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PRODUCT LIABILITY

Product liability essentially deals with unsafe goods as opposed to unsatisfactory goods. Product Liability essentially rests with the manufacturer of that particular product. The Trade Practices Act (TPA) creates a remedy for innocent by-standers who suffer injury, loss or damage because of an unsafe good. If the manufacturer supplies a product to the consumer and that consumer re-supplies to another consumer it is the new consumer who has the remedy available to them. No matter how many times goods are re-supplied the manufacturer remains liable but the Plaintiff is whoever has title to the goods.

If you have suffered loss, damage or injury as a result defective goods you may have rights against the seller of the goods in contract or against the manufacturer of the goods in negligence. The Trade Practices Act (TPA) also introduces a statutory code for dealing with defective goods.

There isn't a single source of law in relation to product liability in Australia. Both State and Federal Parliament have powered to enact laws in this area and they have done so. The three major sources of law in relation to product liability are;

  • A claim in negligence;
  • A claim for damages for breach of express or implied terms in a contract;
  • Claim for compensation against the manufacturer or importer for unsatisfactory goods based on the provisions contained within the TPA.

The TPA deals with defective goods by providing a series of statutory rights of action against the manufacturer, in favour of persons suffering injury, loss or damage caused by the dangerous and or defective goods. The basis of liability or the cause of action is that there is a defect in goods and a person suffers injury as a result of that defect. There are many advantages of this type of action. The main one being that there is no requirement that there be a contractual relationship between the injured party and the manufacturer and further negligence does not have to be proven.

This legislation gives persons who have suffered injury, loss or damage caused by dangerous goods a right of action against manufacturers, importers and suppliers. The act only applies to goods supplied after 9 July 1992. 

LIABILITY

To sue a manufacturer under the TPA the manufacturer has to be a corporation. Importers are also caught by these provisions of the TPA.

If you do not know who the manufacturer of the goods is, it is possible to serve a Written Request on the Supplier of the goods to provide information about the manufacturer or the supplier who supplied the goods to them. If the supplier does not provide the information requested this may result in them being deemed the manufacturer for the purposes of the TPA. 

WHEN WILL A CORPORATION BE LIABLE?

Manufacturers are liable when they supply goods which are defective and which cause loss, damage or injury. A manufacturer of goods for the purposes of the TPA and any product liability claim is given a wide meaning. A manufacturer includes corporations who actually manufacture goods and those who hold themselves as being manufacturers or permit their name to be applied to the goods. If goods are imported and at the time of importation the manufacturer does not have the right to do business in Australia the importer will be deemed to be the manufacturer.

"Supply" includes sale, exchange, lease, hire or hire purchase.

"Goods" have a defect for the purposes of the TPA if their safety is not such as persons are generally are entitled to expect. There are three basic types or categories of defects applicable to unsafe or dangerous goods. These categories are design, manufacturing and instructional. The legislation sets out a number of factors which will be relevant in determining whether goods have a defect, including, but not limited to:

  • The manner in which and the purpose for which they have been marketed.
  • Their packaging;
  • The use of any mark in relation to them;
  • And the instructions or warnings with respect to doing or refraining from doing anything with or in relation to them;
  • What might reasonably be expected to be done with or in relation to them;
  • And the time when they were supplied by the manufacturer.

There are a number of defences available to the manufacturer of alleged defective goods these include:

  • The defect did not exist when the goods were supplied;
  • The defect only existed because the manufacturer was complying with a mandatory standard;
  • The defect could not have been discovered given the state of scientific or technical knowledge when the manufacturer supplied the goods.
  • The defect is attributable to the design, markings, on, or instructions given with goods where the manufacturer only manufactured a component.

If a manufacturer claims that the defect resulted from a compliance with a mandatory standard, the Commonwealth becomes a defendant to the action and if the defence by the manufacturer is proven the Commonwealth is required to meet the verdict. 

CAPACITY TO SUE

Who can sue under product liability law?

People who can sue under the product liability provisions of the TPA are individuals who have suffered loss or injury due to defective goods, including;

  • A person who has suffered injuries due to the defective goods;
  • A person who has suffered loss because of injuries or death suffered by another person because of the defective goods;
  • A person who used or who intended to use goods which were damaged or destroyed because of the defective goods.
  • The goods must be of a kind that a ordinarily acquired for personal, domestic or household use.
  • A person who used or intended to use land, building or fixtures ordinarily acquired for private use that were destroyed or damaged because of the defect.

The owner of the goods however needs to be a consumer as defined by the TPA. A consumer for the purposes of Product Liability Law under the TPA is a person (including a corporation) consumer in relation to particular goods if either;

  • The goods are priced at $40,000.00 or less; or
  • The goods priced in excess of $40,000.00 but are of a kind ordinarily acquired for personal, domestic or household use or consumption, or, or in the case of a vehicle the vehicle is acquired primarily for use in the transport of goods on public roads and they are not purchased for either resale or using them up or transforming them in business in the cause of the process of production or manufacturer, or in the cause of repairing or treating other goods or repairing or treating fixtures.

Time limitations for commencing actions

Certain time limitations apply when bringing an action in product liability law. Ultimately an action must be commenced within 10 years of the supply by the manufacturer of the goods.

Within that 10 year period however, your action must be commenced at any time within three years after you become aware or ought to have become aware of the defect and the identity of the manufacturer.

It is also important to note that in any action for a claim for personal injuries arising out of defective goods, whether it be for breach of contract, negligence and/or product liability, the action must be commenced within 3 years of the date of the injury. 

PROCEEDING WITH A CLAIM

What to do if you have a claim

If you have suffered loss, damage or injury as a result of a defect in goods and think that you might have a potential claim against the supplier or the manufacturer of those goods the most effective way to assist your claim is to collect as much information as you can as quickly as you can. 

Why approach the supplier or manufacturer?

If you want the defective goods replaced your first step is to approach the supplier of the goods. Explain to them why the goods are defective and what you would like them to do about it (i.e refund, replaced etc).

It is often more effective to put your concerns in writing and if you are complaining about the defective goods. You should address your letter to customer service or the General Manager, giving full details and setting a deadline. If your claim involves a significant sum we recommend that you seek legal advice before presenting a letter of demand to a supplier or manufacturer.

Do not send original documents such as receipts and guarantees. You should always send copies instead.

You should keep copies of all letters along with any diary of effects and or telephone conversations had with representatives of the supplier or manufacturer.

To make a complaint to a Government Body.

While it is possible to bring an action in the Federal Court for breaches of the Federal Trade Practices Act very few cases are brought in the Federal Court by or on behalf of consumers. It might be more useful to make a complaint to the Australian Competition and Consumer Commission (ACCC) if you have a complaint which is covered by the TPA.

The contact details of the Commission are :

Level 10

500 Queen Street

Brisbane Qld 4001

Tel: (07) 3835 4666

The purpose of the TPA is to create a cause of action for the owner of the goods against the manufacturer or importer.

There are a number of defences available to the manufacturer. These include that there was no defect at the time of supply of the good, that they had met the mandatory standard in that they had complied with any Australian Standard applicable to that particular product. 

FURTHER INFORMATION

This Information Outline is provided courtesy of Hall Payne Lawyers who are experienced in this area of law. They are located at Level 9, 344 Queen Street, Brisbane, QLD 4000 or call them on (07) 3221-2044 if you would like more information on this legal topic, or you wish to obtain formal advice regarding your situation.

Hall Payne Lawyers are an established Queensland firm practicing in the areas of employment law (unfair dismissal etc), accident compensation (WorkCover, motor vehicle accident, personal injuries), anti-discrimination & harassment, consumer law, family law, wills & estates, criminal law and conveyancing. Hall Payne Lawyers are a founding member of the Australia-wide PeopleLaw group.

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