Mvumvu v Minister for Transport  ZACC 1 (17 January 2011) Summary
The South African Constitutional Court struck down road accident compensation legislation because it is indirectly discriminatory on the ground of race. However, due to evidence of serious budgetary implications, the Court suspended the order of invalidity for 18 months to enable Parliament to cure the defect.
The case was brought by three victims of motor vehicle accidents. Two had been travelling in minibus taxis, while the other was being driven in her employer’s car. Each suffered significant injuries and loss of earning potential.
The claimants sought compensation under the Road Accident Fund Act (the Act). The Act distinguished between “innocent” victims and those travelling in the “offending vehicle”. The former could receive full compensation, whereas the latter’s compensation was capped at R 25,000 (about 3,500 AUD). This cap applied to anyone travelling in an offending vehicle, even if the victim was (like the claimants) using public transport or being conveyed for work purposes. Consequently, once medical costs had been deducted, the claimants received no or little compensation.
Subsequent to the claimants’ accidents, Parliament removed the distinction from the Act. However, the new provisions only applied prospectively, meaning the claimants were still subject to the compensation cap.
The claimants argued that the distinction breached their right to be free from discrimination, guaranteed by s 9(3) of the Bill of Rights. They sought a declaration of constitutional invalidity and full compensation as if the cap had never been enacted. The State argued that as Parliament had already amended the Act for future claims, the Court should defer to Parliament’s solution by suspending the retrospective effect of any order of invalidity.
The Court held that the provisions indirectly discriminated on the ground of race:
It will be observed that the applicants do not assert that the impugned provisions discriminate against black people in a manner that is direct. Indeed they could not make the assertion because the provisions do not expressly place a cap on claims by black people. Instead it applies to claims of the categories of victims mentioned … above. What is established by the applicants’ evidence though is the fact that at a practical level, the majority of the victims affected by the cap are black people. This in turn shows that indirectly the provisions discriminate against black people in a manner that is disproportionate to other races.
The Court went on to find that this discrimination was not justified. The only reason that the State advanced for the distinction was to ensure that compensation levels reflected claimants’ responsibility for the accident – passengers in offending vehicles could be said to have made a poor choice of driver or vehicle, and therefore their compensation was capped. The Court rejected this argument, finding that it was unrealistic to say that users of public transport could choose their driver, or had knowledge of the roadworthiness of their vehicle. Ultimately it found:
While it may be legitimate for the State to limit compensation accruing to victims of motor vehicle accidents, it has failed to show why the applicants ought to be singled out for this purpose.
As to remedy, the Court made an order of invalidity, which would normally have immediate retrospective effect, dating back to when the Constitution came into force (or the relevant legislation, if enacted after the Constitution). However, the Court decided to suspend the retrospective effect of the order for 18 months to enable Parliament to cure the rights breach. It did so based on evidence led by the State that an order of immediate retrospective effect would have a crippling financial impact on the Road Accident Fund. In light of this evidence the Court deferred to Parliament, which it said was best placed to determine the level of compensation to which the applicants should be entitled, balanced against the need to ensure the financial viability of the Fund.
Relevance to the Victorian Charter
This decision provides a good (and relatively rare) example of a final court holding that legislation is indirectly discriminatory on the ground of race. The relatively nontechnical methodology adopted, (including the absence of a reference to a comparator group) is of interest, and may be particularly relevant in Victoria when the new definitions of discrimination come into force via the Equal Opportunity Act 2010. Further, the reasoning adopted – that the cap affected poor people and that because poverty is racially distributed, the cap adversely affected black people – could be of assistance to advocates and should be of guidance to policy makers.
Also of interest is the Court’s approach to justification. The Court does not methodically apply the Oakes test, as is mandated by s 7(2) of the Charter. However, translated into the language of s 7(2), the Court essentially says that there was no rational connection between the provision and the State’s stated purpose of ensuring that responsibility for accidents was reflected in compensation levels, as, in reality, public transport passengers cannot select the competence of the driver or the roadworthiness of their vehicle.
Finally, although the Charter does not provide for the striking down of legislation, the decision as to remedy has some relevance. This is because the Court confirmed that the general position is that an order of invalidity is of immediate, unlimited retrospective effect. This could be relevant in cases where the Court uses the Charter to arrive at a new interpretation of a provision, as this interpretation should apply to all factual situations arising after the Charter came into force or (if later in time) the passage of the legislation in question. The decision also confirms the Court’s reluctance to engage in normally legislative functions, especially involving the allocation of scarce public resources – preferring, by postponing the effect of the order, to defer to Parliament to craft an appropriate remedy. It should also be noted that while the Court did consider and was persuaded by evidence regarding financial considerations in regard to the remedy, it did not consider budgetary concerns as a possible justification for limiting the non-discrimination right.
The decision is at www.saflii.org/za/cases/ZACC/2011/1.html.
Hamish McLachlan is a lawyer in the Social Inclusion Unit at Victoria Legal Aid