at last, a precedent - legal claims
20 June 2008

These contingent liabilities now amount to about 2% of the country's total budget.  But this figure is just the amount set aside for claims across departments, it doesn't show how much the state actually paid out. Those numbers are almost impossible to ascertain.

Civilians lodged claims of more than R6,9bn against the SA Police Service in 2006-2007, including for damage to property, shooting incidents, assault and other claims. Yet, the police settled just R37m of those claims last year. Meanwhile, the department of health faced R10,5m in claims, many for negligence in state hospitals. Yet in 2005-2006 it settled just R3,6m.

Up until now, state departments that simply wouldn't pay up even if there was a court order to do so could not be held accountable for the money. The State Liability Act, in effect since 1957, prevents anyone attaching state assets to secure payment of money owed to them.

But earlier this month, in a landmark case, the constitutional court ruled in favour of Dingaan Nyathi, a victim of negligence at a state hospital. The judgment makes the State Liability Act unconstitutional, meaning state departments will no longer be able to rely on this provision to avoid paying debts.

Nyathi battled through the courts to get the Gauteng department of health to pay damages after he was left disabled when nurses incorrectly treated him at the Pretoria Academic and Kalafong hospitals in Pretoria. Despite an order by the high court to pay the damages, Nyathi died before the money he needed for treatment was paid out.

In a scathing judgment, judge Tholakele Madala said deliberate non compliance with a court order by the state detracts from the dignity, accessibility and effectiveness of the courts.  "The ordinary citizen has no effective remedy available in a situation where the state and its officials fail to comply with a court order."

Declaring the State Liability Act unconstitutional, he said the problem was not one of resources of the state, but one of administration. "Only in recent years have the courts been faced with a flood of litigation of this magnitude in respect of unsatisfied court orders."

It's unclear how widespread non compliance is, says Shameela Seedat of the Institute for Democracy in SA. In the area of social grants a large number of complaints have been levelled against the Eastern Cape provincial government because of its failure to implement various court orders which mandate the payment of social welfare grants. "What's clear is that it is an infringement of the rule of law and has an impact on the constitutional rights of equality before the law, access to the courts and government's obligations to deliver services," Seedat says.

At the moment there is no central state fund from which claimants can ask for outstanding payments. Instead, civilians must tackle officials within the department responsible. Even then, a court order is no guarantee of being paid. Madala criticised the state for 200 outstanding debt judgments. Though it was intended to protect state property lawfully owned by the public from the claims of individuals, Madala says the act is a relic of a legal regime which placed the state above the law and in which its officials could not be held accountable.

Madala gave the legislature 12 months to introduce mechanisms that would allow creditors to attach assets. He also ordered the state attorney to compile a list of all unsatisfied court orders against national and provincial state departments by the end of July. It must also provide the court with details of the steps it will take to ensure speedy settlement of unsatisfied court orders.  Much of the problem seems a lack of co-ordination between the state attorney's office, which represents all government departments, and departmental office bearers. In the Nyathi case, the state attorney appointed to the case did not even show up for some of the most crucial hearings. Madala sharply criticised the tardiness of the department.

Last week, the department of justice acknowledged the problem, issuing a statement saying public concern had been noted regarding the co-ordination between state attorneys and the departments and officials they are defending.  Officials from the state attorney's office and the justice department as well as legal experts and judges met to discuss ways to improve the management of cases involving government. A state litigation management forum will be established to improve co-ordination, efficiency and accountability. It will give input into legislation to replace the State Liability Act.

Nyathi's attorney, Adele van der Walt, says she has one regret that Nyathi did not get to see the impact of his case. "We never expected it to go all the way to the constitutional court," she says. "I think he would be happy to know that it will help others in a similar situation."

Jacqui Pile,  http://free.financialmail.co.za