Should it be illegal to sell products that are listed recalls?
It is not currently illegal in Australia to knowingly sell unsafe goods. I wrote about this last year in my blog article An Australian General Safety Provision and argued justification for adding a general safety provision to the Australian Consumer Law.
If the government decides not to take this step, I wonder if there is an argument for imposing something a bit more straightforward.
Comprehensive recalls database
Suppliers conducting product recalls are required to notify the Australian Competition and Consumer Commission within two days of initiating the recall. The ACCC then posts details on the Recalls Australia website: www.productsafety.gov.au/recalls The website provides a comprehensive database that is publicly available.
Conducting a recall usually involves the suppliers contacting all of its trade customers with instructions to stop selling the product and returning it to source. Such communications should be straightforward, immediate and effective. Trade customers should be able to respond promptly to such instructions and withdraw stock from sale.
Risk of continued sale and supply
Failing to respond to a safety recall puts consumers at risk of injury from using a product with known product defect/s.
There are several scenarios that risk continued supply:
- Retailers are not informed or do not respond to their supplier’s instructions
- Hirers are not informed or do not respond
- Other traders that supply the same product (sourced from different supplier than that initiating the recall) continue to sell
Information available to all
The recalls register allows anyone and everyone to stay informed of recalls. It is possible to narrow your subscription criteria so you get advice of recalls only in relevant product categories.
It is valuable for all suppliers to keep an eye on recalls to check when similar products are recalled. I wrote about this in my blog article Product Safety Recalls Australia. Retailers, hirers and others up the supply chain have a duty to stay informed of product recalls. Irrespective of the law, corporate responsibility requires everyone in the supply chain to make sure their products are safe. And all suppliers have incentive to withdraw unsafe goods once identified.
Special law introduced in the USA
Last year the US government introduced a law that explicitly prohibits car rental companies from hiring out vehicles that are subject to a recall. This followed a campaign by the mother of two sisters in their early 20s who died when their hire car leaked steering fluid, caught fire then crashed into a semi-trailer. The car had been recalled a month before the crash for a faulty power steering hose that could cause a fire and lead to loss of steering.
You can read about the fight the mother had to have with the hire companies and the legislators – over 12 years! It’s an amazing story.
It might have taken a long time, but the US now has a specific law to address the risk of hiring out recalled vehicles. That it required legislation, which was fought hard by the car hire industry, is telling. To what extent can any community put its faith in the market to self-manage and act with corporate responsibility?
General Safety Provision or not . . .
One argument against implementing a general safety provision is that it can be difficult for suppliers to know what’s safe and what isn’t. That situation does not apply once a product is recalled and posted on the recalls website.
If a GSP is included in the ACL, I believe the onus should be on all suppliers to ensure they do not supply products that have been registered on the recalls website. If a GSP that requires all products to be safe before they are sold is not introduced, then a requirement not to sell recalled products could be a reasonable ‘fall-back’.
The litigious nature of the American market did not deter the vehicle hire companies from knowingly renting out an unsafe, recalled car. Australia has a far less litigious record in consumer products. Perhaps it needs its own stronger consumer safety laws.
For further analysis of this topic, see my update Is a recaller breaching the law if they continue to supply their product?
