CONSUMER PROTECTION ACT 68 OF 2008

The Consumer Protection Act 68 of 2008 (“CPA”) is yet another piece of consumer protection legislation and it comes into effect this year. The CPA is aimed at the protection of individual consumers and smaller businesses, yet some of its provisions apply to all consumers.

Section 61 of the CPA (liability for damage caused by goods) is such a section that applies to all consumers. Section 61 imposes strict liability (i.e. liability without negligence) on producers, importers, distributors or retailers of any goods which cause harm as a consequence of supplying unsafe goods, product failure, defect or hazard in any goods or inadequate instructions or warnings provided to the consumer about hazards associated with the use of any goods. This means that to be liable a supplier of goods must have caused the harm (wholly or partly) but it is irrelevant whether or not the supplier was negligent.

Harm includes (amongst other things) the death of any person, loss of any property and any economic loss resulting from these.

Goods are very widely defined in the CPA to include (amongst other things) anything marketed for human consumption and intangible products written or encoded on any medium or a license to use any such intangible product.

In addition, a supplier of any services who, in conjunction with the performance of those services, applies, supplies or installs or provides access to any goods is regarded as the supplier of those goods for the purposes of section 61. An obvious example would be a mechanic who installs a new part in your car. For the purposes of determining liability, the mechanic is regarded as the supplier of the parts.

Services are also widely defined in the CPA to include (amongst other things) any work performed by one person for the direct or indirect benefit of another, transportation, the provision of accommodation or sustenance, entertainment and access to any electronic communication infrastructure.

The CPA takes effect in two stages, some provisions being effective from 24 April 2010 (the “earlier effective date”) with most only taking effect on 24 October 2010. Section 61 takes effect from the earlier effective date (i.e. 24 April 2010).

Prudent suppliers need to re-asses the additional risks to which they will be exposed as a result of section 61 of the CPA and to consider what steps they may take to mitigate those risks. In particular, consideration should be given to whether or not a supplier’s existing insurance policies adequately cover such risks.

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