Negligence and Australian Consumer Law: A Case Study Analysis

Commercial Law

Answer 1
Material Facts
Samsung launched the Galaxy Note 7 smartphone in August 2016, and it was
discontinued by the company in October 2016. The reason for discontinuing the
smartphone was the battery issue in the phone which caused some phones to generate
excessive heat. Due to excessive heat, many smartphones caught fire, and they caused
physical injuries to the customers. The company recalled its smartphones and also took
measures to reduce the capacity of the battery and block the ability of people to connect
their phone to wireless network. Jane purchased Galaxy Note 7 in August 2016 it caught fire
in January 2017. Due to the fire, she suffers from severe burns, and her BMW car caught fire
as well which was destroyed completely.
Issue
The issue is relating to the rights which are available for Jane under the provisions of
the tort of negligence and Australian Consumer Law. Another issue is relating to possible
damages which can be claimed by Jane under these laws and what defences can be claimed
by the defendant to reduce its liability.
Rule
Negligence is the failure of a person to maintain proper care to ensure that other
parties did not suffer loss. There are certain elements which are necessary to be present in
order to file a successful suit of negligence (Stickley, 2016). The first element is that the
defendant must owe a duty of care. While determining this duty, the court uses ‘neighbour
test’ which was established by the court in the case of Donoghue v Stevenson [1932] AC 532.
As per this test, if the parties are in a proximity relationship and the risks are foreseeability,
then the duty of maintaining a standard of care is imposed on the party. Moreover, this duty
must be violated by the party by taking to take certain action which is expected for a
reasonable person in a particular position. The third element provides that the injury which
is suffered by a party must be the result of the failure of the party who owes a duty. This
element was recognised by the court in the judgement of Cork v Kirby MacLean Ltd [1952] 2
All ER 402. Lastly, the injury or damages suffered by the party due to the negligence of
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another person must not be too remote as provided in the case of The Wagon Mound no 1
[1961] AC 388. In case all these elements are present, then the victim has the right to hold
the defendant liable for negligence. Damages can be demanded by the aggrieved party for
psychiatric harm, personal injury and economic loss (Luntz et al., 2017). Moreover, certain
provisions are given under the Wrongs Amendment Act 215 (Vic) in relation to deciding the
amount of damages suffered by the party. As per section 28G, the victim has the right to
receive damages up to $577,050 for non-economic loss.
There are various defences given under the tort law based on which the defendant
has the right to eliminate the liability or reduce it to certain extent. Contributory negligence
is a common defence in the tort of negligence which provides that the amount of damages
which is paid by the defendant is reduced to the certain amount based on the contribution
of the claimant in the negligent act (Goudkamp & Klar, 2015). This defence is also provided
under the Wrongs Act 2015. If the claimant failed to maintain a duty to protect themselves,
then the amount of damages can be reduced to certain extent. The court evaluates the
extent up to which the parties have the right to reduce the amount for damages. The
Australian Consumer Law (ACL) focuses on protecting the rights of customers from unfair
trading practices of businesses. Various rights of customers are recognised under schedule 2
of the Competition and Consumer Act 2010 (Cth) (CCA). Section 7 provides that the meaning
of manufacturer include parties that are responsible for assembling, extracting, growing or
producing goods (Legislation, n.d.).
Under ACL, certain guarantees are recognised for customers to protect their rights
from fraudulent and unfair trading practices. Manufacturer of a product can be held liable
for failing to ensure that the customers are protected from any injury. Section 138 of ACL
focuses on protecting the safety of customers. As per this section, a liability can be imposed
on the manufacturer if the goods which are provided through trade and commerce contain
some safety defect which resulted in causing personal injury to the customers (Austlii, n.d.).
According to this section, the safety defect is referred to a condition when the good is no
longer remains in the condition where it is expected to be. Customers have the right to
claim damages for violation of their rights under the ACL. Along with section 138, section
139, 140 and 141 also provides key provisions for customers to claim damages. According to
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