Standox October
Ibis

Here is a response from the Competition Commission from the CRA on behalf of our members, as well as thinking about the collision repair industry as a whole and the preservation of this market. 

Collision Repairers Association (CRA) take the opportunity to thank the Commissioner for allowing the right to comment on maintaining and promoting competition in the Automotive Aftermarket Industry. Once again, we note that the aftermarket industry has been incorporated under the same umbrella which can in no way be seen in protocol specific terms to the inherent differences in Mechanical and Body Repair industries. 

Our mandate and jurisdiction cover body and panel repair industry segment although acknowledge the reference to other sectors and applaud the opening of barriers to entry specifically to previously disadvantaged business communities and apply relevancy to unfair practises in contravention of the competition and consumer protection acts. CRA are of the opinion that in the interests of roadworthiness and protection of the safety of the vehicle owner and other road users that the principle of qualified standards are a prerequisite for directed procurement to offer accident damage repair where conformance to certified OEM repair methods is always adhered to.  

CRA welcome the confirmation that focus is directed at the rights of the consumer to ensure that a greater number of firms have an opportunity to undertake accident motor vehicle repairs and ensure the fair allocation of motor-body repairs based on their competitive merits such as service and quality of work. Transformation is priority but the rights of all South Africans, irrespective of race, creed or colour must be accommodated through standards for safety and fair procurement distribution models.  

Insurers must implement specific measures to broaden the allocation of work to independent service providers (ISP), offer consumers their right of choice of approved repairers within their geographic area and refrain from entering into exclusivity arrangements with service providers within a designated geographic area.  

Insurers must ensure fair allocation of work and not appoint an exclusive service provider within a designated geographic area. Insurers must not appoint any service provider for an unreasonably long term and should not continuously renew the appointment of the same service provider.  

Further hereto and closely related are the regulations from the Consumer Protection Act and similarly under control of a tribunal or other similar statutory structure. These however, are where your advocacy extends to ensuring equitable implementation and need emphasis on acknowledgement. 

The purposes of the Act are to promote and advance the social and economic welfare of consumers in South Africa by – 

Establishing a legal framework for the achievement and maintenance of a consumer market that is fair, accessible, efficient, sustainable and responsible for the benefit of participants. 

Reducing and ameliorating any disadvantages experiences in accessing any supply of goods or services by consumers. 

Protecting consumers from, unconscionable, unfair, unreasonable, unjust or otherwise improper trade practises; and deceptive, misleading, unfair or fraudulent conduct. 

Further hereto Section (13) explains that it will not be permissible for a supplier, in our environment, The Insurer, to impose a condition requiring a consumer to enter into an additional agreement (disclaimer) with that supplier or with a designated third party unless the supplier can show that it is to the advantage of the consumer. 

Section 48 deals in detail with unfair, unreasonable or unjust contract terms. This section substantially changes our common law and is a very important section which will play a dominant role. In terms of common law, the right to contract on the basis agreed by the parties is respected and no court is permitted to interfere unless the agreement can in some way be implied as unlawful. This section now gives courts and of course the Consumer Tribunal the right to review the terms of the agreement concluded between the parties. This review extends not only to the terms of the agreement but also to the price!  

This section provides that a supplier is prohibited from entering into an agreement to supply goods or services at a price which is unfair, unreasonable or unjust or on terms which are unfair, unreasonable or unjust. This section also provides that the supplier is not permitted to require a consumer to waive any rights or assume any obligations on terms which are unfair, unreasonable or unjust. This section also provides that terms will be deemed to offend this section if they are excessively one-sided or inequitable.  

On this point we bring consideration to the above that is currently being investigated by the Namibian Commissioner on commercially sensitive information and consequential damage where Insurers are admitting guilt and paying arbitrary settlements. Consideration to our economy should be investigated as these Insurers are managed from with within our borders. 

Definition to the two points made above are in more simple terms: 

“Commercially Sensitive Information” means trade, business or industrial information that has economic value to a firm and its business strategy and that is generally not available to or known by others; 

means injury or harm that does not ensue directly and immediately from the act of a part“Consequential Damage”, but only as a result of a consequence or from some of the results of such act, and that may be compensated by a monetary award; 

In summary and extracted for emphasis we support the enforcement and non-compliancy of the following major protocols; 

Insurers must approve any service providers that meet OEM or vehicle brand standards and specification, to undertake service and maintenance work, motor-body repairs, non-structural repairs and mechanical repairs on vehicles during the warranty period. and beyond as construction and metal compositions do not change with age, skills equipment, access to repair data and training is non-negotiable.  

Insurers may not prohibit approved service providers or approved dealers from carrying out service and maintenance work, motor-body repairs, non-structural repairs and mechanical repairs on vehicles of other brands; Major structural is infinitely specialised and safety must be deemed as direction through qualified and accredited service provider only. 

Insurers must advise consumers, in clear and explicit terms, that they have a right to have the service and maintenance work, motor-body repair, non-structural repairs and mechanical repairs of their vehicles undertaken by any services providers of their choice.  

Insurers must offer access to any approved service providers and apply the principle of broad-based transformation to SMME business with fair and equitable capacity procurement allocation. 

Insurers must offer consumers priority of their choice of approved repairers within their geographic area from which they can select to repair their vehicles. They are also prohibited from appointing an exclusive service provider within a designated geographic area.  

In conclusion the base of our intervention is equally to ensure social responsibility and job preservation to SMME business whom employ a large proportion of demographically aligned citizens and provide comfort to their wellbeing and ability to earn a living wage. We operate in an industry of severe skill shortage and commit to skills training and attraction of young artisans.  

 

By Steve Kessel