THE Constitutional Court on Thursday paved the way for bread distributors in the Western Cape to bring a class action against three bread producers after suffering financial losses as a result of cartel activity in 2006.
The court upheld an appeal by Imraan Mukaddam, who had sought to institute an application in the high court for certification so that he and other bread distributors could bring a class action against Pioneer Foods, Tiger Consumer Brands and Premier Foods Limited.
The court ruled that should Mr Mukaddam pursue certification in the high court, he was granted leave to supplement his papers within two months of this order setting out his claim against the three producers.
The Legal Resources Centre welcomed the ruling and said it was a significant judgment as there were now different ways of approaching the courts. "Class actions are now recognised as one of the many mechanisms for the indigent and the marginalised to be able to seek legal recourse," said Sayi Nindi, an attorney at the centre.
The three companies had been implicated in a cartel which was found guilty of anticompetitive behaviour. Last year, Mr Mukaddam and other bread distributors in the Western Cape approached the high court for permission to bring a class action against the three companies.
The high court refused to allow Mr Mukaddam to bring a class action. His appeal to the Supreme Court of Appeal was also unsuccessful. He then approached the Constitutional Court.
In a majority judgment written by Justice Chris Jafta, he court found that at the time the high court considered the request for a class action, the standard applicable to such requests had not been determined and the uniform rules of the court did not provide for class actions.
"The high court was asked to negotiate uncharted waters without any guidelines. It is therefore understandable that the court ended up applying a standard other than the interests of justice. As a result its decision was based on an incorrect test," Justice Jafta said.
Justice Jafta said the Supreme Court of Appeal has since pronounced that class actions should not be limited to constitutional claims. He said courts should embrace class actions as one of the tools available to litigants for placing disputes before them.