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Australia

Litigation

Product liability actions in Australia are most commonly commenced pursuant to the provisions of the Australian Consumer Law  (in Schedule Two of the Competition and Consumer Act 2010 (Cth)) or pursuant to the laws of negligence and contract. This often occurs for example, as an alternative cause of action where the claim does not relate to consumer goods, or where goods have not been purchased by a "consumer". 

For causes of action based in negligence, each State and Territory has its own statutory regime regulating civil liability claims. Therefore, there are different thresholds in terms of the right to sue for different individuals (the test is more difficult to meet in some States), and the assessment of  damages can vary from State to State.

While the Australian Consumer Law, negligence and contract are all appropriate sources of law for product liability claims, the introduction of the Australian Consumer Law (which commenced on 1 January 2011) has made the process of framing many claims more uniform.

Under the Australian Consumer Law, liability attaches to a manufacturer (and in some cases, a supplier) of consumer goods where products have safety defects or do not otherwise meet the standards consumers are generally entitled to expect (which are set out in the legislation).

A product liability defence strategy should be created with a view to defending (or otherwise managing) any litigation that may ultimately be commenced.

While a number of provisions in the ACL impose strict liability, there  are several defences available to a party defending a claim. In the case of a safety defect allegation, examples of these defences include the defect being caused by compliance with a mandatory standard; that the defect did not exist at the time of the supply by the manufacturer; and that the state of scientific or technical knowledge at the time the goods were supplied did not enable the safety defect to be discovered.

When it comes to hearing proceedings in the state courts, procedure between States may differ. For example, some States do not allow trial by jury, while other States give plaintiffs the right to elect the mode of trial. For a defendant in a jurisdiction allowing jury trials, it is not the case that one mode of trial is invariably  preferable to the other.

Once civil proceedings are finalised, costs generally follow the event (i.e costs are awarded to the successful litigant on a party-party basis). Indemnity costs may be awarded if a litigant failed to accept an offer of compromise that was served by the other litigant and that was greater than the damages that were ultimately recovered or in rare circumstances where, for example, one party has not conducted themselves in a manner conducive to resolving the proceedings (or in fact preventing resolution).

Even though much product liability litigation will be brought at a State level in a State’s Supreme Court or District/County Court, plaintiffs may also issue proceedings in the Federal Court of Australia. This is particularly common in larger disputes.

Product manufacturers are also at risk of complaints to the Australian Competition and Consumer Commission (ACCC) and State consumer safety authorities. Manufacturers  also have notification obligations if they become aware of an injury, illness or death associated with one of their products. There are also separate reporting requirements for specific classes of goods as well as Workplace Health and Safety regimes in each State. In relation to product recalls, the Australian Consumer Law states that suppliers should recall consumer goods (being goods intended or likely to be used for personal, domestic or household use) as soon as they realise the goods may cause injury or do not comply with a safety standard. The Australian Consumer Law also gives the relevant Commonwealth Minister the power to  order a compulsory recall if the product poses a safety risk and the supplier is not prepared to recall the goods voluntarily, or has not adequately taken steps to do so.

 

 

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Note past results are not guarantees of future results. Each matter is individual and will be decided on its own facts.