A recent Constitutional court judgment has the legal world in uproar, since the judgment confirms an amendment to the Road Accident Fund Act which decreases the compensation paid by the Road Accident Fund to accident victims. The Act removes the victims’ common law right to claim the balance of their damages from the negligent driver, so that these accident victims appear to be left without a legal remedy to cover all of their damages which result from the accident.
However, the new Consumer Protection Act may well offer a new remedy to road accident victims. Section 61 of the Consumer Protection Act (“CPA”) provides that:
a supplier of services (e.g. a bus or taxi owner) who applies or provides access to any goods (such as the vehicle) in the course of providing his services, is liable for any harm caused as a result of supplying unsafe goods, a product failure, defect or hazard in the vehicle or inadequate instructions or warnings provided to a consumer pertaining to any hazard arising from or associated with the use of the vehicle. The taxi or bus owner will be liable even if there was no negligence on the part of the taxi or bus owner.
Harm for which an accident victim can claim damages under this section includes: death or injury of any natural person, an illness of any natural person, any loss of, or physical damage to any property, and any economic loss that results from the other types of harm listed.
Can an accident victim claim damages from a person who caused the accident (“wrongdoer”), but has not rendered services? The definition of “supplier” (read with the definition of “supply”) requires that the wrongdoer be a person who has rendered services “in the ordinary course of business for consideration“. The CPA does not provide guidance on what the phrase “ordinary course of business” means, save that “business” is defined as “the continual marketing of goods and services”. To market is in turn defined as the promotion or supply of services or goods. The CPA on the other hand gives plenty of guidance on what is meant by “consideration”, since it is defined to include “anything of value given and accepted in exchange for goods or services”, as well as labour, other goods or services, loyalty credits, an agreement, undertaking or promise, irrespective of its intrinsic value.
A supplier of services in this context clearly includes a taxi owner, bus company and car rental agency. Debatably, a mom who regularly ferries her and her neighbour’s kids around on Mondays in exchange for an agreement with her neighbour that she will in turn ferry around the kids on Tuesdays, could be held liable if she causes harm due to her car being unsafe, defective, hazardous, suffering a product failure, or even where the mom simply fails to give “adequate warnings and instructions” “pertaining to the use of her car”, irrespective of whether the mom was negligent or not.
Does only an accident victim who is a passenger of the wrongdoer have the right to claim damages? No, the wording of section 61 of the CPA does not require this, so a pedestrian, any other driver or a passenger of the other driver can also claim, provided all the requirements are met. It is debatable that section 61 implies that the accident victim must be the recipient of the services rendered by the wrongdoer, but my view is that this is not in fact required by the section.
What is meant by “defect”, “failure”, “hazard” and “unsafe”? Section 53 of the CPA states:
… when used with respect to any goods, component of any goods, or services—
(a) ‘‘defect’’ means—
(i) any material imperfection in the manufacture of the goods or components, or in performance of the services, that renders the goods or results of the service less acceptable than persons generally would be reasonably entitled to expect in the circumstances; or
(ii) any characteristic of the goods or components that renders the goods or components less useful, practicable or safe than persons generally would be reasonably entitled to expect in the circumstances;
(b) ‘‘failure’’ means the inability of the goods to perform in the intended manner
or to the intended effect;
(c) ‘‘hazard’’ means a characteristic that—
(i) has been identified as, or declared to be, a hazard in terms of any other law; or
(ii) presents a significant risk of personal injury to any person, or damage to property, when the goods are utilised; and
(d) ‘‘unsafe’’ means that, due to a characteristic, failure, defect or hazard, particular goods present an extreme risk of personal injury or property damage to the consumer or to other persons.
When are warnings or instructions “inadequate”? The CPA does not provide any guidance on this, save that section 58 of the Act states:
(1) The supplier of any activity or facility that is subject to any—
(a) risk of an unusual character or nature;
(b) risk of which a consumer could not reasonably be expected to be aware, or which an ordinarily alert consumer could not reasonably be expected to contemplate, in the circumstances; or
(c) risk that could result in serious injury or death,
must specifically draw the fact, nature and potential effect of that risk to the attention of consumers in a form and manner that meets the standards set out in section 49.
(2) A person who packages any hazardous or unsafe goods for supply to consumers must display on or within that packaging a notice that meets the requirements of section 22, and any other applicable standards, providing the consumer with adequate instructions for the safe handling and use of those goods.
Providing a transport service is clearly an activity or facility that is subject to risk that could result in serious injury or death.
It was reported in the judgment referred to in the introduction to this article, that 20 000 claims for compensation by the Road Accident Fund arise each month. Clearly, vehicle use regularly results in injury and death, and my suspicion is that a disproportionate number of these cases involve taxis or buses. One will be able to ascribe a further proportion of accidents to other suppliers of services, such as rental agencies, or lift clubs.
My hope is that section 61 of the CPA will provide new hope for the recovery of full damages for victims of accidents caused by these service providers.
25 January 2011