ACCC provides renewed guidance on mandatory injury reporting of product safety issues

On 17 December 2021, the Australian Competition and Consumer Commission (ACCC) released new product safety mandatory injury reporting guidelines and tools to assist manufacturers and suppliers with understanding and complying with their obligations under the Australian Consumer Law (ACL). The release of these materials provides further insight into the ACCC's interpretation of the requirements that sit with manufacturers and suppliers to report serious product-related injuries and illnesses.

Section 131(1) of the ACL requires that a "supplier" of consumer goods notify the relevant Commonwealth Minister (via the ACCC) of certain matters within two days after becoming aware of the death, serious injury or illness of any person which the supplier (or another person) considers was caused (or may have been caused) by the use or foreseeable misuse of the product in question. Section 132 of the ACL is an analogue provision about injuries and illnesses in relation to product-related services.

We have previously explained that the ACCC would be using additional resources from the Federal Government to increase its product safety capabilities. The level of detail included in these new guidance documents reflects the ACCC's increased focus on product safety regulatory issues, and demonstrates a particular concern with ensuring that manufacturers and suppliers comply with the reporting regime in section 131.

What has the ACCC published?

In addition to the comprehensive 38-page updated guidelines, the ACCC has also published a number of other documents intended to make it easier for businesses to understand and comply with their obligations under section 131:

• a quick guide and flow chart – which provide a summary of the updated guidelines and aims to provide companies with high-level level information about when a safety incident must be mandatorily reported.
• a template notice about mandatory reporting obligations - which provides example communications to be provided to employees (and potentially other contractors or agents of a company) to ensure those employees are aware of the obligations and are able to effectively handle complaints. The template is consistent with the ACCC's stated expectation that companies should have internal processes in place to ensure that an appropriate person in the company is told about product-related incidents in a timely fashion.
• a questionnaire – to assist with interviewing customers that are reporting an injury or illness.

Background to section 131 of the ACL

Section 131(5) specifies the minimum information which a report to the ACCC must contain, however in practice reports are to be made via an online reporting form accessible via the ACCC's Product Safety website.

There are only very limited exceptions to the reporting obligation in section 131(1) of the ACL, such as where the supplier or another person is otherwise required to notify a death, serious injury or serious illness to another regulatory authority under prescribed laws or industry codes. Examples include the reporting requirements relating to road vehicle accidents that occur on public roads.

If the ACCC considers that section 131 has been breached, it could seek to impose a penalty or commence regulatory enforcement proceedings, and there are examples where the ACCC has done exactly that against high-profile companies. Failure to report as required by section 131 is a strict liability offence and carries a penalty of $3,300 for an individual or $16,650 for a body corporate. Other penalties can also apply such as orders disqualifying individuals involved in the contravention from managing corporations for a certain period.

The ACCC's updated guidance

The updated guidance clarifies the ACCC's view on the key elements of section 131, a number of which are discussed below.

Meaning of "supplier"

The definition of "supplier" in the ACL is expansive. The updated guidelines provide that all participants in the supply chain are – in effect – "suppliers" and as such are required to comply with the mandatory reporting obligation in section 131. This includes retailers, distributors, importers, and manufacturers.

Serious injury or illness

An injury or illness will be serious if the following criteria are met:

1. there is an acute (as opposed to chronic) physical injury or illness. The updated guidance provides examples such as burns and broken bones.
2. the injury or illness requires medical or surgical treatment by, or under the supervision of, a medical practitioner or a nurse. The updated guidance notes that this includes minor medical treatment (such as the application of a bandage or the prescription of medicine), but does not necessarily include diagnostic procedures (such as an X-ray).
3. the condition is not an ailment, disorder, defect or morbid condition (or an aggravation or one). The updated guidelines provide that this means a pre-existing medical condition and gives the example of an allergic reaction (being the aggravation of a pre-existing ailment).

Becoming aware of a reportable incident

The reporting obligation is triggered when the company becomes aware that any person (eg. a consumer) takes the view that a death or serious injury or illness was or may have been caused by a consumer product that it supplies (which could include by way of a consumer complaint, or even through reading a newspaper article or social media post). The company then has two days to report the event to the ACCC.

The guidelines provide that a business becomes aware of a reportable incident as soon as any person (not just a manager or officer) within the organisation becomes aware of it. The ACCC's updated guidance even goes as far as saying that the obligation is triggered if sub-contracted customer service call centre staff become aware of a reportable incident.

Does section 131 apply to overseas companies and overseas incidents?

The ACCC's updated guidance makes it clear that the ACCC's interpretation of section 131 includes a view that:

• an incident does not need to have occurred in Australia to require a mandatory report; and
• overseas companies who supply consumer goods in Australia must submit a mandatory report for reportable incidents which occur overseas if they involve the same consumer goods that they supply in Australia. This is particularly onerous for overseas manufacturers who sell the same model of product globally.

Notwithstanding, the scope of section 131 of the ACL has not been properly tested by a Court and any analysis of section 131 involves complex legal questions concerning its extraterritorial reach. It is only a matter of time before a Court closely examines the scope of section 131.