Financing house Channel Capital is looking at introducing a tailor-made insurance product to the channel, based on the implications of the Consumer Protection Bill.
The draft law, currently with the National Council of Provinces, introduces "strict liability" into the consumer value chain, and has been tipped to have potentially negative implications for the cost of IT.
Strict liability means every producer, distributor, or supplier can be held liable for any damage caused by product failure, defect or hazard.
Channel Capital MD Ron Keschner says there is great potential for the company to assist its customers in this regard. He has welcomed the new legislation.
"Certainly it won't all be bad news - there should be some positive spin-offs in that training and certification will now have to be taken very seriously by all concerned as the 'last line of defence' will really be the techies that do the installations and support of the equipment," he says.
"We can also probably expect quality control at the vendors to become a major focus, so there are some good things to look forward to among all the concerns."
Possible danger
Keschner says it is, however, "critical" for a channel body to intervene in order to ensure the law is implemented fairly and realistically.
"The danger is having half the channel tied up in court in the event of a claim and the almost certain counter-claim that will result - this could grow into an uncontrollable monster and we have to make sure we work very closely with the authorities to prevent this from happening," he explains.
He says initially there may be confusion around who takes responsibility for what and this may have a negative effect on the industry as a whole.
However, he maintains: "The channel is a resilient bunch, and I am pretty confident things will soon settle back into their groove once we have all worked out exactly what the legislation entails.
"Channel Capital has already started engaging its insurance partners to see how we could assist by putting together channel-friendly insurance products to try and cover all parties from what may arise as a result of the new Bill."
Protective measures
Meanwhile, Fujitsu Siemens Computers has also welcomed the Bill. The company's channel director, Fred Saayman, says it could even profit from the legislation.
"I do believe that the Bill will impact the channel as members of the value chain within the entire channel will want to protect themselves from risk and will thus move away from 'grey' and 'un-researched' products," he explains.
For this reasons, Saayman says the company's concerted investment in research and development should stand it in good stead when the Bill becomes law, as "local assemblers, who do not have the resources to invest in product research and development, (generally) assemble boxes with a mix of products from a wide range of suppliers".
"Resellers will probably be forced into reconsidering their choice of vendor in order to mitigate their exposure to risk. This may positively impact our revenues - as well as those of our tier one competitors," he explains.
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