Wednesday, March 10, 2010

Is bad legislation better than no legislation?

I don't know which excuse my fellow bloggers will offer for the thundering silence in the past 6 days. I have a valid one: I have been in Johannesburg for the Department of Trade and Industry's Consumer Protection Law Conference (the DTICPLC) - a veritable feast of highly politicised back patting, irony and starch loaded conference food (I always thought the term fat cat was a metaphor).

Long story short - the aim of the DTICPLC was to discuss 'Changing the Consumer Protection Landscape in South Africa: The Consumer Protection Act 68 of 2008'.

As I think I mentioned before, the CPA is supposed to (and according to the DTI will) come into effect in October 2010. I view myself as a dangerously optimistic person, but not only do I think that this is unlikely, I fear that premature implementation of this legislation will be the end of the already battle weary South African consumer. My reasons?
  • Misinformation - amongst the various pamphlets unleashed at the DTICPLC was the CPA Guide aptly (if you like irony) emblazoned with the following slogan: 'You have rights as a consumer. Understand them. Enforce them.' The guide is not only written in legalese (again, ironic, the CPA demands that all communication with consumers takes place in plain language), it is riddled with omissions and at times patently incorrect. Oh, and almost no mention is made of enforcement measures. The answer to this criticism: We will sort it out once the CPA is in effect.
  • Lack of consultation - one of the aims of the CPA is to consolidate consumer remedies in one act thus presenting a united front against Evil (read: suppliers). The CPA not only fails in that regard, but it would appear that there has been little, if any, consultation with other state departments (think Department of Health, Agriculture etc who administers various pieces of legislation aimed at ensuring that only quality and safe goods reach the consumer) and industry regulators (think insurance, banking etc). The answer to this criticism. We will sort it out once the CPA is in effect.
  • No one knows how to interpret the provisions of the CPA. Consistently the speakers at the conference stated that they have not done a detailed analysis of the CPA because it is too difficult. Again, irony, the CPA is aimed at providing protection to vulnerable consumers, hopefully they won't find the CPA too difficult to interpret. The answer to this criticism: We will sort it out once the CPA is in effect.
  • Gaps in the Act: One example, the Act fails to give alternative dispute resolution agencies (who will form the first line of defence against Evil) the right to refer disputes directly to the National Consumer Tribunal. The answer to this criticism: We will sort it out once the CPA is in effect (can anybody spell ultra vires).

So I guess my question today is: Is bad legislation better than no legislation? (Political gain aside.)

Yours in frustration,

Elizabeth 'the Consumer Protector' de Stadler (my wrestling name)


  1. Elizabeth - in another thread you say "Now that I have gotten today's little rant off my chest (and once I finish this week's round of CLH tut hell) I will write it. You Libertarians are going to go down in flames." I find this interesting because in this very post you highlight the massive problems with government interfering with private relations. Just a comment. Although I do support consumer protect laws I think libertarianism reminds us of some important truths :D

  2. Is it again a copy from some Canadian legislation, like the National Credit Act, 2005 - which nobody understands and is totally incomprehensible?
    I get the idea the new Companies Act possibly also hails from there?
    Like exotic/intruder plants.

  3. I don't think we should start referring to these pieces of legislation as 'exotic' plants. Exotic implies something potentially idyllic and sought after. That suggestion might unleash the Elizabeth-'the-Consumer-Protector'-de-Stadler-wrestler-fury. Let's stick with 'intruder' for now.

  4. @ Dave: Hmmmm, sure I get it. Paternalism is dangerous if the father in question is perhaps a drunk, abusive moron?

    @ Henri: Lol. The drafter of the legislation does hail from Canada (ironically, last time I checked, the only first world country which does not have consumer protection laws). It is based on an old (as in outdated) piece of UK legislation. I believe one of my Stellenbosch friends is thinking about writing an article on the damage inflicted on South African law by Phil Knight. Say no more.

  5. @Elizabeth - I think you're missing my point. I was just keen to highlight how often when government acts with noble intentions it creates chaos and harm disproportionate to its aims. I am not sure whether the CPA is/is going to do this but I think the comments you make here indicate that this damage exists.

    As a small point to illustrate this - if the Act remains as ambiguous as this it allows the DTI to say 'we have consumer protection legislation'. But because the Act is ambiguous noone can say with certainty what their rights and remedies are. So consumers are deterred from ever protecting their rights and government can claim it has satisfied its obligations to citizens.

  6. Mmmm......I wonder then why the drafter [if he's so good / knowledgable ] is not drafting legislation for the Canadians?
    Or is he lending a hand to us poor [South] Africans?.

  7. @ Dave: No, I think we are on the same page. To my mind the question which I posed at the end of the blog actually asks whether (particularly now in the contractual context - the CPA is much wider than that) consumers are better served by an ambiguous piece of legislation or by residual rules (such as implied warranties)which do not have any significant extra-judicial effect.

    @Henri: Apparently he drafted something once about aboriginal title. WTF?

  8. A quote from an interesting paper called "Towards a new legal realism":

    The endowment effect causes a bias in favor of the status quo. This attachment to the status quo is reinforced by a bias in favor of inaction: people are willing to tolerate higher losses from failing to act in order to avoid the sense of responsibility when losses arise from their own affirmative acts (p 168). Thus, they may be more willing to accept a contractual term when it is found in a form contract or when it is the legal default than when they are negotiating on a blank slate (p 116). Accepting a default or boilerplate term is an inaction that would lead to fewer regrets if the deal later goes sour than would be experienced if the same contract term emerged from active negotiation.

  9. I personally am a fan of the instrumental view on freedom of expression - Basically i think expression should almost be allowed, but it should be 'punished' when it serves no good purpose.
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