Under the Australian Consumer Law, consumers who suffer loss or damage because of safety defects in a manufacturer's goods when supplied in trade or commerce can:
take the manufacturer to court (a court can award compensation to cover the loss or damage), or
make a complaint to a consumer protection agency, which may take action on the consumer's behalf.
When does a product have a safety defect?
A product has a safety defect if its safety is not what the community is generally entitled to expect. While the level of safety will vary from case to case, it is ultimately for the court to determine whether a product has a safety defect. There are various factors the court will take into account when making its determination, including:
how and for what purposes the product has been marketed
the product’s packaging
the use of any mark in relation to the product
instructions for, or warnings about, assembling and using the product
what might reasonably be expected to be done with the product
the time when it was supplied
A good will not necessarily be considered to be safe just because it complied with a Commonwealth mandatory standard.
Expected levels of safety differ for older products because they cannot be expected to be as safe as brand new products. Similarly, older models of products would not necessarily be considered defective simply because more recent models have improved safety features.
When is a manufacturer not liable for the defective product?
Several statutory defences are provided to a manufacturer against a product liability action. The defences are available when:
the safety defect did not exist at the time of supply by the manufacturer
the product was a component of a finished product and the safety defect is only attributable to the design of the finished goods or the packaging, instructions or warnings included in those finished goods—then, the manufacturer of the finished goods is liable and not the component maker
the safety defect could not have been discovered at the time the manufacturer supplied the goods because there was insufficient scientific or technical knowledge at that time
the safety defect only existed because a mandatory standard was complied with. In this case, the Commonwealth may have to pay any compensation.
It's important to also note that when the actions or omissions of an injured person contribute to the loss, the court can reduce the amount of compensation payable to the appropriate extent.
What is the ACCC's product liability role under the Australian Consumer Law?
While the Australian Consumer Law provides consumers with rights to take action through the legal system themselves, the ACCC may sometimes take representative action on behalf of one or more consumers who have suffered harm from a product with a safety defect. This is intended to improve access to the law and to allow the ACCC to act when goods have caused, or may cause, widespread detriment.
The ACCC has an important role in informing businesses and consumers about all aspects of the Australian Consumer Law, including their rights and obligations under the product liability provisions.
Australia’s product liability laws are a mixture of common law and federal and state legislation. In addition to the product liability provisions in the Australian Consumer Law, people who have been injured or otherwise sustained loss or damage may take action under the common law tort of negligence.