STAY HOME BE SAFE. For more information on COVID-19 please visit www.sacoronavirus.co.za
TOP
contact us today for consultation : 0861 674 352
CAREERS

Has the SCA undermined the purpose of the Consumer Protection Act?

Our law has historically required fault (culpa) on the part of a wrongdoer who is sued for harm caused to a third party. This is referred to as the fault theory of delictual liability. Until the introduction of the Consumer Protection Act (No 68 of 2008), suppliers and manufacturers enjoyed virtual immunity from liability for product defect claims because of the difficulty of establishing a contractual nexus between the plaintiff and the distributor, producer or importer. Section 61 of the CPA remedied this problem by establishing a form of strict liability of producers, importers, distributors, and retailers for harm caused by unsafe products, product failures, defects or hazards in goods, or inadequate instructions or warnings provided to consumers. This strict liability, by definition, arises irrespective of any negligence on the part of the producer, importer, distributor or retailer.

In Halstead-Cleak v Eskom Holdings Ltd 2016 (2) SA 141 (GP), a cyclist suffered severe burns when he came into contact with a live power line belonging to Eskom and which was lying low over a footpath. He claimed damages under Section 61 of the CPA from Eskom as a producer and distributor of the electricity. The High Court awarded damages to the plaintiff after holding that the design, manufacture and distribution of products (such as electricity) are activities that occupy the centre stage for the wealth and welfare of society. These products may at times may result in death, disease or injury for a wide range of parties, for example workers in factories or along distribution channels, users of defective products and third parties like consumers and innocent bystanders. Applying Section 61 to the matter, Eskom could not be permitted to introduce a source of danger and thereafter seek exoneration when injury is caused as a result thereof. In other words, the court was upholding the strict liability framework of the CPA.

The SCA took a different view when Eskom appealed the High Court finding. In Eskom Holdings Limited v Halstead-Cleak 2017 (1) SA 333 (SCA), the SCA found that Eskom was not liable to the plaintiff because he did not qualify as a “consumer” in relation to Eskom. This was because the plaintiff (a) did not enter into any transaction with Eskom as a supplier or producer or electricity; and (b) was not at the time of his injury a user, recipient or beneficiary of the electricity.

The difficulty with this judgment is that all of us are consumers of electricity on a daily basis and are customers of Eskom. Therefore, the SCA could just as easily have concluded that the plaintiff was a consumer of electricity supplied by Eskom, had entered into a transaction with Eskom as a supplier or producer of electricity, and was at the time of his injury a recipient of electricity.

An alternative argument is that even if the plaintiff was not considered a consumer of electricity at the time of his injury, Section 61 does not exclude bystanders injured by goods as potential claimants. In fact, Section 61(5) of the CPA deals with the kinds of harm for which damages can be claimed and refers to the injury of “any natural person.” It is therefore arguable that a bystander who is injured by goods could claim for damages under Section 61 of the CPA.

Why then did the SCA not extend protection to the plaintiff in the Halstead-Cleak case? It appears that the SCA was concerned about not extending the net of liability for defective goods too wide. The difficulty with this concern is that it runs contrary to the purpose of the CPA, which is to provide for improved standards for consumer protection through a consistent legislative and enforcement framework relating to consumer transactions and agreements [See the preamble to CPA].

Closing thoughts
The difficulties presented by the Halstead-Cleak judgment are evident in an example where two colleagues are standing together, and one colleague is injured after the other colleague opens a defective tin of Coca-Cola that explodes in his face. Assuming that the requirements of Section 61 are satisfied (retailer supplied unsafe goods causing harm in the form of injury) it would be hard to imagine a court denying a claim under Section 61 on the basis that the injured colleague did not purchase the tin of Coca-Cola and therefore (a) did not enter into any transaction with the retailer; and (b) was not at the time of his/her injury a user, recipient or beneficiary of the Coca-Cola. And would the answer be different if the bystander had taken a sip of the Coca-Cola from his/her colleague just before the tin exploded?

It seems that the SCA has unduly restricted the ambit of the CPA which is to provide a strict liability delictual framework for consumers or “any natural person” to obtain redress for injury caused by a defective product from producers, importers, distributors or retailers who do not have a contractual relationship with the consumer or any other natural person. In so doing, much of the remedial purpose of the CPA has been lost or at least severely attenuated.

=========================
Ivor Heyman is an advocate at the Johannesburg Bar. He publishes articles of interest to attorneys and their clients. For questions or comments you can reach him at adv.heyman@gmail.com or 061-120-8740.