Tag Archive | Training

Loss of Earning Capacity vs An Actual Patrimonial Loss

Dear Reader,

Welcome to the thirtieth edition of Independent Actuaries & Consultant’s (IAC’s) monthly newsletter.

IAC Training 2012 – Time Management Workshop for all supporting staff

Based on the lack of response regarding the training seminar on how to work with the IAC blog we have decided not to proceed with same.

However, in line with our ethos of adding value to our clients business, we are looking at presenting a time management workshop aimed at equipping your supporting staff (personal assistants, office managers, legal secretaries, typists and article clerks) to better manage their time and your resources thereby increasing productivity.

The workshop will take place during the July 2012 recess, depending on your response.

Please indicate via return mail whether you are interested and how many people from your firm might attend.


LOSS OF EARNING CAPACITY vs AN ACTUAL PATRIMONIAL LOSS – Mvundle v Road Accident Fund (63500/2009) [2012] ZAGPPHC 57 (17 April 2012)

The plaintiff, the driver of a Mercedes-Benz bus, was involved in a motor vehicle collision. As a result of the collision the plaintiff sustained the following injuries: soft tissue injury of the scalp, neck, shoulder and ankle; loss of 50% of his sight to the left eye and emotional trauma.

The Plaintiff was employed as a professional driver for most of his working life. His claim for loss of earning capacity was based on him no longer being physically able to drive because of the shoulder injury, loss of sight in his left eye and head injuries sustained in the accident.

In considering the claim the court held that it’s trite law that any claim in respect of future loss of earnings / earning capacity requires:

“36.1 A loss of earning capacity as a result of a damage causing event; and
36.2 An actual patrimonial loss of income as a result of the above mentioned loss of earning capacity. In which case, either the one or the other may be claimed for the same amount.”

The court further held as trite that damages for loss of income can be granted where a person has in fact suffered or will suffer a true patrimonial loss in that his or her employment situation has manifestly changed. The plaintiff’s performance can also influence his patrimony if there was a possibility that he could lose his current job and be limited in the number and quality of his choices should he decide to find other employment.

In casu the honourable Judge found that had the plaintiff remained in his erstwhile employment he would not have succeeded in his claim for loss of earnings / earning capacity. But because he left the job, irrespective of what the cause was, he must be compensated if he could establish that but for the accident he was no longer fit to drive and that his choices, either in number or quality, of finding alternative employment were now limited and his chances of retraining for a new career were negatively affected.

Sending us an Instruction

Our dedicated full time professional team receive instructions by any of the following means:

• Email : damagesclaims@iac.co.za, or
• Post : PO Box 1172, Cape Town, 8000
• Fax : 086 616 8308

Now for a joke –

Q: What’s the difference between a lawyer and a herd of buffalo?
A: The lawyer charges more

Depression as Sequlae of – Quantum of damages to be awarded


I am excited to announce that IAC will again be presenting training on the calculation of simple loss of income and loss of support
calculations. The training is aimed at attorneys in order to equip them to give better instructions, have a better understanding of the actuarial calculation process and to aid in settlement of matters.

Same will be taking place on the following dates:

Durban 13 July 2010
Johannesburg 15 July 2010
Pretoria 15 July 2010
Cape Town 28 July 2010
Port Elizabeth 29 July 2010

Further details will follow.


Bicycle Share the road sign

The plaintiff claimed damages from the defendant arising from bodily injuries she sustained in a motor vehicle collision on 8 January 2005. The plaintiff was a cyclist on the Kliprivier Road when the insured vehicle, travelling in the same direction, collided with her from the rear. The collision caused her to fall from the bicycle and she sustained a head injury as well as orthopaedic injuries.

Both the merits and certain heads of quantum were in dispute. The Court found in favor of the plaintiff in regards to the merits.

The plaintiff’s past hospital and medical expenses as well as future medical expenses was settled. The court had to assess the plaintiff’s loss of earning capacity and general damages. It was common cause that the plaintiff suffered a head injury. What remained to be considered were the psychological sequelae of the brain injury. The plaintiff’s psychiatrist testified that the head injury had resulted in a post-traumatic neuropsychological disorder, as well as depression.

The crucial issue in quantifying the plaintiff’s damages for loss of income was to consider the effects of the psychological deficits on her employability and therefore earning capacity. Pre-morbid she excelled in the workplace and moreover fostered excellent relationships. Outside the workplace she proved her organisational capabilities in organising her own cycling events attracting some 2500 participants.

Post-collision the plaintiff remained in the employ of her employer but her capabilities dwindled resulting from her neuropsychological profile. Briefly stated, she lacked motivation and drive and often became emotional and irritable, resulting in a decline in performance and resultant loss of income to her employer.

It was common cause that depression manifested itself once prior to the collision. In addition a family history of depression had been identified. However, since the collision she often suffered from bouts of depression. In this regard the plaintiff’s psychiatrist testified that the plaintiff, prior to the collision, was pre-disposed to developing depression which could be treated and, in any event, did not cause any level of dysfunction. In contradistinction hereto, the depression the plaintiff now suffers is as a result of organic injury to the brain cells.

The depression the plaintiff now has to endure affects her coping and adaptation skills. The depression can be treated but not cured and she will therefore function at a lower level. In addition the plaintiff also suffers from cognitive deficits post-morbid.

A comparison by the plaintiff’s Industrial Psychologist between the plaintiff’s performance and that of her rival co-employee revealed that Pre-collision, the plaintiff out-performed her rival but postcollision the plaintiff brought in less than half the business her rival did.

As a result two possibilities was advanced by the plaintiff’s Industrial Psychologists: either that she remains employed at her present place of employment earning substantially less or employment in a less stressful and demanding work environment in a secretarial environment.

The defendant’s Industrial Psychologist’s opposing view was disregarded by the court. Plaintiff suggested a contingency allowance of 10% pre-morbid, and 20% post-morbid. The defendant contended for a contingency allowance of 50%.

The Honourable Judge held that a contingency deduction of 15% on the pre-morbid scenario is appropriate taking into account plaintiff’s age of 46 years, her consistent and stable employment history in public relations/marketing, the absence of any indications that she would not have further excelled in her work environment and the positive attitude she had displayed towards her work prior to the accident.

The Honourable Judge further held that a contingency deduction of 10% on the post-morbid scenario is appropriate taking into account the plaintiff’s current employer although aware of her condition since 2005, has kept her on and increased her salary from time to time; the plaintiff has no formal qualification; the plaintiff’s husband’s evidence that she was steadily improving and the negative effects a lower category employment is likely to have on her mood and therefore functioning.

Referring to the judgment of the Supreme Court of Appeal in De Jongh v Du Pisani NO [2004] All SA 565 (SCA) the Honourable Judge further held that the sum of R400 000 would constitute fair and adequate compensation in respect of the plaintiff’s general damages.

The plaintiff was awarded R3 333 068.00 for future loss of income and general damages of R 400 000.00 as well as Costs.

Sending us an Instruction

Our dedicated full time professional team receive instructions by any of the following means:

• Email : damagesclaims@iac.co.za, or
• Post : PO Box 1172, Cape Town, 8000
• Fax : 086 616 8308

With the trial season heating up here are a few wise words to keep you humble and your anger in check –
“A man wrapped up in him self makes a very small package.” – unknown
“Be not angry that you cannot make others as you wish them to be, since you cannot make
yourself as you wish to be.” – Thomas A` Kempis