Case no: CCT 38/2010 High Court Case no: 10654/09 In the matter between:
LAW SOCIETY OF SOUTH AFRICA First Applicant SOUTH AFRICAN ASSOCIATION OF PERSONAL
INJURY LAWYERS Second Applicant
THE QUAD-PARA ASSOCIATION OF SOUTH AFRICA Third Applicant THE NATIONAL COUNCIL FOR PERSONS WITH
PHYSICAL DISABILITIES IN SOUTH AFRICA Fourth Applicant
MONTLE JENNICA WILLEM Fifth Applicant
BRENDA FLANAGAN Sixth Applicant
LISHA GOVENDER Seventh Applicant
JOHN QONDILE NTSHIZA Eighth Applicant
MCEDISI DAKELA Ninth Applicant
JERONICO MERVYN JANSEN Tenth Applicant
DIVAN GERBER Eleventh Applicant
and
THE MINISTER OF TRANSPORT First Respondent THE ROAD ACCIDENT FUND Second Respondent ______________________________________________________________
THE MINISTER’S ANSWER
______________________________________________________________
I, the undersigned,
MARIA CLAUDINA KOORTS
hereby make oath and say that:
1 I am an adult person and the Deputy Director-General: Public Entity Oversight of the Department of Transport in the Government of the Republic of South Africa. I am duly authorised to depose to this affidavit on behalf of the First Respondent.
2 The facts deposed to in this affidavit, are to the best of my knowledge, true and correct. Legal assertions made in this affidavit are made on the advice of the First Respondent's legal representatives, which advice I believe to be correct.
3 I have read the affidavit of Rajesh Ranchod Daya filed in support of the Applicants’ application for leave to appeal. I have also read the affidavit of Jacob Rasetlhake Daniel Modise, which was filed on behalf of the Second Respondent (hereafter also “the RAF”).
4 The First Respondent accepts that the application for leave to appeal raises constitutional issues but contends that the Applicants do not have reasonable prospects of success regarding the constitutional challenges raised by them.
5 The First Respondent opposes the application for leave to appeal. The main reason for the First Respondent’s opposition is that it is not in the interests of justice for the matter to be heard directly by this Court without the benefit of the views of the Supreme Court of Appeal (“the
SCA”). There are 2 considerations which militate against a direct appeal in the present matter:
5.1 First, the SCA has extensive experience and expertise in dealing with the Road Accident Fund Act 15 of 1996 and its predecessors.
The SCA frequently adjudicated in matters arising under the RAF Act and its predecessors since the middle of the previous century.
In the circumstances, this Court will benefit considerably from a judgment by the SCA on the important issues raised by the Applicants.
5.2 Second, it is trite that leave to appeal will not be granted directly to the Constitutional Court in cases where the development of the common law is at stake. In this regard I refer to the following decisions of the Constitutional Court:
5.2.1 Amod v Multilateral Motor Vehicle Accidents Fund 1998 (4) SA 753 (CC) (1998 (10) BCLR 1207) at para [33]:
“[33] When a constitutional matter is one which turns on the direct application of the Constitution and which does not involve the development of the common law, considerations of costs and time may make it desirable that the appeal be brought directly to this Court. But when the constitutional matter involves the development of the common law, the position is different. The Supreme Court of Appeal has jurisdiction to develop the common law in all matters including constitutional matters.
Because of the breadth of its jurisdiction and its
expertise in the common law, its views as to whether the common law should or should not be developed in a 'constitutional matter' are of particular importance. Assuming, as Mr Omar contends, that this Court's jurisdiction to develop the common law in constitutional matters is no different to that of the Supreme Court of Appeal, it is a jurisdiction which ought not ordinarily to be exercised without the matter having first been dealt with by the Supreme Court of Appeal.”
5.2.2 Fourie and Another v Minister of Home Affairs and Another 2003 (5) SA 301 (CC) (2003 (10) BCLR 1092) at para [12]:
“[12] This appeal is likely to raise complex and important questions of the legal conformity of our common law and statutory rules of marriage in the light of our Constitution and its resultant jurisprudence. Marriage and its legal consequences sit at the heart of the common law of persons, family and succession and of the statutory scheme of the Marriage Act. Moreover marriage touches on many other aspects of law, including labour law, insurance and tax. These issues are of importance not only to the applicants and the gay and lesbian community but also to society at large. While considerations of saving costs, and of 'an early and definitive decision of the disputed issues' are in themselves weighty, they should not oust the important need for the common law, read in the light of the applicable statutes, to develop coherently and harmoniously within our constitutional context. The views of the SCA on matters that arise in the appeal are of considerable importance.”
5.3 In the present matter one of the main arguments of the Applicants is that the abolition of the common law claim against the wrongdoer is unconstitutional and invalid. The case accordingly concerns the impact of the Road Accident Fund Amendment Act 19 of 2005 (“the 2005 Amendment Act”) on the common law. If
the views of the SCA are important in respect of the development of the common law, it is axiomatic that their views must be important in respect of the abolition of the common law.
6 The Applicants contend that there is substantial public interest in the early final resolution of the issues involved in the matter (see para 56 of the affidavit) and if leave must first be sought from the SCA then it will not be possible to “unwind” the consequences of the Act with full retrospective effect (see para 57 of the affidavit). The difficulty with this contention is that the unwinding will not be achieved, even if leave to appeal directly to the Constitutional Court is granted. The amendments to the RAF Act which the Applicants attack came into force on 1 August 2008. They have been in force for more than 21 months.
7 It must be kept in mind that the application was launched only seven months after the 2005 Amendment Act came into force, namely on 26 February 2009. Thereafter there was considerable wrangling over months about the contents of the Rule 53 record, with the Applicants filing no less than three Rule 30A notices, alleging that the Rule 53 record was incomplete. Eventually, the Applicants filed their supplementary papers on 21 August 2009 and the Respondents filed their answering papers in January 2010. The matter was eventually heard from 1 March 2010.
8 The Applicants further contend that an “intermediate appeal would be
unduly onerous” to them and further that they are “already experiencing difficulty in financing the proceedings”. It is submitted that this contention should not weigh heavily with this Court. The First Applicant has some 18 000 members and it is common cause that some of these members are paid huge amounts (totaling to some billons of rand) in legal fees each year by the RAF. The first two Applicants have thus far been represented by no less than five counsel. In the circumstances, the plea of poverty should be rejected.
9 I now turn to deal with some of the allegations in the affidavit of Daya. It is not necessary to deal with each of the contentions in the affidavit as the facts have been fully traversed in the High Court proceedings, the record of which runs to over 4000 pages. My failure to deal with a contention or factual allegation contained in the affidavit of Daya must not be construed as an admission of the correctness thereof. Where such contentions or factual allegations are inconsistent with what is stated in the affidavits filed in the High Court, they must be taken to be denied.
AD PARAS 10 and 11
10 The statement that “the effect of the provisions of the Amendment Act is illustrated by Fifth to Eleventh Applicants” is not correct as these Applicants have either not submitted claims to the RAF or their claims have not been assessed by the RAF. There is nothing before the Court
which “illustrates” how the Act impacts on them. The challenge to the Act was brought in the abstract and without reference to the circumstance of any particular Road Accident Fund victim or victims.
AD PARA 18
11 The statement that the victims of road accidents are in a “markedly worse position than victims of work-place accidents” is not correct. Dr Maria Koorts, who deposed to an affidavit on behalf of the First Respondent, made a detailed comparison between the benefits conferred by the Compensation for Occupational Injuries and Diseases Act 130 of 1993 (“COIDA”) and the benefits conferred by the new Road Accident Fund Compensation Scheme. She concluded that the comparison demonstrates that the benefits currently payable under the Amendment Act compare favourably with those payable under COIDA.
Dr Koorts pointed out, for example, that COIDA merely provides for the payment of medical expenses “necessitated by an accident or disease and for a period of 2 years from the date of the accident or the commencement of the disease”. Further medical aid is only payable if, in the opinion of the Director-General, such aid will reduce the disablement from which the employee is suffering. It is accordingly not correct to claim that the Road Accident Fund victims’ right to compensation for medical expenses is substantially lower than that of COIDA claimants. The analysis of Dr Koorts was not challenged by the Applicants in their replying affidavits.
AD PARA 20
12 The claim that meaningful compensation for loss of earning capacity will only cost 1,28c per litre is disputed. The claim was first made in a replying affidavit by actuary Alexander Reginald Munro. It is based on an estimate by actuaries as to the percentage saving which the R160 000.00 cap would achieve. Apart from being an estimate, the actuaries did not factor in the significant saving that the cap will bring about in respect of administrative costs, expert reports and legal fees.
AD PARA 21
13 The contents are not correct. The main cause of the delay was not the conduct of the Respondents. The Applicants were late in each and every respect of the High Court proceedings: their founding papers were delayed and they did not meet the deadline of 180-days set in the Promotion of Administrative Justice Act 2 of 2000 (“PAJA”); their supplementary papers were late and in contravention of the Uniform Rules; their replying papers were late in contravention of the order made by Sapire AJ; and finally, heads of argument were filed late.
AD PARAS 27 AND 52 TO 54 (TARIFFS FOR MEDICAL EXPENSES)
14 The Minister of Health sought to intervene in the High Court proceedings but, as will be noted from the judgment of Fabricius AJ, the application to intervene was dismissed. An affidavit regarding the UPFS tariffs, the treatment and services provided in public hospitals was however admitted into evidence. In that affidavit it is denied that the UPFS tariffs are so low that Road Accident Fund victims cannot obtain treatment at those rates and that certain essential treatment and services are not provided by public hospitals.
15 I should further point out that the NHRPL or the “medical aid” tariffs apply in respect of emergency medical treatment.
AD PARAS 29 TO 32 AND PARAS 47 TO 48 AND PARA 50 (ABOLITION OF THE COMMON LAW CLAIM)
16 The statement that 40% of wrongdoers are insured has never been accepted by First Respondent. The figure derives from a submission made by the South African Insurance Association to Parliament in 2005.
It was estimated at that time that approximately 40% of vehicles in South Africa were insured under the previous compensation system. This, of course, is no proof that 40% of drivers would have insured themselves in the new system if the common law claim was not abolished. Liability insurance would be much more expensive under the new system than it was under the previous one. Evidence was presented on this aspect.
17 The reasons for the abolishment of the common law claim were
explained in the First Respondent’s Heads of Argument. It was stated that “the principal rationale for the abolition of the common law claim by the 2005 Amendment Act is that:
17.1 The compensation payable under the Act remains fault-based.
Road accident victims are entitled to compensation only if and to the extent that their loss was due to someone else’s fault. They are paid compensation under the Act in lieu of the claim they would otherwise have had at common law against the wrongdoer.
17.2 The substitution of a statutory claim for the common law claim is to the advantage of claimants insofar as they now have a debtor with a “deep pocket”. They would otherwise have been at risk of having a good common law claim against a debtor who cannot afford to pay. This is a significant risk. The substitution of the risky common law claim with a statutory claim against a public fund, is a significant advantage.
17.3 The trade-off is in the first place that the compensation payable under the Amendment Act is limited. The limitations are designed to ensure that the basic needs of all are met from public funds but to limit the overall cost of the scheme.
17.4 The second element of the trade-off is that the victim’s common law claim is abolished to afford immunity from liability to drivers
and owners. They are afforded this immunity because they are the funders of the scheme through the fuel levies they pay. If they were not afforded this protection, they would have had to pay both the cost of the scheme and the cost of liability insurance to cover themselves against the risk of claims by the victims of road accidents.
17.5 In short, it is a legitimate state objective to require motorists to fund the compensation payable to the victims of motor vehicle accidents under the Act and in return to give them immunity against claims for damages by those victims.
18 It was then stated, to the above rationale, one must add the following considerations:
18.1 It is not unfair to require high income earners to acquire top-up accident insurance. Many would already have such insurance to cover themselves in respect of other forms of accidents or harm.
The risk posed by high income earners was shared by many millions of poor South Africans who contributed to the Fund through the fuel levy but who could claim no or little compensation for loss of income or support. The insurance afforded to the rich by the system was cheap only because the millions of poor people (who posed little risk to the system) subsidized the rich.
18.2 Liability insurance would always be more expensive than accident insurance and cannot be tailored by the motorist to suit his or her needs. Moreover, as pointed out in the submission by the South African Insurance Association (“SAIA”), if the common law claim was retained, claimants would put in claims far in excess of the limit, which would leave insured motorists exposed to an excess claim from the victim.
18.3 Fault may consist of a moment’s inattention and, in many instances, it would be unfair to punish a wrongdoer with financial ruin.
18.4 It is unfair that the victim without means is able to claim from a wrongdoer with means but the latter cannot claim from the former.
The retention of the common law would increase the cost of doing business in South Africa.
19 A court will not set aside a law which it considers to be ineffective, or because there are other and better ways of dealing with a problem. As long as a law is objectively rational, a court cannot interfere with it simply because it disagrees with it, or considers the power to make law to be exercised inappropriately. There is also a long line of cases which stress that the task of a court is not to second-guess the wisdom of policy decisions made by elected bodies. The Constitutional Court has emphasized that courts are not allowed to make policy choices under the
guise of rationality review.
20 It is clear that the Act passes muster under this test. Injury and death as a result of motor vehicle accidents constitute a particular and very significant socio-economic phenomenon. It is legitimate for the state to devise a special scheme to deal with it. The Act creates such a scheme.
It is legitimate for the scheme specifically to address losses suffered as a result of bodily injury and death caused by motor vehicle accidents without also dealing with losses of other kinds or due to other causes.
Within the context of such a scheme, it is also legitimate for the state to require motorists to fund the scheme on the one hand and to afford them immunity against liability for injury or death arising from the use of their vehicles on the other, especially given the realities pertaining to insurance, as described above. The differentiation made by the abolition of the common law claim is a rational and consequently defensible one.
AD PARA 36
21 I point out that no evidence was presented to substantiate the statement that the UPFS tariffs “are so inadequate that the life expectancy of many victims of serious road accidents drops as a result thereof”.
AD PARA 39
22 The statement that children, students, young persons, the poor and
people suffering from chronic conditions cannot readily insure themselves against loss of earning capacity, was disputed and evidence was presented to the contrary.
AD PARA 49 (CAP ON LOSS OF INCOME CLAIM)
23 The attack on the R 160 000.00 cap is dealt with in the affidavit of Mr Modise. The First Respondent agrees with that response and I will not reiterate same here.
_________________________
MARIA CLAUDINA KOORTS
I certify that the deponent has acknowledged that he knows and understands the contents of this affidavit which was duly signed and affirmed before me at __________________, on this ____ day of ___________ 2010, in terms of the conditions set out in Regulation R.1258 dated 21 July 1972, as amended.
Before me,
_______________________
Commissioner of Oaths
