Apex court sets limits for judges

The Constitutional Court has ruled that judges “should not interfere” with settlement agreements between litigants, a landmark decision that outlines judges’ power when requested to sign off on such agreements.

The decision stems from a Road Accident Fund (RAF) claim for R1.3m by Tumelo Mafisa that had been “unilaterally deleted” by the high court.

Mafisa was a passenger in a car that collided with a tree and suffered head and back injuries that required surgery. He then claimed compensation from the RAF.

The RAF is a statutory body established to compensate road traffic accident victims. It is funded by a fuel levy on petrol and diesel — currently R2.18/l. Victims can claim for medical expenses and loss of earnings.

The claim ended up in the Bloemfontein high court a few years ago to decide how much should be paid. Before the trial ended, Mafisa and the RAF , however, agreed to settle the matter, with the RAF agreeing to pay R350,000 for “general damages” Mafisa suffered. Mafisa was unable to work as a result of the accident and an actuary calculated that he had lost R1.3m in earnings as a result, which the RAF also agreed to pay.

Mafisa and the RAF drafted a settlement agreement indicating the fund would pay a total of R1.6m and asked that the settlement agreement be made an order of court.

Settlement agreements don’t have to become orders of court, though they provide finality for disputing litigants and carry the power of the court.

However, judge Sylvia Daniso struck out the R1.3m claim for loss of earnings entirely, saying she was not satisfied with the calculations. According to Mafisa, the judge did so “unilaterally ... and without affording any opportunity for input by the parties”.

Mafisa was refused leave to appeal until the Constitutional Court decided to hear the matter last year. The RAF did not oppose.

In its ruling in Mafisa’s favour, the apex court noted that “as a general rule, a judge should not interfere with the terms of a settlement agreement”.

Writing for a unanimous court, justice Nonkosi Mhlantla outlined how courts must deal with settlement agreements that litigants request be made orders of courts.

“A judge is ... entitled to raise concerns,” Mhlantla wrote, where, for example, the agreement may be “incompetent in law”, such as submitting claims for injuries that did not occur.

“Nonetheless, even in these circumstances, courts do not have free rein and must exercise restraint.”

Should a judge raise concerns, the grounds “should be clear”, allowing parties to respond. Once the issues are addressed, the court can sign off if it is satisfied. However, parties do not have to respond to judges’ concerns. “The fact that the judge refused to make the settlement agreement an order of court does not mean that the settlement agreement [itself] is invalid,” Mhlantla said.

The Constitutional Court found that the court’s conduct was “improper and irregular”.

Mhlantla dismissed the high court’s findings and made the settlement agreement an order of court, resulting in Mafisa receiving R1.6m.

The judgment is likely to be the subject of much discussion by lawyers and judges in the months to come, according to practitioners and legal observers.