Liability for Products in the Consumer Protection Bill 2006: A Comparative Critique

JurisdictionSouth Africa
Published date27 May 2019
Pages412-453
AuthorMax Loubser
Citation(2006) 17 Stell LR 412
Date27 May 2019
LIABILITY FOR PRODUCTS IN THE CONSUMER
PROTECTION BILL 2006: A COMPARATIVE
CRITIQUE
*
Max Loubser
BA LLD D Phil (Oxon)
Professor in Private Law, University of Stellenbosch
Elspeth Reid
MA LLB DipLP
Senior Lecturer in Law, University of Edinburgh
Solicitor
1 The background to reform
The Draft Consumer Protection Bill, recently published by the
Department of Trade and Industry,
1
encapsulates a vision for a ‘‘new
consumer law’’,
2
which has as its objective the establishment of ‘‘a fair,
accessible and sustainable marketplace for consumer products and
services’’.
3
The cultural change necessary to address South Africa’s lack
of ‘‘a vibrant and strong consumer movement’’
4
requires to be under-
pinned by legal certainty and accessibility. This is particularly important
in areas of liability ‘‘characterised by imbalances in information and
bargaining power between businesses and consumers’’.
5
An important
dimension to the proposed reform is therefore the creation of a strict
liability framework to provide redress for consumers who have suffered
harm due to defects in products. Until now, a consumer who was injured
or who sustained property damage because of a safety defect in a product
obtained redress from the producer or distributor only where it could be
proved that the latter was at fault. Only three years ago, the Supreme
Court of Appeal confirmed the fault requirement in relation to the
manufacture, sale or distribution of goods and concluded that ‘‘if strict
liability is to be imposed it is the legislature that must do it’’.
6
In section
* The authors wish to record their thanks to the British Council and the Association of Commonwealth
Universities who awarded them a Grant for International Collaboration to support work on this
project; as well as to the University of Stellenbosch for a research grant; and to Anita Moolman, who
rendered valuable research assistance to the project.
1
At http://www.dti.gov.za/ccrdlawreview/DraftConsumerProtectionBill.htm.
2
As originally unveiled by the Department of Trade and Industry in its 2004 Green Paper on the
Consumer Policy Framework (at http://www.dti.gov.za/ccrdlawreview/conslawreview.htm).
3
Preamble to the Bill.
4
Green Paper 7.
5
Green Paper par 1.3. On the need to modernise consumer law in order to maintain consumer confidence
see, eg, the UK White Paper Modern Market: Confident Consumers (1999) esp ch 6 at http://
www.dti.gov.uk/ccp/topics1/pdf1/consumerwp1999.pdf.
6
Wagener & Cuttings v Pharmacare Ltd 2003 4 SA 285 (SCA) per Howie JA par 38.
412
(2006) 17 Stell LR 412
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71 of the Bill, South Africa institutes a strict liability framework for
compensation.
With the introduction of strict liability for products, South Africa will
be brought into line with many other jurisdictions in the developed and
developing world.
7
Whereas products liability was previously not
regarded as a discrete category, the trend towards making separate
provision gathered pace in the second half of the 20th century, reflecting
an increased interest in broadening access to justice for consumers. In the
1960s, the American Restatement (Second) of Torts }402A, provided the
model for a distinct body of rules imposing liability on producers without
subjecting the consumer to the exacting requirement of proving that the
manufacturer was at fault.
8
Following the Restatement lead, many
jurisdictions moved in the direction of strict, or stricter, forms of liability
specifically for products. A landmark was reached in 1985 with the EC
Directive on Product Liability
9
in implementation of which the member
States of the European Union have introduced statutory frameworks for
strict liability. This has been used extensively as a model, for example in
the relevant sections of the Australian Trade Practices Act 1974, in the
Pacific Rim generally, and in Latin America.
10
Meanwhile, in the United
States, the continuing debate as to the appropriate level of liability for
products culminated in }2 of the 1998 US Restatement Third, Torts:
Products Liability, which in effect combines a strict liability regime for
certain types of product defect and fault-based liability for others. These
developments form the background to analysis of the proposed South
African legislation.
The framework chosen for South Africa appears to follow closely the
European Directive. A strict liability regime is adopted, which makes no
overt mention of fault, and indeed much of the wording appears to derive
from the Directive and the UK Consumer Protection Act, 1987 based
upon it. Given, however, that the experience of consumers in Europe, 20
years after the Directive, has been mixed, the essential question is whether
the draft South African provisions can achieve their stated goal of
establishing an effective system of redress for consumers.
11
7
See the United Nations Guidelines for Consumer Protection, adopted in 1985 by Resolution 39/85
(available at http://www.un.org/esa/sustdev/publications/consumption_en.pdf). The Guidelines aim to
achieve adequate protection for consumers in all countries, ‘‘recognizing that consumers often face
imbalances in economic terms, educational levels and bargaining power; and bearing in mind that
consumers should have the right of access to non-hazardous products’’. There are many dimensions to
the legal protection envisaged, but two of the prime objectives are ‘‘the protection of consumers from
hazards to their health and safety’’ and ‘‘the promotion and protection of the economic interests of
consumers’’.
8
For a comparison of European and Anglo-American perspectives on product liability prior to the
1960s, see Whittaker Liability for Products (2005) 5-6.
9
Council Directive 85/374/EEC of 25 July 1985 on the approximation of the laws, regulations and
administrative provisions of the member States concerning liability for defective products, OJ 1985
L210/29.
10
For an overview of international developments see Reimann ‘‘Liability for Defective Products at the
Beginning of the Twenty-first Century’’ 2003 51 AmJCompL 751 756 et seq.
11
S 3 of the Bill.
LIABILITY FOR PRODUCTS 413
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2 What kind of liability is provided for?
Section 71(1) of the Bill provides that:
‘‘Any producer, distributor or supplier of a good is strictly liable for any damage, as described
in subsection (2), caused wholly or partly as a consequence of a product failure, defect or
hazard in a good, or as a result of inadequate instructions or warnings provided to the
consumer, and if in a particular case, more than one person is liable in terms of this subsection,
their liability is joint and several.’’
A ‘‘defect’’ is defined in section 1 as
‘‘any characteristic of a good, component of a good, or aspect of a service supplied to a
consumer, that renders the good, component, or service less useful, practicable or safe than
persons generally are entitled to expect, having regard to the circumstances of the transaction’’.
Thus the liability of producers, distributors and suppliers towards
persons suffering damage as a result of a product failure or defect is
clearly not limited to parties in a contractual relationship, and section
71(1) utilises concepts associated with the law of delict, albeit not
exclusively; such as strict liability, damage, causation and joint and
several liability. To be properly understood in the context of this section,
these concepts require analysis in terms of the common law, in particular
the law of delict, as discussed further below.
Most jurisdictions now regard product liability as a discrete area of
delict or tort. The law of contract governs only actions by a purchaser in
a direct contractual relationship with a producer or distributor.
12
The
move from contract to tort in American product liability cases has been
described as follows by Traynor J in Greenman v Yuba Power Products
Inc:
13
‘‘A manufacturer is strictly liable in tort when an article he places on the market, knowing that
it is to be used without inspection for defects, proves to have a defect that causes injury to a
human being. Recognised first in the case of unwholesome food products, such liability has
now been extended to a variety of other products that create as great or greater hazards if
defective. Although in these cases strict liability has usually been based on the theory of an
express or implied warranty running from the manufacturer to the plaintiff, the abandonment
of the requirement of a contract between them, the recognition that the liability is not assumed
by agreement but imposed by law, and the refusal to permit the manufacturer to define the
scope of its own responsibility for defective products make clear that the liability is not one
governed by the law of contract warranties but by the law of strict liability in tort. Accordingly,
rules defining and governing warranties that were developed to meet the needs of commercial
transactions cannot be invoked to govern the manufacturer’s liability to those injured by their
defective products unless those rules also serve the purposes for which such liability is
imposed.’’
An action in delict thus ‘‘short-circuits’’ the need for successive actions
for breach of contract by the consumer against the retailer; the retailer
against the wholesaler, and so on. The action in delict also obviates the
12
Reimann ‘‘Product Liability in a Global Context: The Hollow Victory of the European Model’’ 2003 2
European Review of Private Law 128 144.
13
377 P 2d 897 (1963) 901.
414 STELL LR 2006 3
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