AUSTRALIA Law and Practice Contributed by: Greg Williams, Alexandra Rose, Caitlin Sheehy and Sarah Aljassim, Clayton Utz
3. Recent Policy Changes and Outlook 3.1 Trends in Product Liability and Product Safety Policy The maximum penalties for breach of the Aus - tralian Consumer Law, as set out in 1.5 Penal- ties for Breach of Product Safety Obligations , increased fivefold in late 2022 and substantially increased the penalties available (the previous maximum corporate penalty for a breach of the Australian Consumer Law was AUD10 million). The amendments also introduced penalties relating to unfair contract terms, which came into effect in November 2023. Even apart from these amendments, the pen - alties being imposed by courts for breaches of the Competition and Consumer Act 2010 (Cth) (including but not limited to those relating to product safety breaches) have been stead - ily increasing, with a new high being set by the AUD438 million penalty mentioned in 1.5 Penal- ties for Breach of Product Safety Obligations . This trend is expected to continue with the appli - cation of the new penalty regime. Liability under the Competition and Consumer Act 2010 (Cth) extends in some cases to damages for psychi - atric injuries. During the past seven years, class action pro - cedure ‒ in particular, as it relates to litigation funders – has been the subject of considerable activity by the court and the federal legislature. The power of the courts to regulate funding arrangements for class actions and to make procedural orders that facilitate funding arrange - ments continues to be the subject of judicial consideration. By way of example, in May 2025, the High Court overturned a decision of the New South Wales Court of Appeal that had held that the New South Wales Supreme Court did not
non-compliance, Takata airbags and allegedly faulty diesel particulate filters. These claims typi - cally rely on consumer guarantee provisions in the Australian Consumer Law and allege that vehicle owners are entitled to compensation because their vehicles were worth less than they paid for them at the time of purchase. This theory of loss was clarified in November 2024 by a decision handed down by the High Court of Australia on appeal from two federal court class actions. The High Court of Aus - tralia confirmed that the reduction in the value of goods must be assessed at the time of sup - ply, by reference to the best available informa - tion known about the defect at the time of trial (including “availability” of a suitable fix/repair, as well as when, how, and at what cost a repair might take place). The test to be applied is the value that a hypothetical reasonable consumer fully acquainted with the true state and condi - tion of the goods ‒ but with knowledge about what repairs might be available – would assign to the goods. Further Claims In addition, there have been a number of highly contentious toxic tort class actions relating to bushfires and floods ‒ some of which resulted in significant multimillion-dollar settlements. Separately, the ACCC has also been active in recent years, particularly in its oversight of prod - uct recalls and allegedly unsafe products.
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