Brief Summary

Damages — Road Accident Fund — Contingencies in loss of income claim — Plaintiff sustained serious injuries in a motor vehicle accident and claimed damages for past and future loss of income — Defendant conceded merits and general damages but disputed contingencies applicable to loss of income — Court held that Plaintiff's proposed contingencies of 5% and 15% were reasonable and should not be increased, as Defendant failed to provide evidence to justify higher deductions — Judgment awarded in favor of Plaintiff for a total of R1 520 962.27, including general damages and loss of income.

Comprehensive Summary

Summary of Judgment

1. Introduction

The matter concerned a delictual damages claim instituted against the Road Accident Fund arising from injuries sustained in a motor vehicle accident. The proceedings were heard in the High Court of South Africa, Gauteng Division, Pretoria, before Bam AJ.

The plaintiff, Ms K F Marman, sued the defendant, the Road Accident Fund, for compensation for losses allegedly suffered as a consequence of the collision. The claim encompassed, among other heads, general damages, past medical expenses, future medical expenses, and loss of income and earning capacity.

Procedurally, the dispute was significantly narrowed before the trial commenced. The defendant conceded the merits (liability) and also conceded general damages in the agreed sum of R600 000.00. The remaining dispute did not extend to the existence of loss in principle, nor to the acceptance of the actuarial approach as such, but was confined to the appropriate contingency deductions to be applied to the plaintiff’s past and future loss of income calculations.

The general subject-matter of the dispute was therefore the quantification of damages in a Road Accident Fund matter, specifically the discretionary assessment of contingencies in respect of loss of earnings, in circumstances where the defendant had not filed countervailing expert evidence and sought to argue for increased deductions based on the plaintiff’s own expert material.

2. Material Facts

The accident occurred on 1 November 2014. At the time, the plaintiff was 44 years old and employed in a mine laboratory as a section operator. It was common cause on the material presented that she had been productively employed prior to the collision.

As a result of the accident, the plaintiff sustained serious injuries which necessitated a five-month hospital stay. The court accepted that the injuries were permanent in nature and had ongoing consequences for her work capacity.

The plaintiff returned to work only a year after the accident, and then only because her employer accommodated her by allocating light duties. The plaintiff’s evidence (as presented through expert reports and the actuarial material) indicated that, after her return, she earned less because she no longer received overtime and other allowances, and that the accident-related absence also resulted in a lost opportunity for an earlier promotion.

It was further accepted, on the plaintiff’s material, that the plaintiff’s reduced physical capacity placed her in a vulnerable employment position, including a risk of termination. The evidence also suggested the likelihood of future deterioration, including a probable hip replacement, which would further diminish her capacity to work, and that if she lost her current job she would probably become unemployable. Even if she remained employed, the evidence suggested her retirement could be hastened due to incapacity aggravated by the accident-related sequelae.

Two aspects were raised by the defendant in argument to motivate higher contingencies. First, the defendant pointed to an alleged pre-existing condition of hypertension. Secondly, the defendant relied on the fact that the plaintiff had retained her employment and received a promotion during 2016, asserting that this should reduce the award for loss of earnings. The court recorded, however, that the promotion was “apparently” an automatic one and that the plaintiff’s case was that it should have occurred in 2015, but for the accident-related consequences.

In relation to evidentiary posture, the defendant had not filed any expert reports. The defendant attempted to rely on its own calculations handed up from the bar, but the court rejected these because they were not part of the agreed trial bundle and plaintiff’s counsel had not been afforded an opportunity to consider them.

3. Legal Issues

The central legal question was whether the court should accept the plaintiff’s proposed contingency deductions for past and future loss of income, or whether those contingencies should be increased as contended for by the defendant.

The dispute primarily involved the application of law to fact and an element of value judgment/discretion, rather than a pure question of law. The court was required to exercise a quantification discretion in circumstances where actuarial calculations were available, but where contingencies (particularly for future loss) necessarily involve an assessment of uncertainty and probability.

Within that overarching inquiry, two subsidiary questions arose from the defendant’s submissions. The first was whether the plaintiff’s hypertension constituted a material pre-existing condition justifying an increased contingency deduction. The second was whether the plaintiff’s retention of employment and later promotion warranted an increased deduction on the basis that her earning trajectory had not been materially impaired.

4. Court’s Reasoning

The court approached the matter on the basis that, given the concessions made, the only live issue was the proper contingency deductions to be applied to the actuarially assisted earnings calculations. It treated the determination of contingencies as an inherently difficult exercise because it requires speculation about events that may or may not occur, particularly in relation to future loss.

A significant element of the court’s reasoning concerned the evidentiary basis on which the contingency determination had to be made. The court emphasised that the defendant had not presented evidence to disprove or meaningfully challenge the plaintiff’s expert material. In those circumstances, the court stated that it had to rely on the plaintiff’s evidence to the extent that it was “well articulated and probable”. The court also declined to consider the defendant’s calculations handed up at the hearing, because they were not properly introduced as part of the record and had not been disclosed for response.

On the role of comparative awards, the court accepted that reliance on other cases has limitations because each matter turns on its own facts, even where injuries appear similar. Nonetheless, it stated that other cases may serve as guidance and provide acceptable parameters, referring to Road Accident Fund v Marunga 2003 (5) SA 164 (SCA) for that proposition.

Turning to the proposed contingencies, the plaintiff sought to remain within what was described as the “normal contingency” bracket, namely 5% for past loss and 15% for future loss of income. The defendant argued for an increase (in effect, a 20% increase in deductions relative to what the plaintiff proposed, expressed in argument as seeking materially higher contingencies), relying chiefly on hypertension and the promotion.

The court rejected the defendant’s reliance on hypertension, reasoning that there was no evidence that hypertension had affected the plaintiff’s pre-accident performance or ability to perform her tasks. The court treated the plaintiff’s predicament as stemming from the accident injuries, not from the pre-existing condition.

The court also rejected the contention that the promotion undermined the claim for loss of earnings. It reasoned that the promotion was not performance-based and, on the plaintiff’s case, had been delayed by more than a year due to the sequelae of the accident. In that light, the promotion did not displace the plaintiff’s evidence regarding vulnerability in employment, reduced capacity, and the risk of future impairment and early retirement.

Having weighed the submissions, the court concluded that the defendant had offered no adequate basis to justify the requested increase in contingencies. It therefore held that the contingencies proposed by the plaintiff were reasonable and should not be interfered with.

In addition to deciding the quantification issue, the court recorded broader concerns about the Road Accident Fund’s litigation conduct, including lack of preparedness, inadequate instructions, late briefing, and the tendency to settle matters on the “door step” of trial, which the court viewed as disruptive to court roll management. In this context, it referred to prior judicial commentary on similar concerns.

5. Outcome and Relief

The court made an order in accordance with the plaintiff’s draft order (annexure “X”), having concluded that the contingencies proposed by the plaintiff were reasonable and that the defendant had not shown they should be increased.

Judgment was granted in favour of the plaintiff in the amount of R1 520 962.27, comprising past medical expenses of R834.27, loss of income and earning capacity of R920 128.00, and general damages of R600 000.00. Future medical expenses were addressed through a section 17(4)(a) undertaking, rather than a lump sum.

The defendant was ordered to provide an undertaking in terms of section 17(4)(a) of the Road Accident Fund Act 56 of 1996 for payment of 100% of the costs of the plaintiff’s future accommodation, treatment, services, or goods arising from the injuries, after the costs were incurred and upon proof thereof.

The capital amount would bear no interest unless not paid within 14 calendar days, in which event interest would run at 10.25% per annum from the date of judgment to date of payment.

The defendant was also ordered to pay the plaintiff’s taxed or agreed party-and-party costs on the High Court scale, including specified items such as senior counsel’s fees, translator’s fees, and various expert preparation and reservation costs, together with additional specified litigation-related costs. Provision was made for taxation and for interest on costs at 10.25% if not paid within the stipulated period after allocatur or agreement. The order further recorded that a contingency fee agreement was applicable.

Cases Cited

Road Accident Fund v Marunga 2003 (5) SA 164 (SCA).

Ndlovu v The Road Accident Fund 2014 (1) SA 415 (GSJ).

Motswai v Road Accident Fund 2013 (3) SA 8 (GSJ).

Legislation Cited

Road Accident Fund Act 56 of 1996, section 17(4)(a).

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The court held that, where the defendant had provided no expert evidence to contradict the plaintiff’s actuarial and expert material, and where the defendant’s proposed calculations were not properly placed before the court, the court was constrained to decide the contingency question on the credible evidence presented by the plaintiff.

It held further that the defendant had not established a factual basis to justify an upward adjustment to the plaintiff’s proposed contingency deductions. The plaintiff’s pre-existing hypertension did not, on the evidence, affect her pre-accident work performance, and the post-accident promotion did not undermine the plaintiff’s case because it was not performance-based and had been delayed as a result of the accident sequelae.

Accordingly, the court accepted the plaintiff’s proposed contingencies of 5% for past loss and 15% for future loss, and made the agreed draft order an order of court, including payment of the agreed capital amount, a statutory undertaking for future medical expenses, and costs on the High Court scale.

LEGAL PRINCIPLES

The judgment applied the principle that comparative awards in other matters may serve as a guide to appropriate parameters in assessing quantum, while recognising that each case must be decided on its own facts and that direct comparison has inherent limitations, as reflected in Road Accident Fund v Marunga 2003 (5) SA 164 (SCA).

It applied the principle that contingency deductions are a discretionary tool used to account for the uncertainties inherent in predicting past and especially future loss, and that the determination of contingencies is informed by actuarial assistance but ultimately depends on the specific facts placed before the court.

The judgment further reflected that where a party seeking an adjustment to actuarially supported figures provides no countervailing evidence to disprove or undermine the opposing party’s expert case, and where proposed figures are not properly introduced into the evidentiary record, the court may justifiably rely on the properly presented evidence before it in making the contingency assessment.

Marman v The Road Accident Fund (15233/16) [2018] ZAGPPHC 747 (2 February 2018)