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Special report podcast: Charles Abrahams – Abrahams, Kiewitz Attorneys (part I)

Inside the class action suit against bread price-fixers.

LINDO XULU: It’s Tuesday November 30 and I’m in conversation with Charles Abrahams from Abrahams, Kiewitz Attorneys. Afternoon Mr. Abrahams.

CHARLES ABRAHAMS: Good afternoon.

LINDO XULU: Afternoon, now, you are the attorney for the grouping that’s taken, or at least attempting to take a class action suit against the bread producers, is that correct?

CHARLES ABRAHAMS: That is indeed correct.

LINDO XULU: Just if you don’t mind, can you tell us how you became involved in the case?

CHARLES ABRAHAMS: Well, that’s a very interesting question. Mr. Imraan Mukaddam, who was one of the initial whistleblowers in the bread case, was referred to me in connection with a completely unrelated matter and as a result of that referral, one thing led to another and we eventually took on his case. Subsequent to that I was also approached by a number of the other organisations and that is in the consumer action i.e. a children’s organisation called The Children’s Resources Centre, then Black Sash, COSATU and the National Consumer Forum. On whose behalf we instituted the action, which is now known as the Consumer Action or the Consumer Application. In the case of Mr. Imraan Mukaddam and one or two others that application or case is known as the Distributors Action.

LINDO XULU: You can correct me if I’m wrong but you were also involved with the Kulumani support case, is that correct?

CHARLES ABRAHAMS: Indeed, I’m the attorney of record for the Kulumani support group, the organisation whose members have taken a number of multi-national corporations to task in the United States court. That matter has been running for the last nine years and we’re still awaiting a judgment in that one.

LINDO XULU: Okay, fantastic, let’s just move on to what happened last week, lots of media basically commented and there was a lot of media attention around the case but in your words, why did you go to court last week?

CHARLES ABRAHAMS: Yes, what happened last week was an application or two applications that were filed, one of behalf of the consumers and the other on behalf of the distributors, asking the court to authorise the applicants. In the case of the consumers and let me confine myself to the consumers, authorising The Children’s Resources Centre, Black Sash, COSATU, The National Consumer Forum and five individuals to act as class representatives on behalf of all the affected consumers in the Western Cape and those affected nationally, to act as class representatives on their behalf.

LINDO XULU: Let’s just pause for sec, you’re basically saying in the Western Cape, why specifically in the Western Cape?

CHARLES ABRAHAMS: Because we need to understand that when the Competition Commission investigated its complaint, it invested its complaint in a two-fold manner. The one was primarily, sorry, principally in the Western Cape that became known as the Western Cape Complaint and the National Complaint became known as the complaint outside of the boundaries of the Western Cape. So that means to say in any other province of South Africa, other than the Western Cape that became known as the National Complaint. It’s not the entire national…the country but in very specific geographical locations where the National Complaint was located. When we initiated the applications, it was primarily for the Western Cape Complaint but at the same time, secondarily also keeping the National Complaint alive.

LINDO XULU: And if you…I spoke to your opposing counsel and they suggested to me that the matter was not urgent because as far as they are concerned, you could’ve given Tiger Brands and a number of the three other companies a summons without seeking the pre-trial class action status. Is that true?

CHARLES ABRAHAMS: Well, we differ from them in that regard in that at present we don’t have any class action legislation or class action rules or procedure that would guide and regulate the conduct of how to bring class action matters in the country, it’s all new. However, what we do have is, in 1998, the South African Law Commission made certain recommendations to parliament suggesting that if there’s going to be any class action legislation in the country, then one of the recommendations should be that whoever wants to institute an action on behalf of a class must first approach a court and ask for certification. If the certification is granted by that court, only then would you then be entitled to institute litigation against the other party. Similarly, in early 2002 there was a case in the Eastern Cape called the Inxusa Case [? 5:58], which was brought by the Legal Resources Centre. There, also, the precedent was that they filed, similarly brought the action or applied to court for class certification. The certification was granted in order to allow them to act on behalf of the class. So, all indications to our mind seemed to suggest that the appropriate route to follow was first the certification and then only the institution of the action. It’s based on that that we then proceeded to court to ask for a certification. The further urgency of the matter was that the summons against or any action against Tiger prescribed on Friday November 26. So, not only were we faced with having to issue and serve summons on Tiger by Friday but we also had to bring the certification prior to that date so that at least we could get a provisional order of standing and then issue the summons, in the name of the class, prior to Friday or on Friday and then also serve it on Friday. That was the reason why the matters were brought on an urgent basis.

LINDO XULU: Essentially what you are saying is that Friday was the deadline for any party wishing to serve summons to Tiger Brands and that’s the reason it was urgent, am I correct on that?

CHARLES ABRAHAMS: Yes, that’s right.

LINDO XULU: Why didn’t you institute proceedings prior to Friday?

CHARLES ABRAHAMS: Well, there were a number of other logistical aspects that we needed to complete prior to that. That was all ventilated in court, amongst others, we felt that there was a need not only to institute proceedings against Tiger alone but also against Premier and Pioneer Foods. As you know, the settlement around Pioneer was only recently resolved and we have to wait for a certificate from the Competition Tribunal in that regard.

LINDO XULU: Okay. Now, another issue from the opposing counsel is that, essentially, they told me that before you could institute a class action lawsuit, you should’ve gone to the Competition Tribunal to file for civil damages. Did you do that?

CHARLES ABRAHAMS: No that is not correct if that is their understanding. The Competition Tribunal basically issues a certificate in terms of Section 65 of the Competition Act. Once you have the certificate from the Competition Tribunal that then authorises you to commence litigation in any civil court in the country. You can only institute proceedings, civil proceedings upon receipt of that certificate pursuant to Section 65. However, an issue has arisen with Premier, as you may recall, Premier are paying [unclear 1:49] fees from the commission and so Premier never appeared before the Tribunal. The Tribunal obviously never issued a certificate against Premier. However that does not mean that a leniency applicant cannot be sued for civil damages. At this particular point in time, we are liaising with the commission in order to have the leniency applicants being referred to the Tribunal so that we would then be making the necessary representations for a certificate to be issued against the leniency applicant, being Premier.

LINDO XULU: Now, last week, again as I say, essentially what Acting Judge Francois van Zyl said, is they dismissed your case and they did so without costs. Tell us how did you manage to get that because as I understand it, in the distributors case, their case was dismissed with costs?

CHARLES ABRAHAMS: I think at this stage it would be premature to speculate as to why the one case was dismissed without cost and the other one with cost. We are currently waiting for the reasons for his judgment and based on that we will then be able to give our rationale and our views on his decision. It may very well be that the consumer application, being an application that was brought by a civil society organisation that the court felt that since this is a matter that may potentially be in the public interest that it was not good in the circumstances to visit the applicants with cost. The court may very well have adopted a different view in the case of the distributors but again, as I…

LINDO XULU: Speculation…

CHARLES ABRAHAMS: One can only confirm that once we have looked at the reasons.

LINDO XULU: And have you been given a firm date on when you might receive the written judgment?

CHARLES ABRAHAMS: No, we’re still waiting for that.

LINDO XULU: You’re still waiting, okay. Another thing that I wanted to ask is one of the arguments put forward in the court case was that Black Sash and the National Consumer Forum and the Children’s Resources Centre, as well as COSATU in the Western Cape would basically seek the court’s stamp of approval to act on behalf of all bread consumers in the Western Cape and of course, secondarily, nationally.

CHARLES ABRAHAMS: Yes.

LINDO XULU: What mandate do all these organisations have to act on behalf of all bread consumers?

CHARLES ABRAHAMS: No, well that’s the nature of, that’s the very essence of bringing a class suit because you’re basically approaching the court and you’re asking the court to grant us that authority. If the court has granted to you the authority to act on behalf of the class, then the consumers will then have a right to opt out of that class depending on how it is structured. But it is the courts that essentially grant the initial authority, with the consumers ultimately having the right to what is called “opt in” to the class or “opt out” of the class.

LINDO XULU: And what was also quite interesting is that as the judge remarked, he too is a bread consumer, so perhaps there could have been a potential conflict of interests given that he’s a bread consumer and he’s been asked to judge upon the case.

CHARLES ABRAHAMS: He always has a discretion to opt out [laughing].

LINDO XULU: [Laughing] I see, just moving into some of the matters at hand, what I need to understand here is that given that the charges have been dismissed, you’ve still maintained that the action will proceed, is that proceeding on the grounds that you will be presenting the constituencies of the various bodies, meaning that COSATU will represent its own members, Black Sash will represent its own members etcetera, etcetera. On what grounds is it proceeding?

CHARLES ABRAHAMS: No, the proceedings last week was an application or were application proceedings. That is different from the institution of the actual action. We have already issued summons, which is an action against Tiger. Just to clarify that the proceedings last week was purely around the standing of the organisations but it doesn’t mean that the action cannot be proceeded with and that’s exactly what we have done. We have issued summons against Tiger on Friday and in due course we will be issuing summons against Pioneer and Premier as well.

LINDO XULU: What does it mean to issue summons? Are you then asking them to appear at court? What does that mean?

CHARLES ABRAHAMS: The issuing of the summons means that it’s a formal institution of legal proceedings where these organisations and individuals on behalf of the class, formally claim damages on behalf of the class against these companies. That has already commenced by virtue of issuing of the summons against Tiger Consumer Brands.

LINDO XULU: And there was no figure quoted in the media and having spoken to a member of the Black Sash, they said they were consulting with you around this issue. Have you guys arrived at a number? What damages are you guys looking at?

CHARLES ABRAHAMS: Well, collectively we are still obviously busy. Individually, in terms of the summons that we have issued against Tiger, a provisional figure and again, I want to stress, a provisional figure of, I don’t have the summons with me but it’s in the region of R460m. Again, I’ve got to stress that is just a provisional figure at this particular point in time.

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