The South African consumer has for many years been labouring under unfair provisions that are forced on him by the large corporate entities who simply do not entertain any deviation from the standard form contract. Certainly from a corporate point of view the idea of allowing individual consumers to vary their contracts in different ways would introduce a contract management nightmare that any medium to large sized company simply could not manage.

On the other hand this means that there is very little in the way of a voice on the part of the consumers which could result in pressure being placed on the standard form contracts used by companies. To fill this gap (and many others) the Consumer Protection Bill was introduced and is now on its third public draft. This Bill has the potential to, quite literally, redefine the legal landscape with regard to retailers, direct marketers, the financial industry ? in fact basically everyone in South Africa (and even many outside our borders).

This sledgehammer of legislation is founded on good intentions but, in terms of its current trajectory, is currently destined to do something clearly contrary to the purpose of the Bill. Quite simply the Bill in its current form is destined to either be widely ignored or cause a chilling of the financial climate. Either option will have a significantly negative impact on the economy ? the same economy that provides things such as jobs for consumers.

A major stumbling block is the the cost of implementing this legislation.

Clause 12 of the memorandum to the Bill indicates that this Bill will cost the Department of Trade and Industry R51.3 million. But this amount pales in comparison with the cost of this Bill to business. This cost - which has yet to be quantified - is likely to make the implementation of the National Credit Act seem like a small entrée before the main course.

It is impossible to have a meaningful discussion on the impact of this Bill without undertaking a rigorous study on the real cost of this legislation to the country. Incidentally this should already have been done by the Department of Trade and Industry according to the Department of Treasury guidelines.

Another issue relates to unintended consequences. A large problem with this Bill is that there are so many unintended consequences that it is useless to even begin tabulating them. Rather it would be more worthwhile to consider what needs to be done when this Bill conflicts ? as it inevitably will - with other legislation. When this happens then section 2(9) of the Bill indicates that the legislation that has the most beneficial effect for the consumer would apply.

This in turn forces attorneys to look at every other piece of legislation in South Africa in order to determine whether that Act does, or does not, give greater protection to the consumer than the Consumer Protection Bill. Of course as attorneys we love this type of legislation. Just this Bill could keep a phalanx of lawyers in business for a decade at least.

But this legislation is deadly for business as it introduces the one thing that business likes least ? uncertainty. Bear in mind that all you need is uncertainty to discourage foreign investment and ensure that the cost of legal compliance is extremely high.

The Bill is overbroad and vague in terms of concepts and due to its novelty is untested with no precedents (or examples) which could be used to reduce this uncertainty. It is vague as to how it will be practically enforced, what will be contained in the regulations and whether these regulations will be reasonable or wildly idealistic and unenforceable. As a result it is this uncertainty that is the worst aspect of the Consumer Protection Bill and is, with respect, entirely avoidable. Before this Bill can be pushed into law ? and it appears as though the intention of the legislature is to implement this in late 2008 ? this acute lack of clarity needs to be addressed by the legislature.

The overriding irony in this incredibly opaque Bill is that it specifically legislates in section 22 that documents should be provided in ?plain and understandable language?. Perhaps it is time for the legislators to read their own Bills in that light?

- Paul Esselaar (28 July 2008)