Australia: PLC Multi-Jurisdictional Guide 2012: Life Sciences - Part 3


31. Outline the scope of medicinal product liability law.

Legal provisions

Australia's product liability laws are a mixture of common law and various federal, state and territory statutes. The ACL (effective 1 January 2011) replaced the previous legislative provisions of the Trade Practices Act for product liability and product safety.

The majority of product liability claims are based on a number of causes of action:

  • The common law tort of negligence, which is fault-based.
  • Breach of the ACL provisions, which include:
    • product safety and notification obligations;
    • provisions prohibiting misleading and deceptive conduct (except not for personal injury actions);
    • statutory guarantees imposed on manufacturers;
    • liability for unsafe products.

Substantive test

The substantive tests include negligence and contract.

Negligence. The common law test of negligence is fault-based. A manufacturer has a duty of care to take reasonable steps to prevent foreseeable harm to consumers. This duty of care manifests itself in obligations relating to product design, testing, manufacture, distribution and, in some cases, recall from the market. It also imposes a duty to give adequate warnings of risks associated with the uses of a product to enable users to adjust their use of the product to avoid or minimise danger, or to make an informed decision about whether or not to use the product.

To establish liability, a claimant must prove all of the following:

  • That loss or damage has been suffered.
  • That the manufacturer's conduct is in breach of the common law duty of care.
  • That the loss or damage was caused by the manufacturer?s breach of duty.

Contract. Contractual liability for harm caused by faulty goods arises if there is a breach of an express contractual warranty or of a warranty implied under statute. Breaches usually relate to:

  • Merchantable quality.
  • Fitness for purpose.

ACL. The ACL provisions below impose a form of strict liability. Under Part 3-5, manufacturers are directly liable to consumers for injury or property damage suffered as a result of a defective product. Goods are considered to be defective 'if their safety is not such as persons generally are entitled to expect'.

The ACL also introduces a regime of statutory guarantees under Part 3-2. Manufacturers are directly liable to consumers for:

  • Goods that do not correspond with their description.
  • Goods of unacceptable quality.
  • Goods that do not conform to a sample.
  • Goods that are unfit for a stated purpose.
  • Non-compliance with express warranties.

A manufacturer is liable if it engages in misleading or deceptive conduct, or conduct that is likely to mislead or deceive (section 18, ACL). This conduct can be express or implied, and silence can also be a breach in some circumstances. However, misleading conduct is no longer available as a cause of action in personal injury claims.


The elements of each cause of action differ.

Negligence. Generally, the manufacturer of goods owes a duty of care to the buyer and user to safeguard them against the foreseeable risks of injury when using the product as intended. A duty of care may exist in relation to anyone involved in supplying pharmaceuticals, including wholesalers, retailers, doctors or pharmacists.

A non-manufacturing distributor of goods who is ignorant of a dangerous defect in those goods, does not owe the same duty of care as that of a manufacturer. There must be something more, that is, knowledge of or reasonable grounds to suspect the risk. Retailers, importers and distributors are not expected to test or inspect products that the manufacturer delivers in sealed containers, which would not normally be opened until they reach the ultimate consumer.

If any party in the supply chain adds to or modifies a product, including packaging or labelling, that party also owes a duty to the buyer and user in respect of those changes.

Contract. Contractual remedies are only available to parties to the contract. Since, in most circumstances, the retailer has a contractual relationship with the buyer, the retailer bears the liability for any defect or fault according to the express and implied terms of the contract of sale.

ACL. Manufacturers of goods can be held liable under different Parts of the ACL, including Part 3-3 (product safety) and Part 3-2 (consumer guarantees). The legislation broadly defines manufacturer. Apart from the actual manufacturer, it includes any company that:

  • Holds itself out to be the manufacturer.
  • Applies its name or brand to the goods.
  • Permits someone to promote the goods as those manufactured by the company.
  • Imports the goods in circumstances where the actual manufacturer has no presence in Australia.

32. How can a product liability claim be brought?

A product liability claim can be brought by commencing proceedings in either of the relevant courts of each jurisdiction. Under the ACL, claims are most commonly brought in the Federal Court of Australia, commenced by either a writ or a statement of claim.

Limitation periods

This is a difficult question given the diversity of causes of action and jurisdictions that can be involved in product liability claims. However, some general observations can be made:

  • For most causes of action and most jurisdictions, the limitation period is three years.
  • For most causes of action and most jurisdictions, the three years start running when some appreciable (that is, more than negligible) damage occurs.
  • Some jurisdictions have a discoverability test to determine when time starts running.
  • Most jurisdictions have provision to obtain an extension of time, often based on a discoverability test.
  • There are some statutes of repose under the ACL.

Class actions

Class actions for product liability claims are expressly permitted where seven or more persons have claims against the same person and both (Federal Court of Australia Act 1976 (Cth)):

  • The claims of all those persons are in respect of, or arise out of, the same, similar or related circumstances.
  • The claims of all those persons give rise to a substantial common issue of law or fact.

If these requirements are met, any one of those persons can begin a representative action in the Federal Court of Australia. A similar statutory procedure for class action exists in the state of Victoria. Other group action procedures exist in the other states and territories under their respective Rules of Court.

A significant number of product liability class action suits have been brought since the introduction of the procedures in 1992.

Foreign claimants

Provided a claimant fits within the jurisdiction of a ?consumer? under the ACL, the claimant is entitled to bring an action in Australia.

33. What defences are available to product liability claims?

The available defences depend on the cause of action relied on.

Negligence. The following defences may be available:

  • Voluntary assumption of risk.
  • Contributory negligence.

A number of statutory defences also exist, although these differ between jurisdictions.

ACL. There are a number of specific defences to an action brought under different Parts of the ACL.

Under Part 3-2 it is a defence if:

  • Goods are not reasonably fit for purpose or are not of acceptable quality because of an act or default of a third party or a cause independent of human control occurring after the goods have left the control of the corporation.
  • In the case of goods not reasonably fit for purpose, the consumer did not rely or it was unreasonable for the consumer to rely on the manufacturer.
  • In the case of goods not of acceptable quality, defects were drawn to the consumer's attention or if the consumer examines the goods as regards defects that the examination ought to reveal.

Under Part 3-5 there are four defences:

  • The defect did not exist when the goods were supplied by the manufacturer.
  • The goods were defective due to compliance with a mandatory standard.
  • The state of scientific or technical knowledge at the time the goods were supplied did not enable the defect to be discovered.
  • In the case of a manufacturer of a component used in the product, the defect is attributable to the design of the finished product or to any markings, instructions or warnings given by the manufacturer of the finished product, rather than a defect in the component.

34. What remedies are available to the claimant? Are punitive damages allowed for product liability claims?

Australia has undergone a process of significant civil liability reform that has resulted in caps, thresholds and other limitations being placed on the amount of pecuniary damages that can be recovered. These limitations apply to any claim for personal injury, regardless of whether the claim is brought at common law, under contract or under the ACL. The limitations are not uniform.

At common law (tort and contract), remedies include:

  • General damages, including for pain and suffering, loss of amenities and loss of expectation of life.
  • Special damages, including for loss of wages and earning capacity (both past and future), and medical and hospital expenses.

Under the ACL, the main remedy for breach is compensation. Exemplary, punitive or aggravated damages can be awarded by the courts in very limited circumstances in a claim for negligence, although not in relation to claims brought under the ACL. They have also been abolished for personal injury in some jurisdictions (as a result of reform).


35. Are there proposals for reform and when are they likely to come into force?

The Australian and New Zealand Governments have decided to proceed with a joint scheme for regulation of therapeutic goods. The scheme is set to be administered by a single regulatory agency, the Australia New Zealand Therapeutic Products Agency (ANZTPA), which will absorb the current regulators, that is, the TGA and New Zealand's Medsafe. The ANZTPA is expected to be operational within five years. At present, the TGA remains the relevant regulator in Australia.

The Review to improve the transparency of the TGA was released in June 2011 and made 21 recommendations enabling the TGA to communicate its processes and decisions to both pharmaceutical companies and the community more effectively in an attempt to maintain the community's confidence in the TGA. Several of the recommendations suggested by the Review will require amendments to both the Therapeutic Goods Act and Therapeutic Goods Regulations. These are yet to occur.

The 2009 Australian Government Health Technology Assessment review recommended increasing the rigour of the regulatory assessment of higher risk medical devices and technologies by 2011. Nine recommendations have been proposed by the TGA and will be implemented by 1 July 2012. Some recommendations require the amendment of the Therapeutic Goods (Medical Devices) Regulations 2002 (Cth), which has not yet occurred.

The Revised Arrangements for the Efficient Funding of Chemotherapy Drugs came into effect on 1 December 2011. These changes are designed to minimise waste and reduce costs for patients, requiring prescribers to write dose specific prescriptions using milligrams, without specific reference to forms and strengths. Additionally, payments will be made to approved suppliers/pharmacies for the combination of vials that most (cost) efficiently makes up the required patient dose.

Following the September 2010 Memorandum of Understanding between the Department of Health and Ageing and Medicines Australia, on 1 January 2011 parallel process from listing with the TGA and PBAC was introduced. Under the TGA-PBAC parallel process, a submission to the PBAC can be lodged at any time from the date of the lodgement of a TGA registration dossier. As the PBAC registration process is often quicker than the TGA process it has been recommended the PBAC process begin during the fifth month of the TGA registration process.

Australia's intellectual property laws are currently undergoing considerable reform and review, much of which has the potential to impact on life sciences companies.

The Intellectual Property Laws Amendment (Raising the Bar) Bill 2011 is pending before the Senate. This Bill proposes amendments to the Patents Act, the TM Act, the Copyright Act 1968, the Designs Act 2003, and the Plant Breeder's Rights Act 1994. The Bill includes the following proposed amendments to the Patents Act:

  • The removal of the current requirement of the inventive step analysis to show that the relevant skilled person would have 'ascertained, understood and regarded as relevant' an item of prior art information before it can be considered as a starting point for the inventive step analysis. This will raise the standard set for inventive step in Australia to a level that is more consistent with standards set in Australia's major trading partners.
  • The bolstering of the requirement that a patented invention be useful by:
    • adding the requirement that unless a specific, substantial and credible use for the invention (so far as claimed) is disclosed in the complete specification, it will not satisfy the usefulness requirement; and
    • stating that the disclosure in the complete specification must be sufficient for that specific, substantial and credible use to be appreciated by a person skilled in the relevant art.
  • Requiring that a provisional specification contain an enabling disclosure.
  • Requiring that a specification enable claims across their full scope.
  • Abolishing the 'fair basis' requirement and replacing it with a requirement that the claim or claims must be 'supported by matter disclosed in the specification'.
  • Expansion of the grounds that the Commissioner can consider in deciding whether to grant a patent, and the application of a consistent standard of proof across all grounds, so that the Commissioner is not obliged to grant patents which would not pass scrutiny in a court challenge.
  • The introduction of infringement exemptions for research and experimental activities relating to patented inventions and for activities undertaken solely for the purpose of gaining regulatory approval to market or manufacture a patented technology (this expands the existing exemption for pharmaceutical inventions to all technologies).
  • Refining opposition proceedings.
  • Tightening the timeframes within which divisional applications can be filed.

The Bill includes the following proposed amendments to the TM Act:

  • Refining opposition proceedings.
  • Bolstering the penalties for trade mark infringement and improving the system for confiscating counterfeit goods.


Therapeutic Goods Administration (TGA)

Main areas of responsibility. The TGA:

  • Regulates medicines and medical devices.
  • Administers the TG Act.
  • Carries out assessment and monitoring activities to ensure that all medical products are of acceptable standard.

Many provisions of the Bill, if enacted, will come into force 12 months after the Bill receives Royal Assent. The new higher standards of patentability will apply to both:

  • Applications filed after the Bill?s commencement.
  • Applications or patents that have been filed before commencement, but where examination has not been requested at commencement.

The new exceptions to patent infringement will come into force on the day after Royal Assent.

The Patent Amendment (Human Genes and Biological Materials) Bill 2010 is also pending before the Senate. The Bill initially proposed an amendment to the Patents Act that would exclude from patentability 'biological materials, including their components and derivatives, whether isolated or purified or not and however made, which are identical or substantially identical to, such materials as they exist in nature'. 'Biological materials' were defined as including DNA, RNA, proteins, cells and fluids.

The Senate Legal and Constitutional Affairs Committee has recommended that the Senate not pass the Bill. However, a number of Senators dissented from the Committee's report and recommended that the Senate pass an amended version of the Bill that would seek to ban the patenting of 'biological materials, whether isolated or not and however made, which are identical to such materials as they exist in nature'. 'Identical' was defined to mean structurally and functionally identical.

Reviews are also underway in relation to post-grant enforcement strategies, the innovation patent system and patentable subject matter.

*The authors wish to thank Wayne Condon, Colin Loveday, Jocelyn Kellam and John Collins for their earlier contributions to previous editions of this chapter.

Related Articles

© DLA Piper

This publication is intended as a general overview and discussion of the subjects dealt with. It is not intended to be, and should not used as, a substitute for taking legal advice in any specific situation. DLA Piper Australia will accept no responsibility for any actions taken or not taken on the basis of this publication.

DLA Piper Australia is part of DLA Piper, a global law firm, operating through various separate and distinct legal entities. For further information, please refer to

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.