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Who can seek compensation?

Businesses that manufacture goods with a safety defect are liable to compensate:

  • any individual to whom the goods cause personal injury. This includes the person who purchased or leased the goods, their family members and even bystanders
  • any person suffering loss or damage because another individual was injured by the goods. However, a person who suffers loss or damage merely because they have a business or professional relationship with the individual injured cannot make a claim
  • a person who suffers collateral loss through their consumer goods or privately owned land being destroyed or damaged by the unsafe goods.

In the case of collateral damage to goods or land, liability will only arise if the goods or land are of a kind normally acquired for personal or domestic use or consumption and the person used, or intended to use, them for that purpose.

Examples

  1. The surviving spouse and children of a person killed by unsafe goods will be able to recover compensation for the financial and non-financial loss they suffer as a result of the death. On the other hand, the deceased's business partner won't be able to recover for the loss caused to the business by their death.
  2. A new toaster explodes and damages an adjacent refrigerator. The consumer will be able to recover the cost of repairing the refrigerator or buying a new one.
  3. A new toaster explodes and damages the consumer's trade tools that had been left nearby as the consumer prepared for work. The consumer will not be able to recover the cost of repairing, or replacing, the tools under the unsafe goods provisions of the ACL as they are not goods of a kind normally acquired for personal or domestic use. However, recovery may be possible under the consumer guarantee provisions of the ACL (see Consumer guarantees).
  4. A new bar fridge is installed in a consumer's home. Due to faulty wiring in the fridge it catches fire and the consumer's home is destroyed. The consumer will be able to recover the cost of replacing their home.
  5. A bar fridge is installed in a small business premises. Due to faulty wiring it catches fire and the premises are destroyed. The business will not be able to recover the cost of replacing the premises because they are being used for commercial purposes. However, recovery may be possible under the consumer guarantee provisions of the ACL (see Consumer guarantees).