UJ’s legal expert: Insurance contracts could leave you as mad as a hatter

​​​​Professorial Inaugural address: Prof Daleen Millard

​Daleen Millard, a Professor in Private Law at the University of Johannesburg (UJ), will deliver her inaugural address with the theme, Through the looking glass: Fairness in insurance contract – a caucus race?, in the Council Chambers, Madibeng Building, Auckland Park Kingsway Campus on Tuesday, 10 September 2013 at 18:00.


Prof Millard obtained her BIuris, LLB and LLM degrees at the University of Pretoria. She started her academic career at Vista University, Mamelodi, before accepting a lectureship in law at the University of Pretoria in 2003. During this time she completed her LLD and obtained her degree in May 2006 with a thesis entitled: Loss of earning capacity: its nature and its place in South African law. In 2007, she was appointed as associate professor at the University of Johannesburg and in 2011 she was promoted to professor of Private Law.


Prof Millard specialises in Law of Delict, Law of Damages, Insurance Law and Law of Third Party Compensation and is the author and co-author of various academic articles and has presented papers at several conferences, both locally and internationally. Prof Millard and Wendy Hattingh recently co-authored a book, The FAIS Act Explained, and their latest publication, The FAIS Multilingual Glossary, is the first mobi site to explain some 140 Financial Law concepts in English, Afrikaans, Xhosa and Zulu.


Abstract of the inaugural address by Prof Millard:​​


When Alice falls down the hole and thus embarks on her adventures in Wonderland, she finds herself in a surreal world of mad hatters and talking mice. At some stage Alice participates in a caucus race. All the participants run around in a circle until an arbitrary end is called and everybody is declared a winner. Alice hands out prizes to the unlikely participants and the Dodo rewards her by returning her thimble to her. So what is the point of running around in circles and not accomplishing anything? It reminds one of the debate on the meaning of fairness in contract law and whether one can reconcile this with the principle of pacta sunt servanda.


The Financial Services Board( FSB) recently published a proposed programme called Treating Customers Fairly (“TCF”). This programme “seeks to ensure that fair treatment of customers is embedded within the culture of financial firms. TCF is a set of rules that was taken unapologetically and unchanged from English law. Many difficulties arise from cutting and pasting from foreign legislation and in the context of insurance specifically, the question is whether all the existing Roman-Dutch and statutory rules should henceforth be interpreted to give meaning to fairness. In addition, is fairness a concrete principle that tempers unconscionable conduct?


This dissertation provides an overview of case law on South African cases on contract that dealt with the treatment of fairness and good faith as principles that temper the sometimes harsh effect of pacta sunt servanda. In insurance law in particular, the debate around fairness took a turn for the worse when the court in Barkhuizen v Napier (2007 (5) SA 323 (CC)) opted to enforce a time bar clause, effectively preventing an insured from instituting legal action against the insurer. The legislator reacted by amending the Policyholder Protection Rules in terms of both the Long-term and Short-term Insurance Acts to effectively reflect the judgment of the minority in Barkhuizen. In addition, by adding that a court may condone non-compliance with the new, more generous time periods if it is fair in the circumstances.


​In searching for fairness in insurance contracts, one should view the whole product life cycle and should not limit the enquiry to the contract between the parties. Existing legislation, and in particular the Financial Advisory and Intermediary Services Act of 2002 and the two insurance statutes already mentioned, contain several provisions aimed at fair treatment of the parties to an insurance contract.​​

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