Samsung Galaxy Note 7 Battery Issue: Legal Issues And Consumer Rights

The purpose of the assignment is to enable you to achieve outcomes in knowledge, skill and application across the designated learning outcomes mentioned in the BULAW5914 course Description.

·Learn how to independently research a particular aspect of the law;
·Reflect on and consider particular legal issues;
·Demonstrate your understanding of relevant laws;
·Develop your knowledge about the subject area of your research;
·Demonstrate the ability to investigate, synthesise and analyse;
·Communicate your findings in a formal piece of work and meet a deadline;
Enhance your written communication skills;

Samsung launched the Galaxy Note 7 smartphone in August 2016, and it was discontinued by the company in October 2016. The reason for discontinuing the smartphone was the battery issue in the phone which caused some phones to generate excessive heat. Due to excessive heat, many smartphones caught fire, and they caused physical injuries to the customers. The company recalled its smartphones and also took measures to reduce the capacity of the battery and block the ability of people to connect their phone to wireless network. Jane purchased Galaxy Note 7 in August 2016 it caught fire in January 2017. Due to the fire, she suffers from severe burns, and her BMW car caught fire as well which was destroyed completely.

The issue is relating to the rights which are available for Jane under the provisions of the tort of negligence and Australian Consumer Law. Another issue is relating to possible damages which can be claimed by Jane under these laws and what defences can be claimed by the defendant to reduce its liability.

Negligence is the failure of a person to maintain proper care to ensure that other parties did not suffer loss. There are certain elements which are necessary to be present in order to file a successful suit of negligence (Stickley, 2016). The first element is that the defendant must owe a duty of care. While determining this duty, the court uses ‘neighbour test’ which was established by the court in the case of Donoghue v Stevenson [1932] AC 532. As per this test, if the parties are in a proximity relationship and the risks are foreseeability, then the duty of maintaining a standard of care is imposed on the party. Moreover, this duty must be violated by the party by taking to take certain action which is expected for a reasonable person in a particular position. The third element provides that the injury which is suffered by a party must be the result of the failure of the party who owes a duty. This element was recognised by the court in the judgement of Cork v Kirby MacLean Ltd [1952] 2 All ER 402. Lastly, the injury or damages suffered by the party due to the negligence of another person must not be too remote as provided in the case of The Wagon Mound no 1 [1961] AC 388. In case all these elements are present, then the victim has the right to hold the defendant liable for negligence. Damages can be demanded by the aggrieved party for psychiatric harm, personal injury and economic loss (Luntz et al., 2017). Moreover, certain provisions are given under the Wrongs Amendment Act 215 (Vic) in relation to deciding the amount of damages suffered by the party. As per section 28G, the victim has the right to receive damages up to $577,050 for non-economic loss.

Background of Galaxy Note 7 Battery Issue

There are various defences given under the tort law based on which the defendant has the right to eliminate the liability or reduce it to certain extent. Contributory negligence is a common defence in the tort of negligence which provides that the amount of damages which is paid by the defendant is reduced to the certain amount based on the contribution of the claimant in the negligent act (Goudkamp & Klar, 2015). This defence is also provided under the Wrongs Act 2015. If the claimant failed to maintain a duty to protect themselves, then the amount of damages can be reduced to certain extent. The court evaluates the extent up to which the parties have the right to reduce the amount for damages. The Australian Consumer Law (ACL) focuses on protecting the rights of customers from unfair trading practices of businesses. Various rights of customers are recognised under schedule 2 of the Competition and Consumer Act 2010 (Cth) (CCA). Section 7 provides that the meaning of manufacturer include parties that are responsible for assembling, extracting, growing or producing goods (Legislation, n.d.).

Under ACL, certain guarantees are recognised for customers to protect their rights from fraudulent and unfair trading practices. Manufacturer of a product can be held liable for failing to ensure that the customers are protected from any injury. Section 138 of ACL focuses on protecting the safety of customers. As per this section, a liability can be imposed on the manufacturer if the goods which are provided through trade and commerce contain some safety defect which resulted in causing personal injury to the customers (Austlii, n.d.). According to this section, the safety defect is referred to a condition when the good is no longer remains in the condition where it is expected to be. Customers have the right to claim damages for violation of their rights under the ACL. Along with section 138, section 139, 140 and 141 also provides key provisions for customers to claim damages. According to section 140, the manufacturer will be held liable for any safety defect in the goods which caused an injury to another party.

However, while applying this section, it is important to determine that the person who has suffered the loss must acquire the goods for personal/household/domestic purposes. Various defences are available under the ACL which protects the manufacturers from liability. Section 142 of ACL provides that a manufacturer cannot be held liable for any defect in the goods if such defect was not present while the goods were supplied. As per clause B of section 142, if the defect is there in goods due to certain compliances which are necessary to meet the standard, then the manufacturer cannot be held liable to pay for damages (Corones, 2014). Clause C of the section provides that at the time the goods were supplied, it was not possible for the manufacturer to discover the defect by using technical or scientific knowledge, then liability cannot be imposed. Lastly, clause D of this section provides that the manufacturer is not liable if the defect in the goods attributed to the design.

Legal Issues relating to tort of negligence and Australian Consumer Law

In the given case study, Jane purchased the Galaxy Note 7 smartphone which is manufactured by Samsung. A duty is imposed on Samsung under the ACL to ensure that safety of customers. As per the law of negligence, a duty of care is owed by Samsung towards its customers based on the neighbour test. There is a reasonable foresight of risk, and the parties have a proximity relationship (Donoghue v Stevenson). Based on this duty, it is important that Samsung acts in a reasonable manner to ensure the security of its customers is maintained. The duty was breached by Samsung since he delivered defected goods to the customers. The damages can only be awarded if the element of causation is present as discussed in the case of Cork v Kirby MacLean Ltd. Lastly, the damages which are too remote cannot be recovered by the parties. In the present scenario, the loss suffered by Jane regarding its BMW car is not recoverable since it was not foreseeable as provided in The Wagon Mound no 1 case.

The physical damages suffered by Jane are recoverable under the Wrongs Act based on which she can claim damages up to $577,050. On the other hand, Jane is also liable for claiming damages under the ACL based on section 138. The overheating of the smartphone was caused due to a manufacturing defect which means that it was not safe. Moreover, Jane can also claim damages for her BMW car under section 140 by providing that she was using the goods for domestic purpose and the same was destroyed because of this safety defect in the phone. Moreover, Samsung can claim the defence of contributory negligence in the present scenario since Jane did not exchange her phone after they were recalled by the company. However, Samsung is less likely to be entitled to this defence, and the court is less likely to reduce the damages caused to Jane due to overheating of the phone. Thus, Jane can claim damages under the ACL and the tort of negligence; however, recovering the damages through ACL is a more suitable option for Jane.

To conclude, Jane has the right to claim damages from Samsung for negligence and violation of her duties under the ACL. Samsung cannot claim on the defence of contributory negligence or the sections of ACL. Samsung is liable as a manufacturer under a suit for negligence and the provisions of ACL based on which Jane can claim damages for her personal injuries and her car.

Elements of Negligence

Alan was drunk when he got a lift from Steven; Alan knew that Steven was also drunk since they were drinking in the same venue. Steven was driving rashly in order to impress Alan due to which he lost control of the car, and it ran into a stationary truck. Both Alan and Steven suffered significant personal injuries due to the accident.

The key issue is whether Alan has the right to sue Steven under a suit for negligence and whether he is likely to succeed in receiving damages from him.

The parties who are in a proximity relationship owe a duty of care towards each other. They have to ensure that they maintain a standard of care to avoid causing harm to third parties. There are certain relationships in which a duty of care exists such as solicitor and client, doctor and patient, parent and child and others (Stychin, 2012). The elements of negligence are necessary to be present in a particular scenario to hold parties liable for a suit of negligence. The success of the suit depends on the fact that whether the defendant owes a duty of care or not. The second element is breach of such duty by acting or omitting certain act. The third element is that the injury suffered by the party must be caused due to the action or omission of the defendant. The last element is remoteness of damages; the injuries which are not foreseeable cannot be recovered through a suit of negligence. In the judgement of Caparo Industries PLC v Dickman [1990] UKHL 2, the court provided ‘Caparo test’ which can be used in order to determine whether the party owes a duty of care or not. This test evaluates three elements to impose a duty on the party which include close relationship between parties, foreseeability of damages and imposition of penalty must be fair and reasonable (Turner, 2013).

In a suit for negligence, the defendant can rely on different defences in order to eliminate or reduce the liability to pay damages such as volenti non fit injuria, contributory negligence, exclusion of liability and others. The defence of volenti non fit injuria provides that when the victim is aware of the risks involved in a particular scenario and still act while knowing the same risk, then the victim did not have the right to hold the defendant liable for negligence. This defence is relevance in a suit for negligence which is filed against the defendant who was intoxicated while breaching the duty of care (Katsivela, 2013). In this context, a relevant judgment was given by the court in the case of Morris v Murray [1991] 2 QB 6. In this case, the court provided that if a person takes a lift from an intoxicated person, then it means that he/she has accepted the risk based on which the defendant can rely on the defence of volenti non fit injuria. In this defence, the complete liability of the defendant to pay the damages is eliminated, and the claimant did not have the right to demand damages from the injury.

Damages and Defences

In the given scenario, Alan has to establish all the elements of negligence in order to hold Steven liable for the damages. A proximity relationship existed between Alan and Steven since Alan took a lift from Steven. The damages were foreseeable since Steven was intoxicated and he was rashly driving the car in order to impress Alan. It is also just and equitable to impose a duty of Steven. Therefore, based on the Caparo test, a duty is owed by Steven (Caparo Industries PLC v Dickman). This duty was violated by Steven because he was negligently driving the car in order to impress Alan due to which the car lost control, and it ran into a stationary truck. The damages suffered by Alan were caused due to the negligence of Steven based on which the element of causation was present in the scenario.

Lastly, the injuries which are suffered by Alan are not too remote, and they are foreseeable. Therefore, all the elements of negligence are present in this scenario. Alan has the right to file a suit against Steven in order to claim damages from him for the personal injuries suffered by him. In order to eliminate the liability to pay damages to Alan, Steven can rely on the defence of volenti non fit injuria. Steven can argue that Alan was aware of the fact that he was intoxicated still he agreed to get a lift from him based on which he accepted the risk involved in the scenario. Steven can also rely on the judgement of Morris v Murray case in order to claim that Alan has accepted the risk by agreeing to get a lift from Steven. Therefore, Steven is likely to succeed in the defence and the court is most likely to accept his arguments. Steven can eliminate his liability arise in the case based on which Alan will not be able to claim damages from him.

Conclusion

To conclude, Alan is less likely to succeed in the suit filed against Steven in order to recover damages for the personal injuries suffered by him which were caused due to his negligence. Steven can rely on the defence of volenti non fit injuria by claiming that Alan agreed to the risk because he knew that Steven was intoxicated, but he still agreed to take a lift from him. Therefore, it is most likely that Alan will not be able to held Steven liable for the damages suffered by him.

References

Austlii. (n.d.). Competition and Consumer Act 2010. Retrieved from https://classic.austlii.edu.au/au/legis/cth/consol_act/caca2010265/toc-sch2.html

Caparo Industries PLC v Dickman [1990] UKHL 2

Competition and Consumer Act 2010 (Cth)

Cork v Kirby MacLean Ltd [1952] 2 All ER 402

Corones, S. G. (2014). Competition law in Australia. Toronto: Thomson Reuters.

Donoghue v Stevenson [1932] AC 532

Goudkamp, J., & Klar, L. (2015). Apportionment of Damages for Contributory Negligence: The Causal Potency Criterion. Alta. L. Rev., 53, 849.

Katsivela, M. (2013). The Volenti Defence under Australian and Canadian Law: A Comparative View. J. Comp. L., 8, 322.

Legislation. (n.d.). Competition and Consumer Act 2010. Retrieved from https://www.legislation.gov.au/Details/C2013C00620

Luntz, H., Hambly, D., Burns, K., Dietrich, J., Foster, N., Grant, G., & Harder, S. (2017). Torts: cases and commentary. New York: LexisNexis Butterworths.

Morris v Murray [1991] 2 QB 6

Stickley, A. P. (2016). Australian torts law. New York: LexisNexis Butterworths.

Stychin, C. F. (2012). The vulnerable subject of negligence law. International Journal of Law in Context, 8(3), 337-353.

The Wagon Mound no 1 [1961] AC 388

Turner, C. (2013). Contract law. Abingdon: Routledge.

Wrongs Amendment Act 215 (Vic)