When misfortune strikes, seeking compensation for loss or damage becomes a natural response. The justification for compensation is clear, but the challenge lies in determining the precise amount (quantum) needed to make the injured party whole again. This is especially true when losses aren’t readily expressed in monetary terms. Traditionally, courts have relied on a blend of experience, intuition, and “right thinking” to determine these awards.
However, a “non possumus” (Latin for “we cannot”) attitude – simply refusing to make a judgement – isn’t an option. Especially when the case’s merit is established, but the actual financial impact remains uncertain. It’s here that actuaries step in, bringing their expertise in mathematical calculations to estimate the loss or damage based on provided information and reasonable assumptions about the future.
Globally, actuaries have become increasingly involved in delictual (tort law) matters. They act not only as expert witnesses in court proceedings but also as crucial contributors during the pre-trial phase. This trend is gaining traction in South Africa as well. Actuarial expertise proves particularly valuable in these sui generis (unique) legal actions, which often operate outside the standard rules of evidence and procedure.
Road Accident Fund Claims: A Prime Example
In South Africa, the most common delictual actions involve claims against the Road Accident Fund (RAF). Established by law, the RAF acts as a compulsory insurer for all road users, both local and foreign. It provides compensation for injuries or death arising from motor vehicle accidents within the country. RAF broadly compensates claimants and their dependents for both general damages (pain and suffering) and special damages (financial losses directly related to the accident).
Legal practitioners often request actuarial assessments or reports to quantify specific types of damages. These include:
- Past or Future Loss of Income: This applies when an accident victim suffers injuries that limit their career progression, potentially causing a loss of future earnings.
- Loss of Support: This is relevant for dependents of a deceased accident victim who relied on their financial support. Here, the actuary calculates the loss of future income the deceased would have provided.
Beyond the Road: Expanding Actuarial Roles in Delictual Law
South African Delictual Law encompasses a wide range of actions that extend beyond the scope of the RAF. Actuarial expertise is increasingly sought after in cases like:
- Unfair Dismissal: When an employee is wrongfully terminated, actuaries can quantify the lost income they would have earned if the dismissal hadn’t happened.
- Breach of Contract: Similar to wrongful dismissal, an actuary can calculate the lost income resulting from a broken contract.
- Divorce Settlements: During divorce proceedings, actuaries can assist in determining fair financial settlements, especially regarding future income streams.
- Maintenance: When calculating child support or spousal support, actuaries can project future earning potential and adjust awards accordingly.
- Wrongful Career Disruption: Other circumstances, such as disability or career-ending injuries not caused by accidents, may require actuarial input to quantify lost earning potential.
Medical Costs and Malpractice: The Importance of Actuarial Analysis
The South African legal system faces a rising frequency of complex medical cases. These often involve multiple future medical procedures, raising concerns about medical malpractice and negligence. Actuarial expertise proves invaluable in such cases by:
- Capitalising Future Medical Costs: Actuaries can estimate the present-day value of the total expected future medical expenses associated with an injury or illness. This helps courts determine a fair compensation amount to cover future medical needs.
The increasing complexity of delictual matters, coupled with the growing need for accurate financial quantification, highlights the crucial role actuaries play in the legal sphere. Their ability to analyse data, make informed assumptions, and translate them into meaningful financial estimates empowers courts to make fair and just decisions. As legal complexities continue to evolve, so too will the need for actuaries’ expertise in navigating the often-uncertain terrain of delictual law.
