Resolution of the silicosis class action
Litigation is not an efficient way of dealing with the matter of occupational disease.
We have previously dealt with two occupational health matters. The first involved Gencor and asbestosis. This matter started in London and later migrated to South Africa where it was eventually settled out of court with Gencor contributing several million rand as two trusts were formed.
At the time, Gencor was involved in merger discussions to form BHP Billiton. The asbestos litigation could have held up the merger for years, so it appeared expedient to settle the matter out of court. The significance of this is that at the time no claim for occupational diseases had succeeded in the courts. Whether such a claim could succeed was untested.
In the silicosis matter, a claim was brought against a mine and the High Court ruled that the matter was non-suited. It was then taken to the Supreme Court of Appeal, which upheld the High Court decision. The matter then proceeded to the Constitutional Court, which ruled against the mines.
This judgement was not made on the merits of the case, but on whether or not the Compensation for Occupational Injuries and Diseases Act of 1993 (COIDA) barred employees from suing their employers.
The Constitutional Court ruled that it did not. This was contrary to the view commonly held for over a century and contrary to the findings of the High Court and the Supreme Court of Appeal.
This ruling opened the way for miners to sue their employers. The action was limited to miners; it did not apply to industries outside of the mines. It was a lacuna in the law. This, in turn, paved the way for a class action, which was instituted and certified. It is this class action that is now being settled.
The purpose behind this all is not to get a court to make a decision, but to force the employer(s) to pay money into a trust. After much negotiation, the matter was again settled out of court. Therefore, despite years of litigation, we still do not have a successful case being decided in the courts.
We are still no closer to a decision as to whether or not it is legally possible to sue an employer for occupational disease. Most lawyers would accept that it is possible, but there are also good reasons to believe that this is not possible. Accordingly, rather than answering the question, the matter was settled out of court.
A similar method was followed in the United States with a range of disease cases. For decades, tobacco companies were sued, but the matter was eventually settled when most state Attorneys General joined forces and sued the tobacco companies. Again, the cases were settled out of court in a multi-billion dollar settlement in favour of the individual states.
Despite the importance of the settlement that is now being reached, it received surprisingly little media coverage – although the mines had come to an agreement that had taken several years to finalise. As the matter became closer to being considered by the courts (in this case the Supreme Court of Appeal) so the parties edged closer to an agreement.
In January this year, Business Day reported that the case had been put on hold as a settlement beckoned. It indicated that an amount of R5 billion would be paid into a trust to benefit some 100 000 former mine employees.
The Supreme Court of Appeal agreed to a postponement to allow the parties to reach the settlement. In May, it was announced that agreement had been reached, although it still needed to be approved by the High Court.
Some lessons appear to have been learnt from the earlier asbestos litigation. In that case, hundreds of millions of rand were paid into the trust. After several years, the fund still had hundreds of millions of rand and the number of persons found to qualify each year declined.
It then transpired that attempts were being made to compel the trust to use the funds for reasons other than compensating persons with asbestosis.
In the silicosis matter, it was announced that the R5 billion will not be paid over to the trust. The trust will make cash calls as and when funds are required.
An interesting report appeared in December 2017 as the parties were reaching an agreement. The government tried to intervene in the process and get agreement that government representatives should be appointed as trustees of the proposed trust.
The report recalls how a group (who were not suffering from asbestosis) tried to get access to the funds of the trust. A former trustee report showed how government representatives tried to persuade the trustees to hand over R30 million to this group.
At one point, the premier for the Northern Cape also alleged that the asbestos trust had paid persons who were not entitled to payment. This matter eventually ended up in court.
The asbestos trust denied that had happened and agreed to a forensic audit. It also asked for a list of persons who had received compensation but were not entitled to it. The premier was unable to provide a list.
Nevertheless, in the case of the new silicosis trust, the chairperson of the parliamentary committee agreed that government representatives should serve as trustees. It will be interesting to see if this happens.
We have previously expressed the view that litigation is not an efficient way to resolve matters of occupational disease. The silicosis matter merely illustrates that point.
Occupational diseases have attracted compensation for over a century. Persons who contract asbestosis and silicosis are entitled to compensation and have received compensation for over a century. The legislation is in place and is operational.
The allegation in the silicosis matter is that the compensation was grossly inadequate. That is probably true. However, the solution to this is not to allow a new cause of action, but to improve the level of statutory compensation. That should have been done by the government, which is responsible for the operation of the legislation. The fact that this was not done points to regulator failure. The way to deal with this is to improve the regulations, not to impose a new obligation.
The establishment of a trust fund is also not the solution. It is merely another administrative body, as it has to administer applications for compensation. The compensation fund is already an administrative body that does this, and the trust fund is a duplication of this body. The solution is to combine and streamline the existing compensation bodies – not to make new ones.