Fury at Ford fires ‘deal’

Owners of burning cars ‘stunned’ by consumer watchdog’s talks with motor firm

US motor giant Ford has entered behindthe-scenes talks with SA’s consumer watchdog to end the scandal of burning Ford Kuga SUVs, enraging victims of the debacle who were hoping the company would be prosecuted and held liable for damages.

The surprise move comes after the National Consumer Commission (NCC) did an about-turn on its stated intention to prosecute Ford, after the company approached it to reach a negotiated settlement instead.

If a settlement is reached, as seems likely, potentially damning details of cases that could have been aired during Ford’s prosecution at the National Consumer Tribunal will remain under wraps. The maximum fine the tribunal could issue is 10% of Ford SA’s annual turnover, running into millions of rands.

The NCC is SA’s primary regulator of consumer affairs, and refers matters to the tribunal for prosecution. The tribunal is an adjuticative body whose rulings have the same effect as those of the high court.

A settlement could limit the options of 4,556 motorists whose Kugas were recalled in January 2017 because of fire safety issues, and the 86 owners whose vehicles were destroyed in fires between 2015 and 2018.

Critics are accusing the NCC of putting Ford’s interests above those of consumers, which the NCC denies. Acting commissioner Thezi Mabuza said the commission’s mandate was to ensure consumers who had suffered received the redress they required.

“Compensation falls outside of the commission’s mandate, with administrative fines paid to the National Revenue Fund.

“Once judgment is issued, judgment copies are provided to complainants who are advised on how to claim damages in court. Liability certificates are issued by the tribunal. The commission cannot speculate on the time it takes to issue [these].”

The commission has not notified potential claimants of the talks, and it as well as Ford declined to discuss the negotiations’ terms.

‘Running down the clock’

The Sunday Times learnt of the negotiations this week after making inquiries about the commission’s intended prosecution of Ford at the tribunal, which it announced with fanfare in April this year.

A deadline of November 30 has been set for the talks to be concluded, with the process “at an advanced stage”.

This is just three months short of the January 2020 cutoff that marks the three-year deadline by which Kuga owners who were affected by the recall must lodge claims.

For most of the 86 Kuga owners whose vehicles caught alight, the three-year deadline has already passed, since most of the fires occurred in 2016.

To lodge a damages claim, consumers must receive liability certificates holding Ford responsible for the fires.

Liability certificates are not guaranteed and are only issued if requested by Commission officials prosecuting companies before the tribunal, and the officials are not obliged to request a certificate.

Ford has accepted some blame and has paid out the outstanding instalments of motorists whose Kugas were destroyed by the fires, but it has not accepted liability for all.

The negotiations began just days after the commission announced it would prosecute Ford for violating the Consumer Protection Act over its handling of the fires, which saw Johannesburg motorist Reshall Jimmy burn to death in his new Kuga in December 2015.

At an inquest into Jimmy’s death, which concluded this month, grisly testimony from witnesses was heard about how Jimmy died, with his sister Renisha Jimmy speaking about the family’s pain.

Experts who testified included private fire

investigators and police forensic officers and detectives who said they believed the fire was caused by an electrical fault. Ford representatives countered the claims. Judge Robert Henney is expected to deliver his ruling next month.

Consumer lawyer Trudie Broekmann said Ford was trying to drag out the process.

“Ford’s behaviour has been reprehensible, with the company consistently blocking proper compensation claims. With the January deadline for summonses for damages from the recall looming, Ford could be kicking for touch to keep as many of the damages claims out of the courts as possible.

“A major issue with a settlement agreement is that consumers often do not receive compensation as the fine is paid to the state.

“The only time consumers receive compensation in a settlement is if it is negotiated as part of the agreement, which won’t happen unless the prosecutor insists on this.

“Hindering consumers’ rights to compensation is the difficulty in securing a tribunal liability certificate, if the consumers are forced to claim damages in court. A settlement means they likely no longer have access to the tribunal, which is a cheaper and faster process.”

Broekmann said that though the tribunal had never awarded the maximum penalty, a hearing was better than a settlement deal.

“In a hearing, consumers’ voices are heard. In a settlement agreement, everything is done behind the scenes, with consumers having no say.”

However, another consumer protection lawyer, Janusz Luterek, said a settlement agreement was similar to a plea bargain.

“When it comes to a settlement, as a company you do not argue with the NCC as the terms are usually far more favourable than the outcome of a tribunal prosecution.”

He said a liability certificate took care of the lot of the hard work for consumers.

“They can go to court and apply for damages without having to prove their case as the company has already been found liable.”

He said it was understandable the commission had taken the settlement route, “because they don’t have the resources needed to fight a case like this compared to what a global giant like Ford has”.

“While there is a 50-50 chance on who can win, there is a good chance, with all the money Ford has to hire the best lawyers, that the company will win on technicalities or an appeal. A settlement is a definite win for the NCC, with Ford likely to face fines running into the millions of rands.

“The settlement does not mean the commission has taken away consumers’ rights. Consumers must realise that these processes do not usually get one money. It is instead about bringing companies to account for their misdeed.”

Rojene Nicolas, whose Kuga caught alight two months before Jimmy died, said Ford knew its cars were defective yet for years did nothing to fix them.

Nicolas, who rescued her young daughter just before her car was engulfed in flames, said she wanted Ford prosecuted.

“My child nearly died. Even after insurance companies warned Ford of the dangers, they didn’t recall them. Ford must answer for this. They must be prosecuted. Any settlement means they can get away with this kind of behaviour without repercussions.”

Former Kuga owner Vivian Jordaan said she knew nothing of the negotiations.

“We have strong cases against Ford. Why is the commission settling? Ford accused us of lying about how the fires started. This is nothing more than Ford dodging a bullet.”

Sissy Mkhwanazi, whose Kuga burnt out, accused the commission of dropping consumers. “I am stunned. They never called about these negotiations,” she said.

Jimmy’s sister Renisha said they did not know the negotiation terms.

“This chapter must be closed with the victims getting justice,” she said.

Ford spokesperson Minesh Bhagaloo said the company was co-operating with the commission.

The NCC’s Mabuza said that before prosecution papers could be served, Ford approached the commission to resolve the matter. “Negotiations are at an advanced stage. The terms are about to be settled.” She declined to divulge the terms, “as they have not been agreed on”.

She said if negotiations failed, “the commission will proceed to the tribunal without further notice”.