EMILE MYBURGH: Decolonise the law for the confusing, digitally complicated 21st century

I won’t blame you if you cringed on reading the word “decolonising” in the headline on this article. It has — incorrectly in my opinion — come to be understood to mean replacing everything from the developed world with an equivalent (or not even an equivalent) from the developing world.

Yet in the legal realm, decolonisation should mean recognising that legal principles, many stemming from the colonial era, that might in the past have served us well need to be re-evaluated in a digital world, and the protection that the law gives powerful corporations needs to be urgently reassessed.

In this sense our apex courts — the Supreme Court of Appeal (SCA) and the Constitutional Court — have let us down by stubbornly sticking to outdated legal principles that are no longer appropriate in the digital era we live in. The Constitutional Court fails us by refusing to hear matters that address how the rich and powerful expose the ordinary person to increased risk in this new world and then hide behind antiquated legal principles to avoid liability for the danger they expose us to. 

Recent legislation has made it clear that parliament is acutely aware of the increased risks we face when dealing in an ever more complicated digital world with businesses that have infinitely more resources then us and are protected by colonial-era legal principles. The Consumer Protection Act, the National Credit Act and the new Companies Act are at pains to level the playing fields a little more in favour of the vast majority of the public, who are not as sophisticated as the businesses they deal with. Refreshingly, the provincial divisions of our high court seem to be more in tune with everyday realities and risks faced by the ordinary human being than the SCA or Constitutional Court. 

The most recent example of the SCA’s tone deafness was the appeal of “Africa’s largest law firm”, Edward Nathan Sonnenberg (ENS) v Judith Hawarden.  I wrote about this case in January last year just after the high court in Johannesburg awarded victory to Hawarden (“Beware the danger of your business emails being compromised”). She had been a victim of business email compromise fraud that led her to pay R5.5m into a fraudster’s bank account rather than into ENS’s bank account during a property transaction.

The high court held that ENS had a duty to warn her of the risks of the business email being compromised, and that it failed to do so. The court held that the firm’s attempts at mitigating the risk for Hawarden were insufficient and ordered ENS to pay her damages. ENS appealed to the SCA, where it prevailed. Hawarden is now appealing to the Constitutional Court. 

I have several problems with the SCA’s decision. Hawarden’s case dealt with modern risks that were brought about by modern technology. And while modern technology has undoubtedly made life easier for all of us, it has also brought risks for which most of us are not prepared. For the SCA to stretch legal principles that were developed in an era before email, EFTs and social media without engaging with the risks these brought about is a major disappointment. 

The SCA decision is a mere 12 pages long. If I had to treat the decision as an answer to an exam question during my long-distant past as a lecturer at Stellenbosch University, the honourable judges would have failed. The SCA justices didn’t deal with the question posed to them, did not deal with the risks of modern technology to ordinary people such as Hawarden — or you reading this article — hardly dealt with a large chunk of the specific facts of the matter nor the reasoning of the Johannesburg high court, and resurrected legal principles that simply cannot apply in our modern era any more.

This was especially disappointing considering that both the legislature and the high courts are acutely aware that the public should have increased protection against economically more powerful businesses. The SCA put a lot of weight on the “trite” legal principle that “everyone must bear their own loss”. Sure, but not when one is thrust into a confusing digitally complicated world, where ordinary people’s ignorance is easily exploited by fraudsters and it is clearly within the realm of large businesses such as ENS and banks to protect us from those risks.

The SCA must wake up to those risks. Having failed to grasp the golden opportunity to do so in the Hawarden matter, one can now only hope that the Constitutional Court will do so.   

Another institution that relies excessively on the “everyone must bear their own loss” principle is the banking ombud. The ombud office’s steadfast refusal to come to ordinary consumers’ aid when their accounts have been hacked is a disgrace. I was in my bank a while back and overheard an elderly lady in a wheelchair reporting that her account had been hacked. The bank immediately blamed her for her loss, accusing her — without a shred of proof — of giving her PIN and login details to the fraudster. She denied having done so.

That’s the kind of case where the ombud routinely sides with the banks. But how can they expect elderly people to be aware of the risks associated with internet banking? Often even seemingly sophisticated people fall victim. But it will take only one instance of the banking ombud or a court holding a bank liable for such a loss for things to change.   

Banks and large corporations have the technology to stop fraud and prevent losses. But why would a bank or ENS worry about the losses we suffer as a result of the technology they pressure us to use, where they are acutely aware of the risks we face, when they have the SCA to back them up?  The rule that “everyone must bear their own loss” might have been considered legally sound in the apartheid era, but we are now living in a constitutional democracy with laws that are supposed to protect vulnerable people (such as the elderly lady in the bank or Hawarden).

Such antiquated rules and legal thinking should not form part of modern jurisprudence. 

• Myburgh is an attorney practising in Johannesburg and São Paulo.