No-fault liability – are you prepared?

2011-03-09 00:00

THE imposition of no-fault liability is a major change to consumer law that will be brought about by the Consumer Protection Act from April 1.

Producers, importers, distributors or retailers of goods can be held liable for injury or damage caused by goods even if they could not have foreseen any harm or taken all reasonable steps to prevent harm. This provision applies to all goods supplied after April 25, 2010.

Previously consumers would have had to prove fault on the part of the suppliers (i.e. that it was reasonably foreseeable that the goods would have caused the harm and the supplier failed to take reasonable steps to avoid the harm) or held the suppliers to a contractual term making them liable. In terms of the new act, this is no longer necessary.

Subject to certain exclusions, consumers can now choose the party in the supply chain with the biggest pockets and hold them liable for any death or injury to a person, loss or damage to property or economic loss. It relieves consumers from impossible tasks such as proving a manufacturer’s negligence.

Suppliers will be liable for that harm where it arises out of any unsafe good, a product failure, defect or hazard or inadequate instructions or warnings pertaining to a hazard associated with the goods.

Liability will not arise if the unsafe product, characteristic, failure, defect or hazard resulted from compliance with a public regulation. If the problem did not exist at the time the goods were supplied to the next person in the supply chain or if it was wholly attributable to the compliance with the instructions provided (such as Eskom supplying electricity in the ordinary course), if it was unreasonable to expect the supplier to have discovered the problem (a supermarket selling pre-packaged goods), the particular supplier may not be liable and liability will rest with the other suppliers in the supply chain.

Unless the circumstances fall within the above exclusions, suppliers cannot avoid being held liable for damages. It is imperative that suppliers improve quality controls and obtain indemnity from all parties in the supply chain and from their insurers.

 

Tessa Stuart, Associate, Deneys Reitz Inc

 

The Witness in association with Deneys Reitz Inc. will publish a weekly column on the Consumer Protection Act, which comes into effect on April 1, touching on a variety of topics to inform businesses and consumers about the widespread and serious implications of the act.

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