Recalling defective products in line with the Consumer Protection Act

BRAND ACTIVITY

Dec 9th, 09:53

Pieter Conradie, Director, Dispute Resolution, Cliffe Dekker Hofmeyr

The Consumer Protection Act, No 68 of 2008 became operational on 1 April 2011 (Act) and changed the way in which manufacturers, retailers, producers and importers (suppliers) will conduct themselves with regard to defect products in general and the recall of unsafe products. Are you aware of the steps to be taken when you receive information that your product has been manufactured or assembled with a device which caused the product to be unsafe, or do you want to wait until it’s too late and face the music of monetary claims without your insurance being in place?

In terms of the Act the suppliers are liable for any harm caused as a consequence of supplying unsafe goods, a product failure, defect or hazard in any goods or inadequate instructions or warnings provided to the consumer pertaining to any hazard arising from or associated with the use of any goods, irrespective of whether the harm resulted from any negligence on the part of the supplier.

Safety monitoring and recall falls within the jurisdiction of the Consumer Commissioner who may recall a product and compel a supplier to supplement warnings. Failure to adhere to rulings by the Consumer Commissioner and which results in damages caused may result in criminal liability. Safety monitoring, investigations, notification of the public and recall of goods are dealt with in s60 of the Act. Safety recall guidelines were published on 3 June 2012.

Those guidelines prescribe reporting requirements in respect of product recalls and regulate the internal procedures which must be followed in the event of a product found to be unsafe.

With the introduction of strict liability, the curtain has opened and the stage has been set for litigation and businesses must be fully aware of this and take the necessary precautions to protect themselves.

Suppliers must be alert and have proceedings in place to recall a product when it is discovered that the product has a defect which may harm a consumer if used as intended. Suppliers must know how the safety recall guidelines operate. If the supplier of a certain product falls within a certain industry, for example, the vehicle industry, then the supplier must be fully aware of the industry codes dealing with safety monitoring and recall and the requirements thereof.

Do not ignore the public guidelines until it is too late. Review your product recall procedures and take out insurance against damages suffered caused by a product recall. A product recall may cripple a supplier. A supplier may be faced with damages claims from the consumer when the product is recalled. Apart from damages claims, the supplier will also suffer damages as it may have to work overtime to fix the defect on the product before it is returned to the consumer, or replace the defect part or remanufacture the entire product.

Suppliers are obliged to recall unsafe defect products but the Consumer Commissioner may also recall a product when it becomes aware of such unsafe product being distributed in the market. When a supplier recalls, it is obliged to give the Consumer Commissioner notice of such recall within two days after the recall occurred.

In certain instances, for example, the motor industry where there is regular service of a motor vehicle, suppliers may decide not to give notice of an unsafe product whilst waiting for a regular service to take place and then to replace the defect product/device, without informing the owner of the vehicle of the defect. This is called 'silent recall'. A manufacturer may find that a 'silent recall' may be too late as drivers and passengers of motor vehicles may have already been injured or killed prior to the regular service date. Suppliers may be charged with murder or culpable homicide if a consumer is injured and the supplier failed to recall the product.