Subrogation is a common law doctrine that allows an insurer who has indemnified its insured to step into the shoes of the insured and recover the loss from the wrongdoer. It is a well-established principle of insurance law that has been applied by South African courts for over a century.

In that light, the Road Accident Fund’s (RAF) defence in a recent claim against it is astonishing. Damages were claimed for injuries the insured sustained during a 2015 motor vehicle collision. The insured received payment of his past hospital and medical expenses from Rand Mutual Assurance Company Limited (RMA) under a Commuting Journey Policy which covers accidents occurring while an employee of the “primary insured” (the employer) is commuting. RMA sought to recover these expenses from the RAF and the action was instituted in the name of the insured.

The RAF argued that the claim for past medical and hospital expenses should be dismissed, because it had been settled under the RMA policy. The RAF also contended that the insured, who had passed away during 2023, did not have legal standing to litigate, and that RMA, who was not a party to the action, did not have legal standing either.

The court dismissed the RAF’s defences and held that the claim was a subrogated claim, meaning that RMA was entitled to claim payment of the compensation it paid to the insured in their insured’s name.  The court explained that subrogation is a doctrine that ensures that the insured receives no more and no less than a full indemnity, and that the loss falls on the wrongdoer. The court noted that it is a prevailing practice that insurance companies litigate in the name of the insured.

While it is undoubtedly correct that the RAF’s first defence was baseless (because an insurance payout does not ordinarily limit the extent of a wrongdoer’s liability), the court seems to have overlooked that procedurally, the correct course would have been to have the nominal insured substituted by the executor of his estate upon his passing in terms of Rule 15(3) of the Uniform Rules which states that:

Whenever a party to any proceedings dies or ceases to be capable of acting as such, their executor, curator, trustee or similar legal representative, may by notice to all other parties and to the registrar intimate that they desire in their capacity as such thereby to be substituted for such party, and unless the court otherwise orders, they shall thereafter for all purposes be deemed to have been so substituted.”

Read the full judgment here: Maseko v RAF (2024).