The media has been awash with stories of how the new Consumer Protection Act will shield consumers from a range of unfair marketing and business practices, but consumers need to note that these protections are not effective yet – the Act will be implemented incrementally, with certain provisions kicking in only late next year.

On the other side of the coin, businesses involved in the supply of goods and/or services (i.e. most businesses!) should start preparing now for the additional risks – and probably cost – that the Act will expose them to.

For a start, your cash flow projections will need to factor in new provisions for implied warranties, return of goods, cancellation of contracts by customers etc.

Factor in also another significant danger - the greatly increased liability for damages caused by defective or unsafe products.  All participants in the chain of supply of goods – including

producers, importers, distributors, retailers and installers - will be equally liable for any damage caused as a result of any “unsafe product characteristic, failure, defect or hazard”.   The risk is high – you could be sued for virtually any type and level of resultant loss – “economic loss”, death, injury, illness, property damage or loss, etc.

And it won’t be easy to escape liability, because liability will now be “no-fault” or “strict”, i.e. the consumer will not have to prove that you were negligent in any way – instead you will have to prove any defence you may raise, and the defences open to you here are limited.

Start planning now!