The reduced utility of a life plan as basis for the assessment of damages for personal injury and death
| dc.contributor.advisor | Loubser, M. M. | en_ZA |
| dc.contributor.author | Koch, Robert Julius | en_ZA |
| dc.contributor.other | Stellenbosch University. Faculty of Law. Department of Public Law. | en_ZA |
| dc.date.accessioned | 2012-08-27T11:38:51Z | |
| dc.date.available | 2012-08-27T11:38:51Z | |
| dc.date.issued | 1993-12 | |
| dc.description | Thesis (LLD)--Stellenbosch University, 1993. | en_ZA |
| dc.description.abstract | ENGLISH ABSTRACT: This thesis is concerned with damages for continuing loss, such as most commonly arise with personal injury, or the death of a breadwinner. The approach has been multidisciplinary rather than multinational. The thesis comprises 4 sections: General theory; technical issues; technique and law governing personal injury claims; technique and law governing claims for loss of support. The thesis does not seek to be a compilation of all relevant legal sources. The initial inquiry focuses upon utility theory and the related concept of value. In its most general form utility is merely descriptive of a vital life force. Its application to the assessment of damages requires objectivization. Money and risk are both subject to utilitarian considerations. Techniques can be developed for the measurement of personal utilities. The statistical concept of an expectation describes the utility of uncertain, usually future events. In suitable circumstances market value provides an objective guide to utility. Abstraction promotes forensic efficiency. Concretization, attention to personal details, ensures for each claimant and defendant a proper hearing. Justice involves a blend of these conflicting goals. Perfect restitution is only possible in extremely rare instances. In general the damages awarded by a court are compensation, a fair equivalent for what has been lost. When differencing utility regard must be had for the effect of the award for damages on the overall utility after the wrongful act. The assessment of lump-sum damages is assisted by the concept of a patrimonium which includes as assets the present values of future uncertain incomes and outlays. The assessment of damages requires a comparison between the hypothetical state had there been no wrongful act and the actual state having regard to that act. Fundamental to the assessment of damages for uncertain loss is the technique, known as 'valuation of a chance', whereby the present value of an uncertain hypothetical event is calculated by taking the value of that event as a certainty and then reducing it by a percentage to allow for the contingency of non-occurrence. The technique is applicable equally to past and future losses. The technique is distinguished from proof in a civil court on the balance of probabilities. The determination of the percentage chance may have regard to historical statistics but will more often be based on subjective value judgments. The analysis of chances according to subjective considerations has been a major field of study for analysts of utility. The average expectation of life is a point estimate obtained by summing the survival chances for all possible years of life to age 99 and beyond. The chance of inheritance is similarly calculated but with the chance of death in each year substituted for one of the survival ratios. The standard actuarial calculation for ascertaining present value proceeds by taking the value of the chance in each year of the relevant income or expenditure and then summing the resulting series of separate values. It is generally unsound to suggest that by consuming interest and capital a claimant may reproduce the income that has been lost. Despite the inadequacies of a compensation model based upon consuming interest and capital it is a useful concept provided its limitations are borne in mind. Conditions of high inflation dictate that there is a 'ballooning' of the original capital for many years before inroads into · accumulated funds begin to be made. To test the consumable income from investing an award a court should ignore high nominal rates of return and look to rates closer to the real rate of return. The prudent investor will save for a retirement that extends well beyond the expiry of the expectation of life. The impact of tax on interest receipts is aggravated by high rates of inflation and renders such investments unattractive compared to growth investments such as mutual funds and immovable property. Life annuities provide a medium for contractually transferring the risk of early and late death to a life insurer. The use of actuaries by the courts has its origin in the need for evidence as to the price at which to purchase a life annuity. This evidence has with time become corrupted into a fiction about consuming interest and capital over the expectation of life. In recent years there has been a resurgence of interest in life annuities in the form of 'settlement annuities' . There are a variety of different annuity contracts of which the 'annuity certain' and the 'life annuity' deserve special note. It was the practice in the classical Roman-Dutch law to ignore the price at which 'life annuities' were commercially available. That practice, with few exceptions, continues today. The 'discount rate of interest' is better described as the 'discount rate of return'. A nominal rate (I) comprises a real rate of return (R) and an offset to inflation (F). For compensation calculations R is the most important measure. · Historical analysis suggests that R has a value of about 2,5 % per year compound. The net capitalization rate will be different from R if the cash flow to be valued does not escalate in line with inflation. The allowance for the risk aspect of general contingencies is best achieved by an increase to the discount rate of return. The deduction for general contingencies reflects the court's subjective impression as to the adequacy, or otherwise, the comparative utility, of the primary actuarial calculations. Although collateral benefits are sometimes viewed as part of the general contingencies the risks attaching to what has been, or will be lost, are the major component of the deduction. Allowance for such risks can equally be achieved through an increase to the discount rate of return. Interest is the measure of loss for deprivation from the use of money. The loss of use of goods can generally be quantified by interest on the value of the goods subject to an adjustment for the rate at which the goods increase or decrease in value with the passage of time. A court is competent to award damages expressed in terms of a foreign currency. The rate of mora interest must then be adjusted to that appropriate to the relevant foreign economy. Before dealing with the explicit actions for loss of earning capacity and support one needs to examine the.impact of collateral benefit rules upon the distribution of the costs of damage within the community at large. A comprehensive approach to damages requires the deduction of insurance and employment benefits. A court making an award of damages should specify that a claimant should reimburse certain welldoers including an employer. Benefits provided by the State are not gratuitous and are generally deducted. The expression 'loss of earning capacity' embraces both earnings and living expenses. 'Loss of earnings' and 'loss of earning capacity' should not be distinguished. Just as increased living expenses, damnum emergens, increase the compensation payable so too saved living expenses reduce damage suffered and thus the defendant's liability. General damages has a patrimonial aspect and awards must have some regard to the cost of goods and services in the community at large. Likely earnings and likely expenses are the criteria by which to measure earning capacity and spending needs. The earning capacity of business capital should be distinguished from the earning capacity of the victim. Compensation for 'loss of earning capacity' includes loss of support for the victim's family. Illegal earnings are best dealt with by basing compensation on what would have been earned had the victim acted legally. The loss of a right to support determines who may bring an action for loss of support. The financial loss suffered is, however, not the right to support but the value of the financial benefits expected from the breadwinner in consequence of this right. This financial value will be assessed according the value of the chance of receiving the support. The working wife who earns sufficient to support herself has no right, at that point in time, to claim support from her husband. The loss by the dependants will be assessed without regard for compensating advantages other than inheritance and remarriage. The focus is on the support which would have been provided had there been no death. The widow who takes up employment after the death will be compensated as though she were unemployed. Conversely a widow who ceases employment in consequence of the death has no claim under the dependants' action for this loss of earnings. Loss of inheritance prospects will be compensated to the extent that these would have provided ongoing support. Although dependants have in theory a claim for loss of support during the 'lost years' such claims will usually fail due to difficulties with evidence. | en_ZA |
| dc.description.abstract | AFRIKAANSE OPSOMMING: Hierdie proefskrif handel oor skade vir voortdurende verlies, soos die wat intree weens persoonlike besering of die dood van 'n broodwinner. Die benadering is metodologies multidissipliner eerder as multinasionaal. Die proefskrif bevat vier hoof afdelings: Algemene teorie; tegniese aangeleenthede, tegniek en reg ten opsigte van eise vir persoonlike besering; tegniek en reg ten opsigte van eise vir verlies aan onderhoud. Die proefskrif is nie bedoel as 'n volledige uiteensetting van alle relevante regsbronne nie. Die aanvanklike ondersoek fokus op die utiliteitsteorie en die verwante begrip van waarde. In mees algemene vorm is utiliteit beskrywend van 'n kern lewensdrang. Toepassing van hierdie begrip op skadeberekening noodsaak die objektivering daarvan. Geld en risiko is albei onderworpe aan utiliteitsoorwegings. Tegnieke vir die meting of beraming van persoonlike utiliteit kan ontwikkel geword. Die statistiese begrip verwagting ('expectation'), beskryf die utiliteit van onsekere, gewoonlik . toekomstige, gebeurtenisse. In gepaste omstandighede verteenwoordig markwaarde 'n objektiewe riglyn vir die bepaling van utiliteit. Objektivering bevorder geregtelike koste-effektiwiteit. Konkretisering of verpersoonliking, dws aandag aan persoonlike besonderhede, verseker dat beide eiser en verweerder volledige geleentheid tot bewyslewering by verhoor verkry. Geregtigheid verg die versoening van hierdie teenstrydige doelstellings. Volkome restitusie is in weinige situasies moontlik. Oor die algemeen verteenwoordig die skadevergoeding wat deur 'n hof toegestaan word, 'n billike ekwivalent vir dit wat verloor is. Waar utiliteitsvergelykings gedoen word, moet die effek van die skadetoekenning op totale utiliteit na die onregmatige daad, in ag geneem word. Die bepaling van enkelbedragskadevergoeding behels aanwending van die vermoensbegrip, dws die huidige waarde van 'n onsekere, toekomstige stroom inkomstes en uitgawes, as 'n bate of las bereken. Die bepaling van skade verg 'n vergelyking tussen die hipotetiese toestand waar geen onregmatige daad plaasgevind het nie, en die werklike huidige toestand met volle inagneming van die gevolge van die daad. Wesenlik by die bepaling van skadevergoeding vir 'n onseker verlies is die tegniek van waardebepaling van 'n kans ('valuation of a chance'). Die tegniek behels die bepaling van die huidige waarde van 'n onseker, hipotetiese verlies deur eers die waarde daarvan as 'n sekerheid te bepaal, en daarna laasgenoemde met 'n persentasie te verminder om voorsiening te maak vir die gebeurlikheid dat dit nie sou plaasgevind het nie. Die tegniek is ewe toepaslik vir reeds gelede en toekomstige verliese. Die tegniek is onderskeibaar van die bewysstandaard van oorwig van waarskynlikhede wat in siviele sake toegepas word. By bepaling van 'n persentasie kans word historiese statistiese gegewens in ag geneem, maar dit sal meer dikwels op subjektiewe waardebepalings berus. Die ontleding van kanse wat volgens subjektiewe oorwegings beraam word, is 'n belangrike gebied van ondersoek vir navorsers op die gebied van utiliteitsleer. Die gemiddelde lewensverwagting is 'n puntskatting, verkry deur die bymekaartel van die oorlewingskanse vir alle moontlike lewensjare tot op ouderdom 99 of meer. Die kans om te erf word op soortgelyke wyse bereken, behalwe dat die kans van sterfte in die betrokke ouderdomsjaar gebruik word in plaas van die oorlewingskans. Die standaard aktuariele metode vir die berekening van die huidige waarde van 'n reeks toekomstige bedrae behels bepaling van die waarde van die kans van die inkomste of uitgawe in elke betrokke jaar, en dan die bymekaartel van die herleide reeks afsonderlike waardes. In die algemeen is dit misleidend om voor te gee dat die eiser deur stelselmatige vertering van inkomste en kapitaal die enkelbedrag vergoeding kan omskep in 'n reeks bedrae wat gelyk is aan die reeks verliese. Nieteenstaande die tekortkominge van 'n vergoedingsmodel wat op laasgenoemde fiksie berus, kan hierdie wyse van berekening nuttig wees, mits die beperkinge daarvan in ag geneem word. Omstandighede van hoe inflasie het die gevolg dat vir 'n groot aantal jare daar 'n sterk groei ('ballooning') van die oorspronklike kapitaal plaasvind, voordat die geakkumuleerde fondse begin daal. As 'n hof 'n aanduiding van die verteerbare gedeelte van die beleggings-opbrengste wil verkry, moet hoe, inflasie-aangejaagde nominale rentekoerse in die proses gelgnoreer word. 'n Opbrengskoers nader aan die reele rentekoers is meer van pas. 'n Versigtige belegger sal fondse spaar vir 'n aftreetydperk wat verder strek as die verstryking van sy lewensverwagting. Die effek van belasting op renteverdienstes word vererger deur toestande van hoe inflasie sodat rentebeleggings minder aantreklik word teenoor reele beleggings soos effektetrusts of vaste eiendom. Lyfrentes of annuiteite is beleggingsmetodes waardeur die risiko verbonde aan vroee of laat sterfte aan 'n lewensversekeraar oorgedra kan word. Die howe se gebruik van aktuariele getuienis het sy oorsprong in die behoefte aan getuienis oor die prys waarteen 'n lyfrente aangekoop kan word. Hierdie soort getuienis is mettertyd verkeerdelik aanvaar as grondslag vir die fiksie van vertering van kapitaal en inkomste oor lewensverwagting. Oor die afgelope paar jaar was daar hernude belangstelling in lyfrentes in die vorm van skikkingsannuiteite ('settlement annuities'). Daar is 'n verskeidenheid annuiteitskontrakte, waarvan jaargeld en lyfrente die vernaamste is. In die klassieke Romeins-Hollandse reg was dit die praktyk om die prys waarteen 'n lyfrente kommersieel aangekoop kon word, te ignoreer. Hierdie praktyk, met min uitsonderings, duur vandag nog voort. Die begrip 'verdiskonterings-rentekoers' kan meer korrek beskryf word as die 'verdiskonterings-opbrengskoers'. 'n Nominale koers (I) bevat 'n reele opbrengsgedeelte tesame met 'n vergoeding vir inflasie (F). Met vergoedingsberekeninge is R die beiangrikste gedeelte. Historiese analise toon dat, bereken oor lang periodes, R 'n waarde van om en by 2,5 % pj saamgestel, het. Die netto kapitalisasiekoers sal verskil van R indien die kontantvloei nie saam met inflasie ge-eskaleer word nie. Die aanpassing vir die risikoelement van algemene gebeurlikhede kan optimaal gedoen word deur die verdiskonteringskoers te verhoog. Die aftrekking vir algemene gebeurlikhede weerspieel die hof se indruk van die toereikendheid, of anders gestel, die betreklike utiliteit van die primere aktuariele berekenings. Alhoewel kollaterale voordele soms as deel van die algemene gebeurlikhede behandel word, verteenwoordig die grootste gedeelte van die aftrekking die ander risikos verbonde aan wat alreeds verloor is, of wat in die toekoms nog verloor sal word. Voorsiening vir sulke risikos kan net so wel in ag geneem word deur 'n verhoging in die verd i skon teri ngskoers. Rente is die maatstaf vir die verlies wat veroorsaak word wanneer iemand van die gebruik van geld ontneem word. Die verlies van die gebruik van goedere kan in die algemeen gekwantifiseer word deur berekening van rente op die waarde van die goedere, onderhewig aan 'n aanpassing vir die koers waarteen sulke goedere se waarde oor die betrokke tydperk toe- of afgeneem het. 'n Hof is bevoeg om skade wat in 'n buitelandse geldeenheid uitgedruk is toe te staan. Die mora rentekoers moet in sulke gevalle aangepas word sodat dit geskik is vir toepassing in die betrokke buitelandse ekonomie. Voor bespreking van die aksies vir die verlies van verdienvermoe en onderhoud moet die uitwerking van die voordeeltoerekeningsreels op die verspreiding van die koste van skadevergoeding in die gemeenskap ondersoek word. 'n Omvattende benadering tot skadevergoeding vereis die aftrekking van versekering- en diensvoordele. 'n Hof wat skadevergoeding toeken, behoort te beveel dat eisers sekere weldoeners, insluitend werkgewers, moet terugbetaal. Voordele toegeken deur die Staat is gewoonlik nie ex gratia nie en behoort dus gewoonlik afgetrek te word. Die uitdrukking 'verlies aan verdienvermoe' het betrekking op verdienste en ook lewenskoste. 'Verlies aan verdienstes' en 'verlies aan verdienvermoe' moet nie onderskei word nie. Net soos verhoogde lewenskoste (damnum emergens) die vergoeding betaalbaar verhoog, so ook verminder uitgeblewe lewenskoste die skade en dus ook die verweerder se aanspreeklikheid. Algemene- of nie-vermoenskade het tog betrekking op die vermoe en toekennings moet rekening hou met die koste van goedere en dienste. Waarskynlike verdienste en waarskynlike uitgawes is die kriteria waaraan verdienvermoe en uitgawebehoeftes gemeet behoort te word. Onderskeid moet getref word tussen die verdienvermoe van besigheidskapitaal en die verdienvermoe van die slagoffer. Vergoeding vir 'verlies aan verdienvermoe' sluit in vergoeding vir die verlies aan onderhoud van die slagoffer se afhanklikes. Ten opsigte van onregmatige verdienste behoort die vergoeding gebasseer te word op wat die slagoffer sou verdien het, het hy regmatig opgetree. Die verlies aan 'n reg op onderhoud bepaal wie 'n aksie mag bring vir vergoeding weens verlies aan onderhoud. Die finansiele verlies verteenwoordig nie soseer die reg op onderhoud nie, maar die waarde van die finansiele voordele wat van die broodwinner verwag kon word, dit wil se, wat hy sou betaal het ter vervulling van hierdie reg. Hierdie finansiele waarde word bepaal volgens die waarde van die kans dat die onderhoud ontvang sou word. Die werkende eggenote, wat genoeg verdien om haarself te onderhou, het geen reg op daardie tydstip, om onderhoud van haar man te eis nie. Die verlies van die afhanklikes word bepaal sender inagneming van vergoedende voordele, behalwe erflatings en hertroue. Die fokus word geplaas op die onderhoud wat ontvang sou word indien geen dood plaasgevind het nie. Die weduwee wat as gevolg van die dood begin werk word vergoed asof sy nie werkend is nie. Daarenteen het 'n weduwee wat ophou werk as gevolg van die dood, geen eis deur middel van die afhanklikes se aksie ten opsigte van haar eie verlies aan verdienste nie. Verlies aan erfvooruitsigte word vergoed in die mate dat dit voortgesette onderhoud sou voorsien het. Alhoewel afhanklikes teoreties 'n eis het vir verlies aan onderhoud gedurende die 'verlore jare' (waar 'n beseerde slagoffer se lewensverwagting ingekort is), misluk sulke eise gewoonlik weens gebrek aan voldoende getuienis. | af_ZA |
| dc.format.extent | xliv, 382 pages | en_ZA |
| dc.identifier.uri | http://hdl.handle.net/10019.1/58194 | |
| dc.language.iso | en_ZA | en_ZA |
| dc.publisher | Stellenbosch : Stellenbosch University | en_ZA |
| dc.rights.holder | Stellenbosch University | en_ZA |
| dc.subject | Damages -- South Africa | en_ZA |
| dc.subject | Life insurance -- Law and legislation -- South Africa | en_ZA |
| dc.subject | Insurance claims -- South Africa | en_ZA |
| dc.subject | Compensation (Law) -- South Africa | en_ZA |
| dc.title | The reduced utility of a life plan as basis for the assessment of damages for personal injury and death | en_ZA |
| dc.type | Thesis | en_ZA |
Files
Original bundle
1 - 1 of 1
Loading...
- Name:
- koch_reduced_1993.pdf
- Size:
- 206.79 MB
- Format:
- Adobe Portable Document Format
- Description:
- Download Thesis