Suing the Road Accident Fund
The recent case of Lategan versus Jansen van Vuuren; Intercape Ferreira Main Liner and others ZAECDHC 2016 September, involved a straightforward enough matter: Is a passenger in a bus, injured in a motor accident, entitled to sue the person who is alleged to have caused his injury?
Why has this matter arisen only now? After all, motor vehicles have been around for over a century and there have been accidents from the beginning. The answer is simple: After the Motor Vehicle Insurance Act 29 of 1942 was passed, persons injured in motor accidents sought compensation from the fund established in terms of the legislation.
The current legislation is the Road Accident Fund (RAF) Act. One would thus have expected that the injured passenger would seek compensation from the RAF. The injured passenger in this case was also an employee; the co-driver of the bus. He would also be entitled to workmen’s compensation.
If he is entitled to compensation, why sue? The answer is not given in the court case, but it is probably because the compensation is becoming increasingly limited in terms of the statutory schemes. As this becomes clearer, other avenues for claiming compensation will be sought such as the common law of delict.
The accident took place more than six years ago, in April 2010. The bus collided with two horses allegedly belonging to the defendant, Jansen van Vuuren. Lategan was sitting next to the driver when the accident occurred.
It has been accepted for a long time that an accident involving a collision with an animal constitutes a motor vehicle accident for purposes of the RAF Act. The defendant argued that, even if it is held he was negligent, the driver was also negligent and thus becomes liable to contribute towards the claim.
Claim against the RAF
The liability of the RAF to compensate victims of motor vehicle accidents is governed by Section 17 of the RAF Act, which provides that the RAF shall be obliged to compensate any person for damages suffered as a result of bodily injury “ … caused by, or arising from, the driving of a motor vehicle by any person … ” if due to the “negligence, or other wrongful act, of the driver or of the owner of the motor vehicle, or of his or her employee, in the performance of the employee’s duties as employee … ”.
If the driver was held to be negligent, then the passenger as the injured party would be entitled to compensation from the RAF. There would thus be no need for the passenger to sue the owner of the horses.
Since Lategan was both a passenger and an employee (albeit there was some confusion which company had employed him) section 18 is also applicable.
This provides that when a plaintiff was “being conveyed in or on the motor vehicle concerned and who was an employee of the driver or the owner of that motor vehicle … ” and the plaintiff “ … is entitled to compensation under the Compensation for Occupational Injuries and Diseases Act 1993 … ” the liability of the Fund is the difference between that which he could otherwise have claimed and that to which he is entitled by way of compensation in terms of the Compensation for Occupational Injuries and Diseases Act (COIDA) 130 of 1993, and further that the RAF “ … shall not be liable under the said Act for the amount of the compensation to which the plaintiff is entitled thereunder”.
This would indicate that Lategan is entitled, in the first instance, to compensation from workmen’s compensation and the difference is to be paid by the RAF. In terms of section 21 of the RAF Act, neither the driver nor the owner can be liable to pay compensation.
Both parties are protected from liability by this section, since any liability that would have attached to them is transferred to the RAF. The Act mandates every driver to contribute to the RAF and in return drivers or owners of motor vehicles are relieved of personal liability for bodily injury or death arising from their negligence, or other wrongful acts, while driving or using a motor vehicle anywhere in South Africa.
Claim for workmen’s compensation
Assuming Lategan was entitled to workmen’s compensation, then, in addition to section 18 of the RAF, section 35 and section 36 of the COIDA becomes applicable.
Section 36 of COIDA provides, that “If an occupational injury – in respect of which compensation is payable – was caused in circumstances resulting in some person other than the employer of the employee concerned being liable for damages in respect of such injury … the employee may claim compensation in terms of this Act, and may also institute action for damages in a court of law against the third party;” and that “In awarding damages … the court shall have regard to the compensation paid in terms of this Act”.
At this stage of the court case, the only issue in dispute was raised by the bus company. Lategan attempted to join the bus company as a co-defendant. The bus company objected, arguing it had no liability towards Lategan.
The rationale of joining the bus company was probably because it would be vicariously liable and a conceptual danger would be: if the bus company was not before the court, any action based on vicarious liability could be non-suited by its absence.
The bus company, however, persisted with its defence. First by virtue of section 21 of the RAF, it was argued on behalf of the bus company that it is was excluded from liability, and second, in terms of section 35 of COIDA, no action could be brought against it.
The court agreed. In law no basis exists to hold the bus company (first as the owner of the bus, and second, as the employer of Lategan) liable. The court thus (correctly it is submitted) dismissed the case against the bus company.
In coming to this conclusion the court made two important points. First, the RAF does not create any new liabilities. The liabilities that exist are founded in the common law; in this case the law of delict.
Second, the RAF is substituted as the wrongdoer in the place of the bus company. So, the wrongdoer is, in fact, before the court. Therefore, any concern, that by omitting the bus company the risk is created that the wrongdoer may not be before the court, is misplaced.
Where does that leave Lategan’s innovative action? That is for the parties to settle between themselves and if they are unable to do so, to return to court. How this should play out is not spelt out. We can only suggest the outcome. It is not clear that this is the outcome pointed to in the case thus far.
First, assuming the argument is upheld that both the farmer and the driver were negligent, then what? The court clearly took the view that if the farmer is sued and held to be liable, then the farmer would be entitled to a contribution from the RAF.
So, for example, assume the negligence is apportioned 70 percent to 30 percent against the farmer and driver. The farmer would pay the 100 percent and be entitled to 30 percent from the RAF. Since both the farmer and the RAF are before the court, the court could order the farmer to pay 70 percent and the fund 30 percent. There are, however, several problems with this approach.
First, the apportionment is not usually done against an innocent party; it is usually done against a plaintiff who is partially negligent.
Second, if contribution is to be paid by the RAF, since the RAF is a creature of statute, that obligation has to exist in the statute itself – it is unlikely that the common law of contribution can be imputed against the RAF.
Third, the obligation of the RAF is no longer the common law basis of delict. It has changed in recent years and will continue to change as it becomes a no-fault benefit scheme. A further consideration is that Lategan is entitled to workmen’s compensation. Any court, in making an award to him, would have to take into consideration the amount he is entitled to receive from the workmen’s compensation scheme.
What would be the position if he never claimed from workmen’s compensation? It probably would make no difference – he is entitled only to the difference between what the RAF would have paid and what workers’ compensation would have paid him had he claimed. These matters are currently unclear, but no doubt this will not be the only case of this nature. We await clarity from future cases.
Legally Speaking is a regular column by Professor Robert W Vivian and Albert Mushai, both in the school of Economics and Business Sciences, University of the Witwatersrand. Robert W Vivian is a leading authority on insurance and risk management. He has written a number of books on South Africa’s business history. Albert Mushai holds a master’s degree from the City University, London, and was the head of the insurance department at the National University of Science and Technology in Zimbabwe before joining Wits University as a lecturer in insurance.