Directors Cotton On to consumer safety standards

A recent Federal Court decision highlights the ACCC's readiness to heavily enforce mandatory safety standards, especially in circumstances where the safety of vulnerable consumers may be affected.

In December 2012 the Federal Court held that Cotton On Clothing Pty Ltd and Cotton On Kids Pty Ltd (together, Cotton On) had put the safety of young children at risk and contravened the Trade Practices Act 1974 (the Act) by selling flammable children's pyjamas.

Tracey J declared that Cotton On's sale of almost 2,500 items of children's nightwear between September and December 2010 - all of which displayed 'low fire danger' labels - not only breached the mandatory fire safety standard but contravened sections 52, 53 and 55 of the Act by falsely representing to consumers that the goods met the requisite standard.

The decision is yet another example of the ACCC's willingness to pursue companies and seek heavy penalties where consumer safety is seen to be at risk. The ACCC described Cotton On's breaches as very serious, arguing that the children's garments should not have been supplied to Australia given the increased risk of fire hazard. The ACCC also noted Cotton On's previous instances of non-compliance, including, relevantly, the offering for sale of a children's dressing gown that failed to comply with the relevant fire hazard warning.