The Australian Consumer Law (‘ACL’) is the national consumer law and applies across Australia. It came into force on 1 January 2011. At the same time, the Trade Practices Act 1974 (Cth) changed its name to the Competition and Consumer Act 2010 (Cth). Schedule 2 of that Act now contains the ACL. The ACL replaced a number of consumer protection provisions in federal, state and territory laws. It was enacted with the cooperation of the federal, state and territory governments. This cooperation was necessary since the Commonwealth lacks the power to comprehensively legislate on consumer law.

The ACL applies as a federal law, or as a law of the relevant state or territory, or both. It is not necessary here to go into all the details of the demarcation since the same body of law generally applies. Broadly, the ACL applies as a law of the Commonwealth to the conduct of corporations and certain natural persons, and applies as a law of a state or territory to the conduct of corporate and natural persons with a connection to the relevant jurisdiction. The application of the ACL as a federal law and the application of the ACL as a state or territory law are not mutually exclusive (where there is no conflict).

Common law damages cannot be awarded in respect of a purely equitable wrong such as breach of trust or breach of fiduciary duty. Instead, a compensatory remedy has developed in equity’s exclusive (or inherent) jurisdiction: equitable compensation. This remedy originated in cases involving breach of trust, although for many years it was not explicitly recognised as a compensatory remedy and was known instead as one of the forms of ‘account’ that a trustee must make when a breach of trust occurs. It is therefore necessary to have a brief look at the main forms of account, which are still used today.

A contract may be breached by one party (the defendant) through defective performance, delayed performance, or a total failure to perform. If the contract breached is enforceable at common law, the innocent party (the plaintiff) can generally claim common law damages for any loss suffered as a result of the breach. The assessment of such damages and the attribution of responsibility for such loss are generally governed by the rules discussed in Chs 2 to 4 for civil wrongs in general. Specific rules for breach of contract are discussed in this chapter: the assessment of damages and the attribution of responsibility.

The victim of a tort can generally claim compensatory damages for any loss suffered as a result of the tort. The assessment of such damages and the attribution of responsibility for such loss are generally governed by the rules discussed in Chs 2 to 4 for civil wrongs in general. Specific rules for tort are discussed in this chapter: the assessment of damages and the attribution of responsibility. The assessment of compensatory damages for personal injury, which are usually claimed in tort, is discussed.

Once a plaintiff has established that a duty of care is owed and has been breached and that the breach has resulted in damage the burden of proof then shifts to the defendant. In an action for negligence, the plaintiff’s claims can be defeated if the defendant can prove a relevant defence. The key defences to an action in negligence are the following:

• The plaintiff’s failure to take reasonable care of their own safety, or ‘contributory negligence’

• The plaintiff’s previous acceptance of the risk – their voluntary assumption of the risk created by the defendant’s conduct

• The plaintiff’s intoxication or willing undertaking of dangerous recreational or unlawful activities may operate as a defence in some jurisdictions. In others, it may be relevant to establishing that a breach has occurred

• Statutory defences, including the plaintiff’s delay in initiating proceedings

  A defendant who wishes to rely on one of these defences must: (1) plead these matters by filing a defence that raises the matters; and (2) produce evidence to prove them on the balance of probabilities. The defendant bears the onus of proving the defence.

This chapter considers the rules governing claims for compensatory damages in tort. Compensation in tort is generally governed by the same rules as apply to all civil wrongs, although some specific rules apply to torts claims in particular.

Judge Richard Posner’s opinion in McCarty v. Pheasant Run, Inc. exemplifies his use of a law and economics approach in tort cases. Applying the famous risk–utility test found in the “Hand formula,” Posner refused to impose negligence liability on a hotel in a case in which a woman was assaulted by an unknown assailant who gained access to her room through an unlocked door that opened into a courtyard. The rewritten feminist dissent objects to the use of the risk–utility test in sexual violence cases where the “loss” being quantified (i.e., a deprivation of personal autonomy) is often undervalued and misunderstood. To eliminate the risk of victim-blaming, the feminist opinion would change the law to disallow a contributory negligence defense to limit a plaintiff’s recovery in cases of rape and sexual assault. The accompanying commentary discusses how Judge Posner’s rhetoric and his law and economic philosophy leads him to weigh the economic interests of businesses over women’s physical and emotional well-being.

The defences available in negligence comprise the following: (1) contributory negligence, i.e., that C carelessly contributed to his own injury; (2) volenti, i.e., that C fully and freely assumed the risk of injury created by D’s breach; (3) illegality, i.e., that C was engaged in an illegal purpose when harmed by D;1 (4) exclusion clauses, i.e., that D can take advantage of a limitation of liability clause in his agreement/contract with C;2 (5) therapeutic privilege, i.e., that D withheld information about material risks from C, because disclosure might harm C’s health and well-being; and (6) necessity, i.e., that D’s negligence was committed because it was necessary to save life, limb, or property.