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New court gives consumers more clout

Staff Reporter

Mungo Soggot

AS the consumer’s best friend, Isabel Jones has always been powerful. But with the help of a new Act that was quietly passed by the Gauteng legislature in September, the consumer journalist will now be able to shut down a business, strike down contracts, and impose fines of up to R200 000 and jail sentences of up to five years.

Jones will be one of five members of Gauteng’s new consumer court, a tribunal armed with massive powers which has, in the words of a senior University of the Witwatersrand law academic, “come like a bolt from the blue”.

Set up two weeks ago under the province’s new Consumer Affairs (Unfair Business Practices) Act, the court’s importance has largely passed Gauteng lawyers by.

The Act’s preamble reads: “Whereas people have the right not to be exploited as consumers; and whereas in our modern society and in the light of the common law, people are inadequately protected against consumer abuse ...”

Pierre Naude, a partner at Deneys Reitz who is one of the few Gauteng attorneys familiar with the new Act, says: “There appears to be little doubt that the Act probably will have far-reaching consequences for many of our corporate clients and insurance policies will have to be scrutinised even more carefully than before.”

Naude said that by far the most important weapon in the court’s armoury was the power to strike down clauses in contracts which clashed with the Act

Most other lawyers approached this week knew very little of the court’s powers, and if they did, expressed reservations. But a common verdict was that the court’s establishment was replete with “noble intentions, but has very serious implications”.

There is some concern about the suitability of some of the tribunal’s five-person team. Jones’s colleagues include businesswoman Angie Makwetla, advocate Matilda Masipa and attorney Ellen Frances. Its chairman is attorney Willie Seriti, a leading light in the Black Lawyers’ Association, while advocate Margie Victor, who recently became the first woman to be elected to the Johannesburg Bar Council, will serve as alternate chairman.

“These officials will be dealing with life- determining amounts of money,” said one Johannesburg attorney.

Naude says that once a complaint has been lodged the court can summon the accused business to court to set about stopping its “unfair business practice”. It can also interdict a business from continuing anything related to an “alleged unfair business practice” before proceedings begin.

If the court believes an “unfair business practice” exists, it can order the business to close down and reimburse consumers.

Like the industrial court, the consumer court will not rely on precedent - a decision which alarms some lawyers. Others say this approach will allow the court to arrive at equitable decisions instead of being inappropriately locked into the approach set by a previous, similar case.

The Act that sets up the court has also established a consumer protector, which will serve as the first line of defence. Both the protector’s office, which will be able to search premises for documents, and the court will have unfair business practices in their sights.

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