From 24 October 2010, the new Consumer Protection Act, 2008 will drastically alter our law surrounding a manufacturer’'s and supplier’s liability for defective products. Subject to some exceptions, section 61(1) of the Act holds any producer or importer, distributor or retailer of any goods liable for any harm caused wholly or partly as a consequence of:
- supplying any unsafe goods;
- a product failure, defect or hazard in any goods; or
- inadequate instructions or warnings provided to a consumer pertaining to any hazard associated with the use of the goods,
irrespective of whether such harm resulted from any negligence on the part of the producer, importer distributer or retailer.
Liability in the absence of fault, known as strictly liability, is a major deviation from the existing South African law surrounding defective products. Presently, a person who suffered harm as a result of a defective product would need to seek remedy either under the law of contract or under the law of delict. A claim under the law of contract requires a contract between the injured party and the party against whom the claim is being prosecuted. Whilst a contractual remedy is sufficient to prosecute a claim against a supplier, may be insufficient to sustain a claim against either a manufacturer or a distributor for lack of this contractual link. The injured party would therefore need look to claim under the law of delict. This has proved difficult in the past due to the requirement that the injured party prove negligence.
For the purposes of section 61, a supplier of services who applies, supplies, installs or provides access to any goods, will be regarded as a supplier of those goods to a consumer. If more than one person is liable to a consumer under section 61, their liability is joint and several.
There are certain exceptions to the strict liability imposed under section 61. Some these exceptions include where:
- the characteristic, defect, failure or hazard did not exist in the goods at the time it was supplied to another person who is alleged to be liable;
- the harm was wholly attributable to compliance by the person blamed with instructions provided by the person who supplied the goods to that person;
- it is unreasonable to expect the distributor or retailer to have discovered the unsafe product characteristic, failure, defect or hazard, having regard to that person’s role in marketing the goods to consumers; or
- the claim is brought after the expiry of certain periods contained in section 61(4)(d).
Consumers may claim under section 61 for “harm” which includes death, injury or illness to any natural person, any loss of or physical damage to any property, and any contemplated economic loss that results from that harm.
The implications of Section 61 of the Consumer Protection Act for entities forming part of the manufacturing process or the supply chain appear to be quite severe. Furthermore, a supplier may not deprive a consumer of any right in terms of the Act.
Manufacturers and suppliers alike will therefore have to ensure amongst other things that their products are safe and contain adequate instructions and warnings of any potential hazard. They will furthermore need to procure adequate insurance against any claims arising under section 61.