It says that the extent to which consumers are protected is best illustrated by the section deal- ing with the right to fair, just and reasonable terms and condi- tions. The subsection that gives guidance in this regard states that a transaction, or an agreement, or its term or condition is unfair, unreasonable or unjust if it is excessively one-sided in favour of any person other than the consumer.
Deneys Reitz Attorneys director Donald Dinnie says that while the preamble to the Bill states that the purpose is to “promote responsible consumer” behaviour, one will “search in vain in the substance of the Bill for any express provisions in that regard”.
“One suspects that, ultimately, the costs of implementation of the legislation, and the liabilities created under the Bill, will, in a time-honoured tradition, be passed onto the consumer. “Increased product or service costs will be the trade-off for the increased protection afforded under the Bill. “Section 61, for example, introduces a no-fault liability for damage caused by goods,” Dinnie told a media briefing in Johannesburg, recently.
Currently, a causal link between a defective product and its negligent manufacture and the harm suffered as a result of the negligent conduct has to be estab- lished. That will no longer be the case.
“Now a causal link between harm, as specified under this section, and the defective product is all that is required to establish the liability of the supplier. “No negligence needs to be proved. “It is debatable whether the section even requires, in certain circumstances, for it to be established that the product was defective when it left the hands of the supplier.”
Dinnie pointed out that the difficulty that the consumer or ultimate user has in establish- ing negligent manufacture of the product has always been a complaint of consumers in establishing producers’ product liability because the consumer is not privy to the manufacturing and quality control process.
A supplier of services, which, in conjunction with the performance of those services, applies, supplies, installs or provides access to any goods, is also regarded as a supplier of those goods.
Suppliers who have an increased risk of exposure would have to look at changing production methods and improving quality control. Suppliers will also need to have appropriate product liability insurance in place.
“Increased exposure to product liability is likely to lead to a rise in insurance premiums. One may have little sympathy for those suppliers who are in the market for profit,” added Dinnie.
Nonprofit organisations are, however, not immune from the effect of this section. The various blood transfusion services in South Africa that are not-for-profit entities will be exposed to liability for blood and blood products, where, for example, notwithstanding screening processes, blood is HIV infected and is then transfused to a patient.
Dinnie said it is unclear whether the services could obtain appropriate insurance cover for such exposure, and, if so, at what cost. If they cannot, the extent to which they could self-insure and the effect this would have on the price of blood and blood products are also unclear.