The nature of a liability policy

A liability policy provides an indemnity in respect of legal liability to compensation to others.

Damage or injury to others or their property is not enough in itself to make the insured liable
even though an involvement arises by way of accident or otherwise. Whenever an occurrence of
claims potential arises, the insurer must consider;
a) Does the policy apply to the circumstances, injury or damage of the stated case.
b) Was the insured legally liable for the injury/damage.
Even if it transpires that no legal liability attaches to the insured, if (a) is answered in the
affirmative the insured will benefit from the services rendered by the insurer in defending
allegation against him.

Delict/Tort
A delict can be defined as ‘a civil wrong for which damages can be claimed as compensation
and for which redress is not usually dependant on a prior contractual undertaking to refrain from
causing harm’.

The principal delicts

The main delicts are negligence, nuisance, trespass, defamation, and strict liability.

Delict Principal Interests Protected

Negligence Damage/injury caused by careless physical invasions
Nuisance Interference with real property
Trespass Interference with real property
Defamation Interference with a person’s reputation

Delicts and Crimes

Delict Crime
Civil or criminal law Civil Criminal
Purpose of legal action? To provide compensation or The object of criminal
reparation for the victim who proceedings is to punish
has been harmed by the offenders who are found guilty
wrongful act of the defendant of a wrong which is harmful to
the interests of society as a
whole
Who brings the legal action? The victim themselves (the The action is brought by the
claimant) state.

The same behavior may amount to both a crime and a delict/tort e.g. If A carelessly drives into
B’s car there may be a crime (perhaps driving without due care and attention) and a delict
(negligence).

Negligence
‘the omission to do something a reasonable and prudent man would do, or doing something a
prudent and reasonable man would not do’.

Case: Blyth Vs Birmingham Waterworks (1856)

The test is objective, i.e. a person is not judged by what he considers reasonable but what a
reasonable person would or would not do in the particular circumstances.
Who is the reasonable man?
He does not ‘have to possess the wisdom of a Hebrew prophet or the agility of an acrobat’.
Thus a person is not an insurer of his fellow man – to be liable, he must be at fault. Fault in this
context means failure to live up to the standard of a reasonable man. The law does not excuse
inexperience.

The constituents of negligence

To succeed in an action, the plaintiff must clear ‘three hurdles’; that is show that;
a) The defendant owed the plaintiff a duty of care
b) The defendant was in breach of his duty
c) The plaintiff sustained damage as a result provided that the damage was not too remote.

Contract

When two or more parties enter into a contract they obtain certain rights and obligations. One
party becomes legally liable to the other, and if s/he this legal duty or obligation we say that s/he
is contractually liable. Civil actions arising from breaches can only be brought by the parties to
the contract. These are easily recognized, and few in number.

Liability under contract is said to be assumed voluntarily. Some obligations are imposed by law,
for example: an implied warranty against latent defect, in contracts of purchase and sale.

From a liability insurer’s point of view, it is usual for policies to exclude liability assumed by
agreement, unless liability would have attached notwithstanding such agreement. For example,
a lease agreement might make the tenant responsible for loss or damage to a rented house, but
to some extent s/he would be responsible at common law.

Delict and Contract

A delict is a breach of duty fixed by law, in other words a general duty which imposes on
everybody. In the law of contract the duties are fixed by the parties themselves and setout in the
contract. E.g. Under an insurance contract the insured has a duty to pay premium and the
insurers have a duty to pay claims. These are not general duties but duties which arise
voluntarily by agreement.
A delictual action can be brought by anyone who has suffered harm through a breach of the
general duty not to harm others in person, property or personality.

No contractual relationship is needed.

There may be many claimants involved.

Delictual duty does not depend on anyone’s consent. It arises involuntarily, although as a result
of our actions or omissions.

The two can overlap e.g. a surgeon performs an operation on a patient in terms of a contract. If
he/she negligently leaves a swab in the patient’s body, the patient (plaintiff) has the option of
suing hum/her in contract or in delict.
Case: Donoghue vs. Stevenson (1932) – Neighbour principle
Mrs. Donoghue suffered shock and a gastric complaint after drinking after drinking bottled
ginger beer that turned out to have contained a dead snail. She did not buy the beer herself (a
friend paid for it) so had no contractual relationship with the manufacturer, Stevenson. This
happens in Scotland, and according to Scottish law at the time, the manufacturer owed a duty of
care only to purchasers, not to consumers. The House of Lords ruled that a duty of care was
also owed to consumers and Mrs. Donoghue was entitled to recover damages. Lord Atkin
formulated a general duty of care while also creating a new category of duty – manufacturer and
consumer. Lord Atkin said;

‘you must take reasonable care to avoid acts or omissions likely to injure your neighbour’.
Neighbours are ‘persons … so closely and directly affected by my act that I ought reasonably to
have them in contemplation as being so affected when … directing my mind to the acts or
omissions called into question’.

Injury to Personality / Libel and Slander (Defamation, Injuria)

Defamation involves injury to a person’s feelings after interference with his reputation. In other
words it is intentional infringement of another person’s right to his/her good name. It is the
publication of a statement which ‘tends to lower the plaintiff in the estimation of right-thinking
people’.

Two forms of defamation – One form is spoken words (slander) and the other is written words
(libel).

Libellous statements may be contained in writing or take the form of pictures or drawings. Libel
can be a crime as well as a delict if it is sufficiently serious. It has always been regarded as a
more serious wrong than slander because written words usually have a more widespread and
lasting effect than speech. Libel has, therefore, always been actionable per se (without proof of
damage).

Slander will usually take the form of defamatory speech or possibly defamatory gestures.
Slander, in itself, is a civil wrong only. Slander is not generally actionable per se and damage
must be proved.

For civil action under delict, the plaintiff must prove ‘special damage’. This must be a material
loss having some financial value, such as loss of employment, or loss of financial benefits
through the refusal of persons to contract with the claimant.

Essentials of defamation
To succeed the plaintiff mush show that the statement;
a) Was published.
b) Was defamatory.
c) Referred to the plaintiff.
d) Caused special damage.
According to the classic definition, a statement is defamatory if it is false and exposes the
claimant to ‘hatred, ridicule or contempt or lowers them in the eyes of right-thinking members of
the society generally. The test for defamation is based not on the intention but the ‘meaning
which would be imputed by reasonable person’. Not only is the author exposed to the risk but so
too are the printers, publishers and negligent distributers.

The remedy is the Actio injuriarum, which has the object of reparation of lowering of the
plaintiff’s esteem in the community. There is no basic formula for this and the amount is at the
court’s discretion.

Strict Liability
It describes liability that does not depend upon proof of fault. Liability depends on proof of the
act. Intent or negligence is not even required.

Common Law – Examples

i) Liability for Animals (Actio de pauperize)
If a domestic animal – cat, dog horse, mule, livestock etc but not a wild animal acts against its
nature (ferociously, not tamely and gently, as one would expect of a domestic animal) the owner
is liable in delict for injury or damage caused.

This does not apply where;

a) The plaintiff has no right to be there, when s/he was attacked.
b) s/he, or a third party, provoked the animal.
c) The harm was a result of a pure accident.

ii) Liability for Falling Objects (Actio de effuses vel dejectis)

If a person is killed or injured by something thrown or falling out of a building where the public
normally pass, that person (or his/her dependants) has an action in damages against the
occupier of the building for the harm suffered, irrespective of negligence or intent.

iii) Statutes
The Aviation Act – Persons injured or whose property is damaged by a object falling from an
aircraft have a claim against the owner of the aircraft, irrespective of fault.

Vicarious Liability - Liability for the acts of others.

This form of liability is strict in one sense. Its attaches to a party, not because he has committed
a delict, but because of his relationship with the wrongdoer, e.g. a master is liable for the delicts
of his servant committed in the course of employment. Vicarious liability is, therefore, note a
delict or a wrong in itself but a way in which liability maybe imposed: a person may be directly
liable for their own delicts or vicariously liable to delicts committed by others. For example a
worker injures a fellow employee in the course of their job, or injures somebody who is not a
fellow employee (such as a visitor to the premises), the victim can claim compensation from the
employer, who is vicariously liable.
For our purposes, three forms of relationships are important;

1) Employer and Employee

The plaintiff will succeed against the employer if he can show;
a) The existence of a master and servant relationship.
b) That the servant committed the delict in the course of employment.

Case: Viljoen [Link] 1997 (1) SA 309 (AD)

An employee in a vineyard, contrary to prohibition by his employer, walked 300 metres, and
relieved himself in the bushes on a neighbouring farm. He then tried to light a cigarette and
caused a fire there. The fact that he relieved himself, or that he smoked, was not important. He
could have done either on his employer’s farm. The actual digression was a fairly short distance
and a few minutes, and it could not be said that he temporarily abandoned his employment.
Vicarious liability was found.

The Rationale
The reasons for making an employer liable can be summarized:
a) It induces the employer to fix maximum safety standards.
b) It is more likely to satisfy the desire to find a financially responsible defendant.
c) The employer is much more likely to have the financial means to pay the claim than the
individual employee. The employer is likely to have cover for accident if this sort.

Independent Contractors
A person who engages an independent contractor (rather than an employee) to carry out work
is not usually liable for the delicts of the latter. The primary responsibility rests upon the party
who committed the negligent act, responsibilities may be varied by the terms of a written
contract between the parties.

The principal will be liable where;

a) a contractor is employed to do illegal acts;
b) a contractor is employed to do a lawful act involving strict liability for;
- extra hazardous work,
- removal of support to land or buildings,
- creation of dangers on the highway,
c) the principal retains a measure of control over the contractor by providing men and/or
machinery
d) the principal is under a statutory obligation to perform work in a particular manner.

2) Principal and Agent

This is similar to the employer/employee relationship. A principal-agent relationship
must exist at the time of the delict. The agent must be acting within the scope of his/her
authority. Usually, these delicts consist of some kind of misrepresentation by the agent
to a third party.
 3) Motor Car Owner and Driver
Someone (other than an employee of the owner) is allowed to derive the car, and
negligently causes an accident.
- The owner must ask the driver to drive, or supervise his/her driving.
- The vehicle must be driven in the interests of the owner ( even if only partially in
his/her interests)
- The owner must retain a right of control over the manner in which the vehicle is
driven.
The vehicle owner is vicariously liable for the negligence of the driver.

Injury to Property (Patrimonial Loss)

Patrimony can be explained in the sense of ‘everything a person possesses’. This is not limited
to things that can be seen or touched, and includes;
- Physical damage to property, reducing the value of the property.
- Something that prevents the estate from increasing e.g. loss of production as a result
of the event.
- Medical expenses and loss of earnings.

Physical injury
Every action which harms another person and satisfies the elements for delictual liability is also a
delict. The victim has the option of laying a criminal charge, e.g. assault and/or suing the assailant
for damages. Every factual infringement of a person’s physique or psyche violates his/her corpus.

Physical injury may occur with or without violence with or without pain, but must not be of trivial
nature.
The action for pain and suffering includes:
- Disfigurement
- Mental injury
- Emotional shock
- Shortened life expectancy
- Loss of amenities of life and health
- Physical and mental suffering

Although no amount of money can adequately compensate for pain and suffering, our law accords
the victim a monetary award as compensation. It has been argued at the courts that every person is
entitled to live free from pain and in enjoyment of those pleasures in life which accrue to the
possessor of a health mind and body. If through the wrongful conduct of another, the person loses
these advantages, the law affords him/her the comfort which is assumed to flow from being in
possession of a sum of money derived from an award of damages given against the wrongdoer,
(Hoffmann v SAMutual Fire and General Insurance Company Ltd 1956 2 SA (C)).

Dependant’s action
The dependantof a person killed in wrongful or culpable manner may claim damages from the
wrongdoer for loss support. The killing infringes the dependant’s personal right of support by the
breadwinner and his action is not affected by contributory negligence or special agreements by the
breadwinner e.g. that the deceased had accepted the risk of being killed or had realised the
wrongdoer from liability.