When does a dangerous good or product have to be recalled?

by The FindLaw Team

As consumers, we’re heavily reliant on suppliers and manufacturers to provide us with goods that well, don’t endanger our health. Australians are fortunate in that there are laws that exist protecting us from suppliers and manufacturers from selling goods that are defective and dangerous to the public. So on occasions where a good or product is deemed to be harmful and that the product needs to be recalled by a supplier or manufacturer because the goods do not meet the acceptable standards expected, then there are various mechanisms under the Australian Consumer Law (ACL) that is in place to ensure that if goods do need to be recalled, there are specific protocols that are in place to make sure that manufacturers and suppliers take the appropriate actions in such circumstances.

The issuing and enforcing of product recall legislation

Rules in relation to product recalls can be found in Chapter 3, Pt 3-3 of the ACL, which outlines the procedures to be followed if a product needs to be taken off the shelves. Product recalls can be initiated by the manufacturer or via the regulating body, which can issue compulsory recall notices if a good is considered unsafe.

Product recalls are usually instigated if there is a reasonably foreseeable use of the goods, which may cause injuries to the public. Additionally, manufacturers and suppliers are obliged to anticipate all the potential types of uses of the goods, rather than the stated use, which ensures that no injuries from the public will be suffered, or the goods may be liable to be recalled. 

What are the types of goods that can be recalled?

Under the s 2 definitions of the ACL, only ‘consumer goods’ can be recalled: But products are considered as ‘consumer goods’? It might seem finicky in attempting to define what ‘consumer goods’ actually are, however, it is an important distinction to make, because only products that are considered as ‘consumer goods’ defined in the ACL, can be recalled.

‘Consumer goods’ under the ACL is defined in the following manner:

consumer goods mean goods that are intended to be used, or are of a kind likely to be used, for personal, domestic or household use or consumption, and includes any such goods that have become fixtures since the time they were supplied if:

(a) a recall notice for the goods has been issued; or
(b) a person has voluntarily taken action to recall the goods."

However, the s 2 definition of ‘consumer goods’, which has both subjective and objective features, must also be read in conjunction with the s 3 meaning of ‘consumer’ as well. Generally speaking, a person will be considered as a ‘consumer’ under the ACL, if they meet the following criteria:

• the amount payable for the goods did not exceed $40,000
• if the goods paid for were greater than $40,000, the goods must have been acquired for personal, domestic or household use or consumption
• the goods consisted of a vehicle or trailer acquired for use of goods on public roads.

Readers should also be mindful, that not all ‘consumer goods’ fall under the authority of the ACL, and are instead the responsibility of other governmental agencies or departments. For example, food products falls under the auspices of the Food Standards Australia New Zealand (FSANZ), and therapeutic goods are controlled by the Therapeutic Goods Administration (TGA), are but two examples of ‘consumer goods’ that are directed by other consumer regimes.

Although, the Australian Competition and Consumer Commission (ACCC) does not usually take action against suppliers or manufacturers who fall out of the ACL, the general duty of care standards, along with the laws of negligence are still applicable to all manufacturers and suppliers of goods – irrespective if the goods in question fall outside of the ACL.

When are goods required to be recalled?

Under s 122(1)(b) of the ACL, the triggering events which can lead to a compulsory recall of goods by the Minister are:

• the goods may cause injury to a person
• there is a reasonable foreseeable use or misuse of the goods that may cause injury to a person
• safety standards are in force in relation to the goods, and the goods do not comply with the standard
• there is an interim or permanent ban in place for the goods.

The States and Territories also have the power to compulsorily recall goods under certain circumstances, and if the goods in question affects no more than two States or Territories.

When a compulsory notice is issued against a manufacturer or supplier, they may be required to undertake some of the following actions:

• recall the goods
• disclose the nature of the defect
• disclose the dangerous characteristic of the goods, and the circumstances in which the reasonable foreseeable use or misuse of the goods
• disclose the procedures for the disposing of the goods
• repair the goods
• replace the goods
• refund the price for the goods.

Manufacturers and suppliers can also initiate a voluntary recall of consumer goods, and the triggering events, along with the notice requirements, are similar in nature to a compulsory recall.

If a manufacturer or supplier has to undertake an action of recalling a consumer good or product, they must inform the ACCC of the recall strategy, as outlined in the Consumer Product Safety Recall Guidelines, as well as enacting an effective communication plan, that must meet the minimum written notice requirements, and should include the following:

• a product description
• a picture of the product
• a description of the defect
• a statement of the hazard
• information in regards of ‘what to do’ in relation to the goods, which sets out the actions the consumer is to take
• contact details, which directs the consumer on whom to contact in order to receive a refund or have the product repaired or replaced. Furthermore, out of hours contact information should be included as well.

Ultimately, the ACCC will make an assessment in regards to the recall strategy of the manufacturer or supplier, and how successful the manufacturer or supplier was in implementing the ACL recall guidelines.

If a manufacturer or supplier is found to be in contravention of the ACL, then a maximum fine of $16,500 may be imposed to a body corporate, and $3,000 for individuals. Furthermore, it is also a criminal offence for a person who fails to notify the Minister of a defect, and such actions carry a maximum fine of $16,650 for a body corporate, and $3,330 for an individual.


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