SUPPLY CHAIN & LIABILITY
What is this so-called ‘supply chain' referred to in the Consumer Protection Act (CPA) and what are the liability implications? Should suppliers be worried?
Supply chain is defined in the CPA as follows, so you can see that it is very broad and all encompassing:
‘The collectivity of all suppliers who directly or indirectly contribute in turn to the ultimate supply of those goods or services to a consumer, whether as a producer, importer, distributor or retailer of goods, or as a service provide'
However liability is not ‘automatic' – the claimant will still have to prove either breach of contract or negligence, the latter including the issue of duty of care. The exception is section 61 of the CPA in terms of which such negligence is not required and liability is absolute – your mere involvement/presence in the supply chain is enough!
Here is a very brief summary thereof:
It applies to (1) the ‘supply of unsafe goods'; (2) ‘product failure, defect or hazard’; (3) ‘inadequate instructions or warnings provided to the consumer pertaining to any hazard arising from or associated with the use of any goods' – Scary indeed and bear in mind that the latter will include not only verbal instructions but also stickers/labels on the goods in question and such stickers/labels may well be outdated or so warn away/ faded as to not be legible!
It must be borne in mind that such goods or product can include vehicles hired and many events that fall under the heading ‘adventure tourism' e.g. white water rafting, canoes, quad bikes (including e.g. defective helmets) and the instructions that accompany these/are issued by the supplier(s) i.e. parties engaged by the travel agent, tour operator or DMC - third party suppliers (‘TPS’)
Even though the travel agent, tour operator or DMC may not have ‘produced' such goods or product, it can be deemed to fall in that category if, as part of the services they provide, they ‘supply, install or provide access to any goods' e.g. something as simple as chair in a conference room, food or parking. The liability is extremely wide and pertains to ‘harm' defined as including the following: (1) ‘death or injury'; (2) ‘illness'; (3) ‘any loss of or damage to movable or immovable property’; (4) ‘economic loss' – the latter will be inclusive of e.g. loss of income!
The liability is also joint and several and this means it can be apportioned between all the parties involved in the supply chain.
There are exceptions (Section 61 (4)) but it is better not to rely on that only and remember the defendant will still have to prove it.
It is therefore imperative for the travel agent, tour operator or DMC to:
1. Have proper up to date T&C;
3. Contracts with TPS which MUST include indemnities and a
proper vetting of the TPS reputation & risk management; 4. Have insurance;
5. Bring to the attention of all pax all risks pertaining to the trip of which they are aware, should be aware and in compliance with:
Section 41 (make sure your advertising, T&C, booking form etc is not misleading and clarify an ‘misapprehensions’ immediately);
Section 48 (make sure your advertising, T&C, booking form etc is not misleading or ‘deceptive’);
Section 49 (unusual risks; risks not reasonably expected or that may result in serious injury or death must be explained and drawn to the attention of the pax in plain language, conspicuously and acknowledged by the pax and as early as possible!!) and;
Section 51 (Restates the sections above BUT adds that liability may not exclude or be limited to gross negligence) – this is where the in depth and detailed customer briefing is a very important document.