Eskom has shrugged off reports of a planned class action lawsuit against its recent bout of load shedding, to the detriment of many a small business in the country who may now seek compensation.
This is according to a report in The Citizen, citing Eskom as saying it cannot be forced to guarantee an uninterrupted supply of power.
Legal firm, De Beer Attorneys announced earlier this week that it is preparing to take legal action against Eskom in respect of the preventable losses suffered by businesses and individuals as a result of load shedding.
The firm said that Eskom as a State Owned Entity (SOE) has a legal obligation to provide electricity to the people of South Africa.
“Legally, if the business in question had a specific contract with Eskom regarding the provision of electricity, then Eskom’s negligent conduct which resulted in the causing of the power supply failure, will form the basis of our claim,” it said.
“If the claim based on delict, then we will again need to prove that Eskom’s conduct was wrongful and/or negligent.
“Here, we can expect that Eskom’s position would no doubt be that load shedding, per se, is neither wrongful for negligent – in so far as it is a rational, responsible response to the electricity crisis, ensuring that SA’s electricity grid will not collapse, which would be an unmitigated disaster.”
However, it could be argued that the electricity crisis itself is something which is of Eskom’s own making – due to its negligence in maintaining the electricity infrastructure, the firm said.
“As such, they should still be held accountable for the losses suffered. Each case would no doubt have to be evaluated on its own merits.”
Can’t sue Eskom
Eskom said in a statement, as documented by The Citizen, that it can legally interrupt the supply of power to prevent a blackout.
“Load shedding is done countrywide as a controlled measure when the national grid is constrained to protect the power system from a total collapse,” it said.
It added that “the financial implications associated with a national blackout far outweigh the economic cost of manual load curtailment or shedding”.
And citing the Electricity Regulations Act, Eskom said “the financial impact to a specific customer alone is therefore not sufficient to justify exclusion of individual customer installations from the emergency load reduction”.
Speaking to CNBC on Thursday, Elaine Bergenthuin, a partner at De Beer Attorneys, said that the firm wasn’t necessarily fighting for money, but wanted action.
“The last thing that we would want is to have an impact on the South African tax payer in terms of this litigation, but ultimately, even if monetary compensation is not the end result that is obtained in this action, ultimately if we are to obtain a better governance and accountability… that would be fantastic.”
She said that the legal firm was however exploring avenues around obtaining monetary compensation. It was also looking at the liability from the power firm’s board.
Bergenthuin said that 300 SMEs had come forward, along with some larger firms – who have suffered damages during load-shedding. She said the firm understands the frustration felt by business, and the impact that load shedding has on the economy as a whole.
“There’s definitely avenues that are worth pursuing in this regard,” she said.
Worse than before
Eskom has previously faced legal claims for damages when it instituted load shedding in 2008 and 2015.
However, the majority of these claims were unsuccessful due to a number of factors – including a reluctance by the courts to hold Eskom liable for damages.
Eskom suspended load shedding on Sunday 24 March following a period of more than 10 days of continuous outages – the worst in history as the power utility introduce stage 4 load shedding for the first time.
Eskom attributed the return of power to a recovery in plant performance and an increase in diesel and water reserves.
Imports from Mozambique’s Cahora Bassa plant also increased to 850MW, with the restoration of feed from one of the two lines after the area was hit by a cyclone.
However, experts have warned that load shedding could last for at least several months as the power provider deals with ageing infrastructure and winter.