One of the most interesting cases in 2013 in the product liability space is Wallace v Kam  HCA 19. In Wallace v Kam, the High Court held that a medical practitioner was not liable for physical injury sustained by a patient as a result of an inherent risk materialising in a medical procedure, in circumstances where the patient would have undergone the procedure even if they had been warned of the risk that ultimately eventuated.
The case concerned two inherent risks involved in a surgical procedure performed by the respondent, Dr Kam, on the appellant, Mr Wallace, for a condition of his lumbar spine. One risk was of temporary local damage to nerves within his thighs (bilateral femoral neurapraxia) and the other was a one-in-twenty chance of permanent catastrophic paralysis caused by damage to his spinal nerves. Mr Wallace was not warned of either risk.
Not only was the operation unsuccessful, Mr Wallace also sustained neurapraxia and brought proceedings against Dr Kam, seeking damages for negligent failure to warn in respect of both risks. The trial judge, Harrison J found that Dr Kam negligently failed to warn Mr Wallace of the risk of neurapraxia. Harrison J also found that Mr Wallace would have chosen to undergo the surgical procedure even if warned of the risk of neurapraxia. By majority, the New South Wales Court of Appeal agreed and Mr Wallace appealed once more to the High Court.
The High Court unanimously dismissed Mr Wallace's appeal finding that the distinct nature of the risks of neurapraxia and paralaysis, together with the willingness of Mr Wallace to accept the risk of neurapraxia, supported the conclusion that any failure to warn on the part of Dr Kam could not be the legal cause of the Mr Wallace's neurapraxia, notwithstanding that had he been warned of the risk of paralysis, he would not have gone ahead with the procedure).
There is potential for this decision to have significant implications for product liability decisions, particularly in relation to the duty of manufacturers to warn consumers of inherent risks associated with a product, on product labelling or otherwise. It seems that failure to warn of a risk will not lead to liability where it is a risk that a consumer is prepared to take, even in circumstances where full disclosure of all risks would have been unacceptable to them.
The decision has also clarified the scope of assessing causation under section 5D of the Civil Liability Act 2002 (NSW); namely, that the determination of factual causation under section 5D(1)(a) in failure to warn cases will involve nothing more than application of the but for test and, further, that the scope of liability, pursuant to section 5D(1)(b), will be a normative question, requiring consideration as to why legal responsibility should be attributed to a particular person.
Thanks to David McCredie, partner at Baker & McKenzie, and Dr Ben De Campo, senior associate, for their assistance with this article.