Drake Flemmer & Orsmond Inc & another v Gajjar NO

Mr Rex Sutherland (the plaintiff) was injured in a head-on collision on 2 July 1997, suffering both orthopaedic injuries and an undiagnosed brain injury. His first attorneys, Drake Flemmer & Orsmond Inc (DFO), negligently under-settled his Road Accident Fund (RAF) claim on 21 December 1999 for R98,334 by failing to investigate brain injury and claim loss of earnings. The plaintiff then instructed Le Roux Inc (LRI) in July 2001 to sue DFO. LRI negligently allowed the claim against DFO to prescribe on 21 December 2002. The plaintiff subsequently instructed new attorneys who joined LRI as second defendant in June 2012. By trial in November 2015, both defendants had conceded negligence. The court a quo valued the plaintiff's RAF claim at December 2015 but reduced it by 43.69% for alleged delay, effectively valuing it at September 2009. A curator ad litem was appointed to represent the plaintiff.

• At what date should damages be assessed in a professional negligence claim against attorneys who negligently under-settled a Road Accident Fund claim?
• What law and evidence is applicable in assessing such damages?
• How should the time-value of money be accounted for in such claims?
• Whether the court a quo erred in reducing damages for alleged delay by the plaintiff?
• Whether section 2A(5) of the Prescribed Rate of Interest Act applies to award interest from an earlier date than demand or summons?
• Whether the in duplum rule prevents interest exceeding capital in such circumstances?

The appeal was dismissed with costs (including two counsel) payable by the second appellant (LRI). The cross-appeal was upheld with costs (including two counsel) payable by the second appellant. Paragraph 87.1 of the court a quo's order was set aside and replaced with an order that the second defendant pay the plaintiff (in his representative capacity) R9,211,953.

In professional negligence cases where an attorney's breach resulted in loss of a client's claim that would have been contested: (1) damages must be assessed at the notional trial date of the original claim, not the date of breach or actual trial against the attorney; (2) the law and evidence applicable are those that would have been available at the notional trial date; (3) the time-value of money is addressed through s 2A(5) of the Prescribed Rate of Interest Act, which permits courts to award interest from a date earlier than demand/summons where justice requires; (4) there is no legal principle permitting reduction of damages for delay in bringing a claim to trial; (5) the in duplum rule does not preclude s 2A(5) interest exceeding capital because such interest only becomes owing when the court exercises its discretion under s 2A(5), distinguishing it from arrear interest; (6) post-judgment interest runs on the combined amount of capital and pre-judgment interest.

The court noted, without deciding, several matters: (1) whether subsequent events after the notional trial date can be used to assess life expectancy more accurately (the English approach) versus only for piecing together evidence that might have been available (the Australian approach); (2) the approach where it is uncertain whether the client's lost claim would have succeeded on its merits, including whether 'loss of a chance' principles apply or a trial within a trial is required; (3) whether s 2A(5) confers power to override the in duplum rule (unnecessary to decide given the finding that the rule didn't apply); (4) whether s 17(3)(a) of the RAF Act trumps s 2A of the Interest Act regarding pre-judgment interest against the RAF. The court emphasized that the plaintiff's approach of valuing at trial date rather than notional date should not be followed in future - claimants must value at notional trial date and formally claim s 2A(5) interest. The court also expressed the view that in such cases, courts should tend toward generous assumptions favoring claimants given the attorney's fault deprived them of running the case at the proper time.

This case establishes important principles for assessing damages in professional negligence claims against attorneys, particularly: (1) the notional trial date principle - damages are assessed at when the original claim would have been tried; (2) application of s 2A(5) of the Prescribed Rate of Interest Act to compensate for loss of time-value of money from the notional date; (3) rejection of arbitrary deductions for delay where delay is attributable to the negligent party; (4) clarification that the in duplum rule does not prevent s 2A(5) interest exceeding capital as such interest only becomes owing when the court exercises its discretion; (5) guidance on applicable law and admissible evidence in 'loss of claim' cases. The judgment provides a comprehensive framework for quantifying damages where attorneys negligently deprive clients of personal injury claims.