While payouts for medical negligence claims against the state have dropped over the past few years, billions of rands are still being paid out annually, write Marecia Damons and David Capel for GroundUp.
The claims largely stem from cases involving obstetric injuries, including cerebral palsy, from orthopaedic surgery and from trauma-related incidents.
From about 2014 until the early 2020s, negligence claims ballooned. By March 2020, the total value of claims (not payouts) against the state amounted to 45% of public health spending for the year, threatening the capacity of the provincial Health Departments to provide proper care.
But after a concerted effort by the state, both claims and payouts on claims have declined. Payouts of negligence claims decreased from R1.8bn in 2019/20 to R1.5bn in 2023/24, according to the National Treasury. In 2024/5, the government paid out R1.1bn in negligence claims, Health Minister Dr Aaron Motsoaledi said, answering a parliamentary question in March last year.
Yet while actual payouts are falling as the state successfully contests more claims, the value of claims against the state is still very high. Only a fraction of claims are paid out: many claims are reduced upon settlement and many have no realistic chance of success. (Claims take years to be finalised in the court system, and claimants and the state incur huge legal costs.)
However, the state still has to take into account that claims may succeed, and to account accordingly. As of 31 March 2024, this “contingent liability” amounted to R62bn, more than 20% of the public health budget.
In a recent case, the Supreme Court of Appeal (SCA) ruled that damages for future medical expenses must always be paid as a lump sum, rejecting an attempt by the Eastern Cape Health Department to provide ongoing treatment instead, a model sometimes referred to as a “voucher system”.
The case involved a child born in 2011 who sustained severe disabilities due to negligence at birth. The Eastern Cape MEC for Health argued that the child could be treated within the public health system at a lower cost, and that large lump sum payouts were placing unsustainable pressure on provincial budgets.
The Eastern Cape High Court (Bhisho) had initially agreed, ordering the department to provide treatment rather than pay damages. But the SCA overturned this decision.
In a unanimous judgment, the SCA reaffirmed the long-standing “once and for all” rule, which requires that damages, both past and future, be paid in a single lump sum.
In an expert opinion offered to the court on behalf of the department, economist Andrew Donaldson warned that because the state has to take into account the possibility that claims will succeed, “the rise in medical negligence claims against the state represents a threat to the capacity of the state to provide and improve health service delivery”.
“On present trends, the annual increase in claims against state Health Departments already exceeds the real (after inflation) increase in resources available for health service delivery, and will soon exceed even the nominal annual increase in resources.”
In a paper on the liabilities of the provincial departments, Zeenat Emmamally, a legal researcher at the Helen Suzman Foundation, wrote that “large awards of compensation cannot accurately be budgeted for because they are unpredictable and case-specific, leaving health departments to scramble to reallocate funds from their budgets to pay such claims”.
“As a consequence, money is diverted from the delivery of healthcare services, causing facilities to be consistently under-funded and resulting in even more claims of medical negligence.”
Donaldson suggested in the SCA case that a system where costs are paid as they arise would better align with how public finances are managed, and solve the problem of estimating future needs.
“This would bring the court system into sync with the way the budgetary and appropriation of funds systems operate”, he said, and allow the state to “better match its actual expenditure to needs and to adapt those commitments over time if needed”. Moving to a pay-as-you-go basis would prompt parties to settle claims sooner, he added.
Paying claims over time rather than upfront would help protect the state’s ability to deliver services, given existing fiscal constraints and rising medico-legal costs, and while upfront settlements might still be appropriate in certain instances, a flexible, needs-based approach could help balance compensation with the state’s broader service delivery responsibilities, Donaldson noted.
But Justice Ashton Schippers, writing for the SCA, warned against “drastically” changing established legal principles, saying such reforms should be left to the legislature.
The court also found that shifting away from lump sum payments would create uncertainty for patients and could expose them to the risk of inadequate care in a public system that had already failed them.
See more from MedicalBrief archives:
Eastern Cape’s plan to turn tidal wave of negligence claims
Court furore over Eastern Cape attempt to stop medical negligence writs