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Friday, March 23, 2012

Malaysian Consumer Protection (Amendment) Act 2010 deals with unfair contract terms

Contracts
Remember our series of articles on unfair contract terms? Well, it now seems that the Malaysian Parliament is set to finally come up with a law addressing the issue in the upcoming Consumer Protection (Amendment) Bill 2010.

Preferring the approach of amending an existing statute to enacting a wholly new one, the Bill inserts a new Part into the existing Consumer Protection Act 1999, namely Part IIIA intituled Unfair Contract Terms. This Part contains new sections 24A to 24J all intended to address the issue of when businesses seek, via standard form contracts, to impose on consumers terms excluding or limiting their liability when they arise, as well as other terms thought generally considered unfair. Section 1(3) provides that the Part applies to contracts entered into after the coming into force of the Bill.

Section 24A deals with general interpretation in connection with the Part. The definition of a contract in section 2 of the Contracts Act 1950 is retained and a “standard form contract” is defined as a consumer contract that has been drawn up for general use in a particular industry, whether or not the contract differs from other contracts normally used in that industry. An “unfair term” is defined as a term in a consumer contract which, having regard to all the circumstances, causes a significant imbalance in the rights and obligations of the parties arising under the contract to the detriment of the consumer. Section 24B states that notwithstanding the Contracts Act 1950, the Specific Relief Act 1950 and the Sale of Goods Act 1957 as well as other provisions of the law for the time being in force, the Part shall apply to “all contracts”. This presumably addresses implied terms regarding sale of goods in the Sale of Goods Act 1957, specifically sections 14 to 16 of that Act regarding transfer of title and issues of merchantability and fitness for the purpose for which goods are bought. The section fails to mention the Hire Purchase Act 1967, of which section 7 also deals with implied terms in hire purchase agreements. Also should the Part really extend so broadly so as to include all contracts? Presumably if such is the case, a contract or contract term proscribed by law, such as those in the Schedules to the Housing Development (Control and Licensing) Regulations 1989, or financial or securities contracts, or contracts or bills of consignment or lading, be included as well?

Section 24C and 24D are probably the most important sections in the new Part. The Malaysian Parliament has preferred to split the question of unfair terms into two, dealing with terms that are procedurally unfair (section 24C) and substantially unfair (Section 24D). Section 24C(1) proscribes that a contract term is procedurally unfair when

i. It results in an unjust advantage to the supplier (ie. the business relying on the term in question) and/or;

ii. It results in an unjust disadvantage to the consumer;

iii. On account of the conduct of the supplier; or

iv. On account of the manner or circumstances that the contract is entered into between the supplier and the consumer.

Section 24D(1) holds that a contract term is substantially unfair when;

i. it is in itself harsh;

ii. it is oppressive;

iii. it is unconscionable;

iv. it excludes or restricts liability for negligence;

v. it exludes or restricts liability for breach of express or implied terms of the contract “without adaquate justification”.

The approach of splitting the dealing with such terms into procedurally unfair and substantially unfair is rather unique and this author knows not of any other jurisdiction within the Commonwealth that has chosen this approach. It is also, in this author’s view, rather needless and unneccessary. A substantially unfair contract term is neccessarily procedurally unfair as well. The two are not mutually exclusive. There is also the troubling question of what would about to inadaquate justification for breach of express or implied terms of a contract. When is the justification adaquate and when is it not? Presumably this follows the approach of determining if whether the exclusion of such terms are fair and reasonable or not, but for this to work the statute itself must give an account of what “adaquate justification” amounts to rather then just simply leave the matter for the courts. Such an approach would be in tandem with those used in other jurisdictions, such as the United Kingdom in their Law Commission’s proposed Unfair Contract Terms Bill 2005, specifically clase 14(1) which provides a test on how contract terms are deemed not fair and reasonable. It is also noted that Malaysia has decided that exclusion or limitation of liability for negligence is to be disallowed outright rather than having it hang on whether such an exclusion or limitation is fair and reasonable or as the Bill puts it “without adaquate justification”.

Sections 24C(2) and 24D(2) at least partially follow the approach of Clause 14 of the UK Bill  (specifcally Clause 14(4) )when they list the considerations to be had when determining when a contract term is procedurally or substantially unfair. The considerations are mostly the same between the soon to be Part IIIA of the Consumer Protection Act 1999 of Malaysia, and Clause 14(4) of the Unfair Contract Terms Bill 2005 of the United Kingdom, and again the latter does not contain needless distinction between what is substantively and what is procedurally unfair. The new section also fails to provide an example of a list of terms that can be thought unfair unlike the corresponding Clause in the UK Bill.

Section 24E states that it is for the supplier (ie the business) to prove that the contract term is with adaquate justification. This is the same as Clause 16(1) of the UK Unfair Contract Terms Bill 2005. Section 24F provides that a court or the Tribunal established by the 1999 Act may deal with any issue of any unfair contract term even if none of the parties has raised the matter, again similar to Clause 21 of the UK Bill.

Section 24G(1) enacts that a court or the Tribunal may declare an unfair contract term under sections 24C and 24 D to be void and subsection (2) is not unlike Clause 24 of the UK Unfair Contract Terms Bill which provides that other clauses of the contract affected are to continue in force without the offending term. Section 24H further provides that a term of a contract can still be held void even if it has been partially or wholly executed. This is a novel idea as it provides more certainty as to the position of the parties in the midst of a continuing contract.

Section 24I makes the contravention by “any person” (as defined under subsection (1)) of the Part an offence. The section is silent on how exactly is the Part contravened. First of all, why “any person”? Is it possible for the consumer to commit an offence under the Part? Or is the inclusion of any unfair contract term by a supplier/business to be made an offence? If this is so, it should have been clearly spelt out. There is also a host of other matters that arise by making unfair contract terms an offence, for instance, it could inhibit freedom of contract. The high penalties involved (RM 250,000 for a first offence and RM 500,000 for a subsequent offence, as well as RM 2,000 a day in which the offence continues) could also be pontentially crippling for small businesses. Other jurisdictions have so far not seen the need to make any inclusion of an unfair contract terms an offence and while the merits of such a move are debatable, it is suggested that a comprehensive study on the move be done at first.

Section 24J empowers the Minister to make Regulations in connection with the Part. This section could provide an avenue to remedy two important defects discovered so far, namely the failure to indicate the extent of the application of the Part and the types of contracts involved and secondly, the failure to provide an list of examplary contract terms that might be thought unfair.

The proposed new Part IIIA of the Consumer Protection Act 1999 as will be introduced by the Consumer Protection (Amendment) Act 2010 contains many weaknesses, all of which could and should be addressed by enacting a single comprehensive piece of legislation on unfair contract terms, rather then by simply amending an existing statute. It does not, for example, include unfair notices. Thus while a consumer can now worry less about whether he or she may claim under a defective contract, the same might not be said for a notice, for example, one notice excluding liability for negligence when using a swimming pool or car park, for example, is not covered by the new Part on a plain reading of the Bill, which clearly limits its scope to standard form contracts, and does not mention notices. This is in spite of Domestic Trade and Cosumer Affairs Minister Datuk Seri Sabri Yaakob’s claims to the contrary.

The Bill also makes an unneccesary distinction between procedural and substantive unfair contract terms. It fails to make provision as to what types of contracts exactly are covered by the Part and extending the application to “all” contracts could possibly have unexpected and unfavourable ramifications. It crucially also fails to address the issue of application taking into account where the contract is concluded (ie whether in or outside Malaysia) or what happens when a contract applies foreign law. A test for determining what amounts to “without adaquate justifiaction” is absent, as well as a list of examples of unfair contract terms. What offence created is not clearly defined and the potential effects not carefully studied.

On the other hand, initiative is demonstrated by providing that a term of a cotinuing contract can also be struck down on account of being unfair. On the whole, it is remarked that some form of bulwark against unfair contract terms in consumer contracts is better then nothing but there is room for improvement. It is hoped that those that be can revisit the issue in the future and consider seperate, more comprehensive legislation on the matter instead. It would be interesting, however, to see how the Malaysian courts react to the new legal provisions on unfair contract terms, especially concerning if they would follow the approach of their foreign counterparts in deducing unfair terms, or create their own notions based on the new provisions.

5 July 2010 by  

THE LEGAL IMPLICATIONS OF THE CONSUMER PROTECTION
Consumers Association of Penang

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Law of Contract online book & recorded lectures (charonqc.wordpress.com)

Thursday, March 22, 2012

Dos and don’ts when leaving for a new job


 EVERYONE has heard of Greg Smith. After all, it's not every day that a top executive at Goldman Sachs resigned in such a public and high-profile way. He told the whole world, via an op-ed piece in The New York Times, that he could no longer stomach the company culture which he described “as toxic and destructive as I have ever seen it”.

Hailed as a hero by many, especially on the social media sites, Smith was nevertheless also castigated by commentators who questioned his real motive. “The reason he's been at Goldman Sachs for 12 years is that he liked the name and probably liked the money,” one wrote.

We all learn, from day one, that we should never burn our bridges when we part ways with our employers. After all, we no longer live in an era where we serve only one employer throughout our working life.

Rolling stones do gather a lot of moss these days.

So while employers do understand when we move to greener pastures, they are unlikely to be sympathetic to you if you decide to badmouth them on your way out.

And bosses do talk to other bosses, more so if you work in a niche industry where everyone knows, well, everyone.

A Goldman Sachs sign is seen above their booth on the floor of the New York Stock Exchange, in this January 19, 2011 file photo. A Goldman Sachs executive director published a withering resignation letter in the New York Times, saying the investment bank is a "toxic and destructive" place where managing directors referred to their own clients as "muppets." - REUTERS
 
As much as I salute Greg Smith for his courage to place his resignation letter in the public domain, I think the rest of us mortal souls will prefer more down-to-earth advice on how to quit a job.

I am no expert on this but here is a short list of dos and don'ts which may be useful.

1. Don't bash your boss, or your company, on social media or anywhere else

It is amazing how people on FaceBook share so openly about the goings-on in the office, including all the nasty stuff about the bosses. Hello there! If stupidity is an acceptable reason for you to lose your job, the boss will show you the door straight away. Sometimes, even private conversations in public places, like restaurants, can have ramifications beyond your control.

Someone who intends to hire you may have second thoughts as chances are if you say bad things about your previous boss, you are more likely to say the same about him. A good principle to follow is: Don't say anything about anyone in private what you would not say in public.

2. Don't play poker with your offers

After you get an offer, you may be tempted to check if your boss would make you a counter-offer. The people who play poker with their offer letters are those with huge egos who think that the office cannot run without them.

Although some employers may play along and give you the raise you demand, you can be sure that the relationship will never be the same again.

3. Do keep your options open

It has been said that no one leaves a company but a boss. So, while a situation may arise where you no longer find it easy to work with your immediate boss, always remember that circumstances may change which may make it possible for you to return to the company in the future.

So you may have to eat humble pie if your exit remarks are vicious and harmful to the reputation of the company. I can't imagine Greg Smith getting a job at Goldman Sachs again, unless he buys the company.

4. Do be professional to the last day of employment

All of us have to give notice before quitting. It's not as dramatic as what we see in the movies when you are immediately told to pack up and go. So from the time you give your notice until the official last day, conduct yourself with full professionalism. If there are things to pass on, do so in an orderly manner. Say your goodbyes without being too emotional about it.

5. Do stay away from your old office

I got this advice from a friend many years ago. He said it is natural, when you move into a new job, that you will actually regret having made the move. In a new environment, you suddenly yearn for the old job where you are comfortable with friends.

Many make the mistake of going back to hang out with their former colleagues and this only adds to their frustrations. His advice: Make a conscious effort to keep away from your former colleagues for at least six months. Concentrate on your new job and build up new relationships first. Then hanging out with old friends after that won't be so traumatic.

Deputy executive editor Soo Ewe Jin is glad that a new column, Talking HR, is now available on StarBiz every Tuesday. All of us in the working world will benefit from the good advice given by the professionals. 

CYBER bullying, a worldwide big problem

CYBER bullying has become more widespread among people today, especially with the emergence of social networking sites like Facebook and Twitter (“Vengeance via the Net” – The Star, March 21).

Social networking sites offer people the chance to jot down the happenings in their daily lives, express opinions and share ideas, besides venting their frustrations.



However, cyber bullies take it a step too far when posting nasty and derogatory comments about others. The reason for their action is that they are prejudiced towards others.

Their prejudice stems from the fact that they think that the other person is not sociable and less outspoken. Due to jealousy, cyber bullies also target those who are popular.

Their methods of bullying include stealing other’s pictures or writing unpleasant remarks in order to attract attention.

Some work in groups so that they seem powerful, and the victims have no chance to turn the tables on them.

Cyber bullies will even use electronic means to superimpose the targeted victim’s face on a nude photo to destroy that person’s reputation.

The main motive is to hurt the other party, and cyber bullies are aware of their actions.

Cyber bullies are actually craving for attention. They lack confidence and they boost their pride and ego by destroying other people’s image. They enjoy the thrill of publicly shaming others in the mistaken idea that it will make them look good.

In actual fact, they are cowards hiding behind technology and using it as a weapon to humiliate others. They do not realise that their actions can have serious consequences.

The person they hurt may be harmed emotionally and psychologically. The victims suffer in silence because they do not know where to turn to for help. It will affect their daily routine.

It is advisable that victims of cyber bullying do not retaliate but instead inform their parents or the authorities.

Cyber bullies may say they are doing it for fun, but their actions will backfire should they be caught.

They are actually the ones who are in need of help. They may even take their bullying ways to the extreme, such as physical violence, if they are not stopped.
Counselling is the proper way to handle cyber bullies. Social networking sites are good outlets to voice opinions but one should not abuse the privilege. Use it right and one can eventually lead a fulfilling life.

By YANG CHIEN FEI, -Use social media right
Ampang, Selangor.

Wednesday, March 21, 2012

Are antibiotics an end to modern medicine?

A warning by the head of WHO that antibiotic resistance is so serious that it may lead to an end to modern medicine should alert health authorities to contain this most serious health crisis.

A schematic representation of how antibiotic r...
A schematic representation of how antibiotic resistance is enhanced by natural selection (Photo credit: Wikipedia)
LAST week, the head of the World Health Organisation (WHO) sounded a large alarm bell on how antibiotics may in future not work anymore, due to resistance of bacteria to the medicines.

Antibiotic resistance has been a growing problem for some time now. From time to time, there will be news reports of the outbreak of diseases, old and new, that cannot be treated because the bacteria have grown more powerful than the antibiotics used against them.

And experts have been warning about how the wrong use of antibiotics has given the bacteria the opportunity to develop resistance, enabling them to become immune to the medicines.

What is needed, of course, is a multi-prong strategy to prevent the abuse and wrongful use of antibiotics. Drug companies should not over-market their products. Doctors should not over-prescribe. And antibiotics should not be used on animals that are not sick but to fatten them and thus enable higher profits.

Now, the Director-General of the WHO has given a big warning that the growing threat of resistance may mean an end to modern medicine, and the entry of the post-antibiotic era.

Speaking at a meeting of infectious disease experts in Copenhagen last week, Dr Margaret Chan said there was a global crisis in antibiotics caused by rapidly evolving resistance among microbes responsible for common infections that threaten to turn them into untreatable diseases.

Every antibiotic ever developed was at risk of becoming useless.

“A post-antibiotic era means, in effect, an end to modern medicine as we know it. Things as common as strep throat or a child’s scratched knee could once again kill. For patients infected with some drug resistant pathogens, mortality has increased by around 50%,” she said.

“Some sophisticated interventions, like hip replacement, organ transplants, cancer chemotherapy and care of pre-term infants, would become far more difficult or even too dangerous to undertake.”

Dr Chan called for action to restrict the use of antibiotics in food production. “Worldwide, the fact that greater quantities of antibiotics are used in healthy animals than in unhealthy humans, is a cause for great concern,” she said.

She called for measures — doctors prescribing antibiotics appropriately, patients following their treatments — and restrictions on the use of antibiotics in animals.

These actions have, in fact, been suggested for many years, including by the health group REACT, based in Sweden, by health networks such as Health Action International, and locally, by the Consumers’ Association of Penang.

The WHO itself has the scope to do much more in alerting health authorities and in building the capacity, especially of developing countries, to act.

There are forms of TB that have become untreatable because of multi-drug resistance. The TB pathogen has become immune to many antibiotics. This has resulted in a resurgence of the deadly disease. The story is the same for many other pathogens causing other diseases.

As Global Trends reported in June 2011, a worrying development is the discovery of a gene, known as NDM-1, that has the ability to alter bacteria and make them highly resistant to all known drugs, including the most potent antibiotics.

In 2010, there were reports of many such cases in India and Pakistan and in European countries. At the time, only two types of bacteria were found to be hosting the NDM-1 gene – E coli and Klebsiella pneumonia.

But it was then feared that the gene would transfer to other bacteria as well, since it was found to easily jump from one type of bacteria to another. If this happened, antibiotic resistance would spread rapidly, making it difficult to treat many diseases.

These concerns have been proven to be justified. In May 2011, the Times of India published an article based on interviews with British scientists from Cardiff University who had first reported on NDM-1’s existence.

The scientists found that the NDM-1 gene has been jumping among various species of bacteria at “superfast speed” and that it “has a special quality to jump between species without much of a problem”.

While the gene was found only in E coli when it was initially detected in 2006, now the scientists have found NDM-1 in more than 20 different species of bacteria. NDM-1 can move at an unprecedented speed, making more and more species of bacteria drug-resistant.

Since there are very few new antibiotics in the pipeline, when the resistance grows among the whole range of bacteria to the existing drugs, human beings will be more and more at the mercy of the increasingly deadly bacteria.

In May 2011, there was an outbreak of a deadly disease caused by a new strain of the E coli bacteria that killed more than 20 people and affected another 2,000 in Germany.

They were affected by a new strain of the already rare 0104 type of E coli. There are other common types of E coli which normally cause only a mild ailment. The WHO said the variant had “never been seen in an outbreak situation before”.

Although the “normal” E coli usually produces mild sickness in the stomach, the new strain of E coli 0104 causes bloody diarrhoea and severe stomach cramps, while in some of the more serious cases so far, it also causes haemolytic-uraemic syndrome (HUS), which damages blood cells and the kidneys.

A major problem is that the bacterium is resistant to antibiotics. Eradication of these kinds of bacteria is impractical partly because they are able to evolve so rapidly, according to medical experts.

Now that the WHO chief has sounded the alarm bell, health authorities should redouble their efforts to contain the crisis. An “end to modern medicine” and a “post-antibiotic era” are predictions too horrible to imagine.

By  GLOBAL TRENDS By MARTIN KHOR

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