How Does Product Liability Work?

The Australian Consumer Law (ACL) is the main provision that overlooks issues between customers and consumers. Manufacturers that supply goods are governed by the liability provisions of the ACL. This is a safeguard to ensure customers are protected. When a product is faulty, the manufacturer generally faces the legal consequences. Additionally, consumers can claim compensation if they suffer loss or damage due to the defect. However, legal limits do apply, so continue reading to know how product liability works.

Who’s to Blame for My Faulty Product?

A product has a safety defect if it does not meet certain safety standards owed to the public. However, this varies based on the product; a children’s toy and car, for example, would have different requirements. The court has the final say in whether something is considered a safety defect or not.

If a product is found to have a safety defect, then there are statutory defences a manufacturer can rely on to protect themselves. These mainly include if the safety defect did not exist at the time of supply by the manufacturer, or the safety defect could not have been discovered at the time of manufacturing because there was insufficient scientific or technical knowledge at that time.

Time Limits

There are of course time limits for when someone can make a claim. Otherwise, the provision would be abused and overused if people made claims against items that are outdated and obviously malfunctioning. Consumers have three years to bring an action from the time they become aware, or would have reasonably known of the loss, defect and identity of the manufacturer.

Additionally, the action must commence within 10 years of the time the manufacturer supplied the goods with safety defects. Hence, you can’t make a claim against an item that was on shelves in the 1980s.

Case Study

Product liability cases tend to dominate the media when word gets out because the public needs to be warned. Common cases have involved Samsung Galaxy phones and NutriBullets exploding. In particular, Apple was fined $9 million for making false or misleading representations which led to customers believing that they were not entitled to repairs or replacements. Note, this is close to the maximum penalty of $10 million for breaching the Australian Consumer Law.

Compensation Claims

If you have suffered loss or damage because of a product, you can make a claim under the ACL. Loss and damage includes if you have suffered an injury, death or economic loss due to damage the product caused to your house or belongings.

When deciding if a product is defective, a court will consider:

  • The product’s purpose
  • Reasonable uses of the product
  • Advertisement of the product
  • The instructions, manuals or packaging warnings

Legal Proceedings

Not every matter has to go to court. In fact, there are various ways you can proceed with an action. Action can be taken under the law of torts, contracts or even common law. Contacting a consumer protection agency such as the Australian Competition & Consumer Commission can be a helpful first step. Through their website, you can write a complaint letter, lodge a complaint, and seek consumer advice. We recommend consulting a consumer lawyer today, to see which pathway best suits your circumstances.

Unsure where to start? Contact a LawPath consultant on 1800 529 728 to learn more about customising legal documents and obtaining a fixed-fee quote from Australia’s largest legal marketplace.

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