AUSTRALIA Trends and Developments Contributed by: Greg Williams, Alexandra Rose, Caitlin Sheehy and Carla Rank, Clayton Utz
Part 1: Automotive class actions and “reduction in value” damages To date, the majority of the automotive class actions filed in Australia have as a common theme “reduction in value” claims in circum - stances where: • a voluntary recall (or other corrective action) has been announced; and • that voluntary recall involves measures to rectify an actual or potential issue (whether safety related or not) affecting the continued operation of affected vehicles. The position in relation to “reduction in value” damages for a breach of the ACL was largely unsettled in Australia until late 2024, when the High Court of Australia delivered judgment in Williams & Anor v Toyota Motor Corporation Australia Limited. Background: Williams v Toyota This proceeding concerned approximately 250,000 Toyota vehicles fitted with diesel par - ticulate filters that were found to be defective. The defect was said to result in a number of issues when the vehicles were driven at speeds of 100 km/h, including: • excessive white smoke and foul-smelling exhaust; • increased fuel consumption; and • excessive servicing and repair requirements. Toyota offered consumers a subsequent repair, which Toyota said restored the value of the vehi - cle by the time of trial and therefore argued con - sumers should not be entitled to any damages. Legislative regime The ACL contains consumer guarantees that apply to all goods sold in Australia to a consum -
The Evolution of Consumer Product Regulation in the Automotive Sector and Digital Marketplace in Australia Australia maintains a robust and proactive stance on consumer product regulation, prioritising the safety, rights, and informed choice of consum - ers. The regulatory framework is largely gov - erned by the Australian Consumer Law (ACL), which is a national law enforced jointly by the Australian Competition and Consumer Commis - sion (ACCC) and state and territory consumer protection regulatory bodies. Under the ACL, manufacturers and suppliers of consumer goods are required to ensure that products supplied to consumers comply with statutory guarantees as to, for example, fitness for purpose. There are significant penalties for non-compliance and, in the case of defective goods, consumers are entitled to remedies. In recent years, the automotive sector has been a target of class actions globally, and Australia is no exception. Motor vehicles are one of the most complex goods routinely purchased by con - sumers. Plaintiffs in automotive cases will most commonly assert claims for reduction in value of their vehicles, due to overpayment at the point of sale, based on allegations of a product defect. In November 2024, the High Court of Australia handed down two significant automotive class action decisions which clarify the test for “reduc- tion in value” damages. This is discussed further in Part 1. Of continued focus for the ACCC are unfair prac - tices in the digital marketplace. This includes issues such as misleading or deceptive advertis - ing within influencer marketing, online reviews, in-app purchases and price comparison web - sites. The regulator’s focus is discussed further in Part 2.
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