The INS and OUTS of liability

Liability implies responsibility for the negative consequences of an act, omission, event or occurrence. 

Criminal liability is commonly equated with guilt. In a civil law and socio-economic context, there is usually a finding of fault and an accompanying compensation component for damage caused. Legal liability generally imposes an obligation to pay an amount of money to the party who suffered a loss.

South African law recognises four ways in which you can attract liability to a third party:

Contractually: By concluding an oral or written contract you can attract liability for doing something (an act) or failing to (an omission). For example, if you sign a contract with a lessee, allowing occupation of a building by 1 January 2012, you may be liable to the lessee for breach of contract in the event the building could not be occupied on this day.

Delictually: If you perform an act (or you fail to) which is wrongful and for which you are at fault, which causes foreseeable harm to a third party, you may be liable in delict for damages. This could occur if you fail to notice a stop sign, proceed through an intersection and collide with another vehicle. You can also attract delictual liability if your employee commits a delict in the course and scope of employment, or your dog acts contrary to its nature and bites a jogger.

Statutorily: Legislation may place an obligation on you to perform an act and failing to do so may render you liable. For example, the National Environmental Management Act places an obligation on certain entities to take reasonable measures to minimise the effects of a spillage that may pose a health and safety risk to others.

Agreement / adjudication: You may accept liability to a third party, regardless of whether you are responsible for your act or omission, or a court / adjudicating body may find you liable. Although you defend a defamation claim against you, a court may still find you liable to the third party, for example.

Unpleasant insects can be exterminated with repellent. The question is whether liability can be eradicated too?

Failure to comply with your obligations in a contract or acting wrongfully does not automatically render you liable to a third party. Most contracts will contain an exclusion of liability clause in favour of one of the contracting parties. A building contractor agrees that it will be liable for damage on site, but not damage caused by an act of God. The contractor’s exclusions or indemnity clauses could thus offer a way out.

Also in delict, there are ways you can cast a net over liability. If you suffer a stroke whilst driving, causing you to drive into another’s palisade fence, you could succeed in defending the third party’s claim on the basis of a sudden emergency.

Even in the "no fault” liability cases of attributed liability or liability for damage by domestic animals, there are ways in which to defend actions. You could argue that your employee used the vehicle for his / her own purposes when the accident occurred, or that your dog was provoked by your daughter’s boyfriend when it bit him. If your liability is established and no exclusion clause or defence excuses your act or omission, that liability can be neutralised by liability’s "Peaceful Sleep” – insurance.

The Short-term Insurance Act defines a liability policy as a contract in terms of which a person, in return for a premium, undertakes to provide policy benefits if an event relating to the insuring of a liability occurs. Cover is ordinarily limited to a specific incident (for example damage to property) or a maximum amount (cover up to R1 million for any one occurrence, for example) and there will be exclusions.

The Consumer Protection Act, in force since 31 March 2011, is an example of an increased focus on fair, just and equitable transactions and dealings with others. Non-compliance with the Act renders you statutorily liable. The best way to take the "bite” out of liability is to ensure that you are adequately insured.