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• Background And Working Procedure
• 1.1 Introduction
• 1.2 Background To The Investigation
• 1.3 Working Procedure

CHAPTER 1

BACKGROUND AND WORKING PROCEDURE

1.1 Introduction

1.1.1 This report of the South African Law Commission on the topics of class actions and actions in the public interest contains the Commission’s reasoned recommendations and a draft bill to give effect thereto. The recommendations in this report substantially confirm those in relation to the same issues in the Commission’s 1995 working paper The Recognition of a Class Action in South African Law (hereinafter the “Working Paper”). This report accordingly builds on the research, consultations and findings of the Working Paper.

1.2 Background to the investigation

1.2.1 Traditionally the South African law of standing has been relatively restrictive: the courts have required a personal, sufficient, and direct interest^[1] before a litigant is accorded standing in court.^[2] This has posed fewer problems in matters of an essentially private law nature than in the realm of public law. In public law, for instance administrative law and environmental law, the interest of the litigant may well be shared with the public at large; the litigant may therefore be unable to meet the personal interest requirement.^[3]

Similarly, representative organisations have on occasion been denied standing on the basis that their interest, as opposed to that of their members, is insufficiently direct.^[4] There are of course decisions that have taken a contrary view,^[5]but the issue has remained a potentially troublesome one.^[6]

1.2.2 Class actions and public interest actions are part of the worldwide movement to make access to justice a reality.^[7] If the traditional notion of standing is strictly adhered to, public spirited individuals are prevented from claiming relief in the public interest or in the interests of persons who for various reasons are unable to enforce their rights. Furthermore, the Constitution of the Republic of South Africa Act 108 of 1996, as did the Constitution, 1993, specifically provides for class actions and actions in the public interest and it is logical that the same principle should apply in non-Bill of Rights cases.^[8]

1.2.3 Internationally, class actions and public interest actions are used outside the scope of constitutional law where a number of persons have the same or similar claims or defences. Some examples of instances where numerous persons have similar claims are those

• arising from a single event (“sudden mass disaster”);^[9]
• attributable to a single cause but occurring at different times and in different circumstances (“creeping disaster”);^[10]
• arising from transactions concluded by consumers (“consumer claims”);^[11]
• arising from some other common factor affecting a class (pregnant women, children, parents, the disabled, etc.).

These examples are by no means exhaustive and other types of claims can be envisaged.

1.2.4 The passage of a vessel carrying nuclear waste from Europe to the East around the Cape illustrates the need for a public interest action in our law. On current tests for standing in court, no one - not even an inhabitant of the Cape Peninsula - would have the "sufficient and direct interest" required by our courts^[12] to enable him or her to prevent the passage of the vessel through South Africa's economic zone (as in fact happened). Similar considerations could apply to nuclear waste disposal in a remote area of the Kalahari, or the erection of further nuclear power stations in inappropriate parts of the country.

1.2.5 If it was possible to institute a class action in South Africa, the benefits of a judgment such as that of Rikhoto v East Rand Administration Board^[13] could have accrued to all those black people denied the right to remain in a "prescribed area" for more than 72 hours unless exempted.^[14] Similarly, the parents of children refused admission to Laerskool Potgietersrus^[15] could have joined forces with great effect by instituting a class action.

1.2.6 Class actions can also be to the advantage of large corporations, municipalities and the like. In Port Elizabeth Municipality v Prut NO,^[16] for instance, the Municipality issued summons against a single "flat rate" payer. Although the doctrine of stare decisis^[17] applies, the Municipality still has to issue individual summonses against all the other "flat rate" payers. If the Municipality brought a class action against all the defaulters, it could obtain a single judgment enforceable against all the defaulters.

1.3 Working procedure

1.3.1 The former Minister of Justice requested the Commission to investigate the possible recognition of class actions on 10 August 1992. Later that same year the Working Committee of the Commission resolved to include such an investigation in its programme. The scope of the investigation was, however, broadened to include actions in the public interest. A project committee^[18] was appointed to assist the Commission with its task and a working paper was published in 1995.

1.3.2 The Working Paper was circulated widely, not only to lawyers but also to other interested persons and bodies, whom the Commission invited to comment. It contained a draft Bill. Numerous persons and bodies availed themselves of the opportunity to comment.^[19]

1.3.3 In the light of the comments received, and our own research, the Commission reviewed and tested its preliminary recommendations as contained in the Working Paper. In this regard the Commission was assisted in its task by a new project committee under the chairmanship of the Honourable Mr Justice P J J Olivier. The committee further consists of Adv J J Gauntlett, SC, Professor C Loots, Mr E Makgoba, the Honourable Madam Justice S Meer, Mr P Mojapelo and Mr D Nkadimeng. Special cognisance was taken of developments in our constitutional law and some recent developments in foreign jurisdictions.

1.3.4 The report is prepared for submission to the Minister of Justice who may then take appropriate action.

[1] Standard General Insurance Co v Gutman NO 1981 2 SA 426 (C); Christian League of Southern Africa v Rall 1981 2 SA 821 (O); Cabinet of the Transitional Government for the Territory of South West Africa v Eins 1988 3 SA 369 (A); Cabinet for the Territory of South West Africa v Chikane and another 1989 1 SA 349 (A).

[2] Or "locus standi". See, for example, Nasionale Party Suidwes-Afrika v Konstitusionele Raad 1987 3 SA 544 (SWA); South African Optometric Association v Frames Distributors (Pty) Ltd t/a Frames Unlimited 1985 3 SA 100 (O); Ahmadiyya Anjuman Ishaati-Islam Lahore (SA) v Muslim Judicial Council (Cape) and others 1983 4 SA 855 (C).

[3] The decisions in Bamford v Minister of Community Development and State Auxiliary Services 1981 3 SA 1054 (C), Jacobs en 'n ander v Waks en andere 1992 1 SA 521 (A), and Fedsure Life Assurance Ltd v Greater Johannesburg Transitional Metropolitan Council 1998 (6) BCLR 671 (SCA) go some way to meeting this concern. The correctness of Bamford was, however, questioned by Rabie CJ in the Eins-decision (supra).

[4] South African Optometric Association v Frames Distributors (Pty) Ltd t/a Frames Unlimited 1985 3 SA 100 (O); Noll v Alberton Frames (Pty) Ltd 1989 1 SA 730 (T); Bohlokong Black Taxi Association v Interstate Bus Lines (Edms) Bpk 1997 (4) SA 635 (O).

[5] Transvaal Indian Congress v Land Tenure Advisory Board 1954 2 SA 506 (T); Ex parte Natal Bottle Store-Keeping and Off-Sales Licensees' Association 1962 4 SA 273 (D) and, more recently, Wildlife Society of Southern Africa and others v Minister of Environmental Affairs and Tourism and others 1996 (3) SA 1095 (Tk SC).

[6] Van Wyk et al Rights and Constitutionalism 421.

[7] Cappelletti (ed) Access to Justice 14; Morabito and Epstein Class Actions in Victoria 4 - 5.

[8] See paragraph 1.3 of Working Paper 57.

[9] In such cases a number of workers, travellers, spectators or residents of an area are adversely affected by a specific event, such as a train or aeroplane crash, a mine accident, an explosion at industrial premises, or a major incident at a sporting or leisure event. Generally, these will be personal injury or fatal accident claims; but they may also involve damage to property. There is usually no doubt as to the immediate cause of the damage and liability issues are often legally straightforward.

[10] Claims alleging environmental pollution of an area, in nuisance or on a statutory basis, may also be of the “creeping” kind where the alleged pollution does not stem from a specific incident, but is said to have occurred over a period of time, such as seepage from an industrial plant, or a nuclear installation, or prolonged use of chemicals in other circumstances, e.g. in a rural area. These types of claims may involve both personal injury and property damage.

^[11] These are typically claims by purchasers of defective goods or services for damage to property or financial loss, including, for example, claims by tenants of a block of flats or an estate for a landlord’s failure to repair and maintain the premises, professional negligence claims e.g. by shareholders against a company or its auditors for disseminating misleading information, by residents of a neighbourhood against a public authority’s decision to build a road or to permit development in their area, or by a group of package holiday customers against a tour operator who has allegedly “failed to deliver”. Often (but by no means always) the claims will be individually small, but, together, substantial. They may involve no personal injury element. See also Swedish Commission Group Actions 1.

^[12] See, for instance, United Watch & Diamond Co (Pty) Ltd v Disa Hotels Ltd 1972 4 SA 409 (C) at 415 B per Corbett J (as he then was).

^[13] 1983 4 SA 278 (W). The Appellate Division dismissed an appeal against this judgment: Oos-Randse Administrasieraad v Rikhoto 1983 3 SA 595 (A).

^[14] In terms of section 10(1) of the Blacks (Urban Areas) Consolidation Act 25 of 1945.

^[15] Matukane and others v Laerskool Potgietersrus 1996 3 SA 215 (T).

^[16] 1996 4 SA 318 (E). See also Walker v Stadsraad van Pretoria 1997 3 BCLR 416 (T) and Fedsure Life Assurance v Greater Johannesburg Transitional Metropolitan Council 1998 6 BCLR 671 (SCA).

^[17] The expression "stare decisis" means "to stand by decisions". According to this doctrine, when a decision on a legal principle has been delivered by a superior court it should, in general, as far as possible be followed by all courts of equal and inferior status, until such time as that judgment has been overruled or modified by a higher court or by legislative authority.

^[18] The project committee was chaired by the Honourable Mr Justice P J J Olivier. The other members of the committee were Professors Piet Delport, Wouter de Vos, Cheryl Loots, Frans Malan, and Ms Shehnaz Meer.

^[19] See Annexure A for a list of respondents.