Product Liability Compensation in Australia

According to the Australian Consumer Law, product liability assigns a certain responsibility to the manufacturer or supplier of goods, where certain standards of product quality and safety must be met.

These standards are set out in the legislation of the Australian Consumer Law.

What is product liability?

Product liability claims in Australia generally relate to negligence on the part of the manufacturer or supplier. E.g.The failure by the supplier to refrigerate milk properly while in transit to retail outlets, arriving at the retailer with soiled milk that cannot be sold. As a result the owner of the retail outlet loses money on the milk he could have sold, as well as loss of customers that would have bought other products in the store. For such losses the business owner may want to take action against the supplier.

Each state and territory in Australia has its own local laws regarding actions against negligence and product liability. This means that the degree of accountability of the supplier/manufacturer may change depending on the state in which it occurred. Also, proving your case may follow different protocols and have different requirements depending on where you are. For this reason, it is important to first consult a legal expert, who has the knowledge to guide and advise you through the complexities of the claims process.

What is a product defect?

A safety defect is a flaw in a product, in which its safety does not meet the standards that the public are entitled to expect. Ultimately, depending on the state you’re in and the product, the court decides whether a product has a defect or not.

Conditions on which the court typically determines a defect:

  • What has the product been advertised as, and how it was marketed
  • Product packaging
  • The use and presence of warning indicators or instructions on the product or its associated   packaging
  • What is reasonably expected to be done with the product
  • Timing and conditions of supply logistics

When are you entitled to seek action?

According the Australian Consumer Law, anyone is allowed to claim if they have received/purchased goods from a manufacturer and safety defects in those goods caused you loss and/damage.

These include:

  • Injuries and medical expenses suffered by the person making the claim, or injuries or death suffered by other people that have arisen as a direct result of the safety defect in the product. 
  • Past and future loss of earnings or material goods due to the malfunction of the product
  • Loss of financial support, dependents of an individual killed due negligence or a defect in a product can claim
  • Material damages to your own possessions due to the malfunction of the product, or associated negligence

Note: The accepted level of safety for products is something that is constantly evolving. Generally, the expected safety of older products is lower than that for newer ones, and so they cannot be held to the same safety standards.

Typical defences for manufacturers/suppliers

While the Australian Consumer Law sets strict safety and liability rules for manufacturers and suppliers to follow, there are cases in which the defendants are protected.

  • If science and technology at the time the product was manufactured were not sufficiently advanced to detect the defect
  • The defect did not exist at the time product was sold/supplied to the customer
  • The use that the product was put to did not coincide with the instructions/intended purpose of that product set out by the manufacturer
  • The product manufactured as a part of another product, in which the design or safety is flawed, is the fault of the designer and not the manufacturer of the component. E.g. A manufacturer may supply a perfectly constructed engine to a client who is building a car. If the design of the car is flawed such that the car cannot house the engine properly and overheats, blowing the radiator, then the fault is on the car manufacturer not the engine manufacturer.
  • The safety defect arose as a result of complying with mandatory consumer standards

Why you need a lawyer to process your claim

The Australian Consumer Law does allow consumers to lodge claims themselves through the Australian Competition and Consumer Commission (ACCC), however the process of claiming for compensation is long, tiresome and confusing. In order to successfully process an action against the responsible party you should consult a lawyer with expertise in product liability. The ACCC does sometimes take representative action on behalf of a widespread group of consumers who were injured by a product malfunction.

One of the most important reasons for consulting a lawyer before initiating a claim is to first determine whether your claim has merit. There is no point in wasting money and time on a fruitless claim that you could rather use to recover from your injuries.

Once you claim has been determined your lawyer will begin collecting all the necessary reports and statements required to prove your claim and ensure the proper administration of your case.

What may be required to prove your claim?

Different states and territories have different requirements to prove claims against product liability.

However, here are some of the main things you will always need to collect:

  • Photos of the product and the damage it caused
  • Invoices for medical bills and estimates of future medical costs associated with your injuries. E.g. Physiotherapy or chronic medication
  • Medical reports from accredited medical experts
  • Technical reports from the supplier/manufacturer regarding the product defect
  • A statement of the events or circumstances under which the product malfunctioned and harmed you.
  • Witnesses attesting to your accident involving the product

Product Liability Claims – Australian Lawyers (9)