I would argue that the settlement which was achieved was not only a reasonable, adequate, and fair compromise, but was even better than the best that the parties could have achieved in litigation.
If the case had been litigated to the end it would have taken ten to fifteen years and successful claimants would have received various amounts of damages, provided they were still alive, and provided the company or companies against whom they were successful were still in existence. To recover the awarded amount, the claimants would have needed the assistance of a lawyer, whose fees would probably have significantly eroded the amount awarded to them.
To have succeeded in the litigation, a claimant would have to have been medically examined in advance of commencing the action, in order to prove the existence of a viable cause of action, as well as the degree of his silicosis or tuberculosis. This would have required a suitable medical facility, within reach of his often distant rural home somewhere in Southern Africa. His employment and other records would have to have been obtained to prove which of the companies he worked for were liable and to what degree. The claimant would further have had to be assisted by experts to quantify his damages. The risks to the claimants in such a process would have been considerable.
Further, in order to recover his statutory compensation under the Occupational Diseases in Mines and Works Act (ODMWA), he would have to have had a separate medical examination according to different criteria to get paid out in terms of this Act.
For the companies, there were also material risks associated with the litigation. Even if the companies had successfully defended the litigation, it would have been at enormous legal, management and potential reputational cost.
In contrast to a litigation outcome, the negotiated settlement establishes a trust which, among many things, is expected actively to go out to locate potential claimants, arrange for them to be medically examined near to their place of residence and help process their payments. The settlement allocates an amount of R845-million to the trust to facilitate this.
Importantly, in addition to this, the settling companies have invested large amounts of financial and human resource into the statutory compensation system operating under the Occupational Diseases in Mines and Works Act (ODMWA) to improve its administrative performance and to ensure that it is able to pay workers what is due to them under this system. The settlement was carefully crafted to ensure that the criteria for settlement and statutory compensation for the degree of silicosis compensable under ODMWA are aligned. This will enable the tracking, tracing and medical examinations for both to be synchronised rather than duplicated. The practical effect of this is that claimants will not only receive compensation under the settlement, but may also receive statutory compensation if they hadn’t done so previously.
In comparing the negotiated settlement with a litigation outcome, it is important to appreciate that a court could not have ordered the establishment of the trust, nor for it to be funded in the way it has, nor for it to do what has been agreed to. Furthermore, no court could have required the synchronisation between the settlement and the ODMWA systems which will result in very significant additional benefits being paid to eligible claimants.
There are many other ways in which the settlement agreement does more than what a court could have ordered. For example, it is unnecessary for a claimant to prove apportionment as between the settling companies; each company is liable for its respective share with separate guarantees totalling R5-billion. The companies have agreed to the basis on which benefit payments should be apportioned between them.
It is therefore unnecessary for a claimant to prove this. The claimant only has to prove that he performed “risk work” at a “qualifying mine”. Because the companies have provided bank guarantees for the settlement amounts, claimants do not run the risk of non-payment due to a company going into liquidation; claimants do not need to pay lawyers or other agents to process their claims; and there are categories of claimants who will receive payments even though they were not included in the class action claim.
The settlement has significant elements that go far beyond what a court has the power to award. It is therefore strongly arguable that, as a whole, the settlement far exceeds the value of any outcome, for both the claimants and the companies, that could have been achieved in litigation.
Modern research shows that contrary to common belief, negotiated settlements, particularly ones mediated or facilitated by skilful experts, achieve outcomes that are not in fact compromises, but are actually of far more value to parties than litigated outcomes. One recent study of 129 settled civil cases shows that, in 65% of them, a substantial element in the mediated settlement was not a part of the original demands filed in the court.
How the silicosis settlement was reached needs to be analysed in order to understand how and why such a valuable outcome was achieved. This may help the public at large, lawyers and judicial leadership to understand the potential value creation of properly negotiated, facilitated or mediated agreements. It may also result in less resistance to these processes and to provide more access to real justice rather than outcomes dictated by the constraints inevitably associated with court processes. DM
John Brand, a lawyer and professional mediator, facilitated the silicosis settlement negotiations on behalf of the companies and led their negotiating team
The movie Cloudy with a Chance of Meatballs is titled It’s Raining Falafel in Israel.