BULAW5914 Commercial Law & Australian Consumer Law

In case when one person or entity commits any wrong towards other person or entity then it is considered as legal wrong and known as tort, it must be noted that in case of tort only remedy granted by Court is Award of damages. The main aim of introducing this provision is to prevent the people from commit any wrongful conduct towards others and this provision also enable the plaintiff to sue the defendant for compensation, and plaintiff can also seek for injunction from Court for the purpose of restraining the conduct. Tort in context of criminal law states that those laws which are related to tort also have normative and regulatory effect on society’s conduct (ALRC, n.d.). 

Tort of negligence occurs when one person or entity owns duty of care towards other person or entity, and fails to do something that any person of reasonable nature would do or would not do, and because of that other person or entity suffers injury or damage. It must be noted that if any person suffers injury or damage then they can file suit against the defendant under tort of negligence, and seek for damages.

The main purpose of this provision is to put the person in the same position in which he would have been if other person does not commit act of negligence. This can be understands through example such as road accidents in which plaintiff either suffered economic loss or injury.

Various factors are used by Court to determine the negligence, and it is necessary that all these factors must be satisfied for the purpose of establishing liability under tort of negligence, and following are some questions which considered by Court for this purpose:

• Whether any duty of care is owned by defendant towards plaintiff?
• Whether defendant breach any duty of care or not?
• Whether plaintiff suffered any injury or damage?
• Whether Injury or damage suffered by plaintiff is because of breach of duty of care or not?

For the purpose of tort of negligence, duty of care is considered as legal obligation on person for avoiding the harm caused to another person, and for breach of duty of care harm must be foreseeable. Relationship must be exists between the parties for the existence of duty of care such as relationship of doctor and patient and driver and road users (Law vision, n.d.; Legal Service Commission, n.d.). 

As stated above, tort of negligence occurred if one person breach the duty of care owned towards another person, and for deciding whether duty is breached in case or not various factors are considered by Court such as standard of care expected in those situations. This standard is determined by court after considering the conduct of reasonable person in similar situations, and if actions of defendant do not match the conduct of reasonable person then it is considered as breach of duty.

Donoghue v Stevenson is the case law which can be used for understanding this, and in this case Court considers the tort of negligence. House of Lords in London is the highest Court of Britain, and this case was decided by this Court. In this case, the main question considered by Court was whether Mrs. Donoghue can initiate any action against the manufacturer under tort of negligence, and as per the decision of the Court manufacturer is liable towards the ultimate consumer, and he owns duty of care towards their consumers at the time of manufacturing those products.  

Determination of injury is a simple task in various cases because it is easy to determine the cause of action, but in some cases it is not simple because there is more than one cause of action (ALRC,n.d.).

In Australia, two cases are reported related to exploding of Samsung Galaxy Note7, and because of this one of the hotel room in Perth is destroyed. In this room one man was asleep when his new Note7 exploded, and this exploration burnt the bed sheet and carpet of hotel room and also injured the person. Later, almost 35 new cases of exploration were reported to Samsung.

Company recalled all the galaxy Note7 smartphones in Australia because it was identified by company that phones have some battery cell issue, and company also requested their customers that they do not use their Note 7.

This case falls under the tort of negligence because relationship exists between the parties that is of buyer and seller, and duty of care is owned by the seller towards the buyer. Therefore, Samsung also owns duty of care towards their ultimate consumer, because ultimately consumer faces the consequences of the product. It is necessary that manufacturer bears the liability towards their ultimate consumer. As stated above in case law Donoghue v Stevenson, manufacturer is liable towards the ultimate consumer, and he owns duty of care towards their consumers at the time of manufacturing those products.  

Therefore, it is clear in this case that Samsung owns liability towards their ultimate consumer of Note 7 because duty of care exist between the parties, and consumers have power to initiate proceedings in court for the purpose of seeking compensation  (The Law Handbook, 2016).

After considering all above facts and cases, in this case tort of negligence is applicable because one party owns duty of care towards other party, but fail to do reasonable things which cause damage to another person. This case also states the liability of manufacturer towards their ultimate consumer, and stated that Samsung also owns duty of care towards their ultimate consumer, because ultimately consumer faces the consequences of the product.

Part 2

Chapter 3 of the ACL states the part 3-5, and this part of the Act states the statutory rules related to liability claims which include any loss or damage caused because of safety defects of goods supplied by manufacturer. Suits for these claims against manufacturer can be filed by injured person and also by any other person who is authorized on behalf of injured person for the purpose of recovering the compensation in lieu of injury or loss suffered by person because of such defective goods. If safety expectations of consumer from product are not meet by the manufacturer then it is considered that product has safety defect, and safety expectations of public in every case is very different.

According to Section 138 of the Act, if any goods with safety defects has been supplied by manufacturer to the consumer while acting in trade and commerce, and because of this consumer suffer any loss or injury then manufacturer is liable towards the consumer, and consumer has power to seek compensation from manufacturer. This section further stated that action can be taken by individual against manufacturer if he suffers any loss or injury, for the purpose of seeking compensation (Competition and Consumer Act 2010 - Schedule 2).

It is determined by Court whether or not product has safety defect on the basis of some different factors, and these factors are stated below (ACCC, n.d.):

• Court consider the purpose and packaging of the product, and Court also consider whether manufacturer use any mark or symbol in relation to the product.
• Whether manufacture any instructions or warnings related to use and assembling of the product.
• Products expectations, in other words what is expected to be done from the product, and Court also consider the time at which product is supplied.

Section 139-141 of the Act states the grounds on the basis of which individual can take action against the manufacturer, and some of those grounds are stated below:

• Whether defective goods cause any loss or damage to person who purchases it and defective goods cause any loss or damage to any other person.
• Whether defective goods cause any loss or damage to any other goods.
• Loss or damaged caused to land, building or any other fixture because of any defective goods.

Section 142 and 148 of the Act states the defenses which can be used by manufacturer, and some of these defenses are stated bellow:

• Manufacturer can state that safety defects are not present in the goods at the time of supply of goods.
• Manufacturer can also state that defect arise in the product when individual who used the product is complied with any prohibited or mandatory standard, and he can also state that defect was not identified by manufacturer  because of scientific and technical knowledge.
• Manufacturer proves that defected goods are the part of other goods, and they can also state that defect in goods arise because of design and packaging (Clayton UTZ, n.d.).

In the present case, consumers who suffer loss and injury from defective Note 7 can take action against the Samsung, because section 138 of the Act make the manufacturer liable towards the consumer in case of defective goods. Section also allowed the consumers to seek damage from Samsung for the injury and economic loss suffered by them, because safety defect in product exists at the time of supplying of product.

Answer 3

For the purpose of managing the high cost of doing business, Government introduce concept of damages caps and this can be done by minimizing the liability of manufacturers and service providers because these costs are beard by consumers ultimately. Many people criticize this concept, especially those who play law lottery, and file suit for the purpose of making money from suits. Damage caps also introduce for the purpose of ensuring that justice system can only be used by those who actually wants justice (OLBRY, n.d.).

Usually, Jury does not use damage caps because maximum of jury does not know about the damage caps and judges and attorney does not want jury to know about the damage caps and they does not instructs or teach the jury about damage caps. Judges don’t want jury to know about damage caps because they don’t want that jury decides the compensation at initiating stage of the product on the basis of damaging caps, so that jury awards the actual and fair compensation. At later stage, these damages and compensation are changed according to damage caps of that state.

For all the damages, caps are regulated by ALRC except the damages in case of economic loss. In other words in case of general damages related to non-economic loss and other exemplary damages total amount would be adjusted as per the similar amount of non-economic loss related to defamation awards. This proposal related to damages caps is given for the purpose of ensuring equality in proposition of privacy and reputational interests, and it also prevents the plaintiff in selecting the cause of action on the basis of higher damages award.

However, in statute many restrictions are stated on the scope of damages related to non-economic loss for personal injury actions. In New South Wales, $350,000 is set as initial cap for damages and now it is set at $551,500, but in case of defamation damages related to non-economic loss is initially capped at $250,000 and now set at $355,000 (Clayton UTZ, n.d.; Find law, n.d.).

Part 3-5 of the Act defines the claims related to defective goods, and this part also states the advantage of negligence in case of strict liability because in this case there is no need to establish actual negligent. In this economic damages are stated as damages which are concrete in nature because there are many damages which are paid by the insurance company to the injured person such as payment of medical bills stemming from the injuries, but economic damages are concrete in nature because amount loss by plaintiff is of permanent nature and cannot be paid by any other person or entity such as income earned by person (ALRC, n.d.).

References:

ACCC. Product liability. Retrieved on 15th May 2017 from: https://www.productsafety.gov.au/product-safety-laws/legislation/product-liability.

ALRC. Authorizing what would otherwise be a Tort. Retrieved on 15th May 2017 from: https://www.alrc.gov.au/publications/right-sue-tort.

ALRC. Cap on damages. Retrieved on 15th May 2017 from: https://www.alrc.gov.au/publications/11-remedies-and-costs/cap-damages.

Australian government. The Australian Consumer Law. Retrieved on 15th May 2017 from: https://publications.qld.gov.au/dataset/1b96f0f9-1d84-44b4-9448-7d871dbd3b9d/resource/a9a1cc75-3b45-44fb-a08d-33d1e6ac7c10/download/aclguidetoprovisions.pdf.

Clayton UTZ. The Australian Consumer Law. Retrieved on 15th May 2017 from: file:///C:/Users/Manisha%20Bhatia_Absas/Downloads/Clayton-Utz-The-Australian-Consumer-Law-An-Essential-Guide-For-Product-Manufacturers-And-Suppliers-2012.pdf.

Competition and Consumer Act 2010 - Schedule 2- S138

Donoghue v Stevenson 1932 AC 562.

Griffith, C. (2016). Exploding Samsung Note7 ruins Australian hotel room. Retrieved on 15^th May 2017 from: https://www.theaustralian.com.au/business/technology/exploding-samsung-note7-ruins-australian-hotel-room/news-story/093d67da670f8c1ed20df88aafbb2f66.

Law Vision. Introduction – The Law of Torts. Retrieved on 15th May 2017 from: https://www.lawvision.com.au/uploads/PDFs/Tort%20Law%20.pdf.

Legal service Commission. Negligence. Retrieved on 15th May 2017 from: https://www.lawhandbook.sa.gov.au/ch01s05.php.

The Law handbook 2016. Negligence and injury. Retrieved on 15th May 2017 from: https://www.lawhandbook.org.au/10_01_00_negligence_and_injury/.

Clayton UTZ. Product Liability 2015. Retrieved on 15th May 2017 from: https://www.claytonutz.com/articledocuments/178/ICLG-Product-Liability-Australia-2015.pdf.aspx?Embed=Y.

OLBRY. Liability of manufacturers for goods with safety defects. Retrieved on 15th May 2017 from: https://olbrychtpalmer.net/2015/04/06/manufacturers-liability-for-safety-defects.html.

ALRC. Remedies and Costs. Retrieved on 15th May 2017 from: https://www.alrc.gov.au/publications/12-remedies-and-costs/damages.

Find  Law. What is a Damages Cap. Retrieved on 15th May 2017 from: https://injury.findlaw.com/accident-injury-law/what-is-a-damages-cap.html.