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Insurance & Reinsurance
A recent South African Constitutional Court judgment provides important guidance regarding wrongfulness and the existence of an actionable legal duty on public bodies. This article provides insight into how this judgment may affect insurers of municipalities and other public bodies that are subject to statutory duties.
On 27 August 2021, the Constitutional Court of South Africa (“the Constitutional Court”) delivered a judgment in the matter of BE obo JE v Member of the Executive Council for Social Development, Western Cape  ZACC 23 (“the judgment”), which provides important guidance regarding wrongfulness and the existence of an actionable legal duty on public bodies. A copy of the judgment can be accessed here.
The judgment pertains to the question of whether the Provincial Minister of the Western Cape Department of Social Development (“the Minister”) could be held delictually liable for damage suffered by a minor child when she fell off a swing at the Babbel and Krabbel play school (“the school”) on 12 August 2008, and sustained severe injuries and became permanently disabled (“the incident”).
The minor child’s father, in his representative capacity, instituted a delictual action in the Cape Town High Court (“the High Court”) against the Minister for the damage suffered. The applicant sought to establish wrongfulness through the existence of a legal duty in statute, namely section 30(3)(b) of the Child Care Act 74 of 1983 (“the Act”) and Regulation 30(4) thereto (“the Regulation”), which provide that the Minister must be satisfied, on periodical review, that a proposed place of care has complied with all prescribed requirements for registration and that it would be managed and conducted in a manner that it would be suitable for the reception, custody and care of children. The applicant had pleaded that in terms of the Act and the Regulation, the Minister had duties to provide for a safe environment at places of care and to take reasonable steps to ensure the safety of children on school premises, and failed to do so which led to the incident which, by the necessary care and proper performance of the Minister’s alleged duties, could have been avoided.
The matter has an extensive litigation history which can be briefly summarised as follows:
The primary issue for determination by the Constitutional Court pertained to the delictual element of wrongfulness and whether the Minister had a legal duty, as pleaded by the applicant, to take reasonable steps to prevent harm to children in institutions similar to the school.
In considering the establishment of a legal duty and a wrongful breach of that duty, the Constitutional Court made reference to a variety of leading case law in noting that in order to establish wrongfulness, one must look at certain public and legal policy considerations to determine whether the imposition of liability is reasonable in the circumstances. In effect, the element of wrongfulness is intended to act as a brake on liability where it would be overly burdensome to impose liability.
Specifically in respect of the existence of a legal duty where there is an alleged breach of statue, the Constitutional Court made reference to judgments which iterated that the focal question in determining whether a statutory provision does confer a right of action is whether it anticipates, directly or by inference, an obligation to pay damages as a result of a breach. If not, the Constitutional Court stated that the focus of the enquiry must be on whether the breach or non-compliance, with regard to relevant factors such as the object and purpose of the relevant provision, was wrongful so as to attract delictual liability.
In applying these principles to the facts at hand, while the Constitutional Court accepted that the Act and Regulation did impose a duty on the Minister, it held that the purpose of the Act and the Regulation pleaded by the applicant was regulatory in nature only, so as to allow for a periodical review of schools and similar institutions. The Act and the Regulation were not designed to secure the safety of learners and people on the premises daily and were not capable, either directly or by inference, of such an interpretation.
In reaching this conclusion, the Constitutional Court placed emphasis on whether the imposition of liability would have a “chilling effect” on the performance of an administrative or statutory function by the Minister. To this end, the Constitutional Court stated that the Act and the Regulation operate nationally, and to impose a duty such as that alleged by the applicant in all nine provinces in thousands of schools and similar institutions would be an impossible obligation on the Minister and would hamper the core function of support and oversight of the operation of these facilities by third parties.
It was therefore held that the regulatory responsibilities of the Minister as pleaded by the applicant did not translate into a legal duty to prevent the harm suffered by the minor child that is actionable in delict, and the Constitutional Court ultimately dismissed the appeal and upheld the judgment of the SCA.
The judgment provides useful guidance and reiterates the principles set out in leading case law on the existence of a legal duty, specifically arising from statute, and when such a duty will be actionable in delict.
Notably, the judgment placed a necessary emphasis on the fact that the imposition of a legal duty on a public body cannot lead to an impossible obligation on that public body, such that it hampers the core functions of such a public body and the important consideration of the “chilling effect” in this regard was confirmed. The element of wrongfulness was aptly used as an appropriate brake to liability in areas of the law of delict where it would be overly burdensome to impose liability, especially on public bodies.
The judgment is of critical importance to insurers of municipalities and other public bodies that are subject to statutory duties which, if breached, may lead to potential delictual liability. The analysis by the Constitutional Court of the considerations in determining the existence of such a legal duty, specifically looking at the nature of the statutory provision in question, will serve as a fundamental factor in delictual disputes involving public bodies going forward, and must be borne in mind by insurers when defending actions brought against insured public bodies.
Should you require further information regarding the judgment and the impact thereof, please contact Amelia Costa.