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, which was 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. In this case, the injured passenger was the co-driver of the bus, and thus could claim workmen’s compensation.

If he is entitled to compensation, why the need to sue? This is most likely because the RAF compensation is becoming increasingly limited.

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 he was found 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 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 any person driving a motor vehicle, if due to the “negligence, or other wrongful act, of the driver, 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 would be entitled to compensation from the RAF, and therefore not need to sue the owner of the horses. Since Lategan was both a passenger and an employee, section 18 of the RAF Act is also applicable.

Section 18 states that when someone is travelling in the vehicle concerned, which is controlled by the owner of the vehicle or an employee and there is an accident, and they are liable for compensation, that the RAF need only pay the difference between the RAF compensation and the other compensation – not the whole amount for which the RAF was originally liable.

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 as the legislation of the RAF mandates a contribution from every driver in exchange for having no liability towards death or injury caused by the operation of a motor vehicle throughout 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 Compensation for Occupational Injuries and Diseases Act (COIDA) 130 of 1993 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”.

The outcome

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 reasoning behind joining the bus company was probably because of the possibility of any action mandated through vicarious liability being cancelled by the absence of the bus company in court.

The bus company, however, persisted with its defence, first by arguing that, by virtue of Section 21 of the RAF Act, it 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 liable. The court thus (correctly it is submitted) dismissed the case against the bus company.

In coming to this conclusion, the court came across an important point: The RAF is substituted as the wrongdoer in the place of the bus company. So, the wrongdoer is, in fact, before the court. Thus, any action will proceed as normal in the court.

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 proceed is not spelt out. However, there are some foreseeable problems.

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.

For example, if the farmer and driver were both found negligent, the court could order the farmer to pay 70 percent and the fund to pay 30 percent. There are, however, several problems with this approach.

First, the apportionment is usually done against a plaintiff who is partially negligent, not against an innocent party.

Second, if a contribution is to be paid by the RAF, the obligation would have to be written in the statute, as 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. Also, 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 only entitled to the difference between what the RAF would have paid and what workmen’s 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.

Professor Robert W Vivian and Albert Mushai are 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.