Consumer Law Review_Sept 2012
Published on: Sep 25, 2012
Dear Consumer Law recipient,
September is the 18-month anniversary of the CPA. To mark this occasion, Juta Law and the Professional Development Project of the Faculty of Law, UCT are hosting a breakfast seminar on the lessons legal practitioners can learn from the first 18 months of the CPA. The anniversary is also marked by the introduction of a new, albeit acting, chief commissioner.
The Protection of Personal Information Bill (PoPI) is upon us. The justice committee voted on the Bill and sent it to the National Assembly on 11 September 2012, where it was approved. All that is needed now is the vote by the National Council of Provinces. As PoPI will be part of our lives soon, we will include an article on a different part of the Bill each month, starting with this edition.
Until next month,
Elizabeth de Stadler
The editor of the Consumer Law Review is Elizabeth de Stadler, a senior associate at Esselaar Attorneys in Cape Town (http://www.esselaar.co.za). Her practice consists of general regulatory compliance due diligences; training and workshops on regulatory compliance; opinion work on the CPA, the National Credit Act, Banking Law, Gaming and Lotteries, Insurance, Medical Law, Marketing Law, Contract Law; and plain language drafting.
She conducts regular workshops and training sessions on the CPA and other consumer legislation for businesses and for Law@work, a unit situated within the Law Faculty at the University of Cape Town. She is the co-author of a consumer law textbook and a guide to plain language legal drafting, both of which are to be published by Juta Law.
IN THIS EDITION OF THE CONSUMER LAW REVIEW
— NCC Politics
— PoPI marches on
— Intro to PoPI (part 1): When does PoPI apply?
— In the NCT
— Plain language tip
Since the previous issue of the Consumer Law Review (CLR), Commissioner Mohlala-Mulaudzi’s contract expired. In the end she went quietly and her deputy, Mr Ebrahim Mohamed, was appointed as acting consumer commissioner. He will occupy this position until a permanent candidate has been appointed.
Commissioner Mohamed’s first task was to report to parliament’s trade and industry committee on the commission’s work during the past year. A report by the Attorney-General was also tabled. According to the report, the National Consumer Commission (NCC) is being investigated for irregular procurement and recruitment practices. Not too long ago, the previous commissioner boasted about the unqualified audit report which the NCC received. It now appears that the report was only given after ‘material misstatements’ relating to irregular expenditure of R8.5 million were corrected (see ‘Auditor-general slams management of National Consumer Commission’ by Linda Ensor in Business Day Live on 6 September 2012).
The following remarks were made by the chairman of the committee (see the Parliamentary Monitoring Group’s website for the minutes of the meeting):
· the NCC and National Consumer Tribunal (NCT) have different opinions on the use of compliance notices in the enforcement process;
· section 71 of the Act must be amended as it refers to sub-sections of s 69 which do not exist;
· the budget and human resources problems outlined in the report must be addressed; and
· the NCC must be more proactive and publicise its work more widely.
The chairman also referred to the provincial consumer protection authorities and made the observation that they may be able to share some of the workload. Few people are aware of the existence of the provincial consumer affairs offices and the provincial consumer courts. The NCC has the authority to refer matters to the relevant consumer courts. In terms of s 73(6) an order made by a provincial consumer court has ‘the same force and effect as if it had been made by the Tribunal’.
It is also worthwhile to note that any difference of opinion between the NCT and the NCC regarding the use of compliance notices is moot. The NCT has delivered several judgments in this regard and until these judgments are overturned by the High Court, the judgments are binding on the NCC. (See s 152 of the National Credit Act 34 of 2005.)
This meeting came hot off the heels of an extremely damaging internal report by the NCT which was leaked to the media last month (see the August edition of CLR).
PoPI marches on
The Protection of Personal Information Bill sailed through the National Assembly on 11 September 2012.
Russell Opland, formerly an Associate Director with PwC South Africa in their privacy practice and who is now doing business as The Privacy Advisor, points out that businesses in South Africa will finally be economically competitive with their international counterpart as our privacy laws have now caught up with the rest of the world:
However, it also imposes very significant responsibilities on businesses, of which many remain completely unaware. Protecting personal information is not just about information security, but has substantial impact on business processes throughout all organisations. Companies (and government) will need to re-consider the reasons and the ways in which they use personal information, and implement measures to ensure that our information is appropriately collected and used, and that we, as citizens, are knowledgeable about those uses, and have choices.
Paul Esselaar from Esselaar Attorneys comments that ‘it will be a surprise for many that the Bill provides for an Information Regulator which will be responsible for the enforcement of the Bill and which will also be making the regulations needed.’
Okyerebea Ampofo-Anti, a senior associate in Webber Wentzel’s Information Law Group, points out that:
the NCOP can accept or reject the Bill or propose amendments to it. Once these deliberations are finalised, and subject to any further amendments that the National Assembly and/or NCOP may propose, the Bill will be signed into law by the President.
Intro to PoPI (part 1): When does PoPI apply?
The bulk of the media’s attention has been focused on the impact of PoPI on companies who are guilty of ‘spamming’. However, it would be dangerous to think that this is the only activity affected by the Bill. It applies to all ‘processing’ of ‘personal information’ for whatever reason, not just its use for marketing purposes. This means that the definitions of ‘personal information’ and ‘processing’ are central to understanding the Bill (see s 1).
‘Personal information’ is defined as:
information relating to an identifiable, living, natural person, and where it is applicable, an identifiable, existing juristic person, including, but not limited to
(a) information relating to the race, gender, sex, pregnancy, marital status, national, ethnic or social origin, colour, sexual orientation, age, physical or mental health, well-being, disability, religion, conscience, belief, culture, language and birth of the person;
(b) information relating to the education or the medical, financial, criminal or employment history of the person;
(c) any identifying number, symbol, e-mail address, physical address, telephone number, location information, online identifier or other particular assignment to the person;
(d) the biometric information of the person;
(e) the personal opinions, views or preferences of the person;
(f) correspondence sent by the person that is implicitly or explicitly of a private or confidential nature or further correspondence that would reveal the contents of the original correspondence;
(g) the views or opinions of another individual about the person; and
(h) the name of the person if it appears with other personal information relating to the person or if the disclosure of the name itself would reveal information about the person.
Two things are particularly significant. First, and quite obviously, the definition is very wide and not limited to the specifically listed information. Second, this act not only protects individuals but also juristic persons. This means that PoPI will also apply to the processing of personal information belonging to juristic persons. PoPI’s scope is therefore much wider than the Consumer Protection Act, which only protects some (small) juristic persons.
Next is the definition of ‘processing’. It means:
any operation or activity or any set of operations, whether or not by automatic means, concerning personal information, including
(a) the collection, receipt, recording, organisation, collation, storage, updating or modification, retrieval, alteration, consultation or use;
(b) dissemination by means of transmission, distribution or making available in any other form;
(c) merging, linking, as well as restriction, degradation, erasure or destruction of information.
It is clear from these definitions that the reach of the Bill will extend to most companies. The next question is what obligations it imposes. Over the coming months this question will be answered, starting next month, with the supplier’s obligation to obtain the data subject’s consent before processing any personal information.
In the NCT
The NCT considered an application for condonation for the late filing of an affidavit by the NCC in the matter of Associated Motor Holdings (Pty) Ltd t/a Chery Isando v NCC (NCT/4057/2012/101(1)(P)CPA) (15 August 2012). What makes this ruling interesting, is that in the process of addressing the application, the NCT had to consider the retrospective application of the Consumer Protection Act and in particular, item 8 of Schedule 2. (This matter was also discussed in City of Johannesburg v National Consumer Commission (NCT/2667/2011/101(1)(P) & NCT/2081/2011/101(1)(P) (30 March 2012).)
The conduct complained of in this case took place between 2 October 2010 and 9 March 2011, well before the commencement of the CPA on 31 March 2011. As a general rule the CPA will not apply to marketing done, transactions entered into or goods delivered before the general effective date (see item 3 of Schedule 2 – but do be careful if the agreement is for a fixed term – then the CPA may apply). Item 8(1) of Schedule 2 provides that:
[d]espite the repeal of the repealed laws, for a period of three years after the general effective date the Commission may exercise any power in terms of any such repealed law that occurred during the period of three years immediately before the general effective date.
The NCC wanted to rely on the repealed Consumer Affairs (Unfair Business Practices) Act 71 of 1988.
The Tribunal explained that ‘the Consumer Affairs (Unfair Business Practices) Act was an enabling Act which did not, on its own, prohibit anything. Unfair business practices per se were not prohibited. A particular business practice was only declared to be an unfair business practice after it had been identified and investigated by the Consumer Affairs Committee, a recommendation by the Committee had been referred to the Minister of Trade and Industry and the Minister of Trade and Industry had promulgated regulations relating to that particular practice.’ (See paragraph 33 of the case.)
Importantly, the Tribunal held that the NCC must ‘identify the particular regulations under which a particular business practice had been declared unfair’ and that ‘the Commission must, in the compliance note, identify which section of which repealed Act it was relying upon.’ (See paragraph 34.)
Plain language tip
Attorneys have the habit of excluding liability for:
direct, indirect, consequential, special, punitive or incidental damages whether foreseeable or not, regardless of form or cause of action, whether in contract or in delict or for restitution.
It may of course be that a particular situation calls for a long list of categories of damage, but more often than not these clauses are copied and pasted from precedents without questioning their content (ironic, given the importance of the clause).
What are all these types of liability? For instance, what is the difference between indirect and special on the one hand, and direct or incidental on the other? Why exclude liability for unforeseeable damage? Why list these supposed different types of liability at all, if all damages regardless of the cause of action are excluded?
Remember that the other party has to accept the terms proposed by the drafter. By listing all of these types of liability, some of which do not extend additional protection to the drafter, the clause may well be perceived as more onerous than they are. This decreases the likelihood of the other party agreeing to it.
Here are some questions which must be asked before drafting an exclusion of liability:
· What is the party who wants to exclude liability potentially liable for? It is nonsensical to exclude liability if it does not arise in the first place.
· What liability must be excluded? You may find that your client is happy to accept some of the liability.
· Is the liability insurable? Why exclude liability if the loss could be insured?
Consider using a clause limiting liability to a certain amount, instead of excluding all liability as an alternative.
This tip applies to negotiated, non-consumer contracts and consumer contracts alike. Of course, if a contract is a consumer contract, ss 48 to 52 and regulation 44 of the Consumer Protection Act will also apply to that contract.
© Elizabeth de Stadler and the Unit for Document Design at the Stellenbosch University Language Centre.
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