The Court’s Discretionary Role on Rights to Settle Between Parties in Litigation | Legal Articles

 

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The Court’s Discretionary Role on Rights to Settle Between Parties in Litigation

MT v Road Accident Fund and HM v Road Accident Fund ; (37986/2018) (2020) ZAGPJHC 286 ; (2021) 1 All SA 285 (GJ) ; (2021) (2) SA 618 (GJ) (16 November 2020)

The above cited cases highlight the oversight role of the Courts where litigants decide and agree to settle the matter in dispute. In these cases, the Court had been advised that the parties wish to settle out of court and that the matters be taken off the roll.

civil litigation attorneys South Africa

Jurisdiction of High Court in Civil Cases

The parties further asked that the settlement agreement not be made an Order of Court. The Court, citing that it is exercising its oversight role, commented on this development, and raised important issues that are worth considering herein.

Civil Procedure South Africa

Firstly, it must be noted that the premise upon which the law of contract stands is of course the principle of freedom to contract. Parties are at liberty to agree and enter into any contract provided that they have capacity, consent, and that the object (subject matter) of that contract is not unlawful.

Equally so, parties are at liberty to decide on how enforcement of such contract will be undertaken and as such most contracts proffer methods of dispute resolution in their clauses.

Secondly, where parties bring disputes to Court and at any point before finalisation of the matter the parties decide to settle, the parties may decide whether such settlement be made an Order of Court or not.

Having the settlement made an Order of Court has the advantage when it comes to execution in that it is effectively a Court Order. Where the settlement is not made an Order of Court means the aggrieved party will have to pursue legal procedures again to enforce the settlement agreement.

In the instance that the Court is asked to make a settlement an Order of Court, the role of the Court in such instances is not reduced to merely rubberstamping the agreement, but there exists a duty to investigate and make certain whether the settlement agreement is one which can be made an Order of Court.

This was held in the case of Mzwakhe v Road Accident Fund (GJ) (24460/2015). Viewed from the perspective that asking the Court to make a settlement agreement have the force and effect of a Court Order, whereas the Court itself is not privy to what has been settled and weigh the provisions of such settlement, somewhat constitutes an anomaly.

Because the settlement will for all intents and purposes operate as a Court Order as if it is from the Court itself, it follows that the Court must have oversight and input in such settlement and secondly, to satisfy the requirement of legality in settlements (which are essentially contracts) the Court must ensure that what it is being asked to make an Order is lawful.

Third and most important, where one of the parties to the settlement is an organ of state, the interest of the state and public is triggered. The Judiciary therefore ought to exercise oversight role in a way beyond the ordinary as is with private parties.

This is because an organ of state derives its function from the state, which in turn has a mandate from the country’s population and therefore public institutions mandated with justice and safeguarding the law ought to protect public and state interest.

Further, where a state organ is funded by social security interventions such as the RAF, making settlements that are beyond actual damages are ultra vires, as was allegedly the case in these two cases.

Road Accident Fund and Civil Litigation

In these court cases cited above there were many changes on the damages and settlement amounts which caught the attention of the Court. RAF was not represented by legal representatives as their services were terminated in May 2020 due to, as per its CEO’s affidavit in case 17518/2020, fraud and corruption between the attorneys and RAF officers.

It then followed that the Court, with such background information, exercised its oversight role to prevent more corrupt activity involving the RAF which is an organ of state. Further, the incidence of the parties asking the settlement agreement not to be made an Order of Court was viewed by the Court as an attempt to avoid judicial scrutiny of the settlement agreements (probably to conceal the fraud).

The above reasoning is what the Court in the above matters followed to extend its oversight role when the litigants reached settlement and asked that the Court remove the matters from the roll, and not make the settlements Orders of Court.

The Court then ordered that the Plaintiff’s attorneys’ be reported to and investigated by the Legal Practice Council, RAF to investigate its own officers, the South African Health Professions Council to also investigate the conduct of the medical practitioner and the actuary be investigated by the Actuarial Society of South Africa.

The above case illustrates the discretion of the Court with regards to matters that are brought before it and in cases where need be, the Court stands to go to lengths to uphold justice.

Van Deventer & Van Deventer Incorporated – Civil Litigation Attorneys South Africa

Our attorneys in Cape Town and Johannesburg are ready to provide expert legal assistance with civil litigation cases.

 

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