ADVICE AND TIPS
Protect your business from out-of-town small claims By Jaqueline Martinez Smith
W
e went to see our lawyers, and here’s how it works when somebody from out of town takes you to the small claims court in another city or town. If you receive a summons from a small claims court it works the same way as in any other court (except you cannot use legal representation) and you will have to defend your case in the court where the action is instituted. As for changes to be affected by the Consumer Protection Act, if anything, there will be greater obligations on suppliers. However as the CPA regulates issues such as the right to return goods, defective goods, refund policies and so on, there is clearer guidance as to what the supplier’s obligations are to consumers who are unhappy with products or services. The CPA introduces a whole range of mechanisms by which consumers can enforce their rights and most of these will be at the convenience of the consumer. There is a large focus on mediation however, and where possible the National Consumer Commission will resolve disputes telephonically or in writing to avoid the consumer incurring unnecessary travel costs. Unfortunately, the costs for suppliers, not only in terms of travelling but in settling complaints and in simply complying with other requirements in the CPA, are much more For example where in the past, a supplier had no obligation to provide a warranty or to repair faulty goods, now everyone in the supply chain gives the consumer a six month warranty (this is in the law and cannot be contracted out of) that goods are good quality and free of defects among other requirements. It the goods do not comply (obviously
38
www.saguides.co.za
this will not apply to consumable items) then the consumer can return them to anyone in the supply chain and receive a refund, replacement or repair at the consumer’s option. This will make business very expensive for suppliers and in all likelihood will ultimately push up prices for consumers. However, it does mean that consumers no longer have to bear the burden of faulty goods. There are remedies, says Rosalind Lake, an Associate at legal firm, Deneys Reitz Inc. “This is really a question regarding which court will have jurisdiction to hear a particular dispute,” she says. “There are several ways that a court can have the authority to decide on a matter and often one or more courts in different regions would have authority to deal with the same matter.” Unfortunately for the company or individual on the receiving end, the person who is instituting the action (in this case the customer) has the right to determine which court to lodge the action in depending on the facts available to support the jurisdiction. “If the business being sued has its premises in a particular region, that can be a basis for using the court in that area. But if the dispute occurred in a region different from where the business is based then the court in that area will also have jurisdiction. For example if the contract was concluded in Cape Town and the supplier is based in Johannesburg, a court in both areas would be in a position to resolve the matter. Unless there are valid grounds to dispute the jurisdiction, or if the customer and supplier agree to move to another court with jurisdiction, if a supplier is called to defend a matter in a particular court they will have to do so at that court,” Lake says. She advises: “If someone receives a summons and they disagree with what
is being alleged and want to defend the matter, they should seek legal advice so that they can see whether there is any basis on which to move the matter to another court. However, this is rarely the case and many people find themselves involved in defending matters in very different regions from where they are based.” Anyone who receives a summons should seek advice on their chances of success and weigh up the costs of defending the matter (including the travel costs associated with attending a court in another region) and consider whether it would be commercially sensible to settle the matter up front and avoid incurring additional cost. For more information and guidelines on lodging in the Small Claims Court, visit: http://www.justice.gov.za/scc/scc_courts.htm or phone 012 357 8236 / 8258. ROSALIND LAKE Associate - Competition Deneys Reitz Inc Telephone: 011 685 8941 Mobile: 082 807 4429 Fax: +27 11 301 3200 15 Alice Lane, Sandton, 2196 PO Box 784903, Sandton, 2146, South Africa Reg No: 1984/003385/21 rosalind.lake@deneysreitz.co.za http://www.deneysreitz.co.za/
SA GUIDE TO BUSINESS OPPORTUNITIES VOL 9, # 2