On 12 August 2022, the Acting Chief Claims Officer of the Road Accident Fund (the Fund) distributed an internal communication (the Directive) noting that all regional managers of the Fund are to assess claims for past medical expenses and reject all claims that have already been paid by medical aid schemes.
Traditionally, claimants have claimed past medical expenses alongside their respective heads of damages, which they are entitled to then recompensate to their respective medical aid scheme in terms of the provisions of their medical insurance agreement.
On receiving the Directive, Discovery Health (Discovery) informed attorneys representing claimants to continue the pursuit of claims for past medical expenses. Shortly thereafter, an urgent application was launched in the Pretoria High Court for an order in the following terms:
- That the Directive issued by the Acting Chief Claims Officer on 12 August 2022 be declared unlawful and be set aside; and
- That the Fund be interdicted and restrained from implementing the Directive
The common law position as it relates to personal injury requires that a victim of the wrongful and negligent conduct of another be compensated for all proven loss or damages. In the context of a motor vehicle accident, this would ordinarily mean that a victim has a direct claim against a negligent driver or its owner. However, the Road Accident Fund Act 56 of 1996 (the Act) has since amended this common law position to provide for a form of compulsory social security for all users of public roads. Section 21(1) of the Act as explained in RAF v Abrahams 2018 (5) SA 169 (SCA) specifically notes that ‘Section 21(1) abolishes the right of an injured claimant to sue the wrongdoer at common law. Section 17(1) in turn substitutes the appellant for the wrongdoer’.
As a result, the Fund steps into the shoes of a negligent driver in respect of all proven heads of harm, both patrimonial and non-patrimonial in nature. Past medical expenses constitute patrimonial harm, as the expenses are a reduction of the victim’s capital.
A layman’s understanding of the above principle may lead one to side with the reasoning of the Fund’s Directive – after all, an insured victim has suffered no patrimonial harm in respect of past medical expenses. However, a closer inspection of common law principles will note that in terms of our law, certain benefits received by a claimant from the benevolence of a third party, commonly referred to as collateral benefits, are not considered when determining the quantum of a claimant’s damages as they do not relate to the relationship between the victim and wrongdoer. Thus, irrespective of the benefit, a wrongdoer must still compensate the victim for the harm as though it is factually suffered and not insured against.
Benefits received from private sources such as an insurance policy originate from a contract between the insured and an insurance company for the benefit of the insured. These benefits belong to the insured and cannot excuse the liability of a wrongdoer, as to do so would defeat the foundation of holding the wrongdoer liable for their actions.
Mbongwe J in the matter of Discovery Health (Pty) Ltd v Road Accident Fund and Another (2022/016179)  ZAGPPHC 768 (26 October 2022) upheld the common law position and in doing so, emphasised that the Fund is ‘obliged to compensate any person for any loss or damage which the third party has suffered as a result of any bodily injury to himself or herself’. Accordingly, while the Act has amended the common law position by substituting the Fund in place of the wrongdoer, it has not detracted in any manner, shape or form from the rights to claim which would otherwise be attributable to a victim under the common law.
In sum, insured persons are not to be denied full and substantive social security on the basis that they have entered into private insurance agreements with the likes of Discovery Health. The common law position was emphasised with reference to Zysset v Santam 1996 (1) SA 273 (C), wherein it was stated that:
‘It is well established in our law that certain benefits which a plaintiff may receive are to be left out of the account as being completely collateral. The classic examples are (a) benefits received by the plaintiff under ordinary contract of insurance for which he has paid the premiums…’
Accordingly, private medical insurance does not exonerate the liability of the Fund, as to do so, would be an exoneration of the negligent driver in whose shoes the Fund substitutes.
As noted above, the Act does not amend the common law by providing for the exclusion of certain claims where victims have received private benefits. Accordingly, the Acting Chief Claims Officer acted ultra vires as the enabling statute did not provide authority for such exclusions.
The Directive would in effect, defeat the purpose of private medical insurance as it would make the various schemes unviable, leading to an increase in premiums or alternatively, leaving members exposed to a statistically more probable form of sudden emergency for which they would later have to reclaim from the Fund, or their medical insurance, but would have to endure the cost for upfront personally.
Medical insurance plays a key role in the road accident ecosystem. It provides access to medical facilities that offer high levels of treatment and ease capacity constraints seen in public hospitals. Furthermore, private hospitals provide efficient access to records thus ensuring that claims are turned over speedily and in compliance with the Fund’s new mode of operations where claims are to be comprehensively lodged and settled within 180 days, avoiding litigation at all costs.
– Written by Brian Preller (Candidate Attorney)