A warning for sellers of goods to Australian consumers

23 May 2018

Megan Edwards, Lynne Lewis

Following the over $4.6 million penalty ordered against Thermomix in Australia Pty Ltd (Thermomix), sellers of consumer goods are reminded of their obligations to report serious injuries caused by the use or foreseeable misuse of a consumer good to the relevant Australian Commonwealth Minister.

What happened in this case

Proceedings were brought by the Australian Competition and Consumer Commission against Thermomix following reports of injuries sustained by Australian consumers using its TM31 device. A Thermomix is a high-end household appliance which has a number of functions, including heating, blending, pureeing and weighing food.  It was found the lid and seal on the TM31 Thermomix did not function as required, and that there was a real risk of burns or other injuries to users if it failed during use. The Court found: 

  • On 14 occasions between June 2012 and July 2016, Thermomix failed to given written notice to the Commonwealth Minister when it became aware that a person had suffered serious injury that was caused by the use or foreseeable misuse of its products.
  • Thermomix was aware that there was a safety issue, yet continued to sell the TM31 from 7 July 2014 until 6 September 2014 without issuing a recall (during which time they sold 9,443 devices in Australia). In fact, the safety issue was not communicated to consumers until 23 September 2014.  Thermomix admitted that by continuing to sell the TM31 during this period, and given the delay in notifying consumers of the safety issue, it impliedly represented that it was not aware of any safety risk with the TM31, which was false or misleading in breach of the Australian Consumer Law. The Court found that "Where a product supplier knows that there is a safety issue with the product that has the potential to cause serious injury to users, there is a reasonable consumer expectation that the supplier will either stop selling the potentially dangerous product or will at least warn consumers of the safety issue.";
  • Thermomix released statements through PR agencies in March 2016 which represented to consumers that the TM31 had never been the subject of a recall, it was absolutely safe and there was not safety issue with a seal of the TM31 which required consumer action.  This was found to be false or misleading in breach of the Australian Consumer Law given the previous voluntary recall in 2014 and that, by this stage, Thermomix was aware of 35 serious injuries suffered by users of the TM31.
  • Thermomix made misleading representations to injured consumers in relation to their rights under the Australian Consumer Law while procuring settlement agreements.

What does this mean for sellers of goods to Australian consumers?

This is a timely reminder for companies who sell goods to Australian consumers of their obligations in relation to the recall of products, particularly in relation to mandatory reporting obligations.  

Under s131 of the Australian Consumer Law, suppliers of consumer goods are required to make a report to the relevant Commonwealth Minister within 2 days of becoming aware of a death, serious injury, or illness of a person if they, or another person, consider that the use or foreseeable misuse of the good was, or may have been, the cause of the death, injury or illness.  There are exceptions that apply to this reporting requirement – including if it is clear that the harm was not caused by the use or foreseeable misuse of the goods, if it is very unlikely that the harm was caused by the use or foreseeable misuse of the goods, or if a notification is required to a person other than the relevant minister under other regulations or industry codes. This obligation imposes a very tight timeframe on suppliers (with a 2 day notification period), and requires a prompt assessment of the circumstances of the injury to assess whether the reporting obligation is triggered.  Also, the threshold required to be met (i.e. either that the goods caused, or may have caused the death, serious injury or illness) is not overly onerous.

In addition, if goods present a safety risk, or are non-compliant with a mandatory standard or ban, they may need to be recalled. A voluntary recall must be notified to the relevant minister within two days of being initiated. In addition, depending on the nature of the product, other state or federal departments may need to be notified e.g. electrical or gas regulators. 

Should you have any questions in relation to your recall or reporting obligations, or other questions in relation to product safety, please contact Lynne Lewis and Megan Edwards.

Authors

Megan Edwards

Megan Edwards

Associate
Australia

Call me on: +61 2 9226 9888
Lynne Lewis profile image

Lynne Lewis

Partner
Australia

Call me on: +61 2 9226 9888