Impact of the Consumer Protection Act in the health care context

March 1st, 2012
x
Bookmark

By Pat van den Heever

Imagine the following scenario:

Patient A presents himself at the rooms of Dr F, a specialist physician. Patient A has been referred to Dr F by a general practitioner as a medical emergency. Patient A is a 57-year-old auditor. He suffers from type two Diabetes, elevated cholesterol and hypertension. Immediately prior to the referral, patient A had been treated for influenza by the referring general practitioner, but despite two completed courses of antibiotics, patient A has not yet recovered. He is presently suffering from acute shortness of breath and can only walk short distances. On examination, patient A is diagnosed with life-threatening congestive heart failure with supraventricular tachydysrhythmia and hypertension. His blood pressure reading is 230/140, which constitutes a hypertensive crisis. Patient A’s condition is critical and he requires immediate admission to the intensive care unit of the hospital to save his life. Is it in patient A’s best medical interests for Dr F to comply with the time-consuming and onerous obligations that the provisions of the Consumer Protection Act 68 of 2008 (the Act) impose on Dr F and the hospital before patient A is treated appropriately? The above is an example of a typical scenario that may now confront a specialist physician and underscores the dilemma created by the Act.

Application of the Act

The Act came into operation on 1 April 2011 and applies to every transaction in the Republic unless it is exempted by the provisions of s 5 of the Act. The definition of ‘consumer’ in the Act includes both a person who purchases goods or services and a person who has entered into a transaction with a supplier in the ordinary course of the supplier’s business, and therefore includes a patient. ‘Goods’ include anything marketed for human consumption and would include medicines, medical devices and consumables. The Act does not apply retrospectively except to the extent set out in item 3 of schedule 2. It introduces and prescribes certain fundamental consumer rights, which consist of the following –

  • the right to equality in the consumer market (ss 8-10);
  • the right to privacy (ss 11-12);
  • the right to choose (ss 13-21);
  • the right to disclosure and information (ss 22-28);
  • the right to fair and responsible marketing (ss 29-39);
  • the right to fair and honest dealing (ss 40-47);
  • the right to fair, just and reasonable contract terms and conditions (ss 48-52); and
  • the right to fair value, good quality and safe goods (ss 53-61).

In terms of the Act, ‘service’ includes any work or undertaking performed by one person for the direct or indirect benefit of another; ‘service provider’ means ‘a person who promotes, supplies or offers to supply any service’; and ‘promote’ includes to ‘advertise, display or offer to supply any goods or services in the ordinary course of business to all or any part of the public for consideration’. The provisions of the Act therefore apply to service providers in the health care sector, as well as service providers of professional services such as health care professionals. The Act establishes a single comprehensive framework for consumer protection (ML Du Preez ‘The Consumer Protection Bill: A few preliminary comments’ (2009) Tydskrif vir die Suid-Afrikaanse Reg 58 ff ).

The objectives of the Act are to inter alia ‘protect the interests of all consumers; ensure accessible, transparent and efficient redress for consumers who are subjected to abuse or exploitation in the market place’ and to enact a law to ‘protect consumers from hazards to their well-being and safety’. As a patient should now be viewed as a consumer of health care services, he is entitled to the consumer protection the Act offers. Where the provisions of the Act conflict with other legislation, the provisions that offer the greatest protection to the consumer/patient will apply (s 4(4)).

The patient’s right to fair, just and reasonable contract terms

When considering whether a condition or an agreement is unfair, unreasonable or unjust, a number of factors play a role, including –

  • the parties’ relationship to each other;
  • their relative capacity, education, experience, sophistication and bargaining position; and
  • whether the parties negotiated and the extent of such negotiation (s 52(2)).

Section 49(1)(a) of the Act stipulates that any provision of a consumer agreement that purports to limit the risk of liability of the supplier or which imposes an obligation on the patient to indemnify the supplier for any cause must be brought to the attention of the patient in a conspicuous manner and form, which is likely to attract the attention of an ordinarily alert patient, having due regard to the circumstances of each case. Such a term or clause must be written in plain language and the patient must be given adequate opportunity to clarify the meaning of such a clause (s 49(3) and s 49(5)). The notice must be given to the patient either before the agreement is concluded or before the patient gains access to the facility where the service will be rendered and also before consideration for the service is required, whichever occurs first (s 49(4)). In the medical context, these provisions will obviously impact directly on the standard exemption clauses that exclude, limit or alter the liability that normally flows from the contractual relationship between the patient and the health care establishment. The relevant provisions of the Act, contained in s 51, read as follows:

‘(1) A supplier must not make a transaction or agreement subject to any term or condition if –

(c) it purports to –

(i) limit or exempt a supplier of goods or services from liability for any loss directly or indirectly attributable to the gross negligence of the supplier or any person acting for or controlled by the supplier;

(ii) constitute an assumption of risk of liability or liability by the consumer for a loss contemplated in subparagraph (i) …’.

Exemption of liability for loss or damage due to gross negligence will thus no longer be permitted in the South African law of contract and such prohibited terms are void and unenforceable (s 51(3)). In the medical context, the interpretation of the term ‘gross negligence’ creates fertile ground for argument, more so because the Act does not define this phrase and it is not at all clear when conduct will be regarded as grossly negligent or when such conduct will constitute ordinary negligence. The problematic nature with regard to this phrase is compounded by the fact that the degree of negligence on the part of the health care practitioner or health care establishment makes no difference to his or its civil or criminal liability (M Nöthling Slabbert ‘Medical Law (South Africa)’ in R Blanpain International Encyclopaedia of Laws (Kluwer Law International 2011) 109 at para 168). The notion of grading criminal negligence seems to be a distinct principle of English law (P Carstens and D Pearmain Foundational Principles of South African Medical Law (Durban: LexisNexis 2007) at 847).

With regard to indemnity clauses in general, C Kok opines as follows:

‘It is however important to bear in mind that the use of all exemption clauses will not cease. Exemption clauses can play an important role in allocating the risk between parties where neither was at fault. The point is that it should be a fair allocation of risk and that both parties must be completely aware of the risk they are undertaking. Exemption clauses must thus in future be formulated in a manner compliant with the Act and exploitation of consumers by means of these clauses will consequently cease. The Act will thus lead to the consequence that exemption clauses, as we know [them], will be phased out because such clauses will become impractical. Where freedom of contract used to be the norm, the emphasis is going to shift towards consumer awareness and fairness in contracting’ (C Kok ‘The effect of the Consumer Protection Act on exemption clauses in standardised contracts’, unpublished LLM dissertation, University of Pretoria (2010) at 63, http://upetd.up.ac.za/thesis, accessed 24-1-2012). Compare also Freddy Hirsch Group (Pty) Ltd v Chickenland (Pty) Ltd 2011 (4) SA 276 (SCA)).

Health care providers and establishments will now be constrained to ensure proper compliance with the aforesaid provisions of the Act if they seek to negotiate the terms and inclusion of the clause in contracts with patients.

Quality of goods and services provided or supplied

In terms of s 54(1)(b), the patient has the right to performance of services in a manner and quality that persons are generally entitled to expect. In the case of goods required for the performance of a service, these goods must be reasonably suitable for the purpose for which they are intended and must be usable and durable for a reasonable period of time, bearing in mind the use to which these goods are normally put, as well as the circumstances surrounding their supply. The Act also establishes an implied warranty in each agreement or transaction relating to the supply of goods to the patient and provides that the importer, distributor and retailer each warrants that the goods comply with the requirements and standards contemplated by the Act (s 56). Furthermore, s 58(1) creates an obligation on the supplier, with regard to any activity or facility that may entail either an uncommon risk or a risk that the patient cannot reasonably be expected to foresee and/or a risk that may lead to serious injury or death, to specifically forewarn the patient of the fact, nature and potential effect of the risk. In the medical context it is also important to note that the provisions of s 6 of the National Health Act 61 of 2003 prescribe the manner in which the patient must be informed with regard to –

  • his health status, subject to a form of therapeutic privilege;
  • the range of diagnostic procedures and treatment options that are generally available;
  • the benefits, risks, costs and consequences generally associated with such options;
  • the patient’s right to refuse medical treatment and the implications; and
  • the risks and obligations of such refusal.

The patient must be informed as far as possible in a language that he understands and in a manner that takes the patient’s level of literacy into account (MCI Wilson ‘Assault in medical law: Revisiting the boundaries of informed consent to medical treatment in South Africa’ (2009) 16 Journal of Law and Medicine 862 at 879 ff).

Apart from the above provisions of the National Health Act, the Act also requires that notice must be given in plain and understandable language to enable an ordinary consumer with average literacy skills and minimum consumer experience to understand it. With regard to the imparting of information to patients, NJB Claassen, after conducting empirical research among medical practitioners, inter alia, came to the following conclusions:

‘Op grond van die ontleding van die onderhawige empiriese data is dit baie duidelik dat ‘n beduidende hoeveelheid geneeshere wat te staan kom voor die problematiese situasie om inligting aan pasiënte wat intellektueel onvoldoende ontwikkel is, te verduidelik, met behandeling voort gaan sonder om die relevante inligting te openbaar, en dat hierdie optrede hoofsaaklik veroorsaak word deur enersyds die onvermoë van die pasiënt om die inligting te begryp en andersyds die gebrek aan tyd om die inligting oor te dra. Tydsbeperkings word dan ook interdaad deur verskeie skrywers geïdentifiseer as ‘n faktor wat in ag geneem behoort te word wanneer die omvang van ’n geneesheer se openbaarmakingsplig bepaal moet word’ (NJB Claassen ‘Negotiorum gestio by geneeskundige ingrepe’, unpublished LLD thesis, University of the Free State (2011) at 261).

Allied to this issue is the fact that the Act also protects the patient from unconscionable conduct, that is, improper or unethical conduct of such a degree that it would shock the conscience of the reasonable person (s 40). The provisions of s 40 are also applicable to marketing, supply, negotiation, execution and enforcement of the contract. Importantly, s 40(2) also stipulates that it is unconscionable for a supplier to knowingly take advantage of a consumer who is unable to protect his own interests as a result of physical or mental disability, illiteracy, ignorance, the inability to understand the language of the agreements or any similar factor. These provisions also impact and serve to enlarge practical difficulties health care practitioners encounter, as alluded to by Claassen above. (Compare also A Dhai, J Gardner, Y Guidozzi, G Howarth, M Vorster ‘Vaginal deliveries – is there a need for documented consent?’ (2011) 101 South African Medical Journal 20.)

Strict liability

In terms of s 61 of the Act, a producer, importer, distributor or retailer of goods will now be liable for defective products. If more than one person is liable in terms of this section, their liability is joint and several. They are also liable wholly or partly as a consequence of supplying any unsafe goods; a product failure, defect or hazard in any goods; or inadequate instructions or warnings provided to the patient 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 producer, importer, distributor or retailer. Section 61(4) sets out the various defences available against the strict liability the Act seeks to impose. Of particular importance is the defence set out in s 61(4)(c). It is clear that, although the Act provides a form of strict liability for manufacturers and importers, distributors and retailers can escape liability if they can prove that ‘it is unreasonable to expect the distributor or retailer to have discovered the unsafe product characteristic, failure, defect or hazard, having regard to that person’s role in marketing the goods to consumers’. In this regard, MM Botha and EP Joubert opine as follows:

‘One can then assume that the liability of these parties is still fault based where reference is made to reasonableness. A distributor of the product does not incur delictual liability at common law unless there was a legal duty on him to inspect a product and he failed to do so … . The CPA [Consumer Protection Act] will make no difference to the present position of most South African consumers especially when taking into account the lack of education regarding consumer rights and that most of these consumers are found in the rural areas. These consumers might in most instances not even be aware of the protection afforded by the CPA. It seems that by opening the backdoor for distributors and retailers, effective redress is not provided for ordinary consumers. This provision is therefore defeating [of] the idea behind true strict liability because only the manufacturer and importer will ultimately be strictly liable and not the distributors and retailers’ (MM Botha and EP Joubert ‘Does the Consumer Protection Act 68 of 2008 provide for strict product liability? – A comparative analysis’ (2011) 2 Tydskrif vir Hedendaagse Romeins-Hollandse Reg 305 at 318).

In the medical context, MS Pepper and M Nöthling Slabbert provide the following example of the effect of applying the provisions of s 61 of the Act:

‘A practical example illustrating the effect of this provision that introduced strict or no-fault liability is where a cardiologist correctly fits a pacemaker into a patient’s heart (eg, an endocardial implantation), which fails prematurely. Whereas a patient previously had to prove that the premature failure of the pacemaker was the result of negligence on the part of the manufacturer of the pacemaker, he or she now only needs to prove that the pacemaker failed prematurely and that he or she suffered harm or a loss as a result of this. Moreover, the patient need not institute a claim against the manufacturer of the pacemaker, but may claim damages from anyone in the supply chain, which includes the cardiologist as the person who supplies the pacemaker to the patient. … The no-fault provisions of this Act will lead to an increase in medico-legal litigation. Since the claimant can sue anyone in the supply chain and hold them liable for harm and cost, and since the health professional who delivered the care is the most easily … identifiable person in the supply chain, she/he can be held strictly liable for the cost of the damages that may follow. This applies, among other things, to defective prostheses, blood products, implants, pacemakers and medication for which a claim may be brought if damage results’ (MS Pepper and M Nöthling Slabbert ‘Is South Africa on the verge of a malpractice litigation storm? (2011) 4 South African Journal of Bioethics and Law 29 at 32. See also M Nöthling Slabbert, B Maister, M Botes & MS Pepper ‘The application of the Consumer Protection Act in the South African health care context: Concerns and recommendations’ (2011) 44 (2) Comparative and International Law Journal of Southern Africa 168).

However, in view of the defence available to a supplier in terms of s 61(4)(c) of the Act, and until more legal certainty is achieved with regard to the interpretation of this provision, it would be advisable to ensure that the action is also instituted against the manufacturer, so that the patient can enjoy the full benefit of the strict liability that s 61 of the Act imposes on the manufacturer or producer of the defective product without running the risk of an adverse costs order should the supplier be successful with a defence in terms of s 61(4).

Remedies afforded to the patient in terms of the Act

In terms of s 69 of the Act, the patient has a choice whether to refer a complaint to the National Consumer Tribunal, the National Consumer Commission, an alternative dispute resolution agent or a court with jurisdiction.

Conclusion

Criticism against the Act includes that –

  • the existing measures before enactment offered sufficient protection to consumers;
  • uncertainty will result from the Act;
  • it will lead to a flood of litigation;
  • it will lead to the reluctance of businesses to contract with consumers; and
  • that the principle of strict liability is too wide (Kok (op cit) 55-61).

I submit that the Act constrains health care providers and establishments to make appropriate adjustments to accommodate compliance with the Act.

It is to be questioned whether the Act, which is directed at commerce in general, will advance a mutually beneficial relationship between the health care practitioner/establishment and the patient, where the patient’s medical interests should be paramount, but without the need to unduly restrict or sacrifice the health care practitioner’s professional freedom. Only time will tell.

Pat van den Heever BIur LLB (UFS) LLM (UCT) LLD (UP) is an advocate at the Cape Bar and is an extraordinary professor in the department of criminal and medical law at the University of the Free State.

This article was first published in De Rebus in 2012 (March) DR 22.