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Frequently Asked Questions About Product Liability
An important message to importers, manufacturers, retailers and
consumers about product liability.
The product liability provisions of the Trade Practices Act allow
persons who suffer injury or loss as the result of a defective product
to take legal action for compensation against the supplier of that
product. These provisions apply to goods supplied after 9 July 1992.
When is a product defective? A product is defective if it does not provide the level of safety
which the community generally is entitled to expect. The level of
safety will vary from case to case and it is ultimately for the
court to determine whether a product is defective. However, there
are a number of factors the court will take into account when making
its determination, including:
the manner in which and the purposes for which the product
has been marketed;
the packaging of the product;
the use of any mark in relation to the product;
instructions for or warnings with respect to doing or refraining
from doing anything with or in relation to the product;
what might reasonably be expected to be done with the product;
and
the time when the product was supplied.
Products which are older and subject to more use would not necessarily
be expected to be as safe as brand new ones. Similarly, products
would not necessarily be defective simply because the safety of
later models had been improved.
Who can bring an action for compensation? What type of loss may be compensated? The TPA allows anyone
to claim for personal injury or damage to private property (including
land or buildings) arising as a result of the defect in the product.
Dependants of a person injured or killed by a defect in goods can
also claim for the losses they suffer as a result. Damage to commercial
property is not covered nor is any loss arising from a business
relationship, such as loss of profits. The TPA also excludes losses
in respect of which a claim might be made for workers compensation
and losses regulated by international agreements.
Time limits for bringing a product liability
action
A person has three years to bring an action from the time he or
she becomes aware (or ought reasonably to have become aware) of
the loss, the defect and the identity of the manufacturer. Also,
any action must be commenced within ten years of the time the defective
goods were supplied by the manufacturer.
In some cases the manufacturer may not be liable for the
defective product A range of statutory defences are provided to a manufacturer
in respect of a product liability action. The defences are available
where:
The defect in the product was not the manufacturer's fault;
The product was a component part comprised in a finished
product and the defect is attributable only to the design of
the finished goods or the packaging, instructions or warnings
included in those finished goods. In this case the manufacturer
of the finished goods will be liable and not the component maker;
The defect that arises could not have been discovered at
the time the manufacturer supplied the goods because there was
insufficient scientific or technical knowledge at that time;
or
Compliance with a mandatory Commonwealth or State standard
was the sole cause of the defect.
It should also be noted that where an injured person's acts or
omissions contribute to the loss the court can reduce the amount
of compensation payable to whatever extent is appropriate. This
may be to nil in some cases.
What can a manufacturer or importer do to
reduce the risk of action? Minimising the risk of action under the product liability provisions
generally requires no more of manufacturers, importers and retailers
than responsible business practice. A culture of safety is an important
attribute of any responsible organisation which should include an
awareness of the firm's product in the hands of the consumer. Prudent
firms review design, production, record keeping and marketing procedures
as well as customer information material to ensure the safety of
their products with consumers. Particular attention should also
be paid to quality assurance systems.
What is the ACCC's role in relation to the product liability
provisions of the TPA? While the TPA provides rights which people will generally pursue
through the courts for themselves, in some instances, the ACCC can
take representative action on behalf of one or more people who have
suffered harm from a defective product. This is intended to improve
access to the law and will allow the ACCC to act where goods have
(or may) cause widespread detriment. An important role of the ACCC
is also to inform businesses and consumers about their rights and
obligations in respect of the product liability provisions of the
TPA.
At the end of 2002, CPSC had reports of 5,239 ATV related deaths
Deaths and injuries associated with all-terrain vehicles (ATVs) have shown an increasing trend in the last several years. This was an increase of 698 deaths from 2001. These additional
reported deaths occurred during the years 1999 to 2002. Of these reported fatalities, about one-third were children under 16 years old. Fourteen percent were under 12.
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