In the final part of this article we look at what noncompliance to the CPA is going to cost you. On the bright side we look at your rights of redress as a consumer. Remember we are all consumers too.
Part 4: Penalties and redress facing the food industry under the CPA
Linda: Practically what could the consumer claim for in terms of damages under the CPA?
Janusz: Some of the causes from which such claims could arise include allergic reactions to ingredients of which the consumer has not adequately been warned, foreign objects in food products. food poisoning and other food safety related situations.
It is quite likely that some consumers or consumer groups will attempt to rely on these provisions against producers who use hormones (rBST), antibiotics, and other production aids without adequately disclosing this information or, in some cases, claiming they are absent when they are not, for example, "rBST free" labelling.
Linda: Hopefully claims for damages will be the exception and not the rule. What about customer complaints?
Janusz: Besides the issue of claims for damages as a result of harm caused by foodstuffs, every consumer has a right to receive goods that are reasonably suitable for the purposes for which they are generally intended for, are of good quality, and will be useable for a reasonable period of time taking into account the sell by date and all the surrounding circumstances of their supply.
Within six months after the delivery of any goods to a consumer, but before the sell by date in the case of foodstuffs, the consumer may return the goods to the supplier, without penalty and at the supplier's risk and expense, if the goods fail to satisfy the abovementioned requirements and standards, and the supplier must either replace the failed, unsafe or defective goods, or refund to the consumer the price paid by the consumer for the goods, at the direction of the consumer.
Food manufacturers should be aware that failure to deal fully with all the issues at an early stage may result in claims escalating. A robust customer complaint procedure should be in place.
Linda: What are the penalties associated failing to meet the provisions of the Act?
Janusz: From the outset, it must be borne in mind that the liability for such damages is not only in terms of the Consumer Protection Act and both existing common law liability and criminal law liability will continue to exist so that a company could find itself both liable civilly under this Act but also under common law and criminal law.
The Consumer Tribunal can fine repeat, intentional, or grossly negligent transgressors up to 10 % of turnover of a company. In terms of other provisions there are criminal sanctions against individuals which carry prison terms of up to 10 years.
The good news is that what has not changed is the determination of the extent of any damages claimed. Thus, there are no punitive damages as is the case in the US and actual damages suffered as well as any provable past, present, or future economic loss may claimed.
The bad news is that consumers will be able to complain to the Consumer Goods and Services Ombud and the National Consumer Commission and mechanisms set up by the Commission, in order to press their complaints and claims without the need for expensive lawyers. The redress system is simple for the consumer but onerous on the supplier against whom the complaint has been lodged and a lot of resources may need to be employed to provide timeous and complete answers to investigations by the Ombud or the Commission. Yet further, the Commission will have the power to institute investigations of its own accord and will be able to carry out dawn raids and seize documents as part of its investigations into undesirable practices.
Linda: Have there been claims related to the food industry since the promulgation of the Act?
Janusz: There have been many complaints lodged regarding foodstuffs both at the NCC and the CGSO, however, all of these with the exception of complaints of general national importance, such as the horse meat scandal, have been referred to the Ombud for resolution and he has managed to finalise the vast majority of these complaints mostly with favourable results for the consumer. The Ombud cannot award damages so the resolution by the Ombud is typically the refund of purchase price and/or medical expenses.
WHAT YOU NEED TO DO:
- Develop a robust customer complaint procedure
- Treat all customer complaints seriously
- Keep records of customer complaints and how these were resolved
About the Author
Janusz F. Luterek, Pr.Eng for Hahn & Hahn Attorneys
For advice on compliance and other legal issues in the food industry contact Janusz Luterek at janusz@hahnlaw.co.za - your food lawyer.
www.hahnlaw.co.za
