Consumer Protection continues
The Consumer Protection Act, 2008 became law on 24 April 2010 but only a portion of the Act was brought into operation. With the “substance” of the Act expected to come into operation on 1st April 2011, its far-reaching implications will be the source of considerable concern for businesses.
Although the Act will not apply to a transaction in which the consumer is a juristic person whose asset value or annual turnover, at the time of the transaction equals or exceeds a threshold [yet to be set] this exemption is not all encompassing. Even if the supply of goods is exempt from the application of the Act, those goods and the importer, producer, distributor and retailer thereof will nevertheless be subject to the provisions of Sections 60 and 61 of the Act.
Section 61 deals with liability for harm caused by unsafe goods, a product failure, defect or hazard in the goods, or inadequate instructions or warning pertaining to a hazard in the goods. Furthermore, consumers will not need to prove negligence on the part of a supplier to hold it liable, nor must consumers establish the existence of a contractual link between the particular supplier and the consumer. For the purposes of this section, a supplier includes a producer, importer, distributor and retailer, all of whom may be liable to compensate the consumer for harm suffered.
Harm, as contemplated by the Act includes death, injury or illness to a natural person, any loss to property and economic loss.
The Act does not leave the supplier or retailer of goods without defences to claims for liability, and acceptable defences include that the defect in the product did not exist when it was sold to the consumer, that it is unreasonable to expect the distributor or retailer to have discovered the defect in the goods having regard to that person’s role in marketing the goods, or that generally, the claim for damages is brought more than 3 years after injury or loss was suffered.
Although section 61 will come into operation no earlier than April 2011, it will impose liability on a supplier from the first operation of the Act, namely April 2010. Thus, there exists the possibility of retrospective liability for suppliers.
