Patrick Bracher (ZA)

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The “provision of goods and services” as government procurement under section 217 of the Constitution

The “provision of goods and services” as government procurement under section 217 of the Constitution The Supreme Court of Appeal held that the requirements of section 217(1) of the Constitution regarding fair, equitable, transparent, competitive and cost-effective procurement were not met where a private contracting party was providing services to smallholder farmers to promote beef … Continue reading

The law does not require impossibilities and its effect on prescription

In finding that the Road Accident Fund Act three year extinctive prescription period (with some exceptions) did not apply to the claimant who had become a person of unsound mind because of the motor accident, the Constitutional Court applied the impossibility principle (lex non cogit ad impossibilia).  It was held that the claimant’s action had … Continue reading

Disgorged funds to comply with authorities order is not an uninsurable penalty (US)

A New York court of Appeals held that a wrongful act liability policy covered funds that the insured disgorged as part of a settlement with the Securities and Exchange Commission.  The settlement payment was not excluded from insurance coverage as a “penalty imposed by law” under the policies. The policy provided coverage for “loss” that … Continue reading

Transferability of water use entitlements and other government-granted rights

In a case where the Supreme Court of Appeal found that section 25 of the National Water Act, 1998 (NWA) permits the transfer of water use entitlements subject to a licence being granted to the transferee by the Minister, the court made some important observations about the transfer of government-granted rights generally. The NWA abolished … Continue reading

Municipalities’ power to impose rates may be limited by national legislation

The power of municipalities to determine their rates policies is subject to regulatory supervision of the national legislature in terms of section 229(2)(b) of the Local Governance Municipal Property Rates Act of 2004.  National legislation limits rates for public benefit organisations (in this case independent schools) to 25% of the rate levied on residential property … Continue reading

Conversion of non-life licence results in lapse of accident and health policies

Prior to conversion of its short-term licence to a non-life licence under the Insurance Act, 2017, the insurer underwrote accident and health policies with what are now both life and non-life risk components.  Under the Insurance Act non-life insurers are only permitted to conduct accident and health policies insuring costs or loss of income (not … Continue reading

When can you claim compound interest?

As a starting point, it is generally accepted that where compound interest is not expressly provided for in an agreement, only simple interest is due.  Compound interest is claimable only in certain defined circumstances namely (a) where parties agree to pay compound interest (b) if the obligation to pay interest is alleged and it is … Continue reading

Silent cyber and ransomeware cover (US)

The insured was locked out of its computer systems with the hard drives encrypted as a result of a ransomeware attack.  It ultimately paid the requested ransom with four bitcoins valued at nearly $35 000 before it regained access to its computer systems.  The court held that, if fraud was established, the insurers would have to … Continue reading

Tribunal upholds Prudential Authority penalty for unrecorded loan & dividends directive

An October 2021 decision of the Financial Services Tribunal upholding an administrative order, a directive, and a penalty by the Prudential Authority is worth noting.  The Tribunal held there was no basis for successfully challenging the penalty for an intergroup loan arrangement not recorded in writing and for unjustified dividends paid. A small licensed life … Continue reading

Cyber risks again

We have been mentioning for some time the pandemic-like risks associated with cyber events.  According to a recent Airmic survey cyber rates have risen by as much as 400% for some insureds.  Cyber risks are therefore said to be the most likely new risks to be financed by captives. If a systemic cyber event should … Continue reading

‘Strategic response costs’ v ‘ex gratia’

A recent US case referred to an interim payment to injured third parties as ‘strategic response costs’ covered under the policy.  That is a neat phrase to use instead of an ex gratia payment. ‘Ex gratia’ is always controversial because it implies a payment without a lawful obligation.  Ex gratia payments are often made for … Continue reading

Insured loss to value of damaged and repaired vehicles

In the US state of Georgia, the formula applied with court backing since 2001 for determining how much a car’s value diminishes after a wreck and repair is “the difference between pre-loss value and post-repair value”.  Attorneys for two plaintiffs brought a class action alleging that the insurer was underestimating the value of repaired cars … Continue reading

Exploding vape excluded from policy by ‘products completed’ exclusion

An electronic cigarette store failed in its claim for an indemnity from its insurer for a vape battery that exploded in a customer’s pocket away from its premises. The policy excluded an event “occurring on any premises other than the designated premises shown in the schedule”. The products-completed exclusion clearly precluded coverage for bodily injury … Continue reading