Court offers guidance on dealing with RAF payouts
The Master of the High Court has asked the Gauteng High Court (Pretoria) for guidance on how to deal with the large number of cash payouts by courts in damages claims.
Another question, notes a report in The Star, is whether it is best to establish a trust or appoint a curator where plaintiffs are unable to manage the money themselves. This is especially in Road Accident Fund (RAF) cases and, to a lesser degree, in medical negligence matters where the victims have suffered severe brain damage, and funds must be protected for further use.
In many cases a lump sum, sometimes running into millions, is awarded.
The Master earlier submitted a report to the court, seeking guidance on certain issues involving the Master’s supervisory powers over trustees and curators in matters where damages have been awarded.
The Master also identified five cases where specific guidance was sought, which involved RAF matters where the accident victims suffered severe brain damage and could not manage the funds.
Three judges – Raylene Keightley, Anthony Millar and Acting Judge Cinzia Vallaro – voiced concern that the RAF did not participate in the proceedings.
‘These were issues in respect of which the RAF could and should have provided crucial input. It is concerning indeed that it saw fit to remain disengaged from the proceedings,’ Keightey said in the judgment.
‘These damages are awarded on the basis that the amount will compensate the plaintiff for the salary he/she would have earned but for their injury in an accident… In most cases, once a lump-sum award has been made, a court has no further legal interest in the matter.’
According to the Master, there are some practical difficulties in implementing court orders. The Master said the best route to follow was through the appointment of a curator bonis, over whom the office had more extensive supervisory powers, rather than through the establishment of a trust, over which it had less extensive supervisory control.
The Star notes that Keightley said practically, if this court were to agree to the Master’s submission, the effect would be to place an even greater bureaucratic burden on the office.
‘The question of whether a curator should be appointed or a trust established is one for a court to consider based on all the facts before it and the motivations that are made for the mechanism proposed by the parties.’
She added that the flexibility of the trust as a mechanism for protecting damages awards may in many cases be beneficial to the plaintiff’s interests.
However, each case must be considered on its own facts, the judge said.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.