State Liability Amendment Bill: public hearings

This premium content has been made freely available

Justice and Correctional Services

31 October 2018
Chairperson: Ms M Mothapo (ANC)
Share this page:

Meeting Summary

There was a consensus from the submissions that the State Liability Amendment Bill should not be passed and that it is unconstitutional. Reasons for the rejection of the Bill include it is unfair to take away lump sum or instalment payments to implement periodic payments, it is a burden to women and families, it focuses more on financial than medical issues.

The removal of the phrase the “Court must” resonated in the meeting and most submissions agreed that this needed to be changed as it confines the Court into a limited space of capacity to execute its role.

Looking to the future, the Bill enables the government to make a blind commitment that does not factor in the future fiscus. The Bill does not tackle the challenge of poor care provided to patients in the public sector. Legal representation of those who cannot afford an attorney due to their financial status also needs to be addressed to ensure that attorneys do not take advantage of the poor. The agreement across the board was that the Amendment Bill has a negative impact on the poor.

A meeting with the Health Portfolio Committee was suggested to ensure that the concerns in the Bill are addressed.

Meeting report

Mr James Wewege submission
Mr James Wewege, a pre-final year BAccLLB student at the Stellenbosch University, said that his submission had three key points. Firstly, he highlighted that in terms of Section 2A(3) of the Amendment Bill, periodic payments are subject to an annual increase in terms of the Consumer Price Index (CPI). He suggested that the Bill should make use of a more suitable alternative measure to allow for the function of accuracy, costs and practicality as this measure is not appropriate. Secondly, according to 2A(2)(b), the plaintiff will be directed to a public health establishment - the wording is singular not plural and there will be a lot of consequences for this. Constitutional rights such as freedom of trade, residence, movement and occupation will be provoked. He suggested that a range would be better to allow for one’s constitutional rights not to be affected. Lastly, in section 2A(2), the plaintiff might be asked to pay tax on their periodic payments and thus tax treatment of the periodic payments needs to be investigated. Taxing the plaintiff goes against the Income Tax Act which exempts those who are injured from paying tax. It is unfair. An exemption should be introduced to the Income Tax Act that allows exemptions for periodic payments.

Mr W Horn (DA) said that the proposed solution assumes that there will always be an increase in the budget provision for public health on a year to year basis. This is not possible as there are years that there will be a decrease and not an increase in the fiscus. This impacts the beneficiary. There is the difficulty in people having to access multiple public health facility, how do we account for this cost wise?

Mr S Swart (ACDP) commended the presenter for the submission. In terms of Section 2A of the Bill which states that “a Court must” is alone problematic. Access to justice is difficult. The proposal for future structured payments might make medical practitioners not keen to assist.

Mr L Mpumlwana (ANC) asked if his recommendation talks to the problem that needs to be solved.

Mr Wewege replied that he did not factor in a decrease of the CPI. He worked on the assumption that it always increases and not vice versa. It will be a more accurate record if the CPI does increase. In terms of someone having to travel, if someone must move because of job opportunity, access to justice might be limited. He was not sure about contingency fees. Having period payments will allow people to budget for payments instead of paying lump sums once off.

Mr Mpumlwana asked Mr Wewege if he preferred payments to be made directly to the hospital or the individual.

Mr Wewege replied that paying the hospital directly will ensure that funds are not abused.

Dr Jessica Rucell submission
Dr Jessica Rucell, a UCT post-doc fellow, said that the Bill will not address the root cause of the crisis in obstetric care; it is an inadequate approach to reduce the Department of Health expenditure. She recommended the Committee reject the Bill in its entirety. Poor birth outcomes are not covered by the Bill. Violation of reproductive health of women and families is not catered for by the Bill. The Bill does not investigate the primary factors that cause loss of money to the Department of Health. Abuse of funds through corruption and irregular expenditure take more funds that those availed to poor women and their families. The burden is put on poor women to access justice.

Mr Mpumlwana asked what the real problem is. The Bill is there to solve the problem of multiple legal claims coming to the government at the same time. He wanted to know what exactly the problem is that the Bill is trying to solve.

Mr Swart said that the Health Committee needs to deliberate on the Bill as well as it is too technical. This should be a priority when they deliberatate on the Bill. The focus is on budgeting and costs. In the long term will it save the state money? There is doubt about this. The role of corruption is important and needs to be addressed. Access to health for the poor is important.

Mr Horn said that one cannot legislate for government failure. If there as better-quality service, what would be your view on the Bill?

Dr Rucell replied that the Bill does not address the problem of lack of budget and will only exacerbate corruption as this is not addressed. The Bill is limiting and will only have a negative impact on human rights. The Western Cape pays out the most claims. Corruption outweighs the medical claims. Payments should not be restructured and will affect access to healthcare by poor women. The current problems would not be there and there would not have been a need for this Bill if there was better quality medical service in South Africa.

Mr V Smith (ANC) asked what the alternative is if the Bill is dropped? There are always problems in the medical field.

Mr Mpumlwana said that what the lawyers usually do is to put their percentage on the lump sum payment. Sometimes the percentage they require can be more than the available funds. If money for future medical expenses is kept and paid by government when it is needed, is this not better?
Dr Rucell replied that there is a need to change the current structure and more accountability needs to take place. The Bill fuels this. The inequality within the health sector needs to be addressed soon and the Minister of Health is right to call for a National Health Insurance (NHI).

South African Medical Malpractice Lawyers Association submission
Adv Karrisha Pillay, an Advocate and Member of the Cape Bar, said that the Bill should not be passed. The Bill has an impact on access to justice for poor people. Secondly, it defers payments and vests in the courts the power to bind government to future payments made for in advance. The separation of powers is an issue that always comes up in courts. They submit that what this does is legitimately vests in the courts the power to prescribe to government how budgets must look like in 10 to 20 years without any insight into what the context is and the demands of the system and this alone brings about difficulty.

Attorneys will most likely be reluctant to take on challenges with these claims and the poor will be left with no recourse. There are eight core issues why the Bill should not pass:
▪ Courts will prescribe to government what budgets will look like.
▪ It has an impact on Section 66 of the PFMA.
▪ It draws a distinction as it applies to the state only and only to medical malpractice and only to claims over R1 million.
▪ It eliminates the discretion of the courts.
▪ It imposes on the public health system the standard of compliance in relation to norms and standards as determined by the Office of Health Standards Compliance.
▪ The Bill does not deal with questions of changing circumstances.
▪ It benchmarks costs between private and public health establishments.
▪ The ambit of the Bill is applicable only to legal proceedings that have not been concluded.

Mr Smith said that he understood the concern about courts giving orders based on the separation of powers doctrine. However, he felt as though the submission was set up in a way to lobby for the private attorney community. Legal Aid SA handles poor people cases. Where in South Africa do you get a private hospital without a public hospital? He was not happy with the submission addressing the impact on lawyers. We are here for South Africa at large and not for the lawyers.

Mr T Mulaudzi (EFF) asked what the problem is for attorneys not being able to assist given the ability to structure future payments. He asked for an explanation on the discretion of courts?

Mr Swart asked Ms Pillay to explain her last three points. Corruption and maladministration need to be addressed and if this is done, fewer medico-legal claims will be made. If funds are available medico-legal claims will also be easily dealt with if there is not the challenge of budgetary constraints. He said that wasted legal costs by the state need to be explained further by the presenter. 80% of medico-legal claims in Limpopo are appealed and once judgements are granted, no payment is made. He added that he was surprised that the Bill was certified.

Mr G Breytenbach (DA) wanted more clarity on the discretion of the courts. She asked about the medical treatment in both public and private facilities and what the difference is. She agreed with Mr Swart that the Bill is not in a state to be passed.

Mr Andre Calitz, Chief Operating Officer of South African Medical Malpractice Lawyers Association, replied that over the past 18 months there has been an investigation in malpractice within the medical field that has taken place with the help of the Minister of Health, Dr Aaron Motsoaledi. Practical solutions have been worked on and the establishment of why there are such claims. In medical malpractice cases, lawyers are entitled to charge double and up to 25% more if they win a case. No bank finances attorneys, they fund their own cases.

Ms Pillay replied that the submission is being made on the premise that the Bill will pass as introduced. The submission addresses the strain on the national fiscus. Section 2(A)(1) states that the “Court must” and the elimination of this must take place. The Bill does not give a choice between private and public health facilities, it only offers public facilities.

The Chairperson said that all questions not answered need to be put into writing so that when a resolution is made, it will come from a more informed base.

Mr Smith said that private hospitals have more capacity than public hospitals but people do not have medical aids to access private facilities.

Mr Mpumlwana wanted to understand how lawyers work tirelessly for no pay? When they do take 25% and double up their fees, this makes the client suffer indirectly. It becomes more of a lottery. He is worried about the lawyers and why they are not patriotic.

The Chairperson said that Mr Mpumlwana had given his own opinion that lawyers are not patriotic. It is not the view of the Committee.

Mr Mpumlwana withdrew his statement.

Mr Swart asked about the progress of the task team that was initiated by the Minister of Health.

Mr Calitz replied that there are organisations such as the Constantia Insurance, South African Medical Coalition, and various high risk medical associations who would also like to present if it is possible.

Ms Breytenbach said that people must have been given sufficient time to make their submissions.

Law Society of South Africa (LSSA) submission
Ms Jacqui Sohn, a LSSA attorney, said that the Bill infringes many constitutional rights and is most likely not to pass. Structured payments are easier to handle than lump sums. When making laws, legislatures should act rationally. There is no rational nexus in terms of the Bill.
Irrational nexus must be found when it comes to considering the purpose of reducing the claims and addressing the cause of the problem. In terms of Section 9 of the Constitution, the Bill does not provide for equality. It discriminates against people who seek help. Section 10 of the Constitution is also affected as the Bill does not give a guarantee to the right to their dignity. In terms of Section 12 of the Constitution, the Bill takes away freedom. Section 25(1) of the Constitution is also infringed through confining people to certain medical institutions. The timing of the Bill is important as it comes only as an interim measure and leaves a lot of questions. In terms of solutions, LSSA will provide these in writing.

Mr Swart asked for more explanation of the R56 billion of contingency liability was raised and only R1.1 billion was paid in settlement. He needed more information on this in writing if possible. they need to amplify the Constitutionality of the Bill. What is the alternative remedy?

Mr Mpumlwana asked for more clarity on the phrase “a court must”. If a lump sum is paid it can be problematic, in comparison to structured payments. He has a problem with the amount that is to be paid out to the lawyer. If they take half or 25%, it is problematic.

Mr Mfana Gwala, LSSA Council Member, replied that they are aware of problems with state attorneys and investigations are taking place. Some even face the possibility of disbarment. Misconduct is taken seriously.

Ms Sohn replied that in terms of contingency and actual payment, the changes proposed are not justifiable. There is an infringement of rights and specific reasons need to be given to do so.

Legal Resources Centre (LRC) & Women’s Legal Centre submission
Ms Mandivavarira Mudarikwa, a LRC attorney, focused on the access of women to medical facilities through child birth and concluded that the Bill will not address the problem. White people are more likely to give birth in a private hospital than in a public hospital. Based on Statistics South Africa, perinatal death is set at 21 deaths per 1000 births. There are 4 000 obstetric claims and 3 000 cerebral palsy claims. There is neglect in still births. There is an increase in child birth claims because of poor service in state hospitals. Section 27 of the Constitution is infringed by the Bill. There is a lack of training and accountability within public facilities. Amending legislation does not solve the problems at hand. 

Ms Nasreen Solomons, a WLCE attorney, said that the Bill infringes the separation of powers. The main concern is the use of “Court must” which should be removed. The once and for all rule is limiting, future medical expenses are taken out of context and the claim that is brought before the court, it excludes future medical expenses. Those that make use of state facilities are indigenous people and have limited legal aid access and when they need legal assistance with personal injury claims they can only go to private attorneys who will assist them on a contingency fee basis. Treatment of the plaintiff can only be done at a public health facility in the area in which the incident happened and where state health care is not available and they are asked to access a private facility, the state caps its liability.
The Chairperson wanted clarity on the role played by access to justice and what it meant.

Mr Mpumlwana asked how the Bill limits the rights of women. The Bill does not limit the claim. What is important is that the lawyers want to secure their fees from the money that would have been awarded. On the separation of powers, “Court must” is there to limit the role of the Court. What must happen if this is not there? Legal Aid does assist with some of the cases for people without money. They can address this. Private hospitals are not necessarily better than public hospitals. People in Mthatha are referred from private hospitals to public hospitals.

Mr Swart said that the statistics on the mortality rate is welcomed. He emphasised that the Committee is not that of Health but Justice. The problem is far deeper than private versus public hospitals. The state needs to be held liable. He gave the example of the Life Esidimeni case where it becomes challenging to make public officials accountable.

Ms Breytenbach said that the Portfolio Committee on Health should be engaged with on this topic.

Mr Skosana said that he welcomed the submission. He did not understand why “must” in terms of periodic payments was being queried. It is meant to cover future expenses. What are the challenges with this?

Ms Solomons replied that they understand that poverty greatly affects women. When a private sector facility is approached for claims of care for injuries, it is capped and does not assist women who are impoverished. This is unlike a public facility where care given is not capped.

Mr Mudarikwa replied that not enough attention is given to women during birth. The reason for the litigation is at the core of the issue. Fewer claims will be made if the service is improved. The focus is more on money now and not valuing the body of a woman. This needs to be addressed.

Mr Mpumlwana said that women are respected. They are solving the problem presented.

Mr Swart said that Mr Mpumlwana is making broad statements and needs to be truthful.

Ms Breytenbach asked how someone can be compensated for the killing their child.

The Chairperson gave the Law Society seven days to submit additional responses to the Committee.

DSC Attorneys submission
Ms Kirstie Haslam, an attorney at DSC Attorneys, said that the Bill must be rejected. The focus has been on lawyers and their fees and working for their self-interest.

Mr Johan Roux, an attorney at DSC Attorneys, said that administration of payments will be difficult if new treatments are made available. There is an administrative burden already on the state; who is going to administer these payments? There is the risk of corruption. Who is going to keep officials accountable? There is a financial burden as well; it is a short-term solution to do periodic payments.

Ms Haslam said that there is a problem with the removal of the judge's discretion in Section 2A(1) when it comes to payments. Allowing the passing of the Bill will be devastating and it is unconstitutional.

Mr Swart said that if a claim of R999 999 is made, full payment is given. However, if it is R1 million, payment will be periodical, this alone is discriminatory. There is milking of the system and corruption activities need to be curbed.

Mr Skosana remarked that important points have been raised and need to be addressed. What is the challenge with people receiving periodic payments?

Ms Breytenbach said that state attorneys need to give their input on the Bill. She said that the Bill is unconstitutional.

Ms Haslam replied that the Bill is there to treat the symptom not the problem. There is no substantiation as to how the R1 million figure was arrived at. She agreed that state attorneys need to give their input on the Bill.

South African Orthopaedic Association (SAOA) submission
Dr Brian Bernstein, SAOA second vice-president, said that there is massive litigation of medical practitioners for malpractice. Due to litigation, the issue of malpractice is becoming costlier. Training in hospitals is critical. The risk of doctors not following correct procedures is on the rise within the medical field. Who will settle the payment for treating a patient who needs care? These are vague issues. They appreciate the attempt to reduce the burden on the state. The health sector loses R43 billion per annum on malpractice claims, only R39.5 billion is given to hospitals, this eats into the already constrained budgets. He welcomed some of the changes in the Bill.

Mr Swart said that the physician and nurses need to be accountable for their actions to avoid malpractice. He was grateful for clarifying the difference between wrongful and negligent claims.

Mr Mpumlwana said that it is good to have someone sympathise with the state. He asked about the problem with the budget and how it is affected by litigation.

Dr Bernstein replied that preventing litigation is determined by resources. Some hospitals have good equipment and are well staffed in state hospitals. Capping might leave patients under resourced. Most patients who are injured on duty are treated in private hospitals and this is determined by availability of resources. The private sector is making money from a government fund and the payment is not sufficient given that there are no resources in the public sector to allow for treatment. The implementation of the NHI will be important.

Western Cape Provincial Government (WCPG) submission
Ms Ronel Berg, WCPG legal advisor, said that they have a specialised unit of lawyers and doctors that have their own budget who work closely together. There is a need for periodic payments, but the method suggested by the Bill will have dire consequences. They do not accept the clause that states the “Court must” in Section 2A(1). There is no control over how the money to be paid out will be used, and this is problematic. Wastage of money will take place. Periodic payment equals deferred debt. Section 2A(2C) makes it appear as if the provincial government will save more money because of patients going to public hospitals for assistance. She referred to an article called “Medical Grief” in Africa’s Medical Media Digest this year, it made reference to only 5 out of 696 state hospitals and clinics being compliant. This does not help. Structured medical claims will not reduce negligence.

Mr Muladzi asked if only 5 out of 696 hospitals and clinics are compliant, have you tried to address this at a national level?

Mr Mpumlwana said the Health budget is limited. If more claims are made than the budget itself, beds and cars will be attached to pay for litigation. There is a need for concrete suggestions.

Mr Swart asked why are other state attorneys not working the way that the Western Cape Provincial Government is? He asked why public entities are underfunded. He welcomed the submission made by the Western Cape Provincial Government.

Ms Ronel re-explained the impact of Section 2A(2C). There is an authority in common law for the court to order for future medical care to take place in the public sector, if there is proof that the service to be rendered matches that of the private sector. There are no budget concerns in the Western Cape. They have capacity in terms of both lawyers and doctors.

Mr Mpumlwana said that when a written submission is made, problems outside of the Western Cape also need to be addressed.

South African Society of Anaesthesiologists (SASA) submission
Mr Johannes van Waart, SASA president, said that SASA has 6 000 members.

Ms Priya Soma-Pillay, SASA member, said that they focus on the improvement of women’s health. An increase in medical claims is not in the interest of the public. SASA is concerned about claims against its members. Medical insurance for SASA members in the private sector is close to R1 million. Payment of large sums will weaken the system. They believe that there should be a drive to reduce medical negligence, amongst various member groups, it does away with legal costs which are currently a huge driver in the litigation process. The Bill only addresses public-sector patients and not the private sector. There should not be any disparity. The Bill needs to be more specific and does not address the financial burden on families. A yearly review of payments needs to take place. The current medical field is underfunded. The Bill must be reformed to address key issues.

Mr Mpulmwana said that SASA does give a solution to the problem and this is appreciated.

Mr Swart asked how the introduction of the NHI will lead to more claims.

A member of the SASA team replied that they are trying to make people aware that some of the issues are not a case of negligence. Consideration needs to be made for what is also taking place in the private sector and not just the public sector. What is happening in South Africa is not unique to what is happening in to the world. Medical reforms must take place.

The Chairperson gave SASA seven days to submit their responses in writing.

Actuarial Society of South Africa (ASSA) submission
Mr Lusani Mulaudzi, ASSA president-elect, said that they are serious about the public interest. They do not know how many claims are sitting with the state attorneys. Management of risk is important.

Mr Gregory Whittaker, actuarial scientist, said that data is needed when it comes to assessing the size of the liability involved. The size of the problem is unknown. Overall there are cases of discounted value under a lump sum regime and undiscounted value under periodic payments regimes.

Mr Mpumlwana said that there is a need to account for the change in the value of money. If cash is to be paid for a house, it will be easier to pay it off in parts and not once off.

Mr Swart requested a graphical representation of payments being referred to. He thanked the presenters for addressing liability.

Mr Mulaudzi replied that a trust deficit exists. The Bill is unclear and does not give the public a sense of comfort that the challenges will be solved.

Mr Whittaker replied that he will provide a graphical representation.

Mr Mpumlwana appreciated the input on the trust element but said that this cannot be put in the Bill.

Mr Mulaudzi replied that countries such as the UK do structured payments. As the Actuarial Society, they are not saying that structured payments are not okay, but are rather suggesting a better mechanism.

The Chairperson said that anything else needs to be put in writing.

The meeting was adjourned.

Download as PDF

You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.

See detailed instructions for your browser here.

Share this page: