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28 Intl Bus Law 195
28 Intl Bus Law 195
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ProfessorStapleton examines
product liability laws in A
Australia,focusing onfour
Federallaws in particular.
Trade Practices Act 1974, Part V, s 52' provision, an allegation of its breach allows the
claimant access, not only to the Federal Court
Section 52 was enacted by the Federal Parliament in
system (which is often attractive for certain
1974 and subsequently mirrored by State 'fair tactical reasons), but also thereby to the class
trading' legislation. It is one of the most strikingly action vehicle allowed for by section 35A of the
open-ended statutory provisions in the common law Federal Courts Act. This vehicle is far more
world and provides that: 'a corporation shall not, in sophisticated than the representative action
trade or commerce, engage in conduct that is procedures typically found in the State courts.
misleading or deceptive or is likely to mislead or (2) Secondly, organisations purporting to represent
deceive'. consumers may make application under the
At its very least, the provision duplicates liability Trade Practices Act for a declaration that
which would exist anyway, either under tort rules conduct of the defendant contravened section 52.
against negligent misstatement or contract rules This may have important indirect effects on later
against misrepresentation. Indeed, it is typically product claims against that defendant. For
appended as an additional claim whenever either of example, in Tobacco Institute ofAustralia Ltd v
those two conventional claims is made. While the Aust Fed Of Consumer OrganisationsInc (1993)
case law on section 52 is voluminous, understandably the Full Federal Court granted such a
given its remarkable width, not many cases have declaration in regard to an advertisement placed
concerned the liability of commercial suppliers of in national newspapers by the defendant tobacco
products liability for injuries caused by the condition industry lobby group, the clear meaning of
of those products. Those cases that have done so which advertisement was that cigarette smoke
centre on this area of duplication so that until now, was not injurious to the health of non-smokers.
section 52 has acted more as a simplified The implications of this result for later litigation
rationalisation of traditional rules than as the against tobacco manufacturers and suppliers are
engine by which corporations are exposed to liability clearly significant.
in new situations. In particular, there does not yet
seem to have been any reported section 52 cases
establishing liability in a product case where Trade Practices Act 1974, Part V,
liability would not also have been arguable under Div 2 and Div 2A
either traditional negligence or warranty doctrines. The Trade Practices Act imposes on manufacturing
What is left unclear is how far courts might be corporations the well known express and implied
prepared to apply section 52 beyond these areas. sales warranties (in Part V, Div 2) in favour of the
It is settled, for example, that carelessness is riot a party who bought from that manufacturer (the
requirement of establishing breach of section 52 privity partner).
(in contrast to the tort of negligence) and there is a But the Trade Practices Act also imposes (in Part
strong possibility that conduct falling short of a V, Div 2A') on manufacturing corporations express
misrepresentation may be caught by the provision and implied sales warranties for the benefit of any
(in contrast to contract law).' It is noteworthy that party down the chain of distribution and supply to
the section does not require proof that anyone was whom they were supplied (and, in the case of the
actually misled or deceived by the conduct, so it has warranty of merchantable quality, anyone deriving
the potential to create a whole new vista of product title through that supplied person). This 'aclassical'
liability: a genus which shall be referred to as statutory warranty between a product supplier and a
'victimless product liability'. Finally, the liability in non-privy buyer/title acquirer is the equivalent of
section 52 is, in effect, non excludable. the aclassical warranties developed by common law
8
Recently, in other contexts, some Australian judges in the US from the early 1900s onwards.
courts have warmly embraced the notion of Like the Directive, the item must be 'goods of a kind
unconscionability. This highlights the explosive ordinarily acquired for personal, domestic or
potential of section 52 to extend the liability of household use or consumption' but (as with the State
corporations. sales warranties) damages are not limited to
Two aspects of section 52 are of even more personal injuries and property loss, as they are under
immediate importance in the product context. the Directive and Part VA, but include pure
(I) First, there is the procedural attraction of a economic loss such as the depreciated value of, or
section 52 claim. Because section 52 is a Federal physical damage to the defective product itself.
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