Spartan
Caselaw
ACTUARIAL CASE LAW REVIEW
Issue 134 – Monday 16 September 2024
ACTUARIAL – Loss of income – Contingencies – Finding of inadmissible evidence – Appeal – Appellant run over by vehicle – Proved that he sustained injury because of wrongful act of insured driver – Compensation warranted – Quantum – Mismatch to desired career path – Undesirable employee in open labour market – Contingency deduction of 60% fair and reasonable in respect of past and future loss of earnings – Appeal succeeds – Appellant entitled to 100% of proven damages.
Pre- and post-accident: The appellant commenced with Grade 1 in 2003 at age 9 years. There is no indication that he passed each grade since then. At the time of the accident the appellant was unemployed. He had thus not secured employment at the age of 26. He had limited career experience other than contract work as a waiter. Six months after the accident, in his injured state, he started volunteering, for the South African Police Services, doing admin work and he remained so volunteering at the time of the various expert assessments.
Accident: The appellant was run over by a vehicle. He testified that the insured vehicle came at him at the maximum of the car’s speed because it was fast as it approached. He was intentionally run over by the insured vehicle. The driver of the insured vehicle was charged with reckless and negligent driving and the outcome of the criminal case was not known to him at the time of trial before the court a quo. The appellant appeals the whole of the judgment and order of the court a quo, who dismissed the appellant’s claim against the respondent.
Assessment: While the appellant’s viva voce evidence before the court a quo may not have been aligned with the pleaded case and grounds of negligence he relied on, this cannot be said to be in contrast to warrant its rejection. The case seems to shift from the negligence, which was pleaded, to intentional knocking down with a motor vehicle, after hearing the appellant’s evidence. Whether negligent or intentional, it is beyond any doubt that such conduct was wrongful and covered by the RAF Act for which the respondent is liable. The appellant proved on a balance of probabilities that he sustained injury because of a wrongful act of the insured driver. The appellant should thus be compensated.
Loss of income: The industrial psychologist projected that the appellant would, in his uninjured state, have secured employment as a Constable during 2020/2021. He would have progresses at 5-year intervals from Constable to, Sergeant, to Warrant Officer, to Captain, to Lieutenant Colonel and finally to Colonel. The industrial psychologist did not consider the requirement that the appellant had to successfully complete a training course with the South African Police Force. The industrial psychologist suggests that he will be a mismatch to his desired career path and testified that he will be a “undesirable” employee in the open labour market. No conclusion was reached that he was unemployable. A contingency deduction of 60 % is fair and reasonable in respect of both past and future loss of earnings.
Order: The appeal is upheld, and the appellant is entitled to 100% of his proven damages.
RATSHIBVUMO J (GREYLING-COETZER AJ and PICK AJ concurring)
ACTUARIAL – Loss of income – Reduction of capacity – Government employee – Risk of dismissal is not same as in private sector – Employee may lose employment because of medical incapacity – Even if dismissed, will be compensated in terms of government employment policy – No collateral information provided to prove that plaintiff is unable to do his current duties as teacher – To be compensated by an application of spread of 35% for future loss of earnings – Minus 40% apportionment to be applied.
Accident: The plaintiff was a driver of a motor vehicle involved in an accident in which the vehicle lost control after being disturbed and caused to overturned by another motor vehicle is unknown to the plaintiff.
Application: The plaintiff instituted an action against the Road Accident Fund (defendant) for damages resulting from personal injuries sustained. The court is called to determine the plaintiff’s claim for general damages and future medical expenses, as well as past and future loss of earnings.
Assessment: The orthopaedic surgeon examined the plaintiff and recorded injuries sustained as cervical spine injury, neck injury and skull injury. The clinical psychologist opined that, based on the plaintiff overall test profile, the results suggest average to moderately impaired neurocognitive abilities. The clinical psychologist opined that the plaintiff may have suffered a severe head injury which resulted in significant neurocognitive deficits. The plaintiff presents with symptoms of a mood disorder which is classified as Mild Depression Disorder. The occupational therapist indicated that the plaintiff's occupation as an educator requires occasional walking, elevated work, lifting and carrying. The occupational therapist opines that the plaintiff's limitation and pain has compromised his ability to function at the same level as his uninjured co-workers, even in a situation with the physical demand category matching his physical abilities. The plaintiff is thus considered a vulnerable competitor in the open labour market compared to his non-injured counterparts.
Loss of income: The court noted the plaintiff’s reduction of his capacity but that he is still employed by the same employer. The court has considered that the plaintiff is a government employee, and the risk of dismissal is not the same as in the private sector, and that even if the plaintiff may be dismissed because of the injuries, he will be compensated in terms of the government employment policy. The plaintiff is not going to have a total loss of his future earnings. The method used in the actuarial calculation did not consider the government policies in a situation where the employee may lose employment because of medical incapacity. The court finds that the plaintiff should be compensated by an application of a spread of 35% as future loss of his earnings. The appropriate amount to be awarded to the plaintiff in respect of the future loss of earnings capacity is in the sum of R5,406,863, minus 40 % apportionment to be applied.
Award: The defendant is held liable to compensate the plaintiff 60% for his proven damages. The defendant shall pay the plaintiff the sum of R3,244,118 in respect of the future loss of earnings. The defendant shall pay the amount of R780,000 in respect of the general damages.
MASHAMBA AJ
ACTUARIAL – Loss of income – Residual earning capacity – Did not resume occupation due to accident-related sequelae – Medical incapacity instituted – Rock drill operator at mine – Accident resulted in profound truncation of future employment chances and level of occupational functioning – Court not convinced that plaintiff sustained significant head injury – Plaintiff not unemployable post-accident – Retains a residual earning capacity in the region of 40%.
Accident: The plaintiff was a pedestrian when a collision occurred with motor vehicle driven by the insured driver. The plaintiff was 43 years old at the time of the collision. The negligence of the plaintiff has already been determined at 80/20 in his favour. At the time of the accident the plaintiff was a Rock Drill Operator at the Impala Platinum mine. He gives the history that he stopped working after the accident and that he has a loss of income since the accident. From an orthopaedic point of view there is a significant loss of work capacity due to the injuries sustained.
Application: The court is called upon to determine the plaintiff’s claim in respect of general damages, loss of earnings and past medical expenses.
Assessment: The court is not convinced that the plaintiff sustained a significant head injury. The court notes that the neurologist simply accepted the plaintiff’s reporting that he was unconscious and woke up the next day in hospital still confused, without verifying that this was in fact so. Had the neurologist done this he would have been alerted to the patient transfer form, which he had in his possession, and which indicated that the plaintiff had a GCS of 15/15, 2h10 minutes after his admission to hospital and that he was alert and orientated. The court is of the view that the plaintiff is not unemployable and does in fact have a residual earning capacity. The court further notes the plaintiff’s refusal to have his funds protected by means of a trust. The court suggests that the plaintiff must make an election: either he has a head injury and is unemployable or he does not have one and has a residual earning capacity. He cannot hope to benefit from a head injury in respect of general damages and loss of earnings and then want to ignore and or discount this injury when it comes to the protection of his funds.
Findings: It is postulated that the plaintiff would most likely have continued working in the role of permanent Rock Drill Operator pre-morbidly. Having regard to the plaintiff’s actual work experience, specific skill set and age, further career progress was not envisaged. Having regard to the injuries he sustained, accident-related sequelae, his age and subsequent medical boarding, the plaintiff’s competitiveness in the open labour market has been completely nullified. The accident has therefore resulted in a profound truncation of his future employment chances and level of occupational functioning. The court, however, does not accept that the plaintiff is unemployable post-accident and is of the view that the plaintiff retains a residual earning capacity, which the court assesses to be in the region of 40%.
Loss of income: The court is accordingly of the view that the plaintiff’s past loss of earnings amount to R1,389,011 and future loss of earnings to R1,837,057.80. A total loss of R3,226,069, which less the 20% merits apportionment, amounts to R2,580,855.
KHAN AJ
4 September 2024
LANGA J
RAF – Liability – Plaintiff’s version – Contradictory versions – Material contradiction between particulars of claim, affidavit and plaintiff’s viva voce evidence regarding description of collision – Evidence demonstrates that plaintiff put up a different case when he instituted action – Failed to establish that cause of accident was driving of insured motor vehicle – Cannot be said that incident happened as recounted by plaintiff – Claim dismissed.
Facts and issue: The plaintiff instituted an action for damages resulting from the injuries he sustained in a motor vehicle accident. The plaintiff was a driver at the time of the accident. The defendant contends that although the plaintiff was involved in a motor vehicle incident, he has however given contradictory versions regarding how the alleged collision took place. The defendant argues that the court should find that the plaintiff was negligent and substantially contributed to the occurrence of the accident. The matter proceeded on the determination of the liability.
Discussion: There is a contradiction between the particulars of claim, the affidavit, and the plaintiff’s viva voce evidence regarding the description of the collision. The essence of the contradiction is that the in the pleadings and the section 19(f) affidavit the plaintiff expressly averred that the plaintiff collided with an oncoming vehicle which left its lane of travel and collied with his. However, in his oral testimony the plaintiff alleged that he collided with a truck which came from behind him. These two versions are not only material, but they are also diametrically opposed and irreconcilable. The plaintiff’s counsel indicated that he intends making an application for the amendment of the particulars of claim to bring same in line with the viva voce evidence. The problem with the proposed amendment is that the plaintiff essentially wants to materially change its case by alleging a new cause of action after the evidence has been adduced. The amendment is proposed in circumstances where there is no good explanation for the contradiction. The plaintiff cannot be allowed to remedy its contradictory version by amending the particulars of claim.
Findings: The issue is one of self-destructive versions in the plaintiff’s own case. The enquiry is not about which version of the plaintiff to accept but it is whether the plaintiff is a reliable witness. Further, the question is about whether the plaintiff has adduced evidence to prove, on a balance of probabilities, that the insured driver was negligent. The plaintiff has failed to establish that the cause of the accident was the driving of the insured motor vehicle, if there was any. Based on the evidence it cannot be said that it is more likely than not that the incident happened as recounted by him.
Order: The plaintiff's claim is dismissed with costs.
6 September 2024
MSIBI AJ
RAF – Loss of income – Contingencies – Cashier – Mild head and orthopaedic injuries – Psychotherapy recommended for post morbid conditions – Highest standard of education is grade 11 – Expected in future to continue to rely on physical aptitudes – Reduction in physical capacity constitutes significant loss – Negatively affects prospective employment – Higher than normal contingency of 30% applied to post injury earnings – R1,744,855.
Facts and issue: The plaintiff sues the defendant for injuries that she sustained from a motor vehicle accident. The plaintiff was a passenger in a motor vehicle when the vehicle got involved in a collision. The plaintiff is suing for loss of earning capacity and general damages. The merits were settled 100% in favour of the plaintiff. The only issues for determination are loss of income and general damages.
Discussion: The plaintiff’s highest standard of education is grade 11. Pre-accident the plaintiff worked as a cashier at a fast-food outlet, earning a salary of about R2,900 to R3,200 00 per month. Her job involved travelling to and from work for about 30 minutes. Her work fell in the light sedentary category. She returned to her work after recuperation. The plaintiff was able to stand for about 30 minutes during her assessment, she showed equal weight bearing throughout the activities. She however continued to experience pain in her left wrist particularly during busy periods and cold weather. The plaintiff’s highest standard of education is grade 11. She thereafter managed to obtain a security certificate and a computer literacy certificate. Due to her low level of education the plaintiff would be expected in future to continue to rely on her physical aptitudes as an economic safety net. Her reduction in physical capacity constitutes a significant loss as it negatively affects her prospective employment.
Contingencies: The plaintiff did not have a history of ailments or injury that could have a negative effect on her employment capacity before the accident. The normal contingency deduction of 5% will be applied on the plaintiff’s pre-injury earnings. A higher-than-normal contingency of 30% will be applied to her post injury earnings.
Order: The defendant is ordered to pay R1,744,455 for loss of earning capacity and R400,000 for general damages.
3 September 2024
CRONJÉ AJ
RAF – Loss of income – Child – Quantum – Moderate head injury at age 4 – Impairment of neurocognitive, neurobehavioral and neuropsychiatric functioning – Post-career path – Not functioning in pre-morbid state which impacts academic ability – But for accident plaintiff would have proceeded to obtain an NQF 7 qualification – Improbable that plaintiff will qualify beyond NQF 6 qualification – 40% contingency on Actuaries’ calculation applied.
Facts and issue: The plaintiff (P) instituted a claim against the Road Accident Fund (RAF). An accident occurred wherein the insured vehicle collided with P who was a pedestrian. P was four years and three months old at the time of the accident. She is now 23 years old. The RAF accepted liability for 100% of P’s proven or agreed damages. The court must determine the quantum of her loss. The contingencies are also subject to the court’s discretion.
Discussion: The educational psychologist concluded that, but for the accident, and taking P’s background and the qualifications of her parents and sibling into account, P would have proceeded to obtain an NQF 7 qualification. Based on all available information, P will not be able to achieve according to her pre-accident ability. She referred to the report of Mrs. Rita Du Plessis (neuropsychologist), who concluded that a healthy neuropsychological status requires healthy and unaffected neurocognitive, neurobehavioral and neuropsychiatric functioning. According to Mrs. Du Plessis, P presents with problems in all these areas. Cumulative interference with these components leaves her with a compromised neuropsychological status. According to Mrs Swart, P is not functioning in her pre-morbid state, which impacts her academic ability. The diploma in performing arts would be her highest level of education. Her present course in software engineering would not supersede her diploma and she does not foresee that P would progress from an NQF 6 to an NQF 7 qualification as she would need at least an APS score of 28, whereas she only obtained 21. This would not assist her in being accepted for an undergraduate qualification.
Findings: Bearing in mind the educational environment P grew up in, what appears to be a stable family environment, she would have had the potential to achieve more than she presently has. P, during various occasions in her evidence, and as also captured in some of the expert reports, indicated that she does not know what she would like to become. Her evidence left the impression that she would rather do something than sit at home. This is part of what Mrs Swart states to be part of the neurocognitive outfall. Mr Zietsman argues for a 40% contingency on Munroe Actuaries’ calculation of R6,215,300.
Order: The defendant is liable for payment to the plaintiff in the amount of R600,000 in respect of the plaintiff's claim for general damages. The defendant is liable for payment to the plaintiff in the amount of R3,993,875 in respect of the plaintiff's claim for past and future loss of income.
5 June 2024
VUKEYA J
RAF – Loss of income – Pre-morbid vulnerability – Serious injuries – Functional and structural impairment – Vulnerable from scholastic perspective prior to accident – Added impact of trauma of accident together with his residual add to scholastic difficulties – More vulnerable than before accident – Limited employment options in open labour market – Fair and reasonable award considered and applied – R719,003.25.
Facts and issue: The plaintiff was involved in a motor vehicle accident which occurred while he was a pedestrian. The motor vehicle was driven by the insured driver. At the time of the accident, he was 17 years old, and therefore a minor. It is alleged that the plaintiff sustained the following injuries, a fracture of the left proximal femur and a lumbar spine soft tissue injury. These injuries, according to the plaintiff have caused him, amongst others, chronic pain and tenderness of the left leg and hip; severe left leg shortening of 5.2cm; varus deformity; weakness, instability and moderate limping gait, etc. The plaintiff claimed damages allegedly suffered as a result of the accident.
Discussion: The clinical psychologist’s point of view is that the plaintiff was vulnerable from a scholastic perspective prior to the accident, the added impact of the trauma of the accident together with his residual add to his scholastic difficulties. This leaves him even more vulnerable than he was before the accident. As a result, this will limit his employment options once he enters the open labour market. The occupational therapist concluded that the plaintiff is only suited for sedentary and limited light work where mobility skills are not a pre-requisite. She opined further that the plaintiff’s cognitive challenges prevent him from securing the type of work he is suited for, and that is, sedentary and limited light work and therefore, it is highly unlikely that he will be able to secure work within these parameters. It is anticipated that he will struggle to enter the formal open labour market.
Findings: The plaintiff was significantly limited in his job options because of the injuries he sustained following the accident. Furthermore, his cognitive abilities limit him to work of an unskilled nature and therefore his work capacity has been severely negatively impacted and truncated. The court’s view is that the plaintiff, being a minor at the time of the accident, did not suffer any past financial loss as he was still in school. To base the calculations on “past income” is an unjustified irregularity. The court’s considered view is that because the two parties are not very far apart with regards to the suggested awards, that a median will be fair and reasonable to award to the plaintiff as compensation for loss of earnings. An amount of R719,003,25 is a fair and reasonable award for compensation for loss of earnings.
13 September 2024
BASSON J
RAF – Default judgment – Rescission – Condonation for late filing of application – Overwhelming evidence that there was proper service on RAF – Failed to appear and failed to file notice of intention to defend – Resulted in default judgment – Launched rescission application 6 months late – Extent of injuries suffered by respondent – Impact on career progression – RAF has no prospects of success in successfully defending matter in action – Application dismissed.
Facts and issue: The applicant (RAF) applies for rescission of the judgment granted by default. The RAF also seeks condonation for the late filing of this rescission application in terms of rule 3(2))(b) of the Uniform Rules. Despite overwhelming evidence that there was proper service on the RAF, it failed to appear and failed to file a notice of intention to defend. This resulted in the order by default in favour of the respondent. The RAF now seeks to rescind the default order and judgment but launched its application to rescission 6 months late.
Discussion: On the eve of the hearing date, the RAF uploaded its assessors report onto Caselines and also uploaded an offer of settlement. The settlement offer was uploaded by the State Attorney. In this settlement, the RAF proposed to settle the merits, future loss of earnings as well as general damages. Yet, even at this late stage, the RAF did not attempt to oppose the matter and remained inactive. Moreover, even though the State Attorney had been on record and had access to Caselines, the RAF inexplicably did not instruct the State Attorney to defend the matter. The irresistible inference is that the RAF chose not to defend the matter. Moreover, given the numerous emails and notices served on the RAF, it is difficult to argue that the RAF could not have been aware of the hearing date. The explanation offered is not reasonable. While the oversight regarding the summons might be excusable, the subsequent notification of two default judgment hearings to the RAF, including multiple staff members and the State Attorney, undermines any claim that it was unaware of the default judgment proceedings.
Findings: Because the RAF was in wilful default, the rescission application must fail on this basis alone. The respondent suffered various serious injuries because of the accident and suffered serious sequelae as a result thereof. Having regard to the expert opinions, the extent of the injuries suffered by the respondent and the impact it will have on his career progression, the RAF has no prospects of success in successfully defending the matter in the action.
Order: The application is dismissed.
26 August 2024
CEYLON AJ
RAF – Loss of income – Child – Experienced physical and emotional difficulties after accident – Psychological problems due to loss of father in accident – Failed grade 1 – Scholastic performance has improved over time – Progress is satisfactory – Cognitive deficits are of a permanent and ongoing nature – Higher certificate NQF Level 5 would probably child's highest educational qualification – 30% contingency deduction applied to post morbid earnings – R5,450,963.50.
Facts and issue: The plaintiff, in her representative capacity as mother and natural guardian of the minor child, seeks relief against the defendant because of bodily injuries sustained by the minor child in a collision that occurred in which the minor child was a passenger and an unknown vehicle with unknown details. The minor child’s father passed away due to the accident.
Discussion: After the accident, the minor child reported physical and emotional difficulties. He reported pain in his hip and leg particularly during inclement weather, as well as anxiety and depression and social difficulties, including anger outbursts towards his peers. Cognitive difficulties reported include poor concentration, comprehension and following instructions in school. The expert indicated that the cognitive deficits are of a permanent and ongoing nature. His scholastic functioning will deteriorate as he progresses in school, due to the demands and complexity of learning materials and psychological vulnerabilities emanating from the injuries and its sequelae. The expert concluded that a higher certificate (NQF Level 5) would probably the minor child's highest educational qualification. Following assessment of the minor child, and having regard to the advices of certain other experts, the occupational therapist reported the physical limitations including impaired bilateral integration skills, and below average fine motor co-ordination.
Findings: The actuary placed a value of R10,215,334 for future loss but for the accident and applied a 20% contingency deduction thereto, therefore a total of value of R8,172,267. An income value of R3,157,962 having regard to the accident, with a 30% contingency deduction applied. The plaintiff persisted with the 30% contingency deduction in relation to post morbid earnings. The court agrees.
Order: The defendant pay the plaintiff an amount of R5,450,963.50 for loss of income.
24 May 2024
MNISI AJ
RAF – RAF 1 form – Medical report – No medical records submitted in support of claim – Relied on self-medication bought at local pharmacy – Improbable to accept that plaintiff suffered neck and chest pains after accident but failed to consult a medical doctor – Did not adduce relevant material evidence to support claim – Consulted doctor more than seven months after alleged accident – Failed to discharge onus – Claim dismissed – Requirements of section 24(2)(a) of Road Accident Fund Act 56 of 1996.
Facts and issue: The plaintiff instituted action against the defendant in terms of the provisions of the Road Accident Fund Act, 56 of 1996, claiming payment for damages he allegedly suffered because of injuries he sustained in a motor vehicle collision. The plaintiff was a passenger in a motor vehicle that collided with another vehicle. The said vehicle was driven by a learner driver. At the time of the accident, Mr Vassiliou was employed as a driving instructor. He sustained neck and chest injuries because of the accident. However, Mr Vassiliou did not seek immediate medical attention as he did not feel severe pain symptoms at the time. He also attributed his failure to seek medical attention because he did not belong to a medical aid scheme. He relied on self-medication which he bought at the local pharmacy. Consequently, he did not submit any medical records to the Fund in support of his claim.
Discussion: It is hard and improbable to accept his testimony to the effect that he suffered neck and chest pains after the accident, yet he did not consult a medical doctor. The plaintiff should prove his case on the balance of probabilities the casual link between the injuries which he sustained, and the negligent driving of the motor vehicle for the Fund to become liable. It is a matter of serious concern that there are no medical records, nor doctor’s notes to corroborate that the plaintiff indeed was treated for injuries sustained in the accident. The plaintiff upon whom the evidentiary burden lies, did not bother to adduce the relevant material evidence to support that he was injured in an accident. Section 24(2)(a) of the RAF Act provides that the report (medical report or RAF1) shall be completed by the medical practitioner who treated the injures or deceased person for the bodily injuries sustained by him/her in the accident from which the claim arises. Mr Vassiliou was not treated by a medical practitioner despite having suffered the alleged injuries.
Findings: From the report of the orthopaedic, Dr M.B Deacon who apparently examined the plaintiff, it was recorded that the plaintiff sustained a chest injury with residual complaints of chest pain and shortness of breath. Dr Deacon further recorded that "the above symptoms are as given by the patient." Nowhere in Dr Deacon’s report or that of Dr Schutte is it recorded that there is a causal link between the injuries and the accident which allegedly took place. The plaintiff in the present case has failed to discharge the onus that rested upon him of proving that the defendant is liable to compensate him for his loss or damages as contemplated in section 17 of the Act.
Order: The plaintiff’s claim is dismissed with costs.
BOOKS / RESEARCH / ARTICLES
Authors: Martin Bladt, Michel Fuino, Aleksandr Shemendyuk and Joel Wagner
The financing of long-term care and the planning of care capacity are of increasing interest due to demographic changes and the ageing population in many countries. Since many care-intensive conditions begin to manifest at higher ages, a better understanding and assessment of the expected costs, required infrastructure, and number of qualified personnel are essential. To evaluate the overall burden of institutional care, we derive a model based on the duration of stay in dependence and the intensity of help provided to elderly individuals. This article aims to model both aspects using novel longitudinal data from nursing homes in the canton of Geneva in Switzerland. Our data contain comprehensive health and care information, including medical diagnoses, levels of dependence, and physical and psychological impairments on 21,758 individuals. We build an accelerated failure time model to study the influence of selected factors on the duration of care and a beta regression model to describe the intensity of care. We show that apart from age and gender, the duration of stay before death is mainly affected by the underlying diseases and the number of different diagnoses. Simultaneously, care intensity is driven by the individual level of dependence and specific limitations. Using both evaluations, we approximate the overall care severity for individual profiles. Our study sheds light on the relevant medical, physical, and psychological health indicators that need to be accounted for, not only by care providers but also by policy-makers and insurers.
PROFESSIONAL GUIDANCE NOTES
APN 701: Delictual and Other Legal Matters
APN 901: General Actuarial Practice
APN 904: Market conduct and treating customers fairly
Recommended Experience Requirements: Calculations for delictual and other legal matters
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