The silicosis class action – which the Gauteng High Court (Johannesburg) recently approved of as ‘reasonable, adequate and fair’ (see Ex Parte Nkala and Others) – has consistently been referred to as a ‘compromise’.

However, lawyer and professional mediator John Brand – who facilitated the settlement negotiations on behalf of the companies and led their negotiating team – argues that the settlement was even better than the best that the parties could have achieved in litigation.

‘If the case had been litigated to the end it would have taken 10 to 15 years and successful claimants would have received various amounts of damages, provided they were still alive, and provided the company or companies against whom they were successful were still in existence.’

Furthermore, lawyers’ fees would have ‘significantly’ eroded the amount awarded to them.

In an analysis on the Daily Maverick site, Brand says for the companies, there were material risks associated with the litigation.

‘Even if the companies had successfully defended the litigation, it would have been at enormous legal, management and potential reputational cost.’

In contrast, the negotiated settlement establishes a trust which is expected actively to locate potential claimants, arrange for them to be medically examined and help process their payments. The settlement allocates an amount of R845m to the trust to facilitate this.

Brand says the settling companies have also invested resources into the statutory compensation system operating under the Occupational Diseases in Mines and Works Act (ODMWA).

‘No court could have required the synchronisation between the settlement and the ODMWA systems – which will result in very significant additional benefits being paid to eligible claimants.’

He adds that claimants do not need to prove apportionment as between the settling companies: ‘Each company is liable for its respective share with separate guarantees totalling R5bn. The companies have agreed to the basis on which benefit payments should be apportioned between them.’

Furthermore, as the companies have provided bank guarantees for the settlement amounts, claimants do not run the risk of non-payment due to a company going into liquidation; claimants do not need to pay lawyers or other agents to process their claims; and there are categories of claimants who will receive payments even though they were not included in the class action claim.

Says Brand: ‘The settlement has significant elements that go far beyond what a court has the power to award. It is therefore strongly arguable that, as a whole, the settlement far exceeds the value of any outcome, for both the claimants and the companies, that could have been achieved in litigation.’

Full analysis on the Daily Maverick site

Ex Parte Nkala and Others