The Trade Practices Amendment (Australian Consumer Law) Bill (No 2) 2010 (ACL Bill) was last week introduced into Parliament as part of the second tranche of the new Australian Consumer Law.
The ACL Bill creates a national consumer product safety law for consumer goods and product related services. These laws will replace the current product safety provisions in the Trade Practices Act 1974 (TPA) and equivalent provisions in State and Territory Fair Trading Acts.
Key aspects of the new proposed legislation are:
- a single set of product safety standards and permanent bans which will apply nationally in all jurisdictions
- suppliers will need to notify the Commonwealth Minister if they become aware that a consumer good or related service has been associated with a death or serious injury
- all responsible Ministers from the Commonwealth, States and
Territories will be able to:
- recall goods which create a risk of injury to any person
- publish safety warning notices to inform consumers about safety investigations or warn consumers of potential dangers with using particular goods or services.
- the Commonwealth Minister will need to be notified of voluntary recalls undertaken because of potential safety concerns, and the Minister may choose to publish details of the recall on the internet
- the introduction of a new reporting requirement to assist regulators to proactively respond to emerging consumer product safety hazards
- a national statutory liability regime modeled on the manufacturers' liability provisions of the TPA, which will enable consumers to recover against manufacturers of goods that contain safety defects, subject to a number of defences which manufacturers can rely upon to defend product liability actions
- the strengthening of product safety investigation and enforcement powers under which the Australian Competition and Consumer Commission (ACCC) will have enhanced entry, search and seizure powers in respect of product safety, as well as information gathering powers and the ability to proactively remove hazardous products from the marketplace by applying to Court to order the destruction of goods that pose safety risks.
Important implications to note
If passed, the requirement to report serious product incidents to the Commonwealth Minister, and the greater product safety investigation and powers given to the ACCC, will necessitate that suppliers are more proactive in undertaking voluntary product recalls, particularly in cases where they become aware of a death or serious injury incident in the ordinary course of business. In his Second Reading Speech to Parliament, Minister Chris Bowen stated that:
- businesses may become aware of incidents through consumer complaints, legal proceedings or other means
- businesses are not required to investigate or otherwise make itself aware of an incident that they do not become aware of in the ordinary course of business
- businesses do not need to report incidents where the product, design flaw or defect is clearly not the cause of the incident (such as when a consumer trips over a product in the store).
Additionally, the ACL Bill expands the threshold tests for imposing safety bans and recalls to require consideration of the possibility of product-related injuries from "reasonably foreseeable use or misuse". If this feature of the ACL Bill is enacted, it will impose additional compliance burdens on suppliers. Bans and recalls will no longer be confined to risks of injury arising from the normal or intended use of a good. Suppliers will also have to consider the possibility of risks of injury arising from a reasonably foreseeable improper or unintended use or misuse of a good.
The Bill was introduced into Parliament on 17 March 2010 and if passed is intended to become effective from 1 January 2011, in line with the intended commencement of the balance of the Australian Consumer Law reforms.
Whilst the Bill will need to be debated in Parliament and could be the subject of amendments, businesses should be reviewing their products and their product safety recall procedures to identify the improvements that would need to be implemented if the ACL Bill is passed in its current form.
Middletons' Competition & Regulatory team is a leading specialist practice with substantial expertise and experience across the entire range of competition and regulatory issues, including competition law and policy, fair trading and consumer protection, product safety recalls, industry specific regulation and access regimes, Australian Competition & Consumer Commission investigations and prosecutions and dispute resolution.
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