Because of companies' concern that a régime of strict product
liability would interfere with research and development into new
products and technologies, section 75AK(1)(c) of the Trade Practices
Act allows a manufacturer to escape liability if it establishes:
"That the state of scientific or technical knowledge (at the time when
a defective product is supplied by its actual manufacturer) was not
such as to enable the defect to be discovered. " "This test is often
referred to as the ?state of the art? or ?development risk? defence."
In considering whether or not the state-of-the-art defense needs to be
repealed, one needs to consider the likely effects of a repeal upon
Australian economic development and its consumers, along with what
problems, if any the existing language has created. Thus far, a lack
of caselaw determining how the state-of-the-art defense will be
applied by the courts makes it impossible to assess how many people
will be injured but will not be entitled to compensation because of
the Act's state-of-the-art defense provision. So, at this point, the
likely impact of the repeal on Australian economic development is the
only aspect that can be examined.
The state-of-the-art defense was instituted because of companies'
concern that research and development would be stifled by a régime of
strict product liability. If strict product liability prevailed, it
is reasonable to conclude that new products and technologies would be
most likely developed and first sold outside of Australia, and that
only products that were proven to be very safe in use by large numbers
of people and predictable to manufacture would be sold in Australia.
Such a circumstance would result in fewer research and development
jobs in Australia, a decrease in scientific and technical knowledge in
Australia, and at best the delayed introduction of new and potentially
risky products in Australia. Some products might never be made
available in Australia at all, even if they were likely to be very
beneficial overall. Scientists and engineers that wanted to be on the
cutting edge of new product development would leave the country. Tax
revenues and economic activity in Australia would be adversely
affected by the loss of jobs and fewer products being available for
sale. Many activities might also have to be performed more
inefficiently because better products available in other countries
would not be available in Australia. As a result, the competitiveness
of Australia with other countries could be adversely affected, hurting
domestic industry and the balance of trade.
Many new products, especially drugs, are introduced with only a poor
understanding of how they work and what their risks are. Nonetheless,
particularly for people with otherwise terminal diseases, the unknown
risks of a potentially beneficial new product are often considered to
be worthwhile. Furthermore, even when a product was proven to be safe
outside of Australia and then made available to Australians, its
manufacturer might resist changing it in a manner which would be more
beneficial to Australians because any change could be potentially
dangerous. The manufacturer might not be able to try an "Australian
version" outside of Australia to evaluate its safety in use by large
numbers of people, and therefore Australians would be left with a less
optimal product. To the extent that significantly more testing would
be required before a new product could be released for sale in
Australia, products would also cost more than they would in other
countries.
Assuming that economic development and access to the latest
technologies at the lowest possible price is important to the welfare
of Australians, and particularly in the absence of any gross
injustices to injured parties resulting from court decisions based on
the state-of-the-art defense, it is difficult to imagine a need to
repeal section 75AK(1)(c) of the Trade Practices Act at this time.
Sincerely,
Wonko
Reference: "Can Defendents Rely Upon the ?State of the Art? Defence
Under Part VA?" by Ian Dallen,Corrs Chambers Westgarth Lawyers
http://www.corrs.com.au/WebStreamer?page_id=2484 |
