local bread distributor said he feels “vindicated” by a Constitutional Court the ruling on Thursday which upheld an appeal for bread distributors who suffered financial losses in the Western Cape to bring a class action against three major bread producers. In 2007, the Competition Commission found that in the Western Cape, three companies were guilty of being part of a cartel that fixed the price of bread for 12 years. Local businessman Imraahn Mukaddam first blew the whistle when he discovered this in 2006. Speaking to Breakfast Beat on Friday, Mukaddam said the outcome was “victory for justice”. “All the actions in terms of class action have been removed in law and all the processes and procedures are now in place. This means it is now easy for us to collectively litigate and get a class representative together and apply for certification. This would allow us to proceed with a class action to pursue justice on behalf of a huge group of people.” The bread producers implicated in the cartel were Pioneer Foods, Tiger Consumer Brands and Premier Foods Limited, found guilty of anti-competitive behaviour. A number of bread distributors in the province approached the high court last year for permission to bring a class action against the companies, which the high court had refused. He then appealed to the Supreme Court of Appeal, which was also unsuccessful. In a final bid for legal discourse, Mukaddam went to the Constitutional Court. The Constitutional Court granted him leave to supplement his papers within two months of the order, setting out his claim against the three producers. “The next step would be to mobilise all the bread distributors to join the class action. I was not the only distributor affected by cartel action. There were a number of others that had to close their doors. There are probably only 10% of bread distributors left in the market as a result of the cartel.” Mukaddam said the class action decision is “precedent setting” as it is a new law for this legal dimension in SA. “These are all new laws… all new territories. The bread price fixing class action, both on the part of consumers which is pending as well as the part of distributors will set the parameters by which other cases would follow.” He said rules have now been written and it is now for authorities to follow those rules and justifying the claim in court. “The judgement can then be made in favour of litigants in excess of 15 to 20 people.” Mukaddam said this addition of class action to the legal sphere will benefit the consumer greatly. Any consumer rights issue can make use of the class action, this means that any consumer rights that is being violated whether it be from a car manufacturer or tyre manufacturer, we can take that issue on collectively on behalf of consumers.” He added that companies would now have to tow the line because class action would allow consumer to regain some power. “We can now take them on without the risk of costs going against us. The benefit of class action means that you can take on any big company, collectively without the risk of a cost order going against you.” Mukaddam said the biggest deterrent to justice in South Africa has always been cost orders going against the complainants. Meanwhile, the Legal Resource Centre (LRC) has welcomed the outcome of the Constitutional Court ruling. The centre’s regional director Sarah Sephton added that Mukaddam still has to go to the high court in the Western Cape and show that all the requirements for a class action are present. That would be appropriate for him to bring an opt-in class action on behalf of bread distributors in the province. “He still has a very long way to go, but for class actions in general it is very welcome because it helps clarify some of the issues around class action. If we want to proceed with class action next month, we know that we can proceed with an opt-in class action.” VOC (Aqeelah Bawa) READ MORE...
Posted on: Fri, 28 Jun 2013 20:57:17 +0000
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