On Friday last week; I received an email which read:
“I HAVE RECENTLY BOUGHT A DEFECTIVE VEHICLE, WHICH I HAVE ALSO NOW ESTABLISHED, WAS ALSO PREVIOUSLY INVOLVED IN AN ACCIDENT. WHAT ARE MY CONSUMER RIGHTS AND HOW DO I ENFORCE THEM?”
This is a simple question; but the answer to it; is not so simple.
This question also gives us an opportunity to look at the various steps that we can take to protect ourselves as consumers.
Initially, one needs to understand all of our legal rights in these circumstances and the remedies available to us, as consumers.
Firstly, you have certain common law rights eg not to be sold a defective “merx” (Item).
These rights can be enforced through litigation in our courts.
However, you also have legislation which protects you in the form of the Consumer Protection Act No 68 of 2008 (CPA).
At The Legal Advice office we use both the common law and the CPA in combination to enforce our clients consumer rights.
Your remedies in terms of that CPA are set out in Chapter 3, which reads:
Protection of consumer rights and consumers’ voice
Consumers’ rights to be heard, and obtain redress
Consumers are often exposed to unfair or harmful business practices by suppliers and thus generally need to be protected in respect of how suppliers interact with them before, during and after agreements or transactions for the supply of goods or the performance of services. In order to enjoy proper protection of consumer rights and an efficient system of redress that is not too costly or dilatory is essential. Without proper access to redress consumer rights remain lofty ideals and the plight of many hapless consumers is not improved.
In South Africa, before the coming into operation of the Consumer Protection Act, consumer protection was provided for by the common law, as well as in certain industry-specific legislation, which dealt with matters such as finance charges and credit granting, weights and measures, trade descriptions on goods and false and misleading advertising. Harmful or unfair business practices were generally regulated by the Harmful Business Practices Act, which was later renamed the Consumer Affairs (Unfair Business Practices) Act. This was an enabling Act rather than a prescriptive one and although its purpose was to provide for the prohibition or control of unfair business practices, it did not contain a list of practices that could be considered unfair. An “unfair business practice” was broadly defined as “any business practice which, directly or indirectly, has or is likely to have the effect of harming the relations between business and consumers; unreasonably prejudicing any consumer; deceiving any consumer, or unfairly affecting any consumer”. The Consumer Affairs (Unfair Business Practices) Act authorised a committee, known as the Consumer Affairs Committee, to investigate business practices and report to the Minister of Trade and Industry and to make certain recommendations to the Minister if it found any business practices to be unfair.
A major drawback of that Act was that the Consumer Affairs Committee had no power to order redress. If the Minister accepted the committee’s recommendations, a notice was published in the Government Gazette declaring the business practice to be unfair and directing that parties or businesses refrain from applying those unfair practices. This publication of the aforesaid notice had the effect that certain practices merely had to be amended but, in some instances, it meant that the entire business had to cease operating. Non-compliance with the published notice was an offence and upon conviction, a person was liable to a fine not exceeding R 200, 000.00 or to imprisonment not exceeding 5 years or both. The author Woker indicates that one of the difficulties with the aforesaid legislation was that the legislature was attempting to protect the public not only from unlawful business practices but also from practices that were lawful yet unfair or harmful to consumers and that this resulted in complaints by suppliers that the Act violated their constitutional rights, particularly the right to freedom of trade, occupation, and profession.
Also, certain provinces have enacted provincial legislation regulating consumer affairs based on the Consumer Affairs (Harmful Business Practices) Act and currently all provinces have Provincial Consumer Affairs Offices. Unfortunately, not all provinces have operational consumer courts yet. The lack of sufficient operational provincial consumer courts is clearly problematic as it hampers access to justice for many consumers. In addition to the fragmented legislation and lack of a sufficient number of operational consumer courts, various industry regulators exist that have also attempted to provide a measure of consumer protection. Woker points out there has always been a lack of co-ordination between these regulators and also that the disjointed pieces of legislation were often unknown to consumers and suppliers alike.
The aforementioned fragmented approach to consumer protection often made it difficult for South African consumers, many of whom are unsophisticated or otherwise uneducated or even illiterate or live in remote areas of the country, to enjoy sufficient access to redress in respect of harmful business practices by suppliers. The CPA has now repealed many of these fragmented pieces of pre-existing consumer legislation and attempts to address consumer protection in one comprehensive piece of legislation that places a high premium on accessible, transparent, and efficient redress for consumers. The Consumer Protection Act operates as overarching national consumer protection legislation in tandem with the provincial consumer protection that exists in the various provinces.
Part A deals with the consumer’s right to be heard and obtain redress;
Part B deals with investigations by the Consumer Commission; and
Part C deals with redress by the courts.
Chapter 3 should be read in conjunction with section 4, which deals with realisation of consumer rights, and Chapter 6, which deals with the enforcement of the CPA.
THE ENTITIES THAT FACILITATE REDRESS IN TERMS OF THE CPA:
The entity that is primarily tasked with enforcement of the CPA is the National Consumer Commission, which is a regulatory body that has been established in terms of section 85 of the CPA and which, being a creature of statute, accordingly functions within the parameters of the Act. The enforcement functions of the Commission are set out in section 99 of the CPA and include the promotion of informal disputes resolution, receiving and instituting complaints regarding prohibited conduct, monitoring of the consumer market, investigation of prohibited conduct and issuing and enforcing of compliance notices.
The next regulatory tier is provided by the National Consumer Tribunal which is an ad hoc body that was established in terms of section 26 of the National Credit Act. The Tribunal is thus a creature of statute that must operate within the parameters of the National Credit Act and the CPA. The Tribunal hears matters that may be referred to it by the Commission or in certain, permitted instances by a claimant him- or herself. It has wide powers and may make a variety of orders such as declaring conduct to be prohibited by the CPA, interdicting prohibited conduct, imposing administrative fines, and confirming consent agreements. In view of the fact that the National Consumer Tribunal has jurisdiction with regard to matters arising from the National Credit Act as well as the CPA, it is likely that matters that are common to both Acts, such as compliance notices, consent agreements and imposition of administrative fines, will be dealt with by the Tribunal in a similar fashion.
The author Naudé aptly points out that the cost, risk and effort of litigation is normally prohibitive to consumers. A very important feature of the CPA in the context of redress is therefore that the CPA attempts to set the scene for a less litigious environment where consumers and suppliers generally iron out their differences extra-judicially by using certain dispute resolution entities to facilitate the resolution of their dispute before approaching the court. This approach is aligned with the approach advocated in the United Nations Guidelines for Consumer Protection, which encourages the establishment and maintenance of formal or informal procedures that are expeditious, fair, inexpensive, and accessible in order to provide efficient redress to consumers. These dispute resolution entities include ombudsmen with jurisdiction, industry ombudsmen and other alternative dispute resolution agents. The emphasis that the CPA places on redress via the route of alternative dispute resolution ties in with its aim to provide for a “consistent, accessible and efficient system of consensual resolution of disputes arising from consumer transactions and providing for an accessible, consistent, harmonised, effective and efficient system of redress for consumers”.
Despite its preference for alternative dispute resolution, the CPA does not attempt to oust the jurisdiction of the courts and specifically acknowledges the jurisdiction of the courts to hear matters that relate to consumer rights protected in the CPA. As will be discussed in more detail in another blog, section 69(d), however, provides that courts may be approached if all other remedies available in terms of national legislation to a person contemplated in section 4(1) have been exhausted. The aforesaid provision thus appears to strengthen the emphasis that is placed by the CPA on consensual dispute resolution, as the latter form of redress generally does not have the serious cost implications that are typical of litigation and might also render a solution without the extreme delay that often accompanies court cases. However, as will become evident from a later discussion, the interrelation between the various sections of the CPA that provide for access to the courts is not altogether clear.
It should further be noted that apart from the entities listed specifically in section 69, the CPA recognises consumer protection groups and the role that they may fulfil in obtaining redress for consumers. The CPA also recognises the importance of self-regulation to enhance consumer protection and in this regard, it endorses voluntary industry codes and provides for accreditation in regard thereto.
Finally, within the context of access to redress, it is important to take note of section 2(10) of the CPA, which states that no provision of the CPA must be interpreted so as to preclude a consumer from exercising any rights afforded in terms of the common law. This right is accorded to a consumer only and not to a supplier. Thus it is to be noted that where a consumer in a specific instance elects to pursue a matter under the common law rather than under the CPA, the provisions regarding redress as contained in section 69 of the CPA find no application. The result is thus that the consumer who opts to fall back on the common law for redress is not required to follow the preliminary dispute resolution processes contemplated by the CPA and can immediately approach a civil court for redress.
About our author:
Hugh Pollard (Legal Consultant) has a BA LLB and 43 years’ experience in the legal field. 22 years as a practicing attorney and conveyancer; and 21 years as a specialist Legal Consultant.
082-0932304 (Hugh’s Cell Number)