Exploring the Growth of Product Liability Claims in the Age of Consumerism

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Consumer concerns about privacy, environmental preservation, and overall safety are becoming increasingly prominent. This, coupled with the implementation of legislation aimed at providing stronger consumer protections, has created greater awareness and understanding of product liability insurance.

Gillian Davidson, Chairman of GILC and Partner at Sparke Helmore, explains, "The global wave of regulatory and legislative changes is encouraging both consumers and corporations to hold manufacturers, importers, and suppliers accountable for the products and services they provide."

Furthermore, the growth rate of product liability claims is likely to be influenced by updated legislation surrounding class actions and third-party funding. These changes empower consumers seeking justice and put increased pressure on manufacturers, suppliers, and importers to deliver safe and reliable products.

Australia's Unique Product Liability Regime

Australia's product liability regime combines common law, contractual obligations, and the Australian Consumer Law. The latter encompasses measures against misleading and deceptive conduct, consumer guarantees, and strict liability for products with safety defects.

Recent developments and shifts in case law have expanded the range of potential defendants, which now includes manufacturers, suppliers, and retailers, although they are typically corporate entities, states Kiley Hodges, a partner at Sparke Helmore.

The claimants involved in product liability cases in Australia vary in size and nature, ranging from individual consumers and small businesses to large corporate entities and even the Australian Competition and Consumer Commission, depending on the complexity and magnitude of the matter.

Resurgence of Class Actions in Australia

After a decline in recent years, class actions have rebounded in Australia. These actions cover a wide range of industries including pharmaceuticals, pesticides, chemicals, medical devices, motor vehicles, and consumable products.

Hodges highlights the passage of legislation last November that increased penalties for companies breaching competition and consumer laws. Additionally, amendments to address unfair contract terms are set to take effect next month, providing even greater protection for consumers.

Product Liability Claims in New Zealand

In New Zealand, the residential building sector sees the highest number of product liability claims. These cases primarily revolve around compliance with weathertightness standards outlined in the building code, as well as issues related to fire safety and cladding systems, both internally and externally.

The Impact of Technology and Global Supply Chains

The emergence of new technologies such as artificial intelligence and their rapid integration into everyday life has posed challenges for regulators and legislators. Their rapid adoption combined with the complexity of global supply chains further complicates the liability landscape.

GILC emphasizes the significance of these trends, stating, "Regardless of a country's existing consumer-friendly laws or the maturity of its product liability market, it is evident that this class of business will continue to grow rapidly in the coming years."

Within this ever-evolving market, insurers must remain vigilant in identifying new risks and seizing emerging opportunities to stay ahead.

Published:Monday, 23rd Oct 2023
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

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