Chartis Warning on Consumer Protection Act

April 8 - With the introduction of the Consumer Protection Act in South Africa this year, many of the country's retailers will be exposed to liability action, according to the Times.

Insurance group, Chartis South Africa predicts that the number of products recalled in the country will increase dramatically.

"This is because the new act casts a much wider legal net for product liability and introduces strict product liability for suppliers, defined by the CPA as any business that markets goods and services," said Chartis in a statement.

The Consumer Protection Act has changed the landscape for liability claims. Where once product liability was limited to those companies that manufactured the faulty goods, today this has extended to importers, distributors and retailers as well.

The Regional Manager of the Liabilities Group at Chartis, Keith Marshall, believes that the new definition of product liability will mean that retailers are the ones most exposed because they are "closer to the consumer than suppliers further down the line."

"Even if the fault is not theirs, they may still have to defend themselves against the action which could be hugely expensive," warns Marshall.

Another major change introduced by the Consumer Protection Act is that where once the consumer had to prove negligence, today that is not necessary.  Marshall explains that the consumer only has to show a "casual link between harm and the defective product."

As a result, Chartis believes that a large number of products will be recalled.

The costs of recalling a product are "astronomical", according to Marshall, and could, he believes, "force a business to close its doors."