Limitation of Liability in Private Security Contracts: National Interest or Private Contractual Engagement

• Jurisdiction: South Africa
• Published date: 17 June 2020
• Citation: (2019) 31 SA Merc LJ 321
• Date: 17 June 2020
• Pages: 321-340
• Author: van Eck, M.

LIMITATION OF LIABILITY IN PRIVATE

SECURITY CONTRACTS: NATIONAL

INTEREST OR PRIVATE CONTRACTUAL

ENGAGEMENT?

MICHELE VAN ECK*

Lecturer, Faculty of Law, University of Johannesburg

Abstract

Private security providers occupy a unique position in South African

society with various formalities and requirements regulating the

normal operation of the sector. These include, in addition to the

Constitution of the Republic of South Africa, 1996, the Private Security

Industry Regulation Act (the Act), the Code of Conduct issued under

the Act, and the Private Security Industry Regulatory Authority. But

private security providers also offer their services on a contractual basis

which raises the question whether, and if so to what extent, private

security providers may exclude or limit their liability in the provision

of security services contractually.

The article examines whether exemption clauses in private security

contracts counter or compliment the aims the Act sets out to achieve. It

further considers whether exemption clauses in security contracts can

survive the scrutiny of public policy. In considering the relevant

provisions in the context of legislative requirements, public policy, and

adherence to the objectives of the Act, a clear model emerges as to the

type of contractual provisions that would contribute to validity in the

exclusion, limitation, and allocation of liability in private security

contracts.

I INTRODUCTION

The private security sector in South Africa has become an integral part of

the country’s operation. Security providers often work together with, or

even supplement, the South African Police Services (SAPS) in order

to curb the ever-increasing crime in the country.

1

It is small wonder,

*BCom (Law) (RAU) LLB LLM (UJ) LLD (Pret).

1

Malesela Taihan Electric Cable (Pty) Ltd v Fidelity Security Services (Pty) Ltd (17193/2014)

[2017] ZAGPJHC 341 (18 April 2017) SAFLII, available at http://www.saf‌lii.org/za/cases/

321

(2019) 31 SA Merc LJ 321

© Juta and Company (Pty) Ltd

considering the unique position of security providers within the fabric of

South African society, that various formalities and requirements regu-

late the normal operation of the private security sector.

2

These include

the Private Security Industry Regulation Act

3

(the Act) and the regulat-

ing body Private Security Industry Regulatory Authority (PSIRA)

4

tasked with monitoring the private security sector in South Africa. This

notwithstanding, private security providers also offer services to their

clients on a private contractual basis for benef‌it and reward.

5

It is against this backdrop that the question is posed whether, and if so

to what extent, private security providers may exclude or limit their

liability in the provision of security services.

6

After all, the services

provided by the private security sector are not a once-off affair and also

not incidental to their business. The protection of the property and safety

of a person is the core of the services offered by security providers and is

regulated by the Act.

7

The limitation of liability is often achieved through

the use of exemption clauses in contracts between the private security

providers and their clients. Therefore, the applicability and enforcement

of exemption clauses are of particular importance in security contracts;

f‌irst, for the survival and sustainability of security providers’ businesses,

and second, to curb potential f‌inancial ruin arising from claims for the

security services provided. This must also be considered against the

possible negative impact on public and national interests and whether the

exemption of liability would in any way undermine the realisation and

maintenance of the objectives set out in the Act.

The aim of this article is therefore to consider whether such exemp-

tion clauses in private security contracts would be contrary or compli-

ZAGPJHC/2017/341.pdf, para 45. See also Schneider, ‘The Private Security Industry: A

Comparison of Recent Australian and South African Priorities’ (2013) 26(2) Acta Crimino-

logica 103, 104.

2

Bertie Van Zyl (Pty) Ltd & another v Minister For Safety and Security & others 2010 (2) SA

181 (CC) para 35; Visser, ‘Certain Provisions in the Law on the Regulation of the Private

Security Industry that Impact on Contractual Liability’ (2004) 37 De Jure 101; Private Security

Industry Regulatory Authority & another v Association of Independent Contractors & another

[2007] 1 All SA 221 (SCA) para 1.

3

Act 56 of 2001. See also Firearms Control Act 60 of 2000 and the Criminal Procedure Act

51 of 1977.

4

Section 2 of the Act.

5

See s 1 of the Act which describes a security service provider as, ‘a person who renders a

security service to another for a remuneration, reward, fee or benef‌it and includes such a

person who is not registered as required in terms of this Act’.

6

The question of the validity of liability of private security providers’ liability is not limited

to South Africa. A similar question has been raised in respect of alarm security systems in

Cohen, ‘Sound the Alarm: Limitations of Liability in Alarm Service Contract’ (2016) 85

Fordham Law Review 813, 815.

7

Bertie Van Zyl para 39.

(2019) 31 SA MERC LJ

322

© Juta and Company (Pty) Ltd