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Settlement discussions

Mine worker [photo]Class action litigation was instituted in 2012 by Richard Spoor, Abrahams Kiewitz and the Legal Resources Centre. The parties reached a negotiated settlement on 3 May 2018, details of which are available elsewhere on this website.

A total of 32 respondents were cited in the litigation, although many of these were previous structures or current divisions of existing companies. The six Working Group companies are the six largest respondents. There are three others.

The litigation covers the period since 1965 and addresses silicosis and TB.

The South Gauteng High Court granted class certification in May 2016 after a hearing the previous October. The companies were granted notice to appeal against the judgment. However, because settlement discussions were proceeding promisingly, in January 2018 the parties requested the court to postpone appeal proceedings until further notice. The court agreed, and the postponement remains in force. It will be possible to withdraw it completely if and when all conditions for the implementation of the agreement have been met.

Settlement talks in fact began between the Working Group companies and the claimants' lawyers in early 2015. The talks ran parallel to the legal process.

It may be asked why the parties sought a settlement rather than pursuing litigation. We believe that both groups had strong incentives:

  • Mutually acceptable comprehensive settlement which is both fair to the claimants and sustainable for the companies
  • Preferable to protracted and costly litigation
  • This would not have been in the interests of former employees, many of whom are elderly
  • And it would not have been in the interests of shareholders, who prefer certainty
  • A settlement would make some recompense for this legacy issue

From July to September 2017, as a consequences of progress made, each of the six working group companies made financial provisions based on their estimates of the settlement costs. Different methodologies and bases were used so the amount cannot easily be aggregated. However, the total pre-tax nominal amount totalled around R5 billion.

The agreement needs to be approved by the High Court in a public hearing process. This was an element of the judgment delivered in May 2016. Thereafter, potential claimants will be offered the opportunity to opt out of the settlement should they so choose.