Tourism Tattler Issue 1 of 2018

LEGAL
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and such stickers/labels may well be outdated or so warn away/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;
2. Indemnities;
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.
Disclaimer: This article is intended to provide a brief overview of legal matters pertaining
to the tourism industry and is not intended as legal advice. © Adv Louis Nel, 'Louis The
Lawyer', March 2018.
Jan/Feb/Mar
Quarter 1 2018
Tourism Tattler Trade Journal 27