SCA overturns Eastern Cape’s plans for compensating medical negligence victims

The Supreme Court of Appeal (SCA) has handed down a judgment that torpedoes the Eastern Cape health department’s efforts to scrap lump sum settlements for victims of medical negligence and provide them with care in the public sector instead.

On Wednesday, the appeal court handed down a ruling that overturns a 2023 high court judgment upholding the department’s plan to use public sector services to care for a child born with severe cerebral palsy instead of paying out a one-off, multimillion-rand sum for care in the private sector. The department accepted liability for negligence during the mother’s labour that led to her baby’s birth injury.

The high court judgment followed a 2021 Constitutional Court ruling that had established the principle that the government could provide medical negligence victims with services as they required them in the public sector, instead of giving them one-off lump sum settlements to cover the estimated cost of future care in the private sector. The Eastern Cape matter was seen as a test case for developing the common law so that “pay as you go” could become routine instead of requiring case-by-case agreement between the parties involved in medical negligence claims.

The Treasury and national health department have consistently raised concerns about the scale of the medico-legal claims against the state and the risk these pose to provincial health budgets. Provinces reported contingent liabilities (the cost if all claims were successful) of R62.4bn in the 2023/24 fiscal year.

While only a small fraction of medical negligence claims are paid out, the payouts are large and not budgeted for and drain resources set aside for personnel as well as vital goods and services.

Officials have also been troubled by the ease with which unscrupulous lawyers and relatives can siphon off money from lump sum settlements, leaving victims dependent on public services and effectively making the state pay twice.

The appeal court heard testimony from the Eastern Cape health department and its expert witnesses who made the case that lump sum settlements drained its operating budget and threatened the state’s capacity to provide and improve services.

It also submitted evidence from investigations into alleged misconduct by attorneys, including one case in which a single firm had received R480m on behalf of medical negligence victims yet paid only R115m into their beneficiary trusts. The victim’s mother brought in expert testimony that challenged the department’s capacity to deliver care at the standard required by her child, given that the province had an extremely high maternal mortality rate and a history of poor financial management.

The appeal court said the courts are not the place to change the law on such a controversial issue and that it is parliament’s job. It set aside judge Robert Griffiths’ high court judgment and ordered the victim to be provided with full payment for the future cost of their care.

Constitutional Court

The Eastern Cape health department said it will seek leave to appeal the appeal court judgment at the Constitutional Court.

“Our decision to apply for leave to appeal is not taken lightly nor is it an attempt to evade responsibility. Liability for the negligent harm in this matter was conceded and we remain fully committed to ensuring the minor child, BN, receives high-quality, necessary and lifelong care.

“The core of our appeal lies in the appropriate, just and equitable remedy,” it said in a statement, adding that lump-sum settlements diverted resources from paying for doctors, medicines and infrastructure.

The Eastern Cape health department faced medico-legal contingent liabilities of R22.15bn in 2024/25, according to superintendent-general Rolene Wagner.

The department’s financial management has improved significantly and it has achieved an unqualified audit in 2024/25, she said. Clinical services have also improved and the maternal mortality rate has declined for three consecutive quarters, Wagner said.