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NEWSLETTERS
October 2016 |
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Hello CLR reader It has not been too long since our last edition, but a couple of things have happened which made me think that an edition of CLR was called for. Here is what happened:
Happy reading! Elizabeth de Stadler Elizabeth de Stadler is the editor of the Consumer Law Review and a senior associate at Esselaar Attorneys in Long Street in Cape Town (http://www.esselaar.co.za). The firm specialises in consumer law. She is also a founding director of Novation Consulting (www.novcon.co.za or @NovConSA), a company which specialises in providing regulatory compliance solutions and designing innovative and effective ways to communicate ‘legal’ documents to consumers. She is the author of a number of publications including co-authorship of A Guide to the Protection of Personal Information Act and Commentary on the Consumer Protection Act. |
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ARTICLES
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POPI is one step closer: Information Regulator staff have been nominated
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Advocate Pansy Tlakula has been nominated by Parliament for appointment as the chairperson of the Information Regulator. She will be assisted by Advocate Cordelia Stroom and Mr Johannes Weapon (full-time members) and Professor Tana Pistorius and Mr Sizwe Snail (part-time members).
No one put it better than Mukelani Dumba (the Executive Director of the Open Democracy Advice Centre): The information regulator is going to be a critical institution in advancing transparency and information rights in the country. We need to get it right from the start. What is needed is someone with extensive experience in building prodemocracy and human rights institutions, someone with expertise in issues of promotion of access to information and a champion of the right of access to information. Tlakula presents these attributes in ample measure. Those that have worked with her say that she is hardworking, smart and independent. It would surely be a pity that a person with such a rare combination of skills and experience is not available to help getting the regulator off the ground. I say give her a second chance.
Now we wait for the effective date to be published. All one can safely say about that is that we don’t know when it will be (although some of my colleagues are speculating quite freely about this in an effort to scare up some fees). |
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National Consumer Tribunal shows its teeth in Lewis Group case
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In the February edition of CLR we wrote retailers getting into troublewith the National Credit Regulator. Well, the chickens have come home to roost for the Lewis Group. The Lewis Group has now been hauled over the coals by the NCT for (in short) selling insurance cover for loss of employment and disability to pensioners and self-employed consumers who cannot benefit from it. The Tribunal held that this was unreasonable and therefore in breach of section 106(2) of the NCA. |
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A small disclaimer: At the time of writing this I have not received the judgment. This discussion is based by and large on reports on the decision in the media. Undoubtedly, we will revisit this discussion once I have read the decision. |
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This means that potentially Lewis’ woes are far from over. In addition, the National Credit Regulator is still pushing for an administrative fine. As if that is not enough, Lewis still faces claims relating to its extended warranties as well as its loyalty programme. It is clear that the NCT has decided to take the gloves off (it is its first substantive finding against a listed company) which signals dark days ahead for companies that flout South Africa’s credit and consumer laws. |
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Constitutional Court: Judicial oversight for garnishee orders
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Section 65J(2) of the Magistrates’ Court Act has been declared unconstitutional. The University of Stellenbosch Legal Aid Clinic was acting for a number of consumers who had had emoluments attachment orders (garnishee orders) granted against them in varying degrees of questionable circumstances. What virtually all of them had in common was that the applicants were left without the means to care for themselves and their dependents. The interpretation and constitutionality of section 65J(2) was at issue, in particular, whether the section allows for the granting of garnishee orders without judicial oversight. Here is what Cameron J had to say about the nature of garnishee orders and the fact that they amount to more than just a procedural cog in the debt collection machine (from paragraph 130): Indeed, this case is a prime example of why judicial oversight over the execution process is required. An emoluments attachment order may deal with the enforcement of a judgment debt, but it is a substantive decision in itself. By granting an order that a debtor will pay the debt through her wages, the court is deciding how the debt will be paid. A decision on the means of paying a debt can often be as important as the debt itself – and parties may contest the means of payment, even when they do not dispute that the debt itself must be paid. A large debt payable through lenient means may be less burdensome than a small debt payable in one go. An emoluments attachment order is clearly burdensome. It severely constricts the autonomy of the debtor to decide how she will pay of the debt. It is also inflexible as it does not adapt to the debtor’s changing circumstances from week to week. It goes directly of a debtor’s wages – and these wages will often form the means of the debtor’s day-to-day survival. These are all important considerations to be borne in mind when deciding whether an emoluments attachment order should be granted. What is more, a debtor’s personal circumstances may well have changed in the interim between when a judgment debt is entered and ordered to be paid in instalments and when an emoluments attachment order is sought. It is, therefore, crucial that these considerations are taken into account at the time the emoluments attachment order is sought.
He concludes that ‘[t]he broader approach takes fuller account of the harsh effects in the absence of judicial oversight, acknowledging that they threaten the livelihood and dignity of low-income earners, a distinctly vulnerable group in our society.’ (paragraph 132) The net effect of the judgment is that judicial oversight into whether an emoluments attachment order is just and equitable and the amount is appropriate will be required before the order can be granted. Hopefully, this judgment will result in intervention by the lower courts where credit providers are seeking garnishee orders which are not just and equitable or would put too heavy a burden on the consumer. However, another characteristic of the garnishee orders before the court was the questionable (at times outright fraudulent) behaviour of the credit providers, not only when granting economically vulnerable consumers these loans, but also when enforcing them. I am doubtful that this judgment will prevent this conduct, but it will certainly make it harder to pull off. |
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Two new codes published under the CPA
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Proposed Advertising and Marketing Industry Code A proposal for an Advertising and Marketing Industry Code was published for comment on 26 July 2016. The code will seem familiar to most marketers as it bears some resemblance to the Advertising Standards Association’s Code. Funeral Industry Code A draft Funeral Industry Code of Conduct was published on 2 September 2016. It is interesting (although not surprising) that this industry is in the spotlight. A reminder of the importance of these (and all other) codes Given that so many industries are opting to adopt codes of conduct and establish their own ombuds, it is necessary to come to grips with the legal status of these codes. Section 82 of the CPA provides that it is prohibited to contravene an industry code which has been accredited by the Minister of Trade and Industry. In other words, the code becomes ‘law’. This is very significant given that most of the codes were previously voluntary. So, if a supplier falls within the scope of a code it can be forced to comply by the NCT and can be fined up to 10% of its annual turnover if it ignores the order.
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