Australian Commercial Law - Assignment Example

Commercial Law Institution Student Name Date Commercial Law Introduction Johnson & Johnson are healthcare giants in Australia who established DePuy Orthopaedics. It was revealed that the DePuy Orthopaedics had health impacts that were very shocking on Australian patients[McD14]. The health impact was as a result of a major failure of the device that was referred to as the revolutionary hip replacement. Several patients told their stories indicating how the prosthetic implant causes tremendous cobalt poisoning. The metal fragments from the orthopaedics had caused pollution on their bodies. Quentin McDermott, a Four Corners reporter, mentioned that the company deceived both patients and doctors using the ASR hip replacement implant. After having consulted from technology experts and professionals (doctors) and making an analysis of the internal documents of the company. The documents were unearthed in a very big case in a court in the US. Johnson & Johnson, however, failed to accept and dismissed the allegations made against its technological flaws. As a result, it made attempts of obscuring the lots of problems it created (McDermott & Cronau, 2014). Question 1 There are very particular elements that claimants are supposed to prove so that the defendant can be considered negligent[ACC15]. A tort is a legal wrong that a party suffers under another party. Negligence, therefore, refers to a type of tort that has evolved due to damages and losses that occur between two or more parties that lack a binding contract. It was hence difficult for one party to sue the other because there is nothing that the complainant can sue the defendant over. In 1932, however, the Lords’ house made a verdict that people should be in a position of suing others who caused damages and losses to them even in cases where a contractual relationship does not exist. This was done in the Donoghue v Stevenson case. The Lords’ House incorporated a new law principal that allowed for everybody to have a duty of caring for their neighbour. This, therefore, allows for the claimant to demand a tort of negligence against the defendant even if there was no a legally binding contract. So as to prove negligence, and have what it takes to claim damages, there are three elements that the Complainant is expected to prove at the court of law[ACC15]. These include: The defendant has to owe the claimant a duty of care. The defendants have breached the duty of care. The claimant suffered a damage or loss as the breach’s direct consequence. According to the common law, therefore, the company operated against the law, and the complainants had every right to accuse them of being liable for the tort of negligence. To start with, the defendant owed the complainants a duty of care. Johnson & Johnson offered surgical devices and; therefore, they were to be responsible for the wellbeing of the patient by offering them care in case the product had harmful effects. The defendant, Johnson & Johnson, breached the duty of care in that the company knew that the device was not fully safe for the health of the claimants[McD14]. Nevertheless, the defendants still went ahead to implement their project with a goal of controlling the perception of the complainants that the device was the best in the market. They knew that they were deceiving the complaints but still went on and did it. The complainant also suffered damage or loss that was a direct consequence or impact of breaching the contract. The common law, therefore, supports the complainants because of the suffering and torment they have received as a result of entering the contract. A lot of the damages claims of common law are pursuable basing on the fact that employers are liable for the injuries of the claimant because the damages or injuries are caused when the employer (defendant): Breaches the contract Practices negligence Breach the statutory duty that has been prescribed by WPHSA (Workplace Health & Safety Act) 1995. There are very fundamental and significant issues of the common law that is considered but not a law question when trying to establish the liability of the defendant. It is important to establish whether an incidence really occurred or not as was alleged[Lat12]. The possibilities therefore include: Whether the incidence had a witness with direct evidence of collaborating with the claimant. There was no witness but in the same time no evidence that contradict the account of the claimant. There was no witness and evidence exists that is in contradiction the account of the claimant, for instance, a medical record that is contemporaneous. According to McDermott & Cronau (2014), in the Johnson & Johnson DePuy case, there was enough evidence that the defendant was guilty. First, there were documents signed that the company knew that the project was not going to be successful and will be health hazards in the near future. The extraordinary thing that the company did was to change the name of the project from SR 2 to the Alpha project after realizing that there was a default in the project. The company must have known the problems by 2007. In April 2008 for instance, DePuy engineer Graham Isaac warned senior Depay officials that ASR was susceptible extreme conditions of metals. In the same surgeons hands, Isaac explained, BHR doesn’t have the similar problems. In response, Paul, DePuy’s marketing director mentioned that the company ultimately be in need of a cup redesign. However, in the meantime, the company will manage perceptions. This means that the company encouraged its staff to lie and deceive the customers. DePuy went ahead and made advertisements indicating that ASR had a 99.2% survivorship in patients yet in the real sense it was 95.5%. The company also refused to hire toxicologists to make assessments of the alleged problems. The first complainant was Bill Kransky, who took DePuy to the US court. He suffered from cancer as a result. The complainant luckily lived long enough and won his case. He was hence given big compensation payout[McD14]. There are relevant civil liability statute provisions within Victoria states that can be applied in this case. For instance, the defendant liability has limitations to the damage or loss proportion reflecting the defendant’s responsibility extent. Therefore, a judgement shouldn’t be given against defendants for more than the amount indicated unless there was a fraud as a supplement to the accusations. A fraudulent party, therefore, remains severely and jointly liable for the awarded damages against another co-defendant. Defendants against who judgements are given as ‘concurrent wrongdoer’ relating to apportionable claim can’t be asked to contribute to recoverable and recovered damages in indemnifying any such wrongdoer[Lat12]. Question 2 If the ASR users have rights in the case with a tort of negligence to be applied against the company, there are some factors that will be considered when calculating compensation (ACCA, 2015). The most important principle that is applied to damages assessment and award is that a claimant a claimant has to receive full compensation for his or loss. He or she is therefore entitled to restoration to the position or shape he or she had before the commitment of the tort. This is usually calculated by payment of cash. The calculations of the damages of caused by the defendant depend on the categories of damages. The categories have been established depending on the condition of the damage caused. There are categories of damages that the court can subject a defendant to. Contemptuous or nominal damages are awarded if the complainant proves that a defendant committed some tort yet the complainant did not suffer any loss. This way, the defendant is fined according to whichever mistake they made. A contemptuous damage consists of the derisory sum award and is usually the least coin of the realm of. It is given when a court makes considerations that the action of the claimant did not have any merit as much as it was technically successful. The action, therefore, shouldn’t have come up. The other categories include special and general damages. General damage refers to a damage presumed to have flown from the Torts that are actionable. They hence do not need to be pleaded specifically. A special kind of damage, on the other hand, requires the complainant to plead and prove before the court. This is therefore part of his or her cause of action (Latimer, 2012). In this case, however, the ASR complainants suffered personal injuries and life risks[McD14]. In most personal injury cases, claimants suffer two types of losses that are distinctively stated; non-pecuniary and pecuniary loss. Pecuniary losses are damages that can be calculated directly in terms of money. The most common example is the loss of both future and actual earnings. This incorporates every other expense relating to the tort, for instance, travelling expense, medical expense and special equipment cost. Non-pecuniary damages, on the other hand, reflect the immeasurable matters. For example, there could be suffering that result from amenity loss that relates to disability. The court has the responsibility of assessing under three heads; loss of earnings in the future, non-pecuniary damages and pecuniary damages. In the ASR case, therefore, the damages that the company is liable to can be based on the non-pecuniary damages because the users have been made physically challenged and risk losing amenity (Tufal, 2000). Question 3 The section 3-5 of the (ACL) Australian Consumer Law makes a manufacturer liable in a direct manner for certain kind of losses caused by goods that defective. The ACL’s section 3-5 has got its basis on EC Directive on products that are defective (Utz, 2012). This provision, therefore, allows for a claim to be directed against manufacturers when they have produced goods with defects of safety cause damage, loss and injury. If a plaintiff has a difficulty in identifying the defective product’s manufacturer, the ACL, therefore, allows the complainant to request formally a supplier to identify the manufacturer’s name. A good is described to have safety defects if in any case their safety is not as people should expect. The safety defect precisely involves two elements: a certain safety level entitlement or expectation. The test, however, is objective with its basis on the expectations and knowledge of the community. Utz (2012) states that the factors to be put in mind include: A product should be truly unsafe and not just inoperative or of poor quality. Just because a good may cause an injury does not automatically insinuate that it is defective. A good may cause harm because of its inherent nature and not just their defect. In this case, therefore, the DePay project made SRA products that are unsafe and total life hazards. The products made the flesh around them greyish and at the same time producing dark fluids. The flesh was indeed rotting. The devices caused cancer to Bill Kransky, which compelled him to file a case against the company Johnson & Johnson[McD14]. There are circumstances that must be considered so as to determine the safety extent of the goods. The goods safety include the way the goods were marketed, packed if there was any use of any particular mark. Others include what might be reasonably expected, any warnings, use instructions and time of supply. The company is, therefore, subject to fine because it marketed the product even more after there were speculations that if was faulty. The company encouraged the staff to deceive and convince people’s perception about the new product. It convinced people globally that ASR was by far better than the initially used BHR. In Australia, it made an advertisement that the survivorship of the product was 99.2% yet in the real sense it was 95.5%[McD14]. Inferences that goods are defective should not be made up only because a safer good has subsequently been supplied. Products are still defective if their operations are as intended, but its warnings are not sufficient to alert consumers of any possible dangers the products could cause (Utz, 2012). Conclusion In conclusion, the Johnson & Johnson DePuy project was a complete fault. The company, however, happened to know that the product was defective, but it still went ahead and executed the project. It only blamed the doctors and surgeons for the health hazards the product caused. It steadfastly held that the device was fine and safe. Its operation was against the Common Law because it went against the manufacturer-consumer legal relationship. The company was subjected to the Australian Consumer Law that indicated that a manufacturer is liable in a direct manner for certain kind of losses caused by goods that defective. List of references McD14: , (McDermott & Cronau, 2014), ACC15: , (ACCA, 2015), Lat12: , (Latimer, 2012), Read More