The recent judgment of
Rahldeyah Esack v the Road Accident Fund[1], handed down by the Western Cape High Court, has contributed to the ongoing legal debate regarding the Road Accident Fund's (RAF's) liability to compensate accident victims already covered by their medical aid. At the heart of this case lies a fundamental legal question: Can a claimant's right to compensation in terms of the RAF Act 56 of 1996 be diminished by third-party payments?
In December 2015, Mr Esack sustained bodily injuries when his vehicle collided with another vehicle. His wife was subsequently substituted as the plaintiff and sought compensation from the RAF for past hospital and medical expenses. The central issue was whether the RAF was obliged to settle those expenses notwithstanding that they had been settled by the medical aid scheme, Discovery.
The plaintiff adopted the position that, based on the legal doctrine of
res inter alios acta, which directly translates to "a matter between others is not our concern", the RAF was obliged to reimburse the expenses.
The RAF, relying on the decision of the Full Bench of the Gauteng Division of the High Court, Pretoria, in
Discovery Health (Pty) Ltd v
RAF[2], argued that neither Mr Esack nor his estate had suffered financial loss, as Discovery had already covered the medical expenses. The main issues in
Discovery Health related to the RAF's directives, one of which instructed its employees to reject claims which had already been covered by medical aid. As a result of the decision in
Discovery Health, the RAF in
Esack contended that it was not obliged to pay. Furthermore, the RAF argued that the expenses in question fell under
Prescribed Minimum Benefits or Emergency Medical Conditions, which medical aid schemes are statutorily required to cover.
In the
Esack matter, the court was not persuaded that the
Discovery Health judgment changed the legal landscape in so far as the common law principle of
res inter alios acta is concerned. Such a conclusion would be contrary to the Supreme Court of Appeal's decision in
Bane v
D'Ambrosi[3], that the Medical Schemes Act does not deprive plaintiffs of their claims for hospital and medical expenses. The court in
Esack ultimately ruled that the RAF is liable for the plaintiff's past hospital and medical expenses, even if these were covered by a medical aid scheme, thereby upholding the principle of
res inter alios acta.
This judgment reinforces that medical aid payments do not reduce a claimant's entitlement to compensation from the RAF. The interesting divergence in judgments by the Western Cape High Court and the Pretoria High Court highlights the ongoing legal debate surrounding this issue, which has been settled based on the
res inter alios acta principle in other forms of indemnity insurance.
As the legal dust settles (or not), we are keeping a keen eye on what happens next.
