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GUIDE - CLASS ACTION LITIGATION IN SOUTH AFRICA
Transcript of GUIDE - CLASS ACTION LITIGATION IN SOUTH …...country, although the procedure for litigating a...
GUIDE - CLASS ACTION LITIGATION IN SOUTH AFRICA
BOWMANS
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BOWMANS
Contents
04 Introduction
05 OurFirm
06 OurFootprintinAfrica
07 DevelopmentofClassActionLitigation
inSouthAfrica
08 ProceduralMechanismforBringinga
ClassActioninSouthAfrica
14 PrescriptioninSouthAfrica
16 Costs
18 FundingofClassActionLitigationin
SouthAfrica
19 TheDiscoveryProcess
20 Remedies
20 OptionsforDefendantstoaClassAction
21 AlternativeDisputeResolutioninClass
ActionLitigation
22 Reform
23 ClassActionTeamMembers:SouthAfrica
Guide - Class Action Litigation in South Africa
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Introduction
C lassactionlitigationisrelativelynewtothe
SouthAfricanlegallandscapeandBowmans
isactinginthreeofthefourmajorclassaction
claimsinthecountrytodate.Ourteamconsists
ofadiversegroupoflawyerswhoareactively
contributingtothedevelopmentofclassaction
jurisprudenceinSouthAfrica.
Thisguideisnotintendedtoserveasa
substituteforlegaladvice.Italsodoesnot
addressclassactionlitigationinotherAfrican
jurisdictions.
IfyouneedadviceinconnectionwithanySouth
Africanclassactionlitigation,pleasecontact
AdamAnderson.YouwillfindAdam’scontact
detailsandcontactdetailsofotherpartnersin
ourSouthAfricanclassactionlitigationteamat
theendofthisguide.
Chris Todd
HeadofDisputeResolution
The guide is not a substitute for advice. It it correct as at March 2019.
This is the first edition of our Guide to Class Action Litigation in South Africa. It is intended to provide a concise overview of the development of the law and procedural requirements of South African class action litigation as well as practical considerations for alternative methods of resolving a dispute that relates to a class action.
BOWMANS
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Our Firm
WithsevenofficesinfiveAfricancountries
andover400specialisedlawyers,we
drawonouruniqueknowledgeofthebusiness
andsocio-politicalenvironmenttoadvise
clientsonawiderangeoflegalissues.
Everywherewework,weofferclientsa
servicethatuniquelyblendsexpertiseinthe
law,knowledgeofthelocalmarketandan
understandingoftheirbusinesses.Ouraim
istoassistthemtoachievetheirobjectives
assmoothlyandefficientlyaspossiblewhile
minimisingthelegalandregulatoryrisks.
Ourclientsincludecorporates,multinationals
andstate-ownedenterprisesacross
arangeofindustrysectorsaswellas
financialinstitutionsandgovernments.
Ourexpertiseisfrequentlyrecognisedby
independentresearchorganisations.Wewere
rankedfirstbydealvalueandsecondbydeal
countinMergermarket’s2018Africaleague
tablesforlegaladvisors.Wereceivedawards
infiveoutofsixcategoriesattheDealmakers
EastAfricaAwardsfor2018:toplegaladviser
inM&Aforbothdealflowandvalue,toplegal
adviserinGeneralCorporateFinanceforboth
transactionflowandvalue,andadvisedonthe
DealoftheYear.IntheDealmakers SouthAfrica
Awardsfor2018,wewereplacedfirstfordeal
flowintheGeneralCorporateFinancecategory.
WewerenamedSouthAfricanLawFirmofthe
Yearfor2018intheChambersAfricaAwardsfor
Excellence.Wealsoreceivedthe2019awardsfor
TransportationandInfrastructureTeamofthe
YearandTMTTeamoftheYearattheAfrican
LegalAwardshostedbyLegal Week andthe
CorporateCounselAssociationofSouthAfrica.
Bowmans exists to help our clients overcome legal complexity and unlock opportunity in Africa. Our track record of providing specialist legal services, both domestic and cross-border, in the fields of corporate law, banking and finance law and dispute resolution, spans over a century.
Guide - Class Action Litigation in South Africa
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Our Footprint in Africa
Weprovideintegratedlegalservices
throughoutAfricafromsevenoffices
(CapeTown,DaresSalaam,Durban,
Johannesburg,Kampala,MokaandNairobi)
infivecountries(Kenya,Mauritius,SouthAfrica,
TanzaniaandUganda).
Weworkcloselywithouralliancefirm,
AmanAssefa&AssociatesLawOffice,in
Ethiopia,andourbestfriendsinNigeriaand
Mozambique(UdoUdoma&Belo-Osagieand
TacianaPeãoLopes&AdvogadosAssociados,
respectively).Wealsohavestrongrelationships
withotherleadinglawfirmsacrossthe
restofAfrica.
WearerepresentativesofLexMundi,aglobal
associationwithmorethan160independentlaw
firmsinallthemajorcentresacrosstheglobe.
Thisassociationgivesusaccesstothebest
firmsineachjurisdictionrepresented.
Mozambique
Kenya
Tanzania
South Africa
Nigeria
Uganda
Mauritius
Best friends
Bowmans offices
Significant transaction or advisory experience
Alliance firms
Ethiopia
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Development of Class Action Litigation in South Africa
Priorto1996,classactionlitigationwasnot
recognisedbySouthAfricanlaw.Overthelast
twodecades,theConstitutionalCourtand
SupremeCourtofAppealhaveplayedavital
roleinshapingclassactionlitigationinthe
country,althoughtheprocedureforlitigating
aclassactionisstillinitsinfancystage.
TheConstitutionoftheRepublicofSouth
Africa,1996(Constitution),providesthe
basisforclassactionjurisprudenceinSouth
AfricathroughSection38(c)whichprovides
that‘anyoneactingasamemberof,orin
theinterestsof,agrouporclassofpersons’
hastherighttoapproachacompetent
courttoallegethatarightintheBillof
Rightshasbeeninfringedorthreatened.
In2012,theSupremeCourtofAppealin
Children’s Resource Centre Trust and Others v Pioneer Foods (Pty) Ltd and Others 1 (Children’s Resource Centre) extendedclassactionlitigationtoinclude
civildamagesclaimswhichfalloutsidethe
scopeoftheBillofRights,andestablished
thecriteriaforcertificationofaclass
actioninSouthAfrica.Sincethislandmark
decision,theprocedureforclassaction
litigationhasbeenadvancedbyanumber
ofdecisionsoftheConstitutionalCourt
andSupremeCourtofAppeal,discussed
inmoredetailoverleaf.Nolawhasbeen
enactedtoregulateclassactionlitigation.
AsSouthAfricanclassactionjurisprudence
isdevelopedthenumberofclaims
hasincreased,andweexpectthis
trendtocontinuegoingforward.
1. 2013(2)SA213(SCA)
Kenya
Tanzania
Mauritius
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Guide - Class Action Litigation in South Africa
Procedural Mechanism for Bringing a Class Action in South Africa
Classactionsfollowatwostageprocessin
SouthAfrica.Acertificationapplicationisthe
firststage.SouthAfricanlawrequiresthat
beforeaclassactionmaybeinstitutedthe
potentialplaintiffsmustobtainpermission,from
acourt,resultingincertificationoftheclass.
Withnoseparatelegislationregulatingclass
actions,thecivilprocedurerulesinthecourts
withjurisdictionovertherelevantcauseof
actionareused.Thismeansthataclassaction
foundedonacompetitionlawclaimoran
occupationaldiseasesclaimwillbothbeheard
intheHighCourtofSouthAfricaandwillbe
governedbythesamerulesandprocedures.
CERTIFICATION APPLICATION
IntheChildren’s Resource Centrecase,the
SupremeCourtofAppealdevelopedseven
requirementsforcertifyingaclassactionin
SouthAfrica.InMukaddam v Pioneer Foods (Pty) Ltd and Others 2,theConstitutionalCourt
heldthatthesewerenotinfactrequirements
butratherfactorstobeconsideredindeciding
whethertocertifyaclassactionandthat
theoverridingtestis‘theinterestsofjustice’.
TheConstitutionalCourtheldthatthepower
ofacourttocertifyaclassisdiscretionary
andthatinexercisingitsdiscretionacourt
mustbeguidedbytheprinciplesidentified
intheChildren’s Resource Centrecase.
Thismeansthatthesevenfactorsare
notaclosedlistandtheabsenceofone
factordoesnotautomaticallyrendera
classactionincapableofcertification.
The‘certificationfactors’andtheseare:
• Class is identifiable by objective criteria:
theproposedclassshouldbedefined
withsufficientprecisionthataparticular
individual’smembershipoftheclass
canbeobjectivelydetermined. Objectivelyidentifyingaclassensuresthat:
• membersoftheclasscan
begivenpropernotice;
• membersoftheclassareaware
thattheyfallwithintheclassand
arethereforeunabletoinstitute
litigationseparatelyunless
theyareabletoopt-out;
• personsthatcanbeboundbyany
judgmentareproperlyidentified;and
• anyjudgmentmadeinthe
classactionisfinalandbinding
betweentheparties.
• Cause of action raising a triable issue:
thepersonapplyingforcertificationofa
classactionmustsatisfythecourtthat(a)
thereisacasethatislegallytenable;and(b)
aprima faciecaseexistsontheevidence.
• Sufficient issues of fact or law are common
to all members of the class: theextent
ofcommonalitythatisrequiredfroma
SouthAfricanlawperspectiveisunclear
asdivergentviewsexistonthisfactor.
IntheChildren’s Resource Centrecase,the
SupremeCourtofAppealfavouredthe
approachadoptedintheUnitedStates
ofAmericathat‘aclaimmustbeofsuch
2. 2013(5)SA89(CC)
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anaturethatitiscapableofclass-wide
resolution’.Incontrast,theHighCourt,in
thecaseofNkala and Others v Harmony Gold Mining Co Ltd and Others3(thecase
commonlyreferredtoastheSilicosiscase),
favouredtheCanadianapproachthat
‘ensurestheinterestsofjusticepredominate’
whichadoptsalowerthresholdfor
establishingcommonalitythantheapproach
oftheSupremeCourtofAppeal.
• The relief sought or damages claimed flow
from the cause of action:thereliefsought
ordamagesclaimedmustbeascertainable
andcapableofdetermination.Although
notdealtwithindetailbyourcourts,
someSouthAfricanacademicsbelieve
thatdeterminabilitymeansthatapplicants
seekingcertificationmustmakeitclear,in
theapplicationforcertification,howthey
proposetodeterminethereliefinthe
classaction.
IntheSilicosiscase,theHighCourtallowed
atwo-stageclassactionwherecommon
issuesweretobedeterminedinthefirst
stageanddamagesweretobequantified
inthesecondstage.However,itremainsto
beseenwhetherthisapproachwouldbe
acceptedbytheSupremeCourtofAppeal.
• Allocability:theclassactionshouldbe
themostappropriatemeansofallocating
damagestomembersoftheclass.
Appropriatemechanismsmustexistand
beproposedbytheapplicantstoensure
thatdamages,ifawarded,areallocatedto
membersoftheclassinaparticularmanner
• Representation:theproposedrepresentatives
oftheproposedclassmustbesuitable
toconducttheactionandrepresentthe
class.Classrepresentativesdonotneed
tobemembersoftheclassandtheterm
‘representativesoftheclass’meansthat:
• theplaintiffswhorepresentthe
classareappropriate;and
• thelegalrepresentativesof
theclassareappropriate.
Aclassrepresentativemust:
• besuitabletoassisttheclassin
obtainingcertification;and
• havethecapacitytoconduct
theclassactionlitigation.
Aclassrepresentativeisconsidered
suitabletoassisttheclassinobtaining
certificationprovidedthatshedoesnot
haveaninterestthatisinconflictwith
thatoftheclass.IntheSilicosiscase,the
HighCourtcautionedagainstfindinga
conflicttooeasilyandheldthataclass
representativemustbefoundtohavea
seriousconflictwithotherclassmembersin
ordertobedisqualifiedasarepresentative.
IntheChildren’s Resource Centrecaseit
washeldthataclassrepresentativewillbe
regardedashavingthecapacitytoconduct
litigationonbehalfoftheclassif:
• therepresentativehasthetime,
inclinationandmeanstoprocure
theevidencethatisnecessary
toconductthelitigation;
3. 2016(5)SA240(GJ)
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• therepresentativehasaccessto
lawyerswhohavethecapacity
toproperlyrunthelitigation;
• therepresentativehasthefinancial
meanstoconductthelitigationand,
ifnot,detailsofhowthelitigation
willbefundedmustbeprovided;
• therepresentativecanshowthe
basisonwhichthelawyerswouldbe
paidandifthelitigationisfunded
onacontingencybasisthendetails
ofthefundingarrangementsmust
bedisclosedtoensurethatthere
isnoconflictbetweenthelawyers
andmembersoftheclass;and
• thecourtissatisfiedthatthelitigation
isnotpursuedbythelawyersfor
theirowngainandis,infact,inthe
genuineinterestsoftheclass.
• Appropriateness:aclassactionshouldbe
themostappropriatemeansofdetermining
theclaimsofthemembersoftheclass
giventhecompositionoftheclassandthe
natureoftheproposedaction.
The‘interestsofjustice’istheoverarching
factorthatthecourtswillconsiderwhen
decidingwhetherornottograntan
ordercertifyingaclassaction.Thereis
somedebateovertheapplicabilityofthe
‘interestsofjustice’considerationinpurely
commercialmatters,andthisissuehasnot
yetbeendefinitivelydecidedbytheSouth
Africancourts.InthecaseofJPH Pretorius and Another v Transnet and Others4
(Transnetcase)acertificationapplication
relatingtoaclasscomprisingthousandsof
pensionerswasgrantedonthebasisthatit
wasintheinterestsofjusticetodoso.
Intheabsenceoflegislationregulating
classactioninSouthAfrica,thereis
littleguidanceondealingwith‘opt-in’
and‘opt-out’classesandcurrentlyeach
matterisdealtwithonitsownmerits.
An‘opt-in’classisonewheremembersof
anidentifiedclassarerequiredtoprovide
writtenconsenttobeincludedintheclass
action.Bycontrastan‘opt-outclass’allows
membersoftheidentifiedclasstochooseto
beexcludedfromtheclassthroughwritten
noticeafterthecertificationprocessand
duringaprescribednotificationperiod.
Withoutclassactionlegislation,these
principleswillneedtobedevelopedover
time.IntheSilicosiscasethecourtallowed
forboth‘opt-in’and‘opt-out’proceduresat
variousstagesofthelitigation.
4. (42355/2015)[2016]ZAGPPHC352
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Notice of intention to oppose
certification application
15 days
15 days
Answering affidavit
Class will appeal
End: no certification
Action proceedings
Unclear in law if right of
approval exists
Decision not to oppose certification
application
Heads of argument
Graphicalrepresentationofthe
certificationapplicationprocess:
Appeal granted Appeal denied
Replying affidavit
Notice of motion and founding
affidavit
Hearing
Applicationdismissed
Certification granted
10 days
Guide - Class Action Litigation in South Africa
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TRIAL OF CLASS ACTION
Onceaclasshasbeencertified,the
matterwillproceedbywayoftrialaction
beforeasinglejudgeorpanelofthree
judgesintheHighCourtofSouthAfricain
accordancewiththeUniformRulesofthe
HighCourtregardingtrialproceedings.
Thetrialisconductedinthesamemanner
asanyotherHighCourttrialandisalso
subjecttothesameappealmechanisms.
Atthetimeofpublication,theTransnetcaseistheonlyclassactionwhichhas
advancedpasttheexchangeofpleadings
stageaftercertificationoftheclassaction.
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1313
Guide - Class Action Litigation in South Africa
Prescription in South Africa
InSouthAfrica,‘prescription’refersto
thestatutorytimeperiodswithinwhich
certaintypesofclaimsarerequiredto
bebroughttocourt,failingwhichthey
willconsideredtobetime-barred.
Theprescriptionperiod(thetimelimit
withinwhichaclaimmustbebrought)in
ordinarycommercialclaimsisthreeyears
afterthecauseofactionarises.Thethree-
yearperiodstartsrunningfromthedateon
whichtheplaintiffis,orshouldreasonably
be,awareof(a)thefactsgivingrisetothe
debt;and(b)theidentityofthedebtor.
INTERRUPTION OF PRESCRIPTION
Theinterruptionofprescriptionisdealtwith
inSections14and15ofthePrescriptionAct
68of1969(PrescriptionAct).Therunningof
prescriptionisinterruptedintwosituations.
Thefirstiswherethereisanadmissionof
liabilitybythedebtor.Thesecondiswhatis
referredtoasjudicialinterruption.
Judicialinterruptionisreferredtointhe
PrescriptionActas‘theserviceonthe
debtorofanyprocesswherebythecreditor
claimspaymentofthedebt’.Therearethree
elementsnecessaryforprescriptiontobe
judiciallyinterrupted:(a)service(b)ofcourt
process(c)inwhichpaymentisclaimed.
PRACTICAL CONSIDERATIONS REGARDING PRESCRIPTION IN THE CLASS ACTION PROCESS
Therearedivergentopinionsinthecontext
ofclassactionsonwhethertheservice
ofacertificationapplicationsatisfiesthe
requirementthatpaymentisclaimed.
Thisisbecausenoclaimforpaymentis
madeinacertificationapplication.Rather,
thereisarequestforthecourttodeclare
thataclassactionisasuitablemeans
ofclaimingadebtordebtswhichare
allegedlyduetomembersoftheclass.
Giventhatatwostageprocessisnecessary
(certificationoftheclassactionandonly
thereafterinstitutionoftheclassaction
itself)itiscurrentlyuncertainwhichstageis
regardedastriggeringthejudicialinterruption
ofprescription,andthepointisyettobe
decidedbythecourts.Thecommonly
heldview,however,isthatacertification
applicationdoesinterruptprescription.
First,itwouldlikelynotbeconsideredto
beintheinterestsofjusticetopermita
respondentincertificationproceedings
toeffectivelyengineertheprescription
ofclaimsbydelayingthecertification
application,therebydelayingthe
institutionoftheclassactionitselfduring
thethree-yearprescriptionperiod.
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Second,thereareseveralreportedcases
inSouthAfricaholdingthattheservice
ofprocesswhichisa‘necessarystep’for
thecreditortoclaimadebtissufficient
tointerruptprescription.Althoughthis
hasnotbeendecidedinthecontextof
classactionsspecifically,itislikelythata
courtapplythesameprinciple,andthata
certificationapplicationwillberegardedas
a‘necessarystep’foraclasstoclaimthe
damagestheyallegetheyhavesuffered.
Third,Section39(2)oftheConstitution
requiresallcourtstopromotethespirit,
purportandobjectsofthebillofrights
wheninterpretinglegislation.Oneofthe
rightscontainedintheBillofRightsisthe
rightofaccesstocourts.TheConstitutional
Courthasrecentlyruled5thatthePrescription
Actmustbeinterpretedinamannerleast
restrictiveoftherightofaccesstocourts.
Itislikelythatacourtwillregardtheinstitution
ofacertificationapplicationasinterrupting
prescriptiontoavoidlimitingtherightof
accesstocourtsbycreatingtheopportunity
forabusebyrespondentsdescribedabove.
5. MakatevVodacomLtd2016(4)SA121(CC)
Guide - Class Action Litigation in South Africa
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Costs
SECURITY FOR COSTS
Atcommonlaw,alitigantisentitledto
requestthatthepartyinstitutingproceedings
againstitpayintoescrowanamountof
moneyassecurityforthecoststobe
incurredindefendingtheclaim.Thisis
mostcommonlyusedwhereaforeign
partyinstitutesproceedingsagainsta
localparty,butitcanalsobeusedinother
circumstanceswherethereappearstobe
aninabilityonthepartoftheapplicant/
plaintifftopaytherespondent/defendant’s
costsifhe/sheisorderedtodoso.
Securityforcostsisrequestedbywayof
anoticetothecourtandtheapplicants.
Iftheapplicantsdisputetheirliability
topaysecurity,acourthasadiscretion
todecidewhetherornottoorderthem
toputupsecurity.Thisprocedureis
notuniquetoclassactions,andisdealt
withintheUniformRulesofCourt.
Inpractice,anestimateismadeofthe
taxedcostswhichwillbeincurredbythe
defendingparty,andthatamountisthen
paidintoescrowbytheinstitutingparty
pendingthedeterminationofthecase.Once
thecasehasbeenfinalised,andifacosts
orderismadeinfavourofthedefending
party,thefundsinescrowarereleasedto
thedefendingparty.Anysurplusfunds,
ortheentireamountifnocostsorderis
made,isreturnedtotheinstitutingparty.
POTENTIAL RECOVERY OF COSTS
Regardlessofwhetherornotsecurityis
furnished,thegeneralapproachofSouth
Africancourtsisthatcostsshouldfollow
theresult.Thismeansthatincivillitigation
anunsuccessfullitigantwillusuallybe
orderedtopaythelitigationcostsof
thesuccessfullitigant.Thecourtdoes,
however,retainadiscretionwhetherto
awardcostsinfavourofeitherparty.
Thismeansthatrespondentsinaclass
actionmay,ifsuccessfulinopposinga
certificationapplicationorindefendingthe
mainaction,beentitledtorecovercostsfrom
theapplicantsorplaintiffs,asthecasemay
be.Inlitigationoverconstitutionalrightsthe
ConstitutionalCourthasestablishedwhat
isreferredtoasthe‘Biowatch’principle6,
whichaimstoshieldunsuccessfullitigants
fromadversecostsordersthatmightdeter
citizens,particularlyindigentpersons,from
attemptingtoenforceconstitutionalrights.
Recently,therehasbeenagrowingtrend
ofcourtstakingthisprincipleintoaccount
indecidingcostsordersevenwheretwo
privatepartiesareconcerned,especially
incircumstanceswhereindividuals
litigateinthepublicinterestagainst
largecorporationswhichareviewedby
thecourtsashavingdeeppockets.
6. BiowatchTrustvRegistrar,GeneticResources2009 (6) SA 232 (CC)
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Itfollowsthatevenifrespondentsare
successfulinopposingacertification
applicationordefendingaclassaction,
thereisnoguaranteethattheywillbe
entitledtorecovercostsfromtheapplicants
ortheplaintiffs,asthecasemaybe.
Therehasbeennojudgmentyetonhow
thecostsoflitigationmaybeshared
amongthemembersofaclassandthe
positiononthisiscurrentlyuncertain.
Evenwherecostsareawardedbythecourt,
thisdoesnotmeanthatasuccessfulparty
willbeentitledtorecovertheactuallegal
feesincurred.Costsawardedbyacourtare
assessedagainstatariffsetoutintheUniform
RulesofCourt.Thetariffstipulatesmaximum
amountswhicharerecoverableinrespectof
certainactivitiesundertakenbyattorneysand
advocates,andtheamountsrecoverableare
unlikelytomatchtheactualcostoflitigating.
Guide - Class Action Litigation in South Africa
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Funding of Class Action Litigation in South Africa
Anapplicationforcertificationofaclass
actionmustdisclosethebasisonwhich
theplaintiffs’lawyerswillbepaidto
avoidanyconflictofinterestsbetween
thelawyersandmembersoftheclass.
THIRD-PARTY FUNDING
Third-partyfundingofclaimsispermitted
inSouthAfricaincertainjustifiable
circumstances.TheSouthAfricanprinciples
regardingthird-partyfundingwerescrutinised
inGold Fields Ltd and Others v Motley Rice LLC7.There,thecourtheldthatthird-party
fundingispermissibleifitensuresthatindigent
individualplaintiffswouldbegrantedaccess
tothecourtsthusensuringaccesstojustice.
InPriceWaterhouse Coopers Inc and Others v National Potato Co-operative Ltd and Another8
theSupremeCourtofAppealrecognisedthat
certificationandtrialproceedingsinclass
actionlitigationareseparatefromeachother
andthatitisclearthatfinancialgaindoesnot
accruetolitigantsasaresultofasuccessful
certificationapplicationalone.Different
considerationsexistatthetrialstageofa
classactionwhereafunderwouldreceivea
clearbenefitiftheactionweretosucceed.
Thirdpartyfundingallowsaccesstojustice
forotherwisedisempoweredlitigants
anditisanareaofSouthAfricanlaw
thatrequiresfurtherdevelopment.
CONTINGENCY FEES
ContingencyfeesareallowedinSouthAfrica
providedtheagreementcomplieswiththe
provisionsoftheContingencyFeesAct66
of1997.Thisincludestherequirementthat
the‘successfee’doesnotexceedthe‘normal
fee’by100%,providedthatinthecaseof
claimssoundinginmoney,thetotalamount
ofthesuccessfeepayablebytheclientto
itslegalpractitionermaynotexceed25%of
thetotalamountawardedoranyamount
obtainedbytheclientasaresultofthelegal
proceedings.Thiscalculationdoesnotinclude
coststhathavebeenawardedtotheclient.
7. 2015(4)SA299(GJ)
8. 2015(2)AllSA403(SCA)
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The Discovery Process
Therulesfordiscoveryinclassaction
litigationdonotdifferfromnormalaction
proceedingsinSouthAfricaandare
governedbytheUniformRulesoftheHigh
CourtofSouthAfrica.Intermsofthese
Rules,apartyisrequiredtodiscloseall
documents,recordingsandcorrespondence
relevanttothelitigation,providedthatthey
arenotprivileged.
Theconceptofrelevanceforpurposesof
discoveryisgenerallyanelasticconcept
whichisdeterminedonacasebycase
basisdependingontheclaimitselfand
issuesindispute.
1919
Guide - Class Action Litigation in South Africa
Remedies Options for Defendants to a Class Action
SouthAfricanlawdoesnotrecognisethe
conceptofpunitivedamages.Classaction
claimfordamagesislimitedtoclaimsfor
theactuallossessuffered,withsuchlosses
requiredtobesufficientlycloselylinkedtothe
conductofthedefendant.Thisdiffersfrom
thepositioninmanyotherjurisdictions.
Asclassactionlitigationisrelativelynewto
SouthAfricanlaw,thereismuchuncertainty
aboutthemannerinwhichacourtwillaward
anddistributedamagestomembersofthe
classifadefendantisfoundtobeliable
fordamages.Atthedateofpublication
ofthisguide,nodistributionshavebeen
madeinaclassactioninSouthAfrica.
Adefendanttoaclassactionmustconsider
thecostsoflitigatingaclassactionand
thechallengesoffindingwitnessesand
otherevidenceparticularlyincircumstances
whereclaimsrelatetoexposureover
manyyearsandwherethedefendant
maynolongerhaveaccesstorecords.
Asinanycivillitigation,adefendantinaclass
actionmaychoosetodefendthelitigation
inthecourtsystem,ormayattempttosettle
itusingoneormoreADRtechniques.
Whentherearemultipledefendantstoa
classactionitisimportanttoensurethat
informationissharedonaconfidentialand
legallyprivilegedbasisandthatattorneysare
appointedseparatelytodefendthelitigation.
However,itisprudenttojointlyappoint
independentattorneystofacilitatea
resolutionofanydifferencesamong
defendants,thedevelopmentofastrategy
formanagingtheclassactionlitigation
andsettlementnegotiationswiththe
attorneysrepresentingtheclass.
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Alternative Dispute Resolution in Class Action Litigation
ARBITRATION
InSouthAfrica,therehavebeennoclass
actionsreferredtoarbitration.Itisconceivable
thatonceaclasshasbeencertifiedwith
leaveofthecourttoarbitrate,inorderto
arbitratetheclassaction,alllitigantsmust
agreethatthematterwillberesolvedby
arbitrationandthiswouldbedonebywayof
awrittenarbitrationagreement.Anarbitrator
orpanelofarbitrators(asagreedamong
theparties)willadjudicatethedisputeand
makearulingthatisfinalandbindingonall
parties(unlessarightofappealisagreed).
MEDIATION
Unlikeanarbitrator,amediatordoesnot
makearulingbutratherfacilitatesapossible
settlementamongtheparties.Mediationisonly
appropriateifthepartiesarewillingtoenter
intobona fidenegotiationsforsettlement.
Theadvantagesofmediationincludethatitis
aconfidentialandwithoutprejudiceprocess
withnoobligationtosettle.Partieshavean
opportunity,throughthemediationprocess,
toassessthestrengthsandweaknessesof
theircases.Mediationhasahighsuccess
rateforsettlement.Thereis,however,always
theriskthatthecounter-partyparticipates
inthemediationinbadfaith,wastingtime
andmoneywhileprobingthestrengthsand
weaknessesoftheiropponent’scase.
TheSilicosiscaseisanticipatedtobea
pioneeringprecedentforclassaction
litigationinSouthAfricaandhasbeen
part-settledbymediation.TheSilicosiscase
isacomplexclassactionandisthefirst
classthatwascertifiedandpart-settledby
mediation.Atthetimeofpublicationofthis
guide,anapplicationhasbeenmadefor
thesettlementagreementtobeapproved
bythecourtandmadeanorderofcourt.
SETTLEMENT
Settlementnegotiationsareconfidential
untilmadeanorderofcourt.
Settlementsaveslegalcostsandmanagement
resourcesandcreatescertainty.Itispossible
tohaveaduallitigationandsettlement
approachandusedifferentlawyersfor
settlementandlitigationnegotiations.
TheHighCourt’sdecisionintheSilicosiscase
heldthatasettlementagreementreached
afterthecertificationofaclassactionwill
onlybevalidonceapprovedbythecourt.
IftheContingencyFeesActisapplicable
toanagreementbetweentheclassaction
applicants/plaintiffsandtheirlawyersthen
thatisanothergrounduponwhichjudicial
approvalofthesettlementwouldberequired.
Guide - Class Action Litigation in South Africa
21
Reform
Despitetheguidanceprovidedbythe
SupremeCourtofAppealandConstitutional
Court,whichhasmainlydealtwithclass
actioncertification,SouthAfricancourts
arenavigatingthecomplexitiesofclass
actionlitigationwithlittlelocalprecedent
formanyaspectsofthistypeoflitigation.
Withthelikelihoodofanincreaseinthevolume
ofclassactionlitigationinSouthAfrica,
dedicatedclassactionlegislationorprocedural
ruleswouldbeofgreatbenefittoparties.
BOWMANS
22
DAVID GERAL
HeadofBankingandFinancial
ServicesRegulatory
Johannesburg,SouthAfrica
T:+27116699514
Class Action Team Members: South Africa
To view profiles of our lawyers,
please visit www.bowmanslaw.com
PERUSHA PILLAY-SHAIK
Partner
Johannesburg,SouthAfrica
T:+27116699660
ADAM ANDERSON
Partner
Johannesburg,SouthAfrica
T: +27116699000
JAMES MCKINNELL
Partner
CapeTown,SouthAfrica
T:+27214807820
CLEMENT MKIVA
Partner
Johannesburg,SouthAfrica
T: +27116699206
Guide - Class Action Litigation in South Africa
23
Cape Town, South Africa
T:+27214807800
Dar es Salaam, Tanzania
T: +255768988640
Durban, South Africa
T: +27312650651
Johannesburg, South Africa
T: +27116699000
Kampala, Uganda
T: +256414254540
Moka, Mauritius
T: +2304688411
Nairobi, Kenya
T: +254202899000
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@Bowmans_Law
www.bowmanslaw.com
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Aman Assefa & Associates Law Office, Addis Ababa, Ethiopia
T: +25114702868
