Adv Louis Nel Business Review Advice:Indemnities - Insert 5: Compliance with CPA

The Consumer Protection Act (CPA) necessitates that consumers are adequately and promptly informed in detail about the risks that the indemnity aims to cover, thereby requiring their acceptance. Mere reference and implied acceptance are insufficient. However, despite the seemingly innocuous nature of the risks, this section emphasises the importance of a comprehensive briefing.

Let's commence by examining the following aspects of Section 49 ('Notice required ... T&C'):

• The rationale behind this clause's demand for customer notification is explicitly stated at its conclusion: to provide customers with an 'adequate opportunity to receive and comprehend' the implications of the notice. Consequently, it is advisable that this notification occurs as early as possible during the booking process.
• Timing is expressly addressed, mandating that notification must occur at the EARLIEST of the following: when the customer (1) enters into the transaction, (2) engages in the activity, (3) gains access to the facility, or (4) makes payment. Therefore, hurriedly circulating an indemnity on a clipboard just before a game drive, for instance, is discouraged.
• The manner in which this notification is executed holds significance. This encompasses (a) 'plain language' (as discussed in my previous section), (b) 'conspicuousness', and (c) being 'likely to attract the attention of an ordinarily alert consumer'. Beware of hidden signage, fine print, and the like. It is strongly recommended to obtain the customer's signature instead of a simple nod of agreement, as this can prevent potential misperceptions from arising. (This aligns with section 41, which obliges suppliers to 'correct an apparent misapprehension on the part of a consumer', and section 58 concerning 'hazardous goods'. Although the latter term isn't defined in the CPA, it's advisable to interpret it, particularly in adventure tourism, to encompass 'dangerous', 'risky', and 'unsafe' conditions.)

- The topics to cover in the customer briefing comprise:

• Limitations, acceptance, and assumption of risk and liability.
• Indemnities.
• Anything of an 'unusual character or nature' that may be encountered or participated in, which the customer is 'not reasonably expected to be aware of or notice', or that might lead to 'serious injury or death'. (Welcome to the world of adventure tourism!)

A notable change introduced by the CPA pertains to gross negligence (Section 51(1)(c)). It's prohibited to: ‘limit or exempt a supplier of goods or services from liability for any loss directly or indirectly attributable to the gross negligence of the supplier or any person acting for or controlled by the supplier’.

Pay attention to references to third parties engaged by the principal – these must also be addressed in such contracts or dealings.

Section 61 addresses products liability. It encompasses 'harm' arising from: 'supplying any unsafe goods', a product failure, defect, or hazard in any goods, inadequate instructions or warnings'.

The term 'harm' is defined (Section 61(5)) as '(a) the death of, or injury to, any natural person; (b) an illness of any natural person; (c) any loss of, or physical damage to, any property, irrespective of whether it is movable or immovable; and (d) any economic loss resulting from harm contemplated in paragraph (a), (b), or (c)'.

It's crucial to note that liability is absolute, regardless of whether the harm resulted from negligence (Section 61(1)).

The body responsible for adjudicating the matter is entitled to assess various aspects of such liability, including mitigation and apportionment of liability (Section 61(6)). For instance, reckless or negligent behaviour on the part of the equipment user might indicate a failure to mitigate the outcome and could even exacerbate it.

What are the implications of section 61 for the tourism industry? This question merits an article of its own. However, at the very least, the following should be addressed: back-to-back contracts with suppliers of goods and services, providing clear and legible instructions on or with equipment, and ensuring adequate insurance coverage.

I will address the enforceability of an indemnity in my next section.

© ADV LOUIS NEL

Louis-THE-lawyer

21st August 2023

DISCLAIMER - Each case depends on its own facts and merits - the above does not constitute advice - independent advice should be obtained in all instances.