Firms at fault have to pay up despite signs

INSLA

NOT RISK FREE: Simply putting up an owners risk sign does not absolve a company from responsibility, according to the Consumer Protection Act.

We’ve all seen the signs: enter at own risk, followed by legalese which essentially means that whatever horrible thing happens to you on the premises, you’re on your own – management accepts no liability.

Can companies legally do this, even if the damage or injury caused is their fault, in some way?

In a word, no, they can’t.

Companies are within their rights to indemnify themselves against certain liabilities, as long as they notify consumers properly, but the Consumer Protection Act states that unfair exclusion clauses – those that seek to exempt a company from liability for losses caused by gross negligence, for example – will not be upheld.

Such a case has not come before the Consumer Tribunal yet in order to create a precedent.

But Consumer Watch recently dealt with an interesting one.

As Prithi Jayaraman of Durban drove out of the Umhlanga Medical Centre’s parking garage back in June, part of the boom apparatus failed, and her car was badly scratched down one side as a result.

This wasn’t a case of the boom crashing down on the car – a side panel on the boom’s control box had dropped open and into the path of her car, its edge scratching it down the entire side as she went to exit the parking area.

An attendant rushed over, she says, and explained that the locking clip on the panel was faulty, with the result that the panel kept falling out.

Servest Parking manager Andre Joubert was not on site at the time, but spoke to Jayaraman on the phone, telling her to take photographs and send him an e-mail documenting the incident.

This she did, assuming that the parking company would pay for her car to be repaired.

But a few weeks later she received a response from Joubert, which stated simply: “I have investigated the matter and wish to draw your attention to the disclaimer displayed on entry to the medical centre… ‘All vehicles are driven and parked entirely at the risk of the driver or owner and all persons entering the premises do so on their own risk’.”

Having sourced a repair quote for R7 600, a distraught Jayaraman sought my help.

I, in turn, sought a legal opinion on the case and the issue of indemnities in general, from Salina Govindsamy of Gavin Gow Inc attorneys in Umhlanga.

According to the Consumer Protection Act, she said, a notice limiting the liability of a supplier, or imposing an obligation on the consumer to indemnify the supplier for any cause, must be in plain language and must be drawn to the attention of the consumer before they conclude the transaction.

In other words, the indemnity notice has to be conspicuous.

But, Govindsamy said, the wording of the CPA makes it clear that unfair exclusion clauses won’t be upheld. Such a notice can’t limit or exempt a supplier from liability for any loss directly or indirectly attributable to gross negligence of the supplier or any person acting for or controlled by the supplier.

So what is negligence and gross negligence? The National Consumer Commission hasn’t issued any guidelines on this, Govindsamy said, but negligence is broadly defined as conduct which falls short of what a reasonable person in the circumstances would do to protect a person from a foreseeable risk or harm.

Gross negligence is an entire failure to give consideration to the consequence of actions, a total disregard of duty.

So, Govindsamy said, if the medical centre’s parking operator was aware of the fault in the boom control box for a period of time and did not take any action, this would be gross negligence, and the disclaimer would not be a protection.

I then took up the case with Servest, which operates a number of parking garages countrywide.

Responding on behalf of Servest Corporate, marketing manager Deborah Wiertek issued a statement in late August, saying: “We fully acknowledge the incident and the inconvenience to Ms Jayaraman.

“We are currently investigating the incident to determine who is responsible and the level of responsibility. The equipment in question belongs to the service provider Intellipark and our investigation includes looking at the service records on this equipment, determining if the equipment was faulty and who is accountable for this.

“Once our investigation is complete we will be in a position to determine who is responsible for any possible payment or assistance with the excess insurance payment.”

Having to make an insurance claim was something Jayaraman was hoping to avoid, since she’d be left with an impaired claims record over an incident.

Finally, two weeks ago, Servest Parking’s Joubert issued a statement saying that the investigation was complete and that the company would “pay for the damages”.