The plaintiff's husband died in a motor vehicle collision on 9 October 1998, giving rise to a claim for loss of support against the Road Accident Fund (RAF). The defendants, who were attorneys, were instructed to pursue this claim but negligently failed to issue summons timeously, causing the claim to become prescribed. The agreed value of the lost claim was R850,000. The plaintiff also received a pension benefit of R695,525 from Rand Mutual Assurance Company under a Commuting Journey Policy (CJP) arising from her husband's employment at Douglas Colliery. Had the RAF claim succeeded, the plaintiff would have been obliged under the CJP to indemnify Rand Mutual to the extent of the benefit paid. The defendants argued that the plaintiff's damages should be reduced by R695,525, leaving her with only R154,475, to avoid double compensation.
The appeal was dismissed with costs. The High Court order was amended to include the agreed interest provision. Judgment was entered for the plaintiff against the defendants, jointly and severally, for R850,000 with interest at 15.5% per annum calculated from 14 days after the date of judgment, plus costs including costs of senior counsel.
Section 1(1) of the Assessment of Damages Act 9 of 1969 does not apply to claims for professional negligence against attorneys who negligently allowed a claim for loss of support to become prescribed. Such claims are for loss of opportunity to recover damages, not for loss of support itself, even though the quantum is determined by reference to the lost claim for loss of support. At common law, in determining whether a collateral benefit should be deducted from damages for professional negligence, policy considerations of fairness are determinative. Where attorneys negligently cause a claim for loss of support to become prescribed, they are not entitled to reduce their liability by reference to insurance benefits that would have been excluded from the original claim under the Assessment Act. The wrongdoer should not benefit from a collateral source that was irrelevant to the claim they negligently allowed to be lost.
The Court observed that if the plaintiff does not repay Rand Mutual and thereby profits from the outcome, it would not be unfair because the defendants would be no worse off than the RAF would have been had they fulfilled their mandate to diligently pursue the claim. The Court noted that the plaintiff may consider herself morally obliged to indemnify Rand Mutual as she would have been obliged to do had the claim against the RAF succeeded, and she should not be deprived of that moral choice. The Court also commented that there was nothing opprobrious in Rand Mutual's conduct in being interested in the outcome, as it was out of pocket and entitled to try to recover the amount it had paid. The Court noted that the 14-day delay before interest became payable was inexplicable and would not have been applicable to the plaintiff's claim in any event.
This case is significant in South African law for clarifying the application of section 1(1) of the Assessment of Damages Act 9 of 1969 and the common law principles governing collateral benefits in the context of professional negligence claims by attorneys. It establishes that the Assessment Act applies only to actions for loss of support, not to actions for professional negligence even where damages are calculated by reference to a lost claim for loss of support. More importantly, it demonstrates the application of policy-based fairness considerations in determining whether collateral benefits should be deducted from damages in professional negligence cases. The judgment reinforces the principle that wrongdoers should not benefit from insurance or other benefits that would have been excluded from the original claim that was lost due to their negligence.