/ 27 June 2016

Mining companies are using delay tactics in a bid to slice silicosis payout costs

Justice for Miners March: Former miners are seeking compensation for exposure to conditions that caused TB and silicosis while working in gold mines.
Justice for Miners March: Former miners are seeking compensation for exposure to conditions that caused TB and silicosis while working in gold mines.

On June 24 the high court refused the gold mining industry permission to appeal against its judgment last month, which allowed gold miners’ silicosis compensation claims to proceed as a class action. (The industry can renew its application with the Supreme Court of Appeal.) The high court gave the industry permission to appeal its ruling that, in the event of a miners’ death, his claim for damages for pain and suffering would be transmitted to his estate. 

The objective of minimising the amount of the inevitable payout underpins the industry’s legal strategy. Continuing the procedural wrangling substantially delays the litigation, which is indefensible if the industry does not genuinely intend to defend silicosis litigation on its merits.  That would effectively entail defending the allegation that their negligent failure to control dust exposure on the mines had caused a silicosis epidemic among black gold miners. But the industry has repeatedly expressed a desire to settle the class action. 

Moreover, the two class action defendants with the largest potential silicosis liabilities, Anglo American South Africa and AngloGold Ashanti, have twice settled different silicosis cases, in which we were involved, shortly before trial, indicating a lack of conviction in their defences. These were the President Steyn miners’ test cases in 2013 and the litigation for 4 365 gold miners, which settled in March this year, the latter leading to the establishment of the Q(h)ubeka Trust. Unless these same defendants have suddenly had a change of heart and now intend to defend such claims to trial, the issue of whether or not a class action mechanism is appropriate is artificial.

At the same time as this artificial legal argument is progressing at a snail’s pace through the legal system, the silicosis victims — the cause of whose predicament the industry does not deny — will continue to suffer and die at an ever increasing rate. Their average age is about 60 and their health is fragile. As an aside, 20 years ago we began the Cape Plc litigation for South African asbestos victims.

The majority of the following eight years, prior to the case settling, were spent arguing over whether the case should be tried in England, even though it was obvious that the case would never reach trial. By the time the case had settled, 1 000 of the 7 500 victims had died. In the class action judgment the high court changed the law of South Africa by deciding that in the event of a claimants’ death, compensation for pain and suffering will be transmitted to his or her estate. This is the position under British law, a point that we had highlighted for more than a decade. The industry has been allowed to appeal this ruling.  

Yet, even if the ruling stands, the next of kin would still need to prove that the deceased had contracted silicosis, which would be difficult unless he had been examined during his lifetime or had undergone a post-mortem. It is worth noting that transmission of damages was agreed to by Anglo American and AngloGold in our litigation.

The threat of ongoing procedural delays serves a financial purpose from the perspective of the industry and its shareholders. This is to pressure the claimants into accepting a settlement of a lower value, full compensation being too distant a prospect. Alternatively, if the claimants fight on, increasingly more of them will die and the overall compensation bill will decrease. 

Either way, prolonging the legal process is advantageous to the industry. The other beneficiaries of protracted litigation are the vast array of corporate lawyers recruited by the industry, who will be relishing the prospect of endless rounds of hearings and appeals as to whether a class action should be permitted and thereafter, if it is ultimately permitted, further academic arguments over what form it should take and how it should be managed.

Claimants frequently accept damages that are less than their full entitlement rather than holding out for “jam tomorrow” and to secure speedier payment, avoid litigation risk and reduce legal costs. In the case of silicosis, where the culpability of the industry is so clear, the consequences of delay so dire and the power imbalance so great, the continued delay in compensating the victims is morally reprehensible.

The industry argument that settlement is not feasible pending determination of the likely number of eligible silicosis claimants is no longer tenable. The industry has been anticipating claims by gold miners for 20 years and has had ample time to investigate and make reasonable projections.  For the purposes of the Q(h)ubeka litigation, we conducted a random sampling exercise which indicated that up to 60% of the group of 4 365 claimants were likely to have silicosis. The industry can estimate and set aside an overall amount of money using a similar approach and principles. 

In any event, 32 mining companies between them have deep enough pockets to establish an industry-wide settlement along the lines of the Q(h)ubeka Trust.  They should end their obfuscation and do so now.

Richard Meeran is a partner at Leigh Day law firm.