I was injured by a defective airbag in my car. Who is liable - dealer or manufacturer?

What the Law Says

The Australian Consumer Law (ACL) sets out strict liability for manufacturers and suppliers of goods with safety defects that cause injury. Both the manufacturer and the dealer may be held responsible, but the manufacturer bears primary liability for design or manufacturing defects.

Under the ACL, a 'manufacturer' includes the brand owner, importer, or anyone who holds themselves out as the manufacturer — not just the overseas factory. A 'supplier' includes the car dealer who sold you the vehicle.

A 'safety defect' exists if the good is not as safe as persons generally are entitled to expect, considering factors like marketing, packaging, instructions, and the time it was supplied (ACL s. 64). Airbags are safety-critical components, so failure to deploy or unintended deployment may constitute a safety defect.

Section 138 of the ACL gives injured persons a right to sue the manufacturer for loss or damage caused by a safety defect. Section 271 allows consumers to seek remedies including compensation, replacement, or repair — even if the defect was not known at the time of supply.

Statutory Text

A person is liable to compensate another person for loss or damage suffered by the other person if the loss or damage was caused by a safety defect in a good supplied by the person.

— Australian Consumer Law, s. 138 — Liability for injury etc. caused by safety defect

Statutory Text

A good has a safety defect if it is not as safe as persons generally are entitled to expect.

— Australian Consumer Law, s. 64 — Safety defect

Statutory Text

A court may make such orders as it considers appropriate... including an order that the supplier pay compensation to the consumer for loss or damage suffered by the consumer.

— Australian Consumer Law, s. 271 — Orders the court may make

What to Do

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