Australia: Mandatory product safety reports trigger more product safety recalls

Last Updated: 19 August 2011
Article by Murray Deakin, Joanne Daniels, Sylvia Ng and Travis Payne


Under the new Australian Consumer Law (ACL), which came into operation in January 2011, all participants in the supply chain of consumer goods, including those supplying product related services (such as installation and repair services), must notify the Australian Competition and Consumer Commission (ACCC) within 48 hours of any death, serious injury or illness that has been caused, or may have been caused, by a consumer good or product related service.

A supplier of consumer goods or product related services may become aware of the need to notify the ACCC in at least two scenarios:

  • the supplier becomes aware of the death, serious injury or illness of any person and considers that it was caused or may have been caused by the use or foreseeable misuse of the consumer good or service
  • the supplier becomes aware another person considers the death, serious injury or illness was caused or may have been caused by the use or foreseeable misuse of the consumer good or service.

The effect

The impact of the mandatory product safety reporting requirement has been significant. The ACCC has reported that since the introduction of this requirement six months ago, 911 reports have been lodged with the ACCC, triggering 40 product recalls. These recalls have been implemented to address a variety of safety risks including allergic reactions, burns, electrocution, choking, cuts and lacerations.

The concern

Given the necessity to notify the regulator within 48 hours of becoming aware of a product related death, serious injury or illness, it is incumbent on businesses to have product recall systems in place, so if required to lodge a mandatory product safety report they can simultaneously implement a product recall if required. To achieve such a rapid product recall capability requires planning and development. Such an investment is warranted given the new mandatory reporting requirements.

Most mandatory reports have been lodged to date by large business enterprises. These businesses are expected to have sophisticated product recall systems and procedures in place, however the ACCC has expressed concern that small and medium size enterprises may not be complying with the mandatory reporting requirements. It is important for these businesses to be able to comply with the new requirement and to undertake a rapid product recall if required.

Key things to remember

  • Notification must occur within 48 hours.
  • Mandatory reports are confidential, unless the reporter consents to disclosure.
  • Reporting is not an admission of liability.
  • Failure to notify as required is a criminal offence, punishable by a penalty of A$16,500 for a body corporate and A$3,300 for persons other than a body corporate.
  • It is a strict liability offence, that is, a court is not required to consider whether the person intended to report to the minister in finding them guilty.

How can Middletons help you?

Our Competition & Regulatory Group has developed tools to assist clients in preparing mandatory product safety reports and in planning and implementing any voluntary product safety recalls which may be required, particularly in circumstances where a mandatory product safety report must be lodged.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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