South Africa: Load Shedding - Over 400 Organisations, Small Businesses Join Class Action Against Eskom

Eskom's national control centre (file photo).

A law firm believes that its plans to launch a class action against Eskom over load shedding are viable, despite a previous statement from the power utility that there are limited grounds for such a case to be successful.

De Beer Attorneys in April called on businesses and organisations which suffered losses due to power cuts to join a class action suit against Eskom. The damages claim is against Eskom directors over fraudulent, unlawful and reckless acts which had a role in the deterioration of Eskom's generation and resulted in load shedding. Subscribe to Fin24's newsletter here

In March, Eskom implemented Stage 4 load shedding over several days, due to failing power plants. Power cuts were worsened by Cyclone Idai in Mozambique, which affected a power line from the Cahora Bassa dam.

Eskom has stated that based on the National Code of Practice for Emergency Load Reduction and System Restoration Practices of 2010, the power utility cannot be sued for load shedding, Fin24 reported previously.

Eskom is yet to respond to Fin24's queries following the most recent communication from De Beer Attorneys.

"De Beer Attorneys believes that there is still a firm basis for a claim," the law firm said in a statement issued on Monday. The firm says it is relying on revelations in the State capture inquiry which implicated office bearers at the power utility for corrupt activities.

"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.

"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," said Abduraouph Kamaar, senior associate at De Beer Attorneys.

According to De Beers, some of the losses should at least be recovered from the directors themselves.

'Fed up' with corruption

Commenting on the responses from the public about the suit, Kamaar said that a number of local organisations supported the endeavour.

"They are fed up with corruption and having their livelihoods compromised as a result of malfeasance," Kamaar said.

"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."

Kamaar called on more businesses to join the class action suit. So far businesses from various sectors such as agriculture, retail, manufacturing, IT and hospitality have joined the suit.

De Beer Attorneys MD Elaine Bergenthuin has said the firm would require the permission of the businesses to name them publicly.

Source: Fin24

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