On 1 November 2011, Mrs Debbie Mahlaku Masemola was a passenger in a motor vehicle that collided with another vehicle along Mmameng road travelling towards Marble Hall in the Limpopo Province. She sustained head injuries, soft tissue injuries to her neck and right elbow, and multiple abrasions and lacerations to her face. The Road Accident Fund (RAF) conceded 100% liability and undertook to cover past and future medical expenses in terms of s 17(4)(a) of the Road Accident Fund Act 56 of 1996. The parties agreed on most aspects of her claim for loss of earnings based on an actuarial report and industrial psychologist's report, but disagreed on the percentage to be deducted for pre-morbid contingencies relating to future loss of earnings. Before the accident, Masemola had completed security training, registered as a grade C security service provider with PSIRA, and completed a certificate in early childhood development. She would likely have worked as a security officer but for the accident. After the accident, she could only secure part-time employment due to her injuries, working for a community work programme and as a domestic worker one day per week. The trial court erroneously calculated the award and imposed a 15% pre-morbid contingency deduction instead of the 10% recommended by the actuary.
1. The appeal was upheld with costs, including costs consequent upon the employment of two counsel. 2. The order of the court a quo was set aside and replaced with: (a) The pre-morbid contingency to be deducted for future loss of earnings is 10 per cent. (b) The defendant is ordered to pay the plaintiff's costs including the costs of the plaintiff's experts.
The determination of allowances for contingencies in calculating future loss of earnings involves a process of subjective impression or estimation rather than objective calculation. An appellate court will not interfere with a trial court's determination of contingency deductions unless: (1) the trial court misdirected itself in some material respect; (2) the appellate court's own estimates and those of the trial court are strikingly disparate; or (3) the appellate court is otherwise firmly convinced that the trial court's estimates are wrong. When assessing pre-morbid contingencies, the court must properly consider the plaintiff's demonstrated potential earning capacity and employment prospects had the accident not occurred, including evidence of the plaintiff's ambition, qualifications obtained, and employment history.
The court made critical observations about the RAF's conduct in refusing to settle the matter despite an obvious mathematical error. Tshiqi JA stated: 'It is regrettable that the RAF has wasted money that should have otherwise been efficiently used to pay for the claimants in an appeal like this. Meanwhile Mrs Masemola, has been made to wait unnecessarily, for lengthy periods for her matter to be finalised.' The court expressed hope that the RAF would prioritize the matter to avoid further injustice. The court also noted that where the difference between competing calculations is relatively small (R41,175.40 in this case) and legal costs of an appeal would obviously exceed that amount, it makes no sense for a party to refuse settlement and proceed with an appeal, particularly where the trial court made a patent error.
This case clarifies the principles governing appellate review of contingency deductions in delictual claims for future loss of earnings. It reaffirms that while trial courts have broad discretion in making subjective estimates for contingencies, appellate courts will interfere where there has been a material misdirection or where the court has failed to properly consider relevant factors such as the plaintiff's demonstrated ambition and potential earning capacity. The case also serves as a critique of the RAF's litigation conduct where it unreasonably refused to settle a matter involving an obvious error, thereby wasting resources and causing unnecessary delay to an injured claimant.
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