Liability – the INS and OUTS

Like a cloud of mosquitoes, liability is something that nobody willingly chooses to attract. Unfortunately, in most climates, it is also inevitable at some stage.

What is liability, how do you attract it and can you repel it?

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. It is precisely these financial implications of liability that make it undesirable.

Our law recognises certain 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, you are a lessor and sign a contract with a lessee, allowing it to take occupation of a building by 1 January 2012. But on this day, the building could not yet be occupied. You may be liable to the lessee for breach of contract.

Delictually: If you perform an act (or you fail to) which is wrongful and for which you are at fault, which causes forseeable harm to a third party, you may be liable in delict for damages. For example, you fail to notice a stop sign, proceed through an intersection and collide with another vehicle. You can also attract delictual liability even if you were not personally at fault, for example 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 effects of a spillage with 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 you act or omission, or a court / adjudicating body may find you liable. For example, although you defended the defamation claim against you, a court finds you liable to the third party.

Unpleasant insects can be exterminated with repellant. Fortunately, liability too can be eradicated.

You may have failed to comply with your obligations in a contract or you may have acted wrongfully, but these scenarios do 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. For example, a building contractor agrees that it will be liable for damage on site, but not damage caused by an act of god. In order to avoid liability under a contract, the contractor’s exclusions or indemnity clauses could be 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, such as that your employee acted on a frolic of his own when he caused a motor vehicle accident, or your dog was provoked by your daughter’s boyfriend when it bit him.

If your liability is established and no exclusion clause and no defence excuses your act or omission, that liability can be neutralised by its own version of Peaceful Sleep – insurance. The concepts of liability and indemnity are closely connected. Liability insurance is insurance against a legal liability. 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. Liability insurance is not unlimited – cover is ordinarily limited to a specific incident (for example damage to property) or an amount maximum (for example cover up to R1 million for any one occurrence) and there will be exclusions.

We are living in an age of consumerism, where people are more aware of their rights. The Consumer Protection Act, coming into force since 31 March 2011, is an example of an increased focus on fair, just and equitable transactions and dealings with others. For example, there are limits placed on clauses which exclude liability in certain circumstances. Non-compliance with the Act renders you statutorily liable. The best advice to take the (mosquito) bite out of liability is to ensure that you are adequately insured.

Amelia Costa / Kerri Crawford
Director / Candidate Attorney