On 4 April this year, not very far from the site where gold was
first discovered in South Africa, Judge EJ Francis, in an
unreported judgment, dismissed a technical challenge by Anglogold
Ashanti Limited ("Anglogold") against a
claim by a former mine-worker in silicosis related litigation.
The judgment, in very general terms, underlines the court's
willingness to take an overbroad approach to the manner in which
these types of cases are pleaded, but is particularly significant
to the D&O market because, although only Anglogold is cited as
defendant, there may well have been scope for the claimant to also
name Anglogold's directors, in their personal capacities, as
In this action, the claimant alleges that over the course of a
ten year period where he was employed at the Vaal Reefs Mine (the
"mine"), Anglogold flouted its
obligations under safety legislation governing the operation of
mines in South Africa, and in particular failed to:
1. regularly perform medical examinations and x-rays on the
2. design and implement systems relating to the control of dust;
3. establish dust control policies for the mine and to monitor
dust levels within the mine.
The claimant alleges that, as a consequence of these breaches,
he contracted silicosis and that Anglogold is liable for the
resulting damage suffered. Anglogold's failed technical
challenge, which centred on the claimant's failure to outline
the precise detail about how the breaches are alleged to have taken
place over the ten year period, means that the claim is now free to
proceed. In turn, as this was merely a test case, it is now a
distinct possibility that tens of thousands of other claimants, who
until now have been lurking in the shadows, will step out into the
light, claims against Anglogold and other mining companies in hand.
There is little doubt that, in doing so, they will be bolstered by
the contemplation of class actions as envisaged by the South
African Companies Act 71 of 2008. Whilst the jurisprudence in this
area is relatively rudimentary at present, there is, in principle,
no statutory bar preventing these claimants from launching
proceedings as a group of affected parties (Mankayi v AngloGold
Ashanti Ltd (2011)).
Should they do so, it is possible that not only the mining
companies, but also their directors, will be in the firing
The Mine Health and Safety Act 29 of 1996 (the
"1996 Act") requires the Chief Executive
Officer of a mining company to ensure the discharge of a
company's duties under safety legislation – penalties,
fines and imprisonment can follow for those directors, officers or
managers guilty of a failure to maintain a safe working
environment. Moreover, the 1996 Act also created the office of the
Chief Inspector of Mines, who is authorised to conduct official
inquiries into, broadly, any "cause for concern on health
or safety grounds". The Chief Inspector may require
preventative or remedial action, and can apply punitive enforcement
measures (up to removal of a mining licence) in appropriate
circumstances. Relying on this statutory framework, there are,
therefore, grounds upon which personal claims against relevant
directors and officers could be founded.
Directors, of course, are free to procure D&O cover in
respect of claims brought against them in their personal capacity.
Indeed, given the significant growth of the plaintiff's bar in
South Africa in the last ten years, and the additional complexities
brought about by international lawyers attempting to shift disease
litigation to jurisdictions which tend to award larger sums for
general damages, it would not be unreasonable to suggest that such
cover, combined with proper risk mitigation strategies, is now
critical for directors & officers in this area.
Whilst such policies typically exclude cover for silicosis and
related occupational disease litigation, they may respond to claims
of the kind set out above (failure to discharge statutory
obligations) and may also provide indemnity against the cost of
litigation (assuming the policy has been extended to include legal
defence costs). D&O insurers should therefore be aware of the
potential for claimants afflicted with silicosis-type diseases to
directly pursue directors and officers for breaches of, amongst
others, the 1996 Act, and consider whether their policies would
cover such claims, notwithstanding the applicable exclusions
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The Honourable Minister of Mineral Resources, Ms Susan Shabangu, reinforced during her 2012 budget speech on 10 May 2012, amongst other things, that the Department of Mineral Resources (DMR) remains determined to continue issuing stoppage notices in terms of section 54 of the Mine Health and Safety Act, No. 29 of 1996 (MHSA) to ensure compliance with the MHSA.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).