this Compliance Program have the meanings provided in the Originating Application dated 30 June 2025 and the Statement of Agreed Facts and Admissions dated 5 November 2025.

Bupa will review its Compliance Program to ensure it gives effect to each of the following requirements:

1.    Commencement of this Compliance Program

(a)    This Compliance Program comes into effect when the Court makes the order specifying its implementation (Commencement Date).

2.    Appointments

(a)    Within 3 months of the Commencement Date set out in paragraph 1(a) of this Compliance Program, Bupa will ensure that it has appointed a director or a senior manager with suitable qualifications or experience in corporate compliance as responsible for ensuring the Compliance Program is effectively designed, implemented and maintained (Compliance Officer).

(b)    Within 3 months of the Commencement Date, Bupa will appoint a suitably qualified, external compliance professional with expertise in consumer law (Compliance Advisor).

3.    Risk Assessment

(a)    Bupa will instruct the Compliance Advisor to conduct a consumer law risk assessment within 3 months of being appointed as the Compliance Advisor (Risk Assessment) and to provide a written report outlining their findings to Bupa within 3 months of conducting the Risk Assessment (Risk Assessment Report).

(b)    Bupa will use its best endeavours to ensure that the Risk Assessment Report:

(i)    identifies the areas where Bupa is at risk of breaching the misleading or deceptive conduct or false or misleading representations or unconscionable conduct provisions of the Australian Consumer Law (ACL), being Schedule 2 to the Competition and Consumer Act 2010 (Cth) (CCA), taking into account but not limited to areas which are the subject of the Proceedings set out in clause ‎3.1 of the Undertaking;

(ii)    assesses the likelihood of these risks occurring;

(iii)    identifies where there may be gaps in Bupa’s existing procedures for managing these risks; and

(iv)    provides recommendations, where necessary, for any action to be taken by Bupa based on the Risk Assessment.

4.    Compliance Policy

(a)    Bupa will, within 30 days of the Commencement Date, issue an updated policy statement outlining Bupa’s continued commitment to compliance with the ACL (Compliance Policy).

(b)    Bupa will ensure the updated Compliance Policy:

(i)    contains a statement of continued commitment to compliance with the ACL;

(ii)    contains an outline of how commitment to ACL compliance is realised within Bupa;

(iii)    contains a renewed requirement for all staff to report any Compliance Program related issues and ACL compliance concerns to the Compliance Officer;

(iv)    contains a guarantee that whistleblowers with consumer law compliance concerns will not be prosecuted or disadvantaged in any way and that their reports will be kept confidential and secure; and

(v)    contains a clear statement that Bupa will take action internally against any persons who are knowingly involved in a contravention of the ACL and, as applicable, draws attention to the operation of section 77A of the CCA and/or section 229 of the ACL which prohibit Bupa from indemnifying officers of Bupa from payment of pecuniary penalties or legal costs from related proceedings for certain contraventions.

(c)    Bupa will ensure that all executive or non-executive directors and officers, employees, representatives and agents of Bupa are made aware of the updated Compliance Policy when it is issued and that it forms part of the Staff Training and Induction outlined at paragraph 7 of this Compliance Program.

5.    Complaints Handling System

(a)    Within 6 months of the Commencement Date, Bupa will review and, where necessary, enhance its procedures for identifying, classifying, storing and responding to consumer law complaints (Complaints Handling System).

(b)    Bupa will use its best endeavours to ensure that its Complaints Handling System remains consistent with the Australian/New Zealand Standard AS/NZS 10002:2022 Guidelines for complaint management in organizations, as in force or existing at the Commencement Date, tailored as required to Bupa’s circumstances.

(c)    Bupa will ensure that staff and customers are reminded of the Complaints Handling System.

6.    Whistleblower Protection

(a)    Bupa will:

(i)    review and, where necessary, enhance its whistleblower protection mechanisms to protect those coming forward with consumer law complaints; and

(ii)    use its best endeavours to ensure that these mechanisms remain consistent with good practice guidance identified in ASIC Regulatory Guide 270: Whistleblower policies, as in force or existing at the Commencement Date, tailored as required to Bupa’s circumstances.

7.    Staff Training and Induction

(a)    Bupa will ensure that the Compliance Program includes a requirement for ACL compliance training at least once a year (Staff Training) for all:

(i)    officers, employees, representatives and agents of Bupa, whose duties could result in them being concerned with conduct that may contravene the ACL; and

(ii)    executive and non-executive directors of Bupa.

(b)    Bupa will ensure that the Compliance Program includes a requirement that awareness of Bupa’s obligations under the ACL forms part of the induction (Induction) of all new:

(i)    officers, employees, representatives and agents of Bupa whose duties could result in them being concerned with conduct that may contravene the ACL; and

(ii)    executive or non-executive directors of Bupa.

(c)    Bupa will ensure that the Staff Training and Induction are prepared and/or conducted by a suitably qualified compliance professional or legal practitioner with expertise in the ACL.

8.    Reports to Bupa’s Health Insurance Risk Committee

(a)    Bupa will ensure that the Compliance Officer reports to Bupa’s Health Insurance Risk Committee (HIRC) every 4 months on the continuing effectiveness of the Compliance Program.

9.    Compliance Review

(a)    Bupa will cause an annual review of the Compliance Program (Review) to be carried out at its own expense and in accordance with each of the following requirements:

(i)    Scope of Review – the Review should be broad and rigorous enough to provide Bupa and the ACCC with:

A.    a verification that Bupa has in place a Compliance Program that complies with each of the requirements detailed in paragraphs 2 to 7 of this Compliance Program; and

B.    the Compliance Report detailed at paragraph 10 of this Compliance Program.

(ii)    Independence of Review – Bupa will ensure that each Review is carried out by a suitably qualified, independent compliance professional with expertise in the ACL (Reviewer). The Reviewer will qualify as independent on the basis that they:

A.    did not design or implement the Compliance Program;

B.    are not a present or past staff member or director of Bupa;

C.    have not personally acted and do not personally act for, and do not personally consult and have not personally consulted to, Bupa in any consumer law matters, other than performing Reviews and Risk Assessment Reports; and

D.    have no significant shareholding or other interests in Bupa.

(iii)    Evidence – Bupa will use its best endeavours to ensure that each Review is conducted on the basis that the Reviewer has access to all relevant sources of information in Bupa’s possession or control, including without limitation:

A.    the ability to make enquiries of any officers, employees, representatives and agents of Bupa;

B.    documents relating to the Risk Assessment, including the Risk Assessment Report;

C.    documents relating to Bupa’s Compliance Program, including documents relevant to Bupa’s Compliance Policy, Complaints Handling System, Staff Training and Induction; and

D.    any reports made by the Compliance Officer to HIRC regarding Bupa’s Compliance Program.

(iv)    Bupa will ensure that a Review is completed within one year of the Commencement Date, and that a subsequent Review is completed annually for 2 additional years.

10.    Compliance Report

(a)    Bupa will use its best endeavours to ensure that within 30 days of the completion of a Review, the Reviewer includes the following findings of the Review in a report to the Compliance Officer of Bupa (Compliance Report):

(i)    whether the Compliance Program of Bupa includes all the elements detailed in paragraphs 2 to 7 of this Compliance Program, and if not, what elements need to be included or further developed;

(ii)    whether the Compliance Program adequately covers areas identified in the Risk Assessment, and if not, what needs to be further addressed;

(iii)    whether the Staff Training and Induction are effective, and if not, what aspects need to be further developed;

(iv)    whether Bupa’s Complaints Handling System is effective, and if not, what aspects need to be further developed;

(v)    whether Bupa is able to provide protections consistent with good practice guidance referred to in paragraph 6 of this Compliance Program for consumer law whistleblowers, and whether staff are aware of the whistleblower protection mechanisms; and

(vi)    whether there are any material deficiencies in Bupa’s Compliance Program, or whether there are or have been instances of material non-compliance with the Compliance Program (Material Failure), and if so, recommendations for rectifying the Material Failure.

(b)    For the purposes of paragraph 10(a)(vi), Material Failures are intended to include non-trivial failures, which are ongoing or continue for a significant period of time, to:

(i)    incorporate a requirement of the Undertaking in the design of the Compliance Program (for example, if the Complaints Handling System did not provide a mechanism for responding to complaints); or

(ii)    comply with a fundamental obligation in the implementation of the Compliance Program (for example, if no Staff Training has been conducted within the Annual Review period).

11.    Bupa’s response to Compliance Report

(a)    Bupa will ensure that the Compliance Officer, within 21 days of receiving the Compliance Report:

(i)    provides the Compliance Report to HIRC; and

(ii)    where a Material Failure has been identified by the Reviewer in the Compliance Report, provides a work plan to HIRC identifying how Bupa can implement any recommendations made by the Reviewer in the Compliance Report to rectify the Material Failure.

(b)    Bupa will promptly and fully implement any recommendations made by the Reviewer in the Compliance Report to address a Material Failure.

12.    Reporting to the ACCC

(a)    Bupa will:

(i)    provide a copy of the Compliance Report to the ACCC within 30 days of HIRC receiving the Compliance Report; and

(ii)    where a Material Failure is identified by the Reviewer in the Compliance Report:

A.    inform the ACCC of any steps that have been taken by Bupa to implement the recommendations made by the Reviewer in the Compliance Report; or

B.    otherwise outline the steps that Bupa proposes to take to implement the recommendations and inform the ACCC once those steps have been implemented.

13.    Provision of Compliance Program documents to the ACCC

(a)    Bupa will maintain copies of all documents relating to and constituting the Compliance Program for a period not less than 5 years.

(b)    If requested by the ACCC during the period of 5 years following the Commencement Date, Bupa will cause to be produced and provided to the ACCC copies of all documents constituting the Compliance Program, including:

(i)    the Compliance Policy;

(ii)    the Risk Assessment Report;

(iii)    an outline of the Complaints Handling System;

(iv)    Staff Training and Induction materials;

(v)    the Compliance Report that has been completed at the time of the request (if relevant); and

(vi)    copies of any Compliance Report or work plan produced to HIRC as a result of paragraph ‎11 of this Compliance Program.

14.    ACCC Recommendations

(a)    Bupa will promptly and fully implement any recommendations that the ACCC considers reasonably necessary to ensure that Bupa maintains and continues to implement the Compliance Program in accordance with the requirements of this Compliance Program.

REASONS FOR JUDGMENT

O’CALLAGHAN J

INTRODUCTION

1    On 30 June 2025, the Australian Competition and Consumer Commission (ACCC) filed an originating application seeking various forms of relief, including pecuniary penalties, against Bupa HI Pty Ltd (Bupa), one of Australia’s largest private health insurance providers, for its alleged failure (on multiple occasions and in different ways) to honour the terms of the health insurance policies held by its customers. The ACCC alleged that Bupa’s conduct amounted to contraventions of ss 18 (misleading or deceptive conduct), 21 (false or misleading representations) and 29(1)(m) (unconscionable conduct) of the Australian Consumer Law (ACL), being Schedule 2 to the Competition and Consumer Act 2010 (Cth) (CCA).

2    The ACCC had launched an investigation in November 2020 into Bupa in relation to the subject matter of the contraventions alleged in the originating application.

3    Bupa cooperated with that investigation, so the ACCC did not proceed to file a statement of claim or a concise statement.

4    Ultimately, Bupa and the ACCC agreed upon the content of two critical documents that rendered pleadings, a formal discovery process and a trial unnecessary — namely, a statement of agreed facts and admissions (SAFA) dated 5 November 2025 and joint submissions on liability and penalty filed on 8 October 2025, both of which were settled by senior and junior counsel on both sides.

5    The parties have agreed that, subject to the court’s approval:

(a)    Bupa should pay penalties totalling $35 million in respect of the admitted breaches; and

(b)    the court should grant declaratory and injunctive relief, order Bupa to undergo a compliance program, pay to the ACCC a sum of money as a contribution to its legal costs and make related orders as to confidentiality.

6    The parties appeared at a hearing on 7 November 2025. Mr N De Young appeared with Ms A Lord of counsel for the ACCC. Mr Yezerski SC appeared with Ms A Muhlebach of counsel for Bupa.

7    Counsel made detailed oral submissions in addition to the written submissions, and made extensive reference to the SAFA, directed to the contention that the court should approve the terms upon which the parties have agreed to settle their dispute.

8    The fact that penalties totalling $35 million have been agreed (subject, as I say, to the court’s approval) is indicative of the seriousness of Bupa’s contraventions. In summary, and as I will explain, the contraventions are serious, including because:

(a)    Bupa’s contravening conduct included at least 7,589 false or misleading representations over a period of about five years, and 388 occasions of unconscionable conduct over an eight-month period;

(b)    the contravening conduct was allowed to continue even after Bupa’s senior managers became aware that system changes were necessary to avoid incorrectly rejecting claims;

(c)    the unconscionable conduct took place in circumstances where Bupa chose to discontinue the safeguard (being something called a “Zero Benefits Report”, defined in paragraph 21(c) below) that it had previously put in place to mitigate aspects of its contravening conduct;

(d)    the contravening conduct exposed members of Bupa to the risk of wide-ranging harm, including serious harm to their health and wellbeing, and significant financial harm resulting from the denial of benefits to which they were entitled;

(e)    in many cases, that risk of harm in fact eventuated; and

(f)    Bupa benefited from the contravening conduct, including by retaining unpaid benefits, obtaining increased premiums from members who had upgraded their insurance cover (in order to obtain cover for certain treatments in relation to which they had incorrectly been told they were not entitled to receive any benefits), and delaying or deferring costs of system upgrades and training.

9    On the other hand, the factors weighing in Bupa’s favour must also be taken into account when determining the appropriate quantum of penalties, including:

(a)    since the ACCC commenced its investigation, Bupa has taken positive steps to remediate customers, in the amount of $14.3 million (as at 5 November 2025);

(b)    Bupa has given an undertaking to the ACCC to complete its existing and ongoing remediation program;

(c)    Bupa has cooperated in the course of the ACCC investigation and these proceedings, including by making admissions as to its liability and agreeing to jointly seek penalties that reflect the seriousness of the contraventions;

(d)    Bupa has no relevant prior contraventions; and

(e)    Bupa has taken steps to improve its compliance culture, including by investing approximately $5.6 million (as at 5 November 2025) to rectify its systems and processes since the contravening conduct was identified.

10    For the reasons set out below, I will make the penalty orders agreed upon because in my view, having considered the factual matters set out in the 77-paged SAFA, the 33-paged joint submissions and the helpful oral submissions of counsel, the total amount of $35 million is appropriate in all the circumstances and each component of that penalty is also appropriate. In doing so, I have had regard to, among other things, the fact that the court:

(a)    does not function as a “rubber stamp” when considering whether an agreed penalty is appropriate; and

(b)    should nevertheless recognise generally that the sum agreed:

(i)    is most likely the result of compromise and pragmatism on the part of the regulator; and

(ii)    reflects the regulator’s considered estimation of both the penalty necessary to achieve deterrence and the risks and expense of the litigation had it not been settled.

11    I am also satisfied that it is appropriate to grant the declarations sought, and to make the other orders sought (concerning injunctive relief, an ongoing compliance program, payment of some of the ACCC’s costs, and confidentiality).

THE AGREED FACTS

12    Bupa is a subsidiary of Bupa HI Holdings Pty Ltd, which is ultimately controlled by The British United Provident Association Limited.

13    Bupa supplies “hospital cover”, among other health insurance services, under contracts (being policies) between it and consumers by which, in return for the consumers paying premiums, Bupa agrees to pay certain benefits as defined in the policies towards the costs of particular treatments provided to the consumer during a hospital admission.

14    Those treatments typically comprise services provided by a medical provider, such as a surgeon or an anaesthetist (which the parties called medical claims), and services provided by the hospital itself, such as operating theatre accommodation (which the parties called hospital claims).

15    A single medical claim or hospital claim can include multiple treatments. The parties referred to the portion of any such claim that was covered under the member’s policy as covered treatment, and to the portion not covered under their policy as excluded treatment.

16    Any claims that included both covered treatment and excluded treatment were called Mixed Coverage claims. The parties referred to any medical claims that were also Mixed Coverage claims as Medical Mixed Coverage claims. Equivalently, any hospital claims that were also Mixed Coverage claims were called Hospital Mixed Coverage claims.

17    Separately to the above, the parties referred to claims that included at least one treatment that had a Medicare Benefits Schedule item number that did not “map” to a standard clinical category in Bupa’s claims assessment system as Uncategorised Item claims. These claims were similarly bifurcated into Medical Uncategorised Item claims and Hospital Uncategorised Item claims.

18    A Mixed Coverage claim may also contain treatments that did not map to a standard clinical category, meaning that a Mixed Coverage claim may also be an Uncategorised Item claim.

19    The contravening conduct in this matter concerned:

(a)    pre-treatment enquiries that Bupa members made about their eligibility for benefits in respect of potential Mixed Coverage claims (Eligibility Checks);

(b)    Mixed Coverage claims; and

(c)    Uncategorised Item claims.

20    Under the policies in force in the relevant period (that is, the more than five-year period from 1 May 2018 until 31 August 2023), Bupa’s members were entitled to receive, and Bupa was obliged to pay, benefits for the covered treatment in any Mixed Coverage claim or Uncategorised Item claim. Bupa was not obliged to pay, and no members were entitled to receive, benefits for any excluded treatment under the member’s policy.

21    The parties agreed that Bupa engaged in the following contravening conduct during the relevant period:

(a)    Bupa representatives misrepresented members’ entitlements to benefits for certain Mixed Coverage claims when, in response to Eligibility Checks made by members or persons acting on their behalf (including family members, medical providers or hospitals), Bupa incorrectly advised the enquiring members or their delegates that the member was not entitled to benefits in respect of the claim;

(b)    Bupa representatives misrepresented members’ entitlements to benefits for certain Mixed Coverage claims and certain Uncategorised Item claims, when Bupa:

(i)    through its automatic claims assessment system, incorrectly rejected or assessed certain Mixed Coverage claims and Uncategorised Item claims as having “zero benefits payable”;

(ii)    on some occasions, when Hospital Mixed Coverage claims had been “held” by the automatic claims assessment system for manual review, incorrectly rejected or assessed those claims; and

(iii)    on some occasions, after a member’s Mixed Coverage claim had been rejected, incorrectly advised members or their delegates that the member was not entitled to benefits in respect of the claim; and

(c)    by discontinuing the Zero Benefits Report (on which it had previously relied to identify and correctly assess Hospital Mixed Coverage claims that had been incorrectly assessed by its automatic claims assessment systems) between June 2020 and February 2021, Bupa engaged in conduct that was, in all the circumstances, unconscionable on each of the at least 388 occasions on which it automatically incorrectly assessed a member’s Hospital Mixed Coverage claim in that period.

THE LAW

Sections 18 and 29 of the ACL

22    Section 18(1) of the ACL provides that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

23    Section 29(1)(m) of the ACL provides that a person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services, make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy.

24    There is generally no relevant distinction between the phrases “misleading or deceptive” in s 18 and “false or misleading” in s 29 of the ACL.

25    The principles applicable to determining whether conduct contravenes ss 18 and 29 are well established, and there was no dispute about any of them.

26    Conduct is misleading or deceptive if it has a tendency to lead into error; it is not necessary to prove that the conduct in question actually deceived or misled anyone. Whether conduct in relation to a particular class of consumers is misleading or deceptive is a question of fact to be resolved by a consideration of the whole of the impugned conduct in the circumstances and context in which it occurred.

27    Further, where the conduct in issue consists of an express representation which is demonstrably false, it is not usually necessary to go beyond that finding to conclude that it is misleading or deceptive. See ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 at 380 (French J).

Section 21 of the ACL

28    The relevant provisions in the ACL relating to the question of unconscionable conduct are found in ss 21 and 22.

29    I will not burden these reasons with a recital of those provisions, because they are lengthy and Bupa agreed that its conduct with respect to the Hospital Mixed Coverage claims was unconscionable.

30    As the Full Court said in Unique International College Pty Ltd v Australian Competition and Consumer Commission (2018) 266 FCR 631 at 667 [155] (Allsop CJ, Middleton and Mortimer JJ), an allegation of unconscionability is a serious allegation, sufficient to warrant censure for the purpose of deterrence by the imposition of a civil penalty:

To behave unconscionably should be seen, as part of its essential conception, as serious, often involving dishonesty, predation, exploitation, sharp practice, unfairness of a significant order, a lack of good faith, or the exercise of economic power in a way worthy of criticism. None of these terms is definitional. The Shorter Oxford Dictionary on Historical Principles (1973) gives various definitions including “having no conscience, irreconcilable with what is right or reasonable”. The Macquarie Dictionary (1985) gives the definition “unreasonably excessive; not in accordance with what is just or reasonable”. (The search for an easy aphorism to substitute for the words chosen by Parliament (unconscionable conduct) should not, however, be encouraged …) These are descriptions and expressions of the kinds of behaviour that, viewed in all the circumstances, may lead to an articulated evaluation (and criticism) of unconscionability. It is a serious conclusion to be drawn about the conduct of a businessperson or enterprise. It is a conclusion that does the subject of the evaluation no credit. This is because he, she or it has, in a human sense, acted against conscience. The level of seriousness and the gravity of the matters alleged will depend on the circumstances. Courts are generally aware of the character of a finding of unconscionable conduct and take that into account in determining whether an applicant has discharged its civil burden of proof.

31    The values that inform the standard of conscience include “certainty in commercial transactions, honesty, the absence of trickery or sharp practice, fairness when dealing with customers, the faithful performance of bargains and promises freely made, and … the protection of those whose vulnerability as to the protection of their own interests places them in a position that calls for a just legal system to respond for their protection, especially from those who would victimise, predate or take advantage”. See Australian Securities and Investments Commission v Kobelt (2019) 267 CLR 1 at 17 [14] (Kiefel CJ and Bell J) (internal quotations and citations omitted). The task of the court is to “assess whether [the conduct] is to be characterised as a sufficient departure from the norms of acceptable commercial behaviour as to be against conscience or to offend conscience”. See Australian Competition and Consumer Commission v Quantum Housing Group Pty Ltd (2021) 285 FCR 133 at 156 [92] (Allsop CJ, Besanko and McKerracher JJ).

32    Further, it is not necessary under ss 21 and 22 of the ACL to find “some form of pre-existing disability, vulnerability or disadvantage of which advantage was taken”. See Quantum Housing at 152 [78].

Pecuniary penalties

33    The parties jointly proposed pecuniary penalties in the amount of $35 million, comprising:

(a)    $23 million for Bupa’s contraventions of s 29(1)(m) of the ACL between 30 June 2019 and 31 August 2023, comprising:

(i)    $7 million in respect of the Eligibility Check representations;

(ii)    $5 million in respect of the Medical Mixed Coverage representations;

(iii)    $5 million in respect of the Hospital Mixed Coverage representations;

(iv)    $3 million in respect of the Medical Uncategorised Item representations; and

(v)    $3 million in respect of the Hospital Uncategorised Item representations; and

(b)    $12 million for Bupa’s unconscionable conduct in contravention of s 21 of the ACL.

34    They did so by reference to the well-established principles relevant to the imposition of pecuniary penalties, including most relevantly here by reference to deterrence (which is always the primary objective); the “course of conduct” principle; the nature and extent of the act or omission and of any loss or damage (which includes financial as well as non-pecuniary loss or damage) suffered as a result of the act or omission; the circumstances in which the act or omission took place; the contravener’s size; the deliberateness of the contravention and the period over which it extended; whether the contravention arose out of the conduct of senior management or at a lower level; whether the contravener has a corporate culture conducive to compliance with the relevant laws; and whether the contravener cooperated with the regulator.

35    Before turning to consider those matters, I should say something very briefly about how courts approach the question of assessing the appropriateness of an agreed penalty in cases such as this (namely, where a regulator charged with the task of enforcing statutory consumer protections agrees to a penalty sum with a well-resourced respondent).

36    As French CJ, Kiefel, Bell, Nettle and Gordon JJ said in Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 at 503–504 [46]–[47] and 507 [58]:

[T]here is an important public policy involved in promoting predictability of outcome in civil penalty proceedings and … the practice of receiving and, if appropriate, accepting agreed penalty submissions increases the predictability of outcome for regulators and wrongdoers. … [S]uch predictability of outcome encourages corporations to acknowledge contraventions, which, in turn, assists in avoiding lengthy and complex litigation and thus tends to free the courts to deal with other matters and to free investigating officers to turn to other areas of investigation that await their attention.

… [B]ecause fixing the quantum of a civil penalty is not an exact science, there is a permissible range in which courts have acknowledged that a particular figure cannot necessarily be said to be more appropriate than another. It is only in that latter sense and only to that extent that the court will not depart from the submitted figure merely because it might otherwise have been disposed to select some other figure.

… Subject to the court being sufficiently persuaded of the accuracy of the parties’ agreement as to facts and consequences, and that the penalty which the parties propose is an appropriate remedy in the circumstances thus revealed, it is consistent with principle and … highly desirable in practice for the court to accept the parties’ proposal and therefore impose the proposed penalty. …

(Internal quotations and citations omitted.)

37    As indicated above, however, it remains the case that the court must be persuaded that the penalty proposed by the parties is appropriate; the agreement of the parties cannot bind it to impose a penalty which it considers is not appropriate. As the Full Court observed in Volkswagen Aktiengesellschaft v Australian Competition and Consumer Commission (2021) 284 FCR 24 at 45 [129] (Wigney, Beach and O’Bryan JJ):

… in considering whether the proposed agreed penalty is an appropriate penalty, the Court should generally recognise that the agreed penalty is most likely the result of compromise and pragmatism on the part of the regulator, and to reflect, amongst other things, the regulator’s considered estimation of the penalty necessary to achieve deterrence and the risks and expense of the litigation had it not been settled … The fact that the agreed penalty is likely to be the product of compromise and pragmatism also informs the Court’s task when faced with a proposed agreed penalty. The regulator’s submissions, or joint submissions, must be assessed on their merits, and the Court must be wary of the possibility that the agreed penalty may be the product of the regulator having been too pragmatic in reaching the settlement …

Course of conduct

38    As was submitted, separate contraventions arising from separate acts should ordinarily attract separate penalties. However, where separate acts giving rise to separate contraventions are inextricably interrelated, they may be grouped as a “course of conduct” so as to avoid double punishment.

39    Here, it was jointly submitted that I should treat the contraventions of s 29 of the ACL as forming five separate courses of conduct, one for each of the five different kinds of representations: the Eligibility Check representations, Medical Mixed Coverage representations, Hospital Mixed Coverage representations, Medical Uncategorised Item representations and Hospital Uncategorised Item representations.

40    It was also submitted that the contraventions of s 21 of the ACL should be grouped into a single course of conduct, including because each contravention arose from the same conduct, being Bupa’s decision to discontinue the Zero Benefits Report.

41    I agree with those submissions.

RELEVANT CONSIDERATIONS

Nature and circumstances of the contraventions

42    The parties agree, and I accept, that Bupa’s contraventions were serious.

43    The contravening conduct related to the core function of Bupa’s business. Members were entitled to receive, and Bupa was obliged to pay, benefits for each covered treatment that formed part of a Mixed Coverage claim or an Uncategorised Item claim.

44    Those obligations formed part of Bupa’s contractual arrangements with its members (see SAFA at [8]) within the broader framework of its obligations under the Private Health Insurance Act 2007 (Cth) (the PHI Act) and subordinate rules.

45    Bupa, as one of the largest private health insurers in Australia, self-evidently should have complied with those obligations.

46    Unsurprisingly, Bupa agreed that consumers who purchase private health insurance from it should be entitled to expect it to provide them with accurate information about their entitlements to benefits and to pay the benefits they are entitled to receive. Nonetheless, on at least 7,589 occasions, it denied members some of those entitlements.

47    Bupa’s contravening conduct was also serious because it continued for about five years (including after it was on notice of the ACCC’s investigation), and it involved at least 7,589 false or misleading representations and 388 occasions of unconscionable conduct.

48    In assessing the seriousness of the contraventions, it is instructive to understand how they happened.

49    As the SAFA and the joint submissions record, it arose in part through the programming and operation of Bupa’s automatic claims assessment systems, which determined the benefits that Bupa paid to its members.

50    In particular, the Medical Mixed Coverage representations occurred after Bupa programmed its claims assessment systems in a way that had the effect of incorrectly rejecting certain Medical Mixed Coverage claims in August 2018. The programming was designed to prevent Bupa from paying benefits in circumstances where members were not eligible for benefits under Bupa policies (referred to within Bupa as preventing claims “leakage”). Bupa also had some knowledge that the programming would result in the rejection of Medical Mixed Coverage claims, and it knew that if it rejected valid claims, members (i) would be denied benefits to which they were entitled and which it was obliged to pay; (ii) could incur unexpected out of pocket costs; and (iii) may not receive Medicare benefits unless a separate claim was submitted to Medicare. Bupa also recognised the risk that rejected claims could include both excluded treatment and covered treatment, and it accepted that what it dubbed “extraordinary payments” might be necessary if a member challenged the claim rejection. Despite having an awareness of the above matters, Bupa did not put in place any processes to monitor such claims.

51    During the relevant period, Bupa also came to appreciate that it was incorrect for it to reject all Medical Mixed Coverage claims. From November 2018, it received various enquiries from members and medical providers about its rejection of such claims, and Bupa appreciated by December 2019 that the way it had programmed the system was, as it was put in the joint submission, “inconsistent with its obligations”. Nonetheless, Bupa did not implement any interim measures to mitigate the harm to its members, nor did it implement a systems fix until September 2021, well after the ACCC commenced its investigation.

52    Further, the Medical Uncategorised Item representations occurred after Bupa introduced “restricted surgical items” into its programming in August 2018. By July 2019, Bupa knew that this was causing the Medical Uncategorised Item representations. It took steps to address the programming for some members, but not those on “Basic” policies. To the knowledge of Bupa, the contravening conduct continued with respect to those members until September 2021, when it implemented a “systems fix”.

53    Further, the Hospital Mixed Coverage representations occurred because of changes that Bupa made in August 2018 to its automatic claims assessment systems in response to reforms to the PHI Act. Specifically, Bupa’s adoption of what it called “Minimum Benefits to Exclusion” programming removed minimum benefits payments and instead provided for excluded treatments in Bupa’s policies. Under the new programming, Hospital Mixed Coverage claims were automatically assessed as having zero benefits payable if the “lowest claim group number” in the claim concerned excluded treatment. This meant that a significantly larger volume of claims would be rejected (instead of Bupa paying “minimum benefits” for those treatments), which exacerbated the frequency and impact of Mixed Coverage claims.

54    Even when some claims assessments of Hospital Mixed Coverage claims were “held” for manual review, they were rejected and “released back into the system” — only to be assessed as “zero benefits payable” (another way of saying that the claims were denied in their entirety) because of shortcomings in Bupa’s instructions and staff training, the details of which are set out in the SAFA.

55    Other claims that should have been held for manual review were instead automatically assessed as “zero benefits payable” (a process that the parties referred to as “Straight Through Processing”).

56    In May 2018, in the course of testing the Minimum Benefits to Exclusions change, Bupa became aware that its claims processing system was not operating as intended; the way the system was operating meant that no explanation was given to hospitals about why Bupa had not paid a benefit and, in cases where the claim should have been paid, prevented the claims from being re-submitted through the automatic systems. Bupa identified that adopting the Minimum Benefits to Exclusions change would exacerbate the issue and considered whether to delay implementing that change until the issue was fixed, but decided not to make any programming changes and instead allowed the system to continue Straight Through Processing as described above. Bupa staff identified that a fix would not be simple or cheap and would likely not be achievable by the date proposed to implement the Minimum Benefits to Exclusions programming change.

57    Upon implementing that change, Bupa experienced an immediate increase in Straight Through Processing claims automatically assessed as zero benefits payable (although the parties did not suggest that all such claims should have been paid). Bupa did not implement a systems fix to stop Straight Through Processing until March 2022, but “did take earlier steps to stop the conduct in other ways with varying success”.

58    Further, following the introduction of the PHI Act reforms, senior managers identified in September 2019 that programming changes to assess Hospital Mixed Coverage claims were necessary to address claims being incorrectly assessed as zero benefits payable. However, from May 2020, the proposed system fix was placed on the “backlog” to be considered in Bupa’s 2021 updates, “including due to the impact of the COVID-19 pandemic, funding and priority considerations”.

59    As for the Hospital Uncategorised Item representations, they occurred as a result of the same relevant programming. Bupa became aware that its claims assessment system was incorrectly rejecting Hospital Uncategorised Item claims by at least August 2019, but did not change the operation of its claims assessment system until March 2022.

60    Other contravening conduct arose from the manual assessment or related consideration of Mixed Coverage claims and Eligibility Checks. As stated in paragraph [56] of the joint submissions:

Bupa HI did not provide its representatives with sufficiently accurate, clear or consistent instructions, training or guidance about how properly to assess Mixed Coverage Claims and … Eligibility Checks. Instead, … at times Bupa HI representatives relied on instructions that were incorrect, and other instructions and understandings that could cause claims to be assessed in a way that was inconsistent with [its] obligations. These instructions were published on Bupa HI’s “Know-It” database which was used to provide Bupa HI representatives with information relevant to the assessment of claims. Bupa HI representatives acted consistently with these internal policies and instructions (but incorrectly having regard to [its] obligations to Members) in making the Eligibility Check Representations, Medical Mixed Coverage Representations, and Hospital Mixed Coverage Representations.

(Citations omitted.)

61    The details of such failures are set out in the SAFA, but it is unnecessary to belabour the failures with such minutiae in these reasons.

62    As is clear from what I have already said, the contraventions continued even after Bupa became aware of them.

63    And the unconscionable conduct took place in circumstances where Bupa discontinued the safeguard it had put in place to remedy those contraventions.

64    Moreover, Bupa’s false, misleading or deceptive representations continued after it had received complaints from consumers, including through the Private Health Insurance Ombudsman, and even after Bupa was on notice of the ACCC’s investigation — again, in circumstances detailed in the SAFA.

65    Although Bupa made changes to its medical system programming in September 2021 and to its hospital system programming in March 2022, it continued to make additional Mixed Coverage and Uncategorised Item representations until well over a year later (i.e. August 2023).

66    I turn now to the instances of unconscionable conduct.

67    Between approximately August 2019 and June 2020, Bupa sought to mitigate the effects of the Hospital Mixed Coverage representations by implementing a Zero Benefits Report process to identify and manually assess Hospital Mixed Coverage claims which had been incorrectly assessed as zero benefits payable. But, for reasons that were not explained (save for a reference to “resourcing constraints”), it discontinued that process in June 2020, which resulted in the wrongful rejection of at least 388 Hospital Mixed Coverage claims. That conduct was self-evidently serious.

68    At the time Bupa decided to discontinue the Zero Benefits Report, it knew that certain Hospital Mixed Coverage claims were being incorrectly automatically assessed by its systems and that manual review was necessary to ensure that it identified and paid those claims.

69    It also knew that an improper assessment of certain Hospital Mixed Coverage claims was a probable outcome of failing to continue generating and manually reviewing the Zero Benefits Report. And it knew that there was a risk that members could be charged additional out of pocket costs.

70    Nevertheless, Bupa did not put in place any other processes to ensure that those Hospital Mixed Coverage claims were identified and paid correctly in all cases; took no other steps to fix its claims assessment system; and did not advise potentially affected hospitals or members that its claims assessment systems were incorrectly assessing certain Hospital Mixed Coverage claims.

71    As was agreed, and is obvious in any event, the fact that Bupa “engaged in the conduct in light of this risk to members and in the absence of any, or any sufficient, steps to prevent the incorrect assessment of valid claims from occurring, is critical to its unconscionability and significant in the assessment of an appropriate penalty”.

72    Bupa’s unconscionable conduct continued for eight months, until after it was on notice of the ACCC’s investigation in this matter. During that period, at least 388 Hospital Mixed Coverage claims were incorrectly assessed as zero benefits payable. Those affected members had properly sought to rely on their private health insurance to reduce their out of pocket costs for treatment that was covered treatment under their policies, but their claims were incorrectly assessed and were not subsequently identified or paid.

Deliberateness and involvement of senior management

73    Although there was no evidence that Bupa’s board and executive leadership team were aware of any contravening conduct before the commencement of the ACCC’s investigation, it was agreed that some Bupa senior managers became aware during the relevant period that Bupa’s system programming had the effect that it was incorrectly assessing Mixed Coverage claims and Uncategorised Item claims, and that system changes were necessary to avoid incorrectly rejecting claims. Further, knowledge amongst senior managers that Bupa was incorrectly assessing certain Mixed Coverage and Uncategorised Item claims (both through its automatic systems and manually) “grew over time” during the relevant period, and was said to have become “plainly apparent” by September 2019 (in respect of Hospital Mixed Coverage claims and Hospital and Medical Uncategorised Item claims) and by December 2019 (in respect of Medical Mixed Coverage claims).

74    Senior managers also became aware by late 2019 that Bupa representatives were confused by its inadequate instructions and so were wrongly assessing Mixed Coverage claims and Eligibility Checks.

75    Despite this, Bupa did not stop the contravening conduct until after the ACCC commenced its investigation. It is also telling that, by July 2020, certain Bupa staff (including some senior managers) drew comparisons between Bupa’s conduct and that of Medibank, which had been ordered to pay $5 million in penalties for falsely rejecting claims through its automatic claims assessment system. See Australian Competition and Consumer Commission v Medibank Private Ltd [2020] FCA 1030; (2020) 146 ACSR 181 (Anderson J).

76    Bupa’s senior managers were responsible for the design and approval of the system programming that resulted in the contravening conduct. That programming had the effect of: (i) rejecting certain Medical Mixed Coverage claims and Medical Uncategorised Item claims; and (ii) rejecting or assessing as zero benefits payable certain Hospital Mixed Coverage claims and Hospital Uncategorised Item claims.

77    That said, the ACCC did not contend that Bupa deliberately or knowingly programmed its systems to reject valid claims.

78    Senior managers were also responsible for the inadequacy of the instructions and training provided to Bupa representatives that resulted in the contravening conduct, and were involved in the development of instructions that were incorrect and inconsistent with Bupa’s obligations.

79    Further, an awareness that the programming and instructions were inconsistent with Bupa’s obligations to members and resulted in the incorrect assessment of claims developed over time during the relevant period and took a variety of forms (set out at length in the SAFA). Even after it was beyond doubt that Bupa’s senior managers were aware of the contravening conduct, that conduct continued and it took time for Bupa to put in place any, or any adequate, measures to stop the conduct, or to monitor or mitigate the harm being caused to its members.

Harm

80    It was agreed that the contravening conduct risked causing harm and, in many cases, did cause harm either directly to members submitting Eligibility Checks or Mixed Coverage claims or Uncategorised Item claims (or in some cases, to hospitals and/or medical providers providing the treatment).

81    The types of harm suffered by members were wide-ranging and extended, in some cases, beyond financial harm.

82    It is not possible to quantify in numerical terms the total harm suffered as a consequence of the contravening conduct, in circumstances where members were either planning to receive, or had received, medical treatment in a hospital and were enquiring about, or making claims for, benefits to which they were entitled under their private health insurance policies.

83    In some instances, the harm that members suffered or risked suffering included that they were denied benefits to which they were entitled, or received those benefits on a delayed basis. In certain instances, members may not have received any benefits without lodging a separate claim.

84    In other cases, where hospitals and medical providers absorbed the costs of the unpaid treatment and the costs of following up with Bupa, they did not receive the benefits to which they were entitled in respect of the members’ claims.

85    The value of the benefits which were denied or delayed ranged from less than $10 through to approximately $103,000. The median value was about $900.

86    It was also agreed that the financial harm caused by the unconscionable conduct was “particularly egregious” given that the 388 affected claims the subject of the unconscionable conduct admission may have been identified and paid earlier.

87    As I have already mentioned, Bupa’s contravening conduct caused harm that, in some instances, extended beyond financial harm. Such non-financial harms included potential distress, disappointment and inconvenience caused to members who were incorrectly advised they were not covered, or would receive no benefits, for treatment when they had purchased private health insurance to provide peace of mind, certainty of coverage and the ability to choose when and where to undertake their procedures.

88    The non-financial harm to which members were exposed as a result of the Eligibility Check representations was particularly wide-ranging and serious. It differed in important ways from the harm caused by the other representations, because the conduct occurred prior to members receiving surgery. It included cases in which members:

(a)    contacted Bupa multiple times, only to be given conflicting information about their entitlements to benefits for upcoming medical treatment;

(b)    forwent, cancelled or delayed medical treatment, resulting in potential medical risks or complications and physical or emotional pain or distress;

(c)    elected to undergo covered and excluded treatment separately, thereby: (i) incurring additional and unnecessary risks associated with multiple treatments, physical and emotional pain or distress, and recovery time and inconvenience; and (ii) paying further out of pocket costs and taking additional leave from work;

(d)    elected to undergo treatment in a public hospital (which could involve longer wait times) instead of their private hospital of choice, resulting in potential medical risks or complications and physical or emotional pain or distress; and

(e)    unnecessarily paid higher insurance premiums after upgrading their policies to receive cover for treatment that was in fact already covered under their initial policy, and unnecessarily served applicable waiting periods after upgrading their policies, which prolonged their physical and emotional pain or distress.

89    On the plus side for Bupa, after becoming aware of the ACCC’s investigation, it voluntarily implemented a remediation program to identify and remediate members, hospitals and medical providers affected by all of its contravening conduct. That process is ongoing. As at 5 November 2025, Bupa has paid a total of $14.3 million in remediation: that is, $11.7 million to remediate wrongly assessed Mixed Coverage claims and Uncategorised Item claims; and $2.6 million to remediate wrongly assessed Eligibility Checks.

90    In that regard, it was submitted, and I agree, that the amount paid in remediation provides one numerical yardstick by which the court may be satisfied that the penalties totalling $35 million — more than double the amount Bupa has voluntarily paid to remediate the harm caused to members, hospitals and medical providers as at the date of the SAFA — will have the necessary deterrent effect.

91    Further, Bupa has separately given to the ACCC an undertaking under s 87B of the CCA to complete its existing and ongoing remediation of members, hospitals and medical providers. This is important because it means that the ACCC has not needed to seek orders from the court for redress to non-party consumers.

Benefits to Bupa

92    Bupa benefited from the contravening conduct, primarily by retaining funds through avoiding or delaying the payment of benefits it would otherwise have been obliged to pay, and which members were entitled to be paid.

93    It also benefited (in ways that cannot be precisely calculated) by:

(a)    receiving additional premiums from members who upgraded their policies as a result of the Eligibility Check representations;

(b)    avoiding costs associated with the manual review of:

(i)    Medical Mixed Coverage claims automatically processed as zero benefits payable (other than where medical providers complained to it); and

(ii)    the Zero Benefits Report during the period it was discontinued;

(c)    avoiding the costs of establishing adequate training and policies; and

(d)    deferring the costs of system fixes.

94    On the other hand, as at the date of the SAFA, Bupa has invested a total of approximately $5.6 million to rectify its systems and processes since the contravening conduct was identified.

Cooperation

95    Cooperation with regulators is a mitigating factor because cooperation with investigations and court proceedings resulting from them increases the likelihood of cooperation in future cases. That in turn furthers the object of remedial legislation, frees up the regulator’s resources, and increases the likelihood that other contraveners will be detected and brought to justice. See, for example, Commonwealth v Director at 503–504 [46] (French CJ, Kiefel, Bell, Nettle and Gordon JJ).

96    The parties submitted, and I agree, that the proposed penalties take into account the cooperation that Bupa has provided by agreeing to resolve the proceeding, to make the admissions contained in the SAFA, and to jointly propose the penalties and other relief sought. The parties also agreed that Bupa cooperated and provided information and documents to the ACCC on a voluntary basis on at least 15 separate occasions during the course of the ACCC’s four-year investigation, commencing in 2020.

97    In February 2024, Bupa said it was willing to resolve the proceedings on an agreed basis and has cooperated with the ACCC by making the admissions identified in the SAFA, making submissions jointly with the ACCC, and agreeing to the orders jointly proposed by the parties prior to the commencement of this proceeding.

98    It goes without saying that the proposed resolution has saved time and resources for the court and the ACCC in avoiding a contested hearing on liability and penalty (which, in my estimate, would have likely consumed many days of hearing).

Bupa’s size and financial position

99    The size of a contravener is relevant to the assessment of pecuniary penalty because, “all other things being equal, a greater financial incentive will be necessary to persuade a well-resourced contravener to abide by the law rather than to adhere to its preferred policy than will be necessary to persuade a poorly resourced contravener that its unlawful policy preference is not sustainable”. See Australian Building and Construction Commissioner v Pattinson (2022) 274 CLR 450 at 474 [60] (Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ).

100    The proposed penalties totalling $35 million take into account the fact that Bupa is the second largest private health insurance company in Australia, with approximately 3.64 million members representing a 25.5% market share, and relevant revenue over the period of the contraventions in the vicinity of $7 billion.

101    As was submitted, having regard to Bupa’s size and financial position, the penalties proposed are substantial enough to achieve specific deterrence without being oppressive.

Culture of compliance

102    As is obvious enough from what I have said above, Bupa did not, during the relevant period, have in place or implement effective systems or training to identify the contravening conduct or to prevent it from continuing once identified. Its compliance processes were inadequate to identify and manage the risk of incorrectly assessing checks and claims.

Other factors

103    Bupa has not previously been found by a court to have engaged in any contraventions of the ACL.

104    The totality principle requires the court to make a final check of the penalties to be imposed on a wrongdoer, considered as a whole. If the court believes that the cumulative total of the penalties to be imposed would be too low or too high, it must adjust them to ensure that they are just and appropriate. But here, there is no call for a penalty reduction on the basis of the totality principle.

PENALTIES TOTALLING $35 MILLION TO BE IMPOSED

105    The parties submitted, and I accept, that the penalties totalling $35 million meet the primary objectives of specific and general deterrence (as informed by the mandatory and other relevant factors discussed above) and are within the appropriate range for the contraventions admitted by Bupa for the six courses of conduct, viz:

(a)    $12 million in respect of Bupa’s unconscionable conduct in contravention of s 21 of the ACL; and

(b)    $23 million in respect of Bupa’s false or misleading representations in contravention of s 29(1)(m) of the ACL, comprising:

(i)    $7 million in respect of the Eligibility Check representations;

(ii)    $5 million in respect of the Medical Mixed Coverage representations;

(iii)    $5 million in respect of the Hospital Mixed Coverage representations;

(iv)    $3 million in respect of the Medical Uncategorised Item representations; and

(v)    $3 million in respect of the Hospital Uncategorised Item representations.

NON-PECUNIARY RELIEF

106    The parties sought, and I agree, to include a penal notice endorsement in the orders set out above.

107    The parties also sought an order under s 232 of the ACL restraining Bupa, for a period of five years, from engaging in conduct of the kind constituting the making of the relevant representations. I agree to make the order in the form sought, including because such an injunction serves to record the court’s disapproval of Bupa’s conduct and acts as a further deterrent.

108    Bupa has also agreed to a compliance order, the purpose of which is to ensure a company-wide awareness of responsibilities and obligations in relation to the contravening conduct or similar or related conduct.

109    The court’s power to make such an order is contained in s 246(2)(b) of the ACL, and the parties jointly seek orders pursuant to that provision requiring Bupa, at its own expense, to:

(a)    review and update its compliance program to ensure it meets the requirements of a compliance program in the terms set out at Annexure A to the orders set out above; and

(b)    maintain that program for a period of three years.

110    The compliance program relevantly requires Bupa to:

(a)    appoint an external compliance advisor to undertake a consumer law risk assessment;

(b)    update its ACL compliance policy;

(c)    review and, where necessary, enhance its complaints handling system;

(d)    ensure that its:

(i)    officers, employees, representatives and agents whose duties could result in them being concerned with conduct that may contravene the ACL; and

(ii)    executive and non-executive directors,

undertake ACL compliance training at least once a year; and

(e)    report on compliance measures to its Health Insurance Risk Committee and to the ACCC.

111    I am satisfied that an order for such a compliance program is appropriate, including in circumstances where Bupa’s compliance processes were neither sufficient to identify the incorrectly assessed Eligibility Checks, Mixed Coverage claims and Uncategorised Item claims, nor to manage those risks.

112    The parties have proposed that Bupa make a contribution to the ACCC’s costs of the proceedings fixed in the sum of $250,000. I will also make that order.

113    I will also make the confidentiality order sought by the parties in the form set out above.

Associate:

Dated:    11 December 2025