Counsel said the victim’s past medical expenses being paid by Discovery Health was a private matter between him and Discovery. Picture: Moneyweb
A Western Cape High Court judgment has highlighted “difficulties” with the majority judgment of a full court of the High Court in Pretoria in December 2024 related to the payment by the Road Accident Fund (RAF) of past medical expenses of road accident victims who are members of medical schemes.
The majority judgment by Judge Dunstan Mlambo, the Judge President of the Gauteng Division of the High Court, and Judge Noluntu Bam, with Judge Ingrid Opperman dissenting, dismissed with costs an application by Discovery Health for an order declaring the RAF to be in breach of a previous high court order on the RAF’s liability for the payment of the past medical expenses of road accident victims.
RAF CEO Collins Letsoalo at the time described the judgment as “a watershed for South Africa and the RAF”.
However, Judge Lister Nuku, in a judgment handed down last week to a matter between Rahldeyah Esack and the RAF, said: “In my view Discovery Health [majority judgment] has not changed the legal landscape.”
Nuku ordered the RAF:
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Anwar Esack, who died on 4 May 2020 before the finalisation of the matter, sustained bodily injuries on 11 December 2015 when the vehicle he was driving collided with another vehicle.
He lodged a claim with the RAF and instituted this action after the fund failed to compensate him and was formally substituted as the plaintiff by the executrix of his estate by his spouse, Ms Rahldeyah Esack.
Judge Nuku said he was advised that the quantum of the Esacks’ claim for past hospital, medical and related expenses was not disputed.
Rather, the RAF took issue with its liability to pay them because these expenses had been paid by Esack’s medical aid, he had suffered no loss, and the RAF is therefore not liable to reimburse/compensate Esack and/or his medical scheme.
Alternatively, the RAF argued that if the court finds that Esack has suffered a loss and is entitled to compensation despite his past hospital and medical expenses having been paid by his medical scheme, the past expenses claimed by Esack constitute prescribed minimum benefits (PMBs) and/or treatment for emergency medical conditions (EMCs), for which the medical aid scheme of the deceased is statutorily obliged to pay.
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Esack’s counsel submitted that the fact his past medical expenses were paid by Discovery Health is a private matter between him and Discovery.
Judge Nuku said Esack’s counsel referred to a number of authorities to the effect that medical aid scheme benefits are a form of indemnity insurance that should be disregarded for the purpose of an award for damages in accordance with the common law principle of ‘res inter alios acta’.
This Latin phrase means something transacted between other parties that are not involved in litigation, with evidence of such matters generally inadmissible.
Nuku said the RAF’s view was that the majority judgment in Discovery Health versus the RAF “changed the legal landscape in so far as the common law principle of ‘res inter alios acta’ such that benefits from a medical aid scheme in circumstances where the medical aid scheme is statutorily obliged to pay fall to be deducted in the computation of a claim for past hospital and medical expenses”.
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He said the majority judgment poses the question of whether there are “any policy considerations in favour of excluding collateral benefits received by a claimant from a medical scheme” by way of payment of PMBs and EMCs on the basis of ‘res inter alios acta’.
Nuku said immediately thereafter the majority judgment proceeds to state: “We raise the following considerations without necessarily answering the question …”
Nuku added that after raising various considerations, the judgment concludes by stating:
‘Given the myriad of social challenges facing this developing country, is there justification based on policy considerations, fairness and reasonableness, for the government to concern itself with protecting the interests of medical schemes?
“The contestation before us is simply about whether RAF’s funds should continue being used to replenish the coffers of medical schemes,” according to that judgment.
“The subrogation principle perpetuates the lie that a road accident victim has a claim against the RAF when in truth and in fact, that claim was satisfied by the medical scheme.”
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Nuku said the question therefore is whether the majority judgment in the Discovery Health case indeed changed the legal landscape in so far as the common law principle of ‘res inter alios acta’ – and ruled that it had not.
He said the first problem the majority judgment would fall foul of is “the doctrine of stare decisis”, a fundamental principle of South African law that requires high courts to follow decisions of the Supreme Court of Appeal (SCA) and the Constitutional Court.
Nuku said the issue of deductibility of medical aid scheme benefits was dealt with by the SCA in a previous case, Bane v D’Ambrosi, which concluded that payment made by a claimant’s medical scheme is ‘res inter alios acta’ and …
“the Medical Schemes Act did not have the effect of depriving plaintiffs of their claims for hospital and medical expenses in delictual actions”.
Nuku said while the Bane SCA judgment did not deal specifically with the deductibility of PMBs and EMCs – but rather the deductibility of medical aid benefits in general terms – “I can see no basis to differentiate between the two”.
“I say this because the argument in Bane appears to have been based on the fact that medical schemes are obliged to accept members upon application, an argument that is not so dissimilar to an argument that claimants should not be compensated in respect of PMB’s and EMC’s because the medical schemes are statutorily obliged to pay these.”
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Judge Nuku said the other “difficulty” with the majority judgment in the Discovery Health application is that the court was not required and in fact did not decide the issue of deductibility of payments made by medical aid schemes from compensation to be paid to road accident victims.
He said the majority judgment acknowledged this when it stated: “We raise the following considerations without answering the question.”
Nuku concluded that on the application of the common law principle of ‘res inter alios acta’ the RAF is liable to compensate the Esacks because “such payment is a matter between the deceased and his medical aid scheme” – and is satisfied Esack’s claim for past hospital and medical expenses must succeed.
Comment was requested from the RAF on the judgment but has not yet been received.
This article was republished from Moneyweb. Read the original here.
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