Tort Of Negligence, Cap On Damages, And Part 3-5 Of ACL

Elements of tort of negligence

1.For those injured, explain the basis of possible liability in the tort of negligence that any manufacturer or distributor of the Thermomix appliance might have to those users. Leave aside the question of the amount of damages, but in your answer refer to common law legal principles and (where relevant) to any relevant civil liability statute provisions that apply in your State.

2.What role do the relevant caps on personal injuries damages play in limiting the extent of possible tort of negligence liability that might be owed to the injured users?In your answer, refer to the relevant civil liability statute provisions that apply in your State.

3.Do the injured users have possible rights under Part 3-5 of the Australian Consumer Law (ACL) against any manufacturer or distributor of the Thermomix appliance? If so, on what grounds could they bring such an ACL action and what defences might a sued manufacturer or distributor have? Leave aside any question of the amount of damages under the ACL.

1.Tort of negligence is considered as the legal action which can be taken by any person towards whom the defendant owns any duty of care. Tort of negligence only arises when duty to take care exists and if defendant breach duty and it cause damage to the plaintiff. Negligence under tort law includes three essential elements, and it is important that all three elements must be established by the plaintiff for seeking damages under this:

• First element is the duty to take care, which means defendant must own duty to take reasonable care at the time of negligence and this duty must be owned towards the plaintiff.
• Defendant must breach the duty of care owned towards the plaintiff, which means defendant does not complied with the necessary standard of care.
• Damages must be caused to the plaintiff from that breach of duty by the defendant (Legal Service Commission, nd.).

A duty of care is considered as the legal obligation on the defendant for avoiding the causing of harm to the plaintiff, and this duty arises only in situation when harm caused to the plaintiff is foreseeable in nature in case care is not taken on the part of defendant. One more condition is also there which states that there must be proper relationship between the plaintiff and defendant for the purpose of the existence of the duty of care. Part 6 of the Civil Liability Act 1936 defines the provisions related to the negligence, and section 31 of this part contains provisions related to the duty of care.

For the purpose of proving that duty of care is breached by the defendant, Court considers the standard of care which is expected in those situations. Standard of care is considered as the actions taken by any reasonable person in the similar situation. This can be understood through case law Chapman v Hearse (1961) 106 CLR 112. In this case, Court stated that Hearse was negligent in context of control of the management of his vehicle. Court further stated that Chapman was also held liable in this case, as accident was the main reason because of which all these things happen.

Liability of manufacturers under Part 3-5 of ACL for defective goods

Lastly, Court determine whether breach of duty of care cause injury to the plaintiff or not (ALRC, n.d.).

It must be noted that, manufacturer of the product is generally held liable for any safety defects occurred in the product under tort of negligence, and for this purpose manufacturer can be considered as the company which assembles the goods, import the goods, promotes itself as manufacturer among the public, etc. It can be said that manufacturer of the product is held liable for the damage cause to the consumer from the product (ACCC, n.d.).

This can be understood through case law Donoghue v Stevenson 1932 AC 562. In this case, plaintiff (Mrs. Donoghue) visits café in paisley with her friend, and her friend purchased bottle of ginger-beer for the plaintiff. Bottle of ginger-beer was sealed and unused, because of which it was not possible to inspect the contents of the bottle. Plaintiff pours the drink in the glass and consumed it, and after sometime when she poured second glass from the same bottle she found decomposed snail in the beer. Because of this snail, plaintiff suffered from gastroenteritis and nervous shock. Plaintiff took action against the manufacturer of the beer that was Mr. Stevenson under tort of negligence.

In this case, Court considers the relationship of the parties and as per the analysis of the Court:

• Manufacturer of the beer sold the bottle of beer to the shopkeeper of the Wellmeadow Café. Therefore, in this contract exists between the parties and remedies are available for the breach of contract between the parties.
• Contract also exists between the friend of Mrs. Donoghue and shopkeeper because he sold the bottle of beer, which means remedies exist.
• However, contract does not exist between the friend of Mrs. Donoghue and Mrs. Donoghue because she gifts the bottle of beer to the plaintiff.

This case was decided by the House of Lords in London, as it was the highest Court of the Great Britain. The central issue of this case was, whether plaintiff can file suit against the manufacturer or not.

In this case, Court with the majority of 3:2 stated that manufacturer of the product owns duty of care while preparing the products for the ultimate consumers. For this decision, Court provides reasoning in context of liability under the tort of negligence. Court defines the general rule in this context, and as per this rule person must love their neighbor and must not cause injury to their neighbor. In other words, person must avoid any such act or omission which causes injury to the neighbor. For this purpose, neighbor is the person who was closely and directly affected from the action taken by person (Legal Vision, n.d.).

On the basis of this case, it can be said that manufacturer of the products must take care while preparing the products for the consumers because they know that goods are manufactured ultimately for the consumers and consumed by them. Therefore, manufacturers and distributors of the products can be held liable under tort of negligence in case of safety defect in the product.

Caps on damages

In the present case, those who get injury from the product TM31 can take action under tort of negligence either against the Vorwerk & Co. KG or against the Thermomix in Australia Pty Ltd (falls in the definition of manufacturer). As manufacturer owns duty of care towards the ultimate consumers, and this duty is breached by the manufacturer or distributor of the company. It can be said that manufacturer does not complied with the standard of care while manufacturing the product and this cause severe damage to the ultimate consumers.

2.Proposal related to the cap on damages are made by the ALRC and these caps are applied on all the damages except the economic loss. Applicability of the relevant caps means that the total amount related to the general damages in context of non-economic loss and exemplary damages awarded by Court would be capped at similar amount as the cap on damages in lieu of non-economic loss under defamation awards. This proposal of ALRC ensures equality between the issues related to the privacy and reputational interests. The proposal restricts the chance on part of plaintiff to choose that cause of action which includes higher awards of damages (ALRC, n.d.). 

Restriction on the extend nature of the non-economic damages in context of personal injury actions are defined in law also. This can be understood through example, Section 16 of the Civil Liability Act 2002 stated that initial cap was set at $350,000 and later this limit was revised at $551,500 by passing Civil Liability (Non-Economic Loss) Amendment Order 2013. One more example is also there, Section 35 of the Defamation Act 2005 stated the cap on damages for non-economic loss at $250,000 and later by passing NSW Government Gazette No 65 of 31 May 2013 this limit was set at $355,000.

It was argued by David Rolph stated that cap related to the damages in context of statutory cause of action must be more than the amount stated for defamation law. He further stated that less amount of cap related to the non-economic loss in privacy actions would be ‘undesirable’ because it fails to reflect the necessary importance given by the Australian law to the privacy of the person. Argument was also stated by the Witzleb, that other existing caps related to the damages in different areas of the Australia law were established for the purpose of restraining the intention of the person to get excess from the compensation orders. Support was also provided by various authorities in lieu of cap on damages for non-economic loss and they state that caps on   such damages must not be more than the amount reflected in personal injury law.

Arguments for and against the applicability of the cap on damages

There are number of stakeholders who also argued but against the applicability of the cap on damages. This can be understood with the help of example, OAIC stated  existence of cap on non-economic damages attract the focus of the parties on the upper limit and this also result in the implication of the serious provisions which ultimately result in the payout of magnitude. However, it must be noted that it will completely the discretion of the Court to make this assessment.

As stated by PIAC, applicability of the cap on the damages for non-economic loss immerse the fear that if action falls under the lowest ceiling then it will definitely inadequate to address the unlawful conduct of the person. In case, cap was to be introduced then they must support the connection with the negligence law.

Therefore, it can be said that relevant caps related to the personal injuries law play important role in restricting the amount of damages under tort of negligence liability.

3.Part 3-5 of the Australian consumer law is incorporated under Schedule 2 of the Competition and Consumer Act 2010. This part of the ACL makes the manufacturer directly liable for particular types of losses which caused to the person because of the defective goods.

Section 138 of the ACL stated the provisions related to the liability for loss or damage suffered by the injured individual. As per this section, manufacturer of the product can be held liable for the purpose of compensating the individual in case goods are supplied by manufacturer in   context of trade or commerce, goods have safety defect, and injury is suffered by the individual because of that safety defect. This section further states that individual can recover the goods by filing suit against the manufacturer in context of amount of the loss or damage suffered by the individual.

This part states that goods have safety defect if the safety of the goods does not complied with the general expectation of the person. It mainly involves two types of elements that are expectation of the reasonable person in context of the safety and compliance with that expectation of the particular level of safety. This test is objective in nature and mainly based on the knowledge and expectations of the person. For this purpose, following are some factors which must be considered by the person:

• Product is considered as unsafe not only because of its poor quality or the inoperativeness, but other factors are also considered. Goods cannot be considered as harmful on the solo fact that they cause injury to the person. It must be noted that, goods can be considered as defective not only because of the defect but actually because of its inherent nature. This can be understood with the help of case law Cook v Pasminco [2000] FCA 677.
• Court also consider the situations for determining the expected level of safety and this also includes the manner in which goods are marketed, purpose of the goods, packaging related to the goods, expected purpose of the goods, etc. and whether person complied with the instructions provided by the manufacturer in context of use of the goods.
• Court further considers that defects in the goods are not made just because manufacturer later supplied safer goods.
• Product manufactured by the manufacturer can be considered as the defective product if it operates in those situations when warning related to the products fail to alert the consumers about the possible dangers of using the product.
• Third party can easily depend on the inadequate warning even in case it is not noticed by the plaintiff.

Any person who suffered loss or damage because of the safety defect in the goods can take action against the manufacturer for following damages:

• Personal injury caused to the person, and in this case injured individual or any person who is not an injured individual can take action against the manufacturer.
• Death is the loss under which relatives of the person can file claim against the manufacturer for seeking compensation.
• Loss or damage caused to the other goods of the consumers can be considered as the harm occurred to the person. It can be said that, liability of the person is allowed only if both objective and subjective tests are satisfied.

This part of ACL does not include any provisions related to the offences. This part mainly provides the statutory provisions for commencing the actions against the manufacturers of the goods for the purpose of seeking compensation for loss or damage occurred to the person from the safety defect of the goods. Therefore, ACL also fails to address the provisions related to the remedies and penalties which are provided to the person in case of safety defect.

Therefore, it can be said that person who suffered injury from the safety defect in the good under part 3-5 of the ACL can take action against the manufacturer or the distributor of the Thermomix appliance. They can bring action against the manufacturer on the ground of section 138 which stated that manufacturer of the product can be held liable for the purpose of compensating the individual in case goods are supplied by manufacturer in   context of trade or commerce, goods have safety defect, and injury is suffered by the individual because of that safety defect. This section further states that individual can recover the goods by filing suit against the manufacturer in context of amount of the loss or damage suffered by the individual.

Section 142 and 148 of the ACL stated the defenses which are available on part of the manufacturers and can be used by the manufacturers against the above stated claims. Following are some of the defenses which are stated by these sections:

• Safety defect in the product does not present at the time when such product is supplied by the manufacturer to the consumer.
• Safety defect in the product arise because consumer fails to comply with the mandatory standard related to the product.
• The state related to the scientific and technical knowledge, manufacturer of the product is not able to discover the defect present in the product.
• Good was the part of the goods and defect in that good arise because of the design and packaging in the part of other goods.

It must be noted that, in case any defect is arise because goods complied with the mandatory standard stated by the commonwealth then neither the commonwealth nor the manufacturer of the product will be held liable for the loss or damage suffered by the person.

References

ACCC. Product Liability. Retrieved on 16^th May 2018 from: https://www.productsafety.gov.au/product-safety-laws/legislation/product-liability#manufacturer-liability-for-goods-with-safety-defects.

ALRC. Negligence. Retrieved on 16^th May 2018 from: https://www.alrc.gov.au/publications/7-fault/negligence.

ALRC. Remedies and Costs. Retrieved on 16^th May 2018 from: https://www.alrc.gov.au/publications/12-remedies-and-costs/damages.

Chapman v Hearse (1961) 106 CLR 112.

Civil Liability (Non-Economic Loss) Amendment Order 2013.

Civil Liability Act 1936- section 31.

Civil Liability Act 2002- Section 16

Competition and Consumer Act 2010- Section 138.

Competition and Consumer Act 2010- Section 142.

Competition and Consumer Act 2010- Section 148.

Cook v Pasminco [2000] FCA 677.

Defamation Act 2005- Section 35

Donoghue v Stevenson 1932 AC 562.

Law Vision. The Law of Torts. Retrieved on 16^th May 2018 from: https://www.lawvision.com.au/uploads/PDFs/Tort%20Law%20.pdf.

Legal service Commission. Negligence. Retrieved on 16^th May 2018 from: https://www.lawhandbook.sa.gov.au/ch01s05.php.

NSW Government Gazette No 65 of 31 May 2013.