Utility services, such as electricity, gas, and internet, are subject to consumer protection laws in New Zealand. These laws ensure that consumers receive services that meet certain standards and provide remedies if those standards are not met. The primary legislation governing these protections is the Consumer Guarantees Act 1993 (CGA) and the Fair Trading Act 1986 (FTA).
Consumer Guarantees Act 1993 (CGA) and Utility Services
The Consumer Guarantees Act 1993 (CGA) is an Act that provides guarantees for goods and services supplied to consumers. It applies to services provided by utility companies to consumers [Source: Consumer Guarantees Act 1993, s 2]. Under the CGA, consumers have certain rights, and providers have corresponding obligations regarding the quality and performance of their services.
Guarantees Relating to Services
The most relevant guarantees for utility services include:
- Guarantee as to Reasonable Care and Skill: Services must be carried out with
reasonable care and skill[Source: Consumer Guarantees Act 1993, s 28]. This means the utility provider must act with the competence and diligence expected of a skilled operator in their industry when providing the service. - Guarantee as to Fitness for Particular Purpose: If a consumer makes it known to the provider that the service is required for a particular purpose, and the provider represents that the service is fit for that purpose, there is a guarantee that the service will be reasonably fit for that purpose [Source: Consumer Guarantees Act 1993, s 29].
- Guarantee as to Time of Completion: Where the time for completion of the service is not fixed by contract, there is a guarantee that the service will be completed within a reasonable time [Source: Consumer Guarantees Act 1993, s 30].
Application to Power Surges and Utility Outages
A power surge that causes damage, or an outage, may constitute a failure of the guarantee as to reasonable care and skill if it results from the utility provider's lack of reasonable care and skill [Source: Consumer Guarantees Act 1993, s 28]. Examples of such a failure could include inadequate maintenance of infrastructure, faulty equipment under the provider's responsibility, or unreasonably slow response to known issues.
However, the CGA does not cover every outage or surge. A utility provider is generally not liable for failures to comply with a guarantee if the failure is due to a cause independent of human control, such as a natural disaster, or an act, default, or omission of another person (not being an agent or employee of the supplier) [Source: Consumer Guarantees Act 1993, s 40]. In these cases, the provider is only in breach if their response or preventative measures in the face of such events fell short of reasonable care and skill [Source: Consumer Guarantees Act 1993, s 28].
Remedies for Failure of Services
If a service fails to comply with a guarantee under the CGA, consumers may be entitled to remedies:
- Minor Failures: If the failure is not of a
substantial character(a significant failure, defined below), the utility provider must remedy the failure within a reasonable time [Source: Consumer Guarantees Act 1993, s 32(a)]. If they do not, the consumer can have the failure remedied by someone else and recover the reasonable costs from the provider, or cancel the service contract [Source: Consumer Guarantees Act 1993, s 32(a)]. - Substantial Failures: If the failure is of a
substantial character, the consumer has more extensive options. They may cancel the contract for the service, or obtain damages for any reduction in the value of the service [Source: Consumer Guarantees Act 1993, s 32(b), s 32(c)]. - Consequential Loss: Regardless of whether the failure is minor or substantial, consumers may also claim for
consequential loss, which is damage or loss that arises as a direct result of the failure to comply with a guarantee, provided it was reasonably foreseeable [Source: Consumer Guarantees Act 1993, s 32(d)]. Consequential loss could include damage to electrical appliances caused by a power surge, or spoiled food resulting from a prolonged outage, if the surge or outage was due to the provider's failure to exercise reasonable care and skill.
A failure is of a substantial character if, for example, a reasonable consumer would not have acquired the service if they had known the nature and extent of the failure, or the service is unfit for its common purpose and cannot easily be remedied to make it fit, or it is of significant consequence [Source: Consumer Guarantees Act 1993, s 32(2)].
Fair Trading Act 1986 (FTA) and Utility Services
The Fair Trading Act 1986 (FTA) is an Act that prohibits misleading and deceptive conduct and unfair practices in trade. This Act applies to utility providers just like any other business.
- Misleading and Deceptive Conduct: The FTA prohibits businesses from engaging in conduct that is misleading or deceptive, or is likely to mislead or deceive [Source: Fair Trading Act 1986, s 9].
- False Representations: The Act also specifically prohibits false or misleading representations concerning the nature, characteristics, or suitability of services [Source: Fair Trading Act 1986, s 13(a)].
This means that if a utility provider makes misleading claims about the reliability of its service, the reasons for a power surge or outage, or its responsibilities in such situations, this could be a breach of the Fair Trading Act [Source: Fair Trading Act 1986, s 9, s 13]. While the FTA does not directly address service quality in the same way the CGA does, it ensures that consumers are not misled when choosing or interacting with utility providers.
Contractual Terms and Consumer Rights
It is important to note that utility providers cannot contract out of their obligations under the CGA when supplying services to consumers [Source: Consumer Guarantees Act 1993, s 43]. Any contractual term attempting to override these statutory guarantees for consumers would generally be unenforceable.
When to Seek Independent Legal Advice
Determining whether a utility provider has failed to meet its obligations under the Consumer Guarantees Act 1993 or the Fair Trading Act 1986, and assessing appropriate remedies, often involves complex legal analysis of specific facts and circumstances. It is recommended that individuals affected by power surges or utility outages consult with a legal professional for advice tailored to their specific situation. Further assistance can be obtained from Community Law Centres for free legal guidance, or by contacting consumer protection agencies.
Key Resources
- Consumer Protection: https://www.consumerprotection.govt.nz/
- Ministry of Business, Innovation & Employment (MBIE): https://www.mbie.govt.nz/
- Utilities Disputes: https://www.utilitiesdisputes.co.nz/
- New Zealand Legislation: https://www.legislation.govt.nz/
- Community Law Centres Aotearoa: https://communitylaw.org.nz/