Australia’s legal regime is similar to the United States in that there is a federal government and separate state/territory governments with their own autonomy. Historically, Australia’s tort system was made up of common law precedent and doctrines, like the US. However, following a major tort reform in 2002, Australia’s common law has mostly been overridden by statutes, especially in the areas of negligence and personal injury law.

While the suggestion of a uniform tort scheme was turned down in 2002, Australia adopted a near-uniform product liability scheme in January 2011 through the Australian Consumer Law (“ACL”).[1] Officially found in Schedule 2 of the Competition and Consumer Act 2010 (Cth) (“CCA”), the ACL applies to all jurisdictions and replaced a collection of federal and state consumer protection legislation with imposition of statutory obligations—including a strict liability regime for products which are said to have a “safety defect,”—as well as statutory guarantees imposed on manufacturers.

Thus, most product liability claims for damage to persons will involve causes of action based both on common law negligence and breaches of various provisions of the ACL.

Common Law Negligence

The niceties of a negligence claim vary between jurisdictions but the broad elements closely parallel those in the United States. Specifically, a claimant usually alleges that a manufacturer of a product breached a duty of care owed to the purchasers and users of its product to safeguard them against the foreseeable risks of injury when using the product as intended.[2] In addition to duty and a breach thereof, Australian jurisdictions also require a claimant to demonstrate causation by proving two familiar concepts: Factual Causation (traditional US “but for” causation), and Scope of Liability (“proximate cause”).

Like some jurisdictions in the US, Australian retailers, importers, and distributers subject to negligence actions are protected by a “sealed container” defense, where they only have a duty to guard against known dangers, and those they reasonably should have known about. Thus, such entities are exempted from any duty to test or inspect sealed containers which would not normally be opened until they reach the ultimate consumer.[3] However, to the extent that any party in the supply chain adds to or modifies a product, including packaging and labelling, that party will also owe some common law duty to the purchaser and user in respect of those changes.[4]

ACL Statutory Warranties and Guarantees: Strict Liability Actions

Australia codified strict products liability in the ACL’s statutory guarantees. Those guarantees hold manufacturers strictly liable directly to consumers for injuries suffered as a result of,

  • Goods that are not reasonably fit for a particular purpose or a disclosed purpose;[5]
  • Goods that are not of merchantable or acceptable quality;[6] and
  • “Defective” goods: those that do not provide the degree of safety that persons are generally entitled to expect, or which possess a safety defect.[7]

The warranties apply to goods ordinarily acquired for personal, domestic, or household use or consumption, and are restricted to the claims of consumers who have suffered loss or damage as a result of their use or consumption of consumer goods.[8] While the ACL’s definition of a manufacturer is broad enough to potentially encompass anyone in the supply chain,[9] a supplier will be deemed the manufacturer if both parties fail to determine the identity of the manufacturer 30 days after the claimant makes a written request to the supplier for information about an unknown manufacturer.[10]

Because the ACL provides strict liability causes of action through its “guarantees,” claimants need only demonstrate that it is, “reasonably foreseeable that a consumer would suffer such loss or damage as a result of the failure to comply with [one of the 3] consumer guarantee[s],” rather than show a particular defendant was at fault.[11]

Further, while it appears that no express “failure to warn” cause of action exists under the ACL, evidence of such can be used to help establish that a product has a safety defect, is unfit for its purpose, or is unacceptable quality under the ACL. For instance, a court can look to the warnings and/or marketing strategy adopted by the manufacturer or supplier in deciding whether those items placed the user in a position to properly understand the risks associated with the product.[12]

Product Liability Class Actions

The procedures necessary to bring a product liability class action in Australia will also ring familiar to any US attorney’s ears, but with, perhaps, a few very notable differences.

The procedures are found in the Federal Court of Australia, the Supreme Courts of Victoria and New South Wales, as well as in the representative class procedures in other state jurisdictions.[13] Because claims asserted under the ACL are within federal jurisdiction, this section will focus on class action procedures found in Part IVA of the Federal Court of Australia Act (“FCAA”).

When commencing a class action based on an entity’s violation of the ACL, a claimant must meet three threshold requirements:

  • Seven or more persons have a claim against the same person or entity; and
  • The claims of all those persons are in respect of, or arise out of, the same, similar or related circumstances; and
  • The claims of all those persons give rise to a substantial common question of law or fact.[14]

Regarding the persons—or, “numerosity”—requirement, the FCAA’s rules governing the “Originating Process” for proceedings[15] do not demand that a claimant obtain specific details about the group members or that group members be named, identified, or even quantified.[16] Rather, a representative party need only be able to satisfy the court at some “appropriate time” that their claim is common among at least six other persons.[17]

Further, each of the class members must have a claim against at least one respondent. The FCAA does not elaborate on the requisite degree of commonality between the class members and multiple respondents, and the issue of whether it is necessary for each class member to have a claim against each defendant is currently being expounded in the Australian legal system.[18]

Once both sides of a class action litigation can be established, it must also be shown that all the class members’ claims arise from the “same, similar or related circumstances.” The FCAA requires the claims to be more than merely related, but—in product liability actions—the product itself is a central consideration for the class requirement. For example, the court in Phillip Morris (Australia) Ltd. v. Nixon, deemed that class members’ circumstances were insufficiently related when the facts involved three tobacco companies, 182 different brands of cigarettes, and different advertisements, promotions and public statements over 39 years’ time.[19] Thus, it appears that “similar circumstances” becomes more readily demonstrated the more alike the injury-causing products are.

Australia’s greatest departure from US class action procedure, however, resides in their requirements for what constitutes the “substantial common issue of law or fact.” Similar to the US, a common issue can be of law or fact, and is one which, when determined in the representative party’s case, enables the court to determine that issue for all group members.[20] However, while the term “substantial” refers to issues that are “real or of substance,”[21] the issue need not be one that is a significant or core issue in the case.[22]

Additionally, while Australia and the US both refuse to prohibit class actions merely because some individual issues exist among the members, Australia does not require that common issues between class members predominate over the individual issues.[23]  Instead, the “commonality” requirement—for example—can be satisfied notwithstanding the fact that the individual class members’ claims do not seek exactly the same relief.

Damages

Monetary compensation is available for both pecuniary and non-pecuniary losses asserted through a cause of action under the ACL. Specifically, claimants can recover general damages— including pain and suffering, loss of amenities, and loss of expectation of life—as well as special damages—including lost wages (both past and future), and medical and hospital expenses.[24] Despite the availability of recoverable damages, Australia’s 2002 Tort Reform Process created a variety of caps and limitations on the amount of a personal injury plaintiff can recover.[25]

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[1]                Trade Practices Amendment (Australian Consumer Law) Act (no. 2) 2010. See also, Product Liability Australia, Colin Loveday and Andrew Morrison, International Comparative Legal Guides, (May 21, 2017), available at, https://iclg.com/practice-areas/product-liability/product-liability-2017/australia.

[2]                See Loveday and Morrison supra note 1.

[3]                Id.

[4]                Id.

[5]                ACL §55(1).

[6]                ACL §54(1).

[7]                ACL §§ 9(1), 138

[8]                See Loveday and Morrison supra note 1.

[9]                ACL §7(1).

[10]              ACL §147(1)—(2).

[11]              ACL §272(1)(b).

[12]              ACL §9(2); See also Loveday and Morrison supra note 1.

 

[13]              See also Rebecca Jancauskas, Product Liability Class Actions in Australia, [2015] Precedent AULA 48; (2015) 129 Precedent 23. Available at http://classic.austlii.edu.au/au/journals/PrecedentAULA/2015/48.html#fn8.

[14]              FCAA §33C(1).

[15]              FCAA §33H.

[16]              FCAA §33H(2).

[17]              Symington v. Hoechst Schering Agrevo Pty. Ltd. (1997) 78 FCR 164; See Jancauskas supra note 13.

[18]              See Jancauskas supra note 13, n.7.

[19]              (2000) FCA 229; (2000) 170 ALR 487.

[20]              See Jancauskas supra note 13.

[21]              Wong v. Silkfield Pty. Ltd. ([1999] HCA 48; (1999) 199 CLR 255 at 267.

[22]              Brisbane Broncos Leagues Club v. Alleasing Finance Australia Pty. Ltd. [2011] FCA 106.

[23]              See Jancauskas supra note 13.

[24]              See Loveday and Morrison supra note 1.

[25]              Id.