AUSTRALIA Law and Practice Contributed by: Greg Williams, Alexandra Rose, Caitlin Sheehy and Sarah Aljassim, Clayton Utz
a standard for goods or anything relating to the goods that, under law, must be complied with when goods are supplied and which carries a penalty for non-compliance. This defence can - not be claimed in relation to statutory require - ments for goods to achieve a minimum standard. Manufacturers are also entitled to claim a defence where the alleged defect did not exist when the goods were supplied by the manufac - turer. Similarly, if an entity is only responsible for the manufacture of a component of the product, that entity will be able to claim a defence against actions for claims relating to safety defects in the finished product. 2.13 The Impact of Regulatory Compliance on Product Liability Claims Adherence to regulatory requirements is a rel - evant consideration in product liability cases in Australia ‒ although it does not operate as a complete defence to such claims. In this respect, see 2.12 Defences to Product Liabil- ity Claims . Unlike in the USA, there is no “pre- emption” defence in Australia. Compliance with applicable regulatory requirements or mandated standards will be a relevant factor considered by the courts in actions for negligence and under the statutory warranty or guarantee provisions of the Australian Consumer Law; however, the fact that a product had its safety assessed by a regulator as part of the process of granting a licence to sell that product in Australia does not preclude a product liability claim being brought in respect of it. 2.14 Rules for Payment of Costs in Product Liability Claims Australia has “loser pays” costs system. The precise rules that apply to calculate the costs payable by an unsuccessful party to a success - ful one vary from jurisdiction to jurisdiction, but
are generally calculated on a party/party basis ‒ ie, only some parts of the work undertaken are recoverable (meaning that, in the ordinary course, the costs recovered are only a portion of the costs incurred). However, solicitor/client or indemnity costs ‒ which would be close to the total costs incurred ‒ may be awarded in some circumstances, particularly if a party formally rejected a settlement offer and then failed to do better than that offer at trial. The approach taken to calculating costs differs from jurisdiction to jurisdiction. Some jurisdic - tions have a scale of costs, which specifies (and limits) the amount a successful party may recov - er from an unsuccessful party for tasks under - taken during the course of litigation (such as the drafting of correspondence or electronic docu - ment management). Other recoverable costs include court filing fees and other out-of-pocket expenses. In other jurisdictions, an assessment is made as to the reasonableness of the costs incurred. Depending on the type of proceeding com - menced, more particular rules may apply in relation to costs. By way of example, in repre - sentative proceedings or class actions, statu - tory provisions restrict costs orders being made against class members ‒ other than those who commenced the proceedings. 2.15 Available Funding in Product Liability Claims Australia has a well-established litigation funding industry. Although the exact number is unknown, in December 2020 the Parliamentary Joint Com - mittee on Corporations and Financial Services indicated that 22 litigation funding companies were known to be operating in Australia (14 of which were foreign-owned or based overseas and six of which were Australian-owned or
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