Australia: The Australian Consumer Product Safety System - if it ain´t broke, should we fix it?

Last Updated: 13 March 2006
Article by Sara Dennis and Andrew Morrison

Most Read Contributor in Australia, November 2017

Key Points

  • The Australian Productivity Commission has concluded that, on the whole, our current system of consumer product safety is working relatively well. There is no demonstrated economic need for any wholesale substantive reform.
  • Business will welcome some recommendations made by the Productivity Commission (eg. a General Safety Provision is not warranted) but may be concerned by some of their recommendations.

The current system

Australia has a sophisticated system of consumer product safety. In light of the strict liability provisions[1] contained in the Trade Practices Act 1974 (Cth) ("the Act"), manufacturers and other entities involved in any part of the supply chain must be vigilant to ensure that reasonable care is taken to ensure that consumers do not sustain injuries or loss as a result of their products.

The review process

In light of Australia's relatively highly evolved system, one may ask why the Ministerial Council of Consumer Affairs ("MCCA") and the Productivity Commission ("PC") conducted a review of Consumer Product Safety. MCCA proposed a number of reforms in August 2004[2] and, on 7 February 2006, the PC released its final report in relation to the productivity implications of those proposals. During the process, the PC received 63 submissions from a range of governmental, public and private organisations. The final report contains 21 recommendations over nine areas of focus. In this article, we have focussed on the recommendations which, in our view, will be of most interest to business.

Is there a widespread problem within the current system?

Manufacturers have increased efforts to produce safe products since the introduction of Part VA of the Act in 1992. The review has repeatedly confirmed that there is no widespread problem within the current system of consumer product safety. The PC's research has revealed that the number of injuries and deaths caused directly by consumer products is small (but not insignificant), relative to other causes. Moreover, even when consumer products are involved in accidents, genuine product fault seems to be less of a factor than consumer behaviour and the environment in which the product is used. Despite these observations, the PC has recommended that MCCA conduct a study of consumer product related injuries and deaths.

It is worth bearing in mind that the Australian legal landscape has undergone significant changes over the past four years as a result of the tort law reform process. The PC has observed that it is premature to fully assess the impact of these changes but has suggested that they are likely to lessen the incentive to produce safe products. This observation may further fuel current pressure to wind back aspects of tort law reform.

General Safety Provision ("GSP")

Recommendation: The PC does not support a GSP. The PC concluded that it would deliver some benefits, including change in the behaviour of some businesses and quicker removal of unsafe products from the market, but the additional costs to both business and government, which would be inevitably passed on to consumers, would outweigh these benefits. Moreover, a GSP would not prevent injuries caused by seemingly safe products which are used inappropriately.

The MCCA proposed the introduction of a GSP, similar to that which prevails in the European Union, which would require businesses to only place "safe" products on the market. Action could be taken against a producer/supplier if it was determined that a product was "unsafe", irrespective of any accident, injury or loss being suffered. This concept will be familiar to many Australian businesses as some more hazardous sectors have sector-specific safety standards or particular occupational health and safety regimes.

The impact of a GSP on business would depend on how it is designed, defined and implemented. What does "safe" really mean? The PC has concluded that there does not seem to be a significant problem associated with "unsafe" products reaching the market and causing injuries. However, from a commercial standpoint, before considering whether we need a GSP, don't we need to consider whether the current system is failing its users? There is a genuine debate as to what additional valuable protection a GSP would provide over and above the protections already contained in the Act.[3]

While not supporting the introduction of a GSP, the PC concluded that it is often imported products which are seen to be unsafe and cause injuries. Therefore, it has proposed that consideration should be given to requiring importers of consumer goods (commercial imports for resale) to certify that the goods meet any applicable Australian mandatory safety standards and that regulators should have the power to impose financial penalties on manufacturers once a ban has been implemented. These proposed reforms are said to be sensible, practical and would have a positive impact on consumer safety without law-abiding businesses experiencing any significant associated cost burden.

It is not yet safe to assume that this issue is concluded. The GSP proposal is still at an embryonic stage. Its parameters are undefined and a number of its critical aspects will require more careful consideration. These include:

  • how would the benchmark level of safety be defined?;
  • what products (and perhaps services) should be covered?;
  • which businesses in the supply chain should be subject to the GSP?; and
  • how should the GSP be enforced, including who would have a right of action and what penalties should apply?

It is premature for businesses to concern themselves with the likely impact of a GSP. There are many hurdles yet to jump if a GSP is to become a reality in Australia. The debate is likely to continue.

Foreseeable use and foreseeable misuse

Recommendation: The relevant Minister should be permitted to consider whether a product is unsafe as a result of foreseeable use (including foreseeable misuse) when considering whether to ban or recall a product.

Warning notices[4] and compulsory product recalls may be issued by the relevant Minister when it appears that goods "will or may cause injury." It is currently unclear whether this test includes cases where goods are unsafe because of foreseeable use (including foreseeable misuse). The PC's recommendation responds to research which has shown that the manner in which products are used, rather than defects within the product, seems to be a more significant cause of accidents.

Government agencies and consumer organisations supported this recommendation but the private sector was concerned about how such a test would be expressed and regulated.[5] Why should Australian business be responsible for negligent or reckless misuse? In response to one submission,[6] the PC proposed that the use must be reasonably foreseeable or predictable and that the use must itself be reasonable. This is a useful starting point. However, consideration needs to be given to how "the reasonableness of the use" will be interpreted so that business can be assured that products presenting known and acceptable risks are not withdrawn from the market. Of course, manufacturers will continue to exert influence over what is deemed "reasonable" by placing warnings on products; promoting safe use and taking other cost-effective risk management measures.

The reality is that there may already be sufficient incentive for business to voluntarily recall products which expose consumers to unreasonable risks (due to reasonably foreseeable use). The continuing area of concern is a potential expansion of manufacturers' liability in relation to misuse, whether reasonably foreseeable or otherwise.

National approaches

Recommendation: A national regime with a single law (the Act) and a single regulator (Australian Competition & Consumer Commission) should be established with the States and Territories referring their existing authority to the Australian Government.

Business will be acutely aware of the inconsistencies between the Commonwealth, State and Territory product safety systems, especially if you supply products in a number of Australian jurisdictions. These inconsistencies impose unwarranted cost on businesses and create unnecessary confusion for consumers. This recommendation is to be applauded.

If this recommendation is not implemented, the PC recommended uniform product safety regulations across all jurisdictions or, at the very least, a core set of provisions, such as mandatory standards, recall powers, and notification requirements. Moreover, it recommended co-operative arrangements amongst all jurisdictions regarding enforcement.

There is overwhelming level support for a single law and single regulator. Whilst State governments and State regulators were not entirely supportive,[7] indicating possible resistance by State governments to agree to dilute their powers, the Victorian government has offered some initial support, stating it supports "eliminating unnecessary inconsistency and duplication between jurisdictions as this may lower compliance costs for business and also benefit consumers."

Improved hazard identification and risk assessment

The PC's recommendations in relation to "improved information for hazard identification and risk assessment" are likely to be of interest to business but raise the spectre of yet more business regulation.

The good news for business is that the PC concluded that the benefits associated with requiring suppliers to notify the government of products which are 'under investigation' for possible safety risks, or formally requiring suppliers to monitor the safety of their products, are unlikely to justify the associated costs.

The PC has recommended the establishment of a hazard identification system, co-ordinated by the ACCC, which would collect and analyse information regarding consumer product incidents and distribute it to all jurisdictions. The mechanics of this system have not yet been determined. Business is likely to be concerned about this recommendation as manufacturers and distributors may find themselves with little or no control over the product information which reaches the market.

Also of concern to business are regulatory recommendations:

  • for the establishment of a national electronic system for collecting and distributing consumer complaints information; and
  • that suppliers should be required to notify government of products which have been associated with serious injury or death; or, alternatively, suppliers should be required to notify governments of products which have been the subject of a successful product liability claim or multiple out of court settlements. Of course, the latter recommendation ignores the reality that a claim may have been settled because it makes commercial sense to pay out on a claim rather than launch a full-scale defence on liability issues. An obligation to disclose all settlements has the real potential to fuel further unmeritorious product liability litigation.

Removal of unsafe goods

Recommendation: review and improve recall guidelines.

The PC recommended that the current recall guidelines need to be reviewed and improved. It has adopted the ACCC's submissions regarding improved processes for recalls which included improved advertising (incorporating product photographs in advertisements), buyer registration cards for high risk products and identification and highlighting of particularly high risk products which have been recalled.[8] This is likely to be an area of sustained activity by the ACCC in the future.

Extension of coverage regarding services and second-hand goods

Recommendation: Consumer safety provisions in all jurisdictions should be extended to cover services relating to the supply, installation and maintenance of consumer products. Government policy should clarify that second-hand products are covered by existing consumer product provisions, standards and bans.

There is inconsistency between Australian jurisdictions regarding how product safety legislation applies to services. Some, (but not all), States have enacted consumer safety legislation relating to services but the product safety provisions[9] in the Act (which is a Commonwealth Act) do not cover services. In relation to second-hand goods, the PC recommended that intergovernmental policy should clarify that second-hand goods are covered by existing consumer product provisions. Moreover, it recommended that standards and bans should state whether they apply to second-hand goods or not to prevent uncertainty for business and consumers.

Consistent or uniform, and clear, legislation across all Australian jurisdictions is a centrepiece of the proposed reforms that will be welcomed by business and consumers alike.

What happens next?

The formal review process has almost reached a conclusion. The PC's recommendations will now be reviewed by the MCCA although a formal timeframe for this final review has not been publicised. If the history of the uniform Corporations Law in Australia is any guide, a single or even uniform system will require a substantial degree of legislative will (and goodwill) if it is to succeed. That is, without doubt, a worthwhile aim for all Australian legislatures to achieve out of this current product safety review.


[1] That is, no need to prove fault.

[2] The MCCA released its Discussion Paper in August 2004 which proposed a number of reforms and focussed on harmonisation of legislation across Australia and the introduction of a General Safety Provision.

[3] Notably, Part V, Division 2A ( implied contract provisions) and Part VA (which imposes liability on manufacturers and importers of defective goods where "defect" is defined as "its safety is not as persons are generally entitled to expect") of the Act.

[4] Section 65C(5) of the Act.

[5] See National Product Liability Association submission (53) p 2; see also Australian Consumers' Association submissions (51) p 2.

[6] See Australian Electrical and Electronic Manufacturers' Association and Consumer Electronics Suppliers' Association combined submission (44) p 4.

[7] See Victorian Government submission (60) p 3; NSW Office of Fair Trading submission (61) p 8; Productivity Commissioner Report (Jan 2006) pp 301-2.

[8] Recommendation 11.1, Productivity Commission Report (Jan 2006); see also Productivity Commission Report (Jan 2006) pp 265-7; see also ACCC submission (56) p 11.

[9] That is, Part V, Division 2A and Part VA of the Act.

Thanks to Christopher Brown and Peter Sise for their help in writing this article.

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.

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”

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
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 you may opt out by clicking here

    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.

    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.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    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.

    By clicking Register you state you have read and agree to our Terms and Conditions