‘Businesses can sue Eskom for losses’

Cape Town - Businesses that have suffered major losses as a result of load shedding should not rule out damages claims against Eskom, an attorney has said.

However, consumers who suffer smaller losses because of damage to appliances and electronic devices, will have to turn to insurers for protection.

“The big question is whether a claim could be brought against Eskom for its persistent failure to attend to the necessary maintenance,” Tzvi Brivik of attorneys, Malcolm Lyons & Brivik said.

The answer is that individual consumers will have a difficult time lodging such applications because of the value of their claims.

However, businesses that suffer major losses could take the issue to court, as well as consumers who come together in a class action.

He suggested consumers scrutinise their insurance policies to make sure their expensive appliances and electronic devices are covered or shop around for policies that fit their needs.

“Whereas in the past insurers may have considered claims for damage to electrical appliances or loss of production, depending on whether in the home or work environment, it seems now that insurers are turning these claims away as the outages have become de rigeur.

“Consumers of electricity are now expected to foresee the harm which is likely to be caused and to take action to prevent such harm. Failure to do so would preclude a claim both in terms of the insurance agreement and possibly against Eskom,” Brivik said.

However, he said this had not yet been tested in court.

Samantha Solomons of Minde Shapiro and Smith Attorneys agreed that consumers’ options depend largely on what their insurance policies stated.

However, she pointed out that for those who work, it was not always possible to switch off appliances in the event that there was a planned power outage.

Loadshedding might be suspended, she said.

“The risk is not worthwhile.”

As far as damages claims were concerned, Solomons pointed out that businesses which suffered massive losses could lodge claims against Eskom or the connectivity providers in their municipalities.

A business representative body could even consider a class action against the government, which is ultimately responsible for the supply of electricity, she said.

Shaheid Schrueder of Schrueder Attorneys raised a further matter: “The lack of electricity also causes security concerns with risks of higher burglaries and robberies during load shedding.”

He said insurers could refuse claims on the grounds that consumers failed to prevent damage and unnecessary losses.

However, he said loadshedding had led to a situation in which consumers’ rights to basic services were no longer guaranteed, as in the constitution.

Weekend Argus