The South African Law Reform Commission has recommended that the government scrap lump-sum payouts for victims of medical negligence and introduce a new compensation system providing patients with structured “pay as you go” settlements. This proposal is part of a long-awaited report that aims to tackle the government's concerns about the scale of medico-legal claims levelled against the state and the risk they pose to provincial health budgets. The commission's report was released on Tuesday.
Provincial health departments reported contingent liabilities of R62.4bn in the 2023/24 fiscal year. Although only a small fraction of medical negligence claims are paid out, the sums are not budgeted for and divert funds allocated for frontline health services. Total payouts to successful claimants ran to R1.5bn in 2023/24, half of which was paid out in Gauteng. The commission stated that the extent of medico-legal litigation against the state has reached a level where it is adversely impacting service delivery in the public health sector.
The commission's proposals seek to address concerns about unscrupulous lawyers and relatives syphoning off money from lump sum settlements, leaving victims dependent on public services and effectively making the state pay twice. A nationwide probe by the Special Investigating Unit into medico-legal claims that began in 2022 saved the state more than R3.1bn. This highlights the need for reform in the current system.
The proposed legislation includes two new pieces of legislation: the Redress for Medical Negligence Claims against State Bill and the Medico-Legal Litigation Against the State Bill. The Redress for Medical Negligence Claims against State Bill proposes establishing a public health redress commission to consider applications for compensation from the state without taking the matter to court. Successful claimants will receive structured settlements with three components.
The Medico-Legal Litigation Against the State Bill proposes a series of pre-trial measures that seek to reduce the number of cases that go to court. The bill also contains provisions to set up dedicated medico-legal units in provincial health departments and establish provincial and national databases of medical negligence claims to eliminate duplicate claims. This aims to improve the efficiency of the system.
The South African Law Reform Commission emphasized that its proposed legislative reforms should be accompanied by measures to raise the quality of public health services. This includes improved oversight, accountability, and financial management. Provincial health departments are also urged to implement better record keeping and not to defend indefensible claims.
The proposed changes are significant, as several provincial health departments have tried to implement structured settlements but failed. The Supreme Court of Appeal recently jettisoned the Eastern Cape health department's plan to use public sector services to provide support to a child born with severe cerebral palsy instead of paying out a one-off, multimillion-rand sum for care in the private sector.
Key points
- The South African Law Reform Commission recommends replacing lump-sum payouts with structured settlements for medical negligence victims.
- The proposed legislation aims to reduce the number of medico-legal claims and improve the efficiency of the system.
- The reforms are intended to be accompanied by measures to improve the quality of public health services.
