Business

Law firm wants to sue Eskom directors for load shedding

Staff Writer

 ·6 May 2019

South African law firm, De Beer Attorneys, is preparing a damages claim for individual businesses who have suffered losses during 2019 load shedding.

The firm announced at the beginning of April that it would be taking legal action against the state entity, with over 400 local organisations, enterprises and small businesses joining the suit.

In response, Eskom released a press statement citing the National Code of Practice for Emergency Load Reduction and System Restoration Practices of 2010 as the reason why the parastatal itself cannot be sued for load shedding.

The code was published in 2010 by the South African Bureau of Standards and was subsequently approved as a regulatory standard by the National Energy Regulator of South Africa.

The above notwithstanding, De Beer Attorneys believes that there is still a firm basis for a claim.

“Given recent revelations during the Zondo Commission of Enquiry on State Capture, it seems that several key office bearers at Eskom have been involved in corrupt activities at the parastatal in the past,” it said.

“De Beer Attorneys believe that a legal duty exists on the part of the responsible directors themselves, to recoup at least some of the losses that local businesses have suffered.”

Based upon concessions that the national Government is willing to make, it seems that a number of office bearers at Eskom have engaged in corrupt activities in the past and that this pattern of conduct has resulted in Eskom being unable to meet South Africa’s electricity demand, said Abduraouph Kamaar, senior associate at De Beer Attorneys.

“On this basis, a damages claim for individual businesses that have suffered financial loss as a result of load shedding may still lie against these responsible directors.”

The fact that Eskom is an organ of state obliged (through its board of directors) to conduct its business in the public interest, may persuade a court to recognise a legal duty on the part of the directors not to recklessly cause loss to consumers through their fraudulent conduct, said Kamaar.

“We have received an overwhelming response from local organisations who support this endeavour,” he said.

“They are fed up with corruption and having their livelihoods compromised as a result of malfeasance. The problems at Eskom are far from over and “load shedding” is expected to continue for the next few years.

“South African businesses are dependent upon a stable electricity supply and are entitled to compensation for at least some of the losses they have suffered.

“If not from Eskom, then from the directors themselves whose questionable conduct has resulted in these losses. We urge more businesses and corporates that share these sentiments and have suffered significant financial losses as a result of ‘load shedding’ to come forward and assist us in this action.”

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