Is insurance claim repudiation the answer to the “drunk” driving problem?

Howard Dembovsky writes...

It has become common for insurance companies to include clauses in their policies where it is held that if a person drives under the influence of alcohol or drugs having a narcotic effect, their claim will be repudiated in the event of a claim.

When I first heard that this was the case, I thought “good – at least someone is doing something and there will be a consequence which befalls those who drink and drive”. After all, the current state of affairs insofar as it relates to the prosecution of driving under the influence of alcohol is shambolic and both, I personally and JPSA have a long and vociferous history in trying to actively address this problem.

The current conviction rate in our criminal courts is around 6% nationally and those convictions typically take ages to achieve. Even where convictions are gained, sometimes the sentences handed down can appear to represent little more than a slap on the wrist. And those who drive under the influence of drugs are rarely screened for drugs, let alone prosecuted.

There are however very good reasons why the conviction rate is and remains low and it is my assertion that the root cause of this phenomenon should be urgently addressed since part of the reason why people drive under the influence of alcohol is the fact that they stand an extremely low chance of being convicted.

The two primary problems with convicting those who are accused of driving under the influence of alcohol are that procedure is often not properly followed by authorities and when it is, the entire process falls to pieces because State laboratories do not furnish blood alcohol test results timeously.

I am led to believe that the latter is set to be partially addressed shortly, when evidential breath testing is reintroduced after it was halted in 2011. This happened because the Court found that, amongst other things, authorities and suppliers had not provided sufficient training to operators, had failed to properly calibrate equipment and had failed to operate that equipment in accordance with the manufacturer’s specifications.

Evidential breath alcohol testing is widely utilised elsewhere in the world and results from such equipment are so reliable that courts are put in a position of knowing that when they do convict people, they do so on a scientifically sound basis, comfortable in knowing that they will not wrongfully convict an innocent person.

South African road traffic law has several provisions and safeguards built into it in order to ensure that no person is wrongfully convicted of driving under the influence of alcohol, and this should be applauded since conviction under this offence is a very serious matter indeed.

Amongst these safeguards are scientifically provable levels of alcohol below which a person may not be regarded as being under the influence of alcohol, only allowing accredited laboratories to test blood samples and stringent quality standards which are applicable to evidential breath alcohol testing equipment.

The standard for evidential breath alcohol testing equipment is prescribed in “SANS 1793:2013 Evidential breath analysers” and in terms of the National Road Traffic Act and Regulations, no other evidential breath testing equipment is authorised for obtaining the breath alcohol concentration of a driver for purposes of prosecution. Currently, only one model of evidential breath testing equipment available in South Africa meets the standard. This is the Dräger Alcotest® 9510 evidential.

It is important to note that Dräger is a company name and not a particular piece of equipment as people including but not limited to the Minister of Transport have repeatedly confused it to be.

Dräger manufactures a wide array of electronic equipment and its handheld breath alcohol screening devices, like all other handheld breath alcohol screening devices which are typically referred to as “breathalysers” are not compliant with SANS 1793 and therefore may not be used to convict anyone. Nor are older models of their evidential breath analysers.

Handheld breath alcohol screening devices are designed to act merely as an indication to a law enforcement official as to whether alcohol use should be investigated properly.

However, in spite of the clearly prescribed procedures and standards which exist in law it would appear that insurance companies regard these as a pesky unnecessary inconvenience and have therefore made up their own rules which better suit them to deal with the problem.

It is my view that this is unlawful on so many levels that it’s simply not funny. In fact, there is nothing “funny” about this at all.

On 29 March 2016, the Ombudsman for Short-Term Insurance authored a media release wherein it actively went about justifying the practice of repudiation of insurance claims where alcohol use is suspected, and wherein it was correctly stated that criminal law and civil law have different requirements insofar as the burden of proof goes.

The release says: “In criminal cases, in order to meet a charge of drunken driving or driving under the influence, the State is required to demonstrate beyond reasonable doubt that a driver was indeed driving in such a state. In civil cases, however, such as claims under an insurance policy, the insurer need only show that the insured was, on a balance of probabilities, driving under the influence.”

Now whilst I have to concede that the rules surrounding evidence and the burden of proof in civil law are incredibly loose and do indeed allow for a balance of probabilities, I do not for one second concede that this should be the case. In fact, it is my view that this peculiar phenomenon represents a huge miscarriage of justice as well as a violation of the Constitution and other laws, and should be urgently reviewed and indeed, abolished.

The consequences of incurring a criminal record are dire and it is for this precise reason that criminal law requires that the State prove its case beyond a reasonable doubt. Note that I say “beyond a reasonable doubt” and not “beyond all doubt”. There is a huge difference between the two and our criminal law does not require proof beyond all doubt.

Criminal law does in fact allow for two versions to be weighed up and for the Court to accept the version which is most “reasonably possibly true”, as everyone, including but not limited to the insurance industry got exposed to in the much publicised Oscar Pistorius trial.

As much as incurring a criminal record has dire consequences associated with it, so too does financial loss and indeed in some cases, ruin and that's without even beginning to contemplate the reputational damage which typically accompanies it.

What amazes me is that the Ombudsman for Short-Term insurance acknowledges this fact in its media release yet chooses to allow, enable and support insurance companies to impose these things on people, based on insanely loose standards of evidence. This, in my view, is most probably going to call the credibility of this Ombudsman into serious question.

I could, and indeed do argue that on “a balance of probabilities” insurance assessors whose income are largely dependent on how much money they can save the insurance companies they work for or contract to have a very real and compelling motivation to engage in questionable conduct in order to boost their own incomes. After all, what safeguards have been put in place to prevent them from doing so?

Similarly, insurance companies who repudiate claims naturally boost their own profits by not having to pay claims for which they have received premiums. Money is and always will be a very powerful motivator indeed and anyone who wishes to claim that corruption is not commonplace in South Africa is on a hiding to nowhere.

A specific example comes from a recent matter I was asked to consult on where the insurer repudiated the claim on the basis that it held that the driver of the vehicle in question was driving under the influence of alcohol. It did so despite the fact that the other driver admitted in her own version that she had failed to stop at a “stop street”, thus causing the collision. Incidentally, that driver’s claim for damages to her car was paid in full by her insurer.

The most glaringly obvious problem with this matter comes from the accident report which was filed by the Metro Policeman who attended the scene. On that accident report, next to the section “liquor use suspected” for “driver A”; there was a recordal of “0.00” which was crossed out without initialling, and in a clearly different pen and handwriting, a new recordal of “0.50” was written. There also appeared a third notation of “0.” with nothing else written after the point and this was not crossed out and the recordal next to “driver B” was “0,00”. You don’t need to be a forensic handwriting analyst to recognise these obvious discrepancies either.

"Driver A”, who was accused of being suspected of driving under the influence of alcohol was not charged with operating a motor vehicle while a sample of breath which was not below 0,24mg/1000ml (which would be 0,10mg/1000ml if she was a professional driver). No blood samples were taken. She was not subjected to an evidential breath test. Absolutely nothing.

The most obvious questions which must be asked are “who altered the accident report and when and why did they do it?” as well as “if the driver produced such a result on a handheld breathalyser, why didn’t the Metro cop do his duty and register a criminal case?”

Is it not reasonable to presume that on the “balance of probabilities” civil law is so fond of that the person who altered this report was encouraged and/or bribed to do so by the insurance assessor, insurance company or any other person with a material interest in creating the impression that the driver was under the influence of alcohol?

After all, this has apparently, in their opinion, swayed the “balance of probabilities” in their favour and given them grounds to repudiate the claim. I would suggest that this is an entirely reasonable and plausible conclusion to reach but in criminal law, I would have to prove my allegations.

In this particular case, I would wager and therefore submit that had a blood sample have been taken and/or an evidential breath test been conducted, the driver would have been exonerated, but the insurance company not only repudiated the claim, but further went on to stick to its repudiation when a dispute was lodged.

It also failed to furnish any of the evidence which was requested in the dispute letter, responding that it would only do so “if the matter proceeded” and made the preposterous statement that “Please note that the above mentioned reason(s) for rejection may not necessarily be exhaustive and [insurance company name] strictly reserve its rights to alter these reasons at any time”.

This is a very serious violation of the Promotion of Administrative Justice Act (PAJA) not to mention that such obfuscation would never be allowed in criminal law, but it would appear that the insurance company concerned is not bothered about that; most probably because it feels that it has the upper hand and can financially frustrate the insured into not pursuing a costly and tedious judicial review against it.

This matter will now go before the Ombudsman for Short-Term Insurance and it will be interesting to see what comes of that. I am however prepared to say that if the Ombudsman upholds this repudiation, it will go before a properly constituted Court, which is not reliant on funding by the insurance industry for its existence, and which is where I would have preferred to see it go from the outset.

Now that I have made out a case for why I feel that insurance companies should not be allowed to act in this manner, let’s talk about what they could do to lawfully make a difference. After all, levelling criticism without offering any solutions doesn’t help anyone.

In her address at the launch of the National Road Safety Strategy in March 2016, the Minister of Transport, Dipuo Peters said that her department was working with the Department of Health to allocate budget for more staff in State laboratories to clear the backlog and reduce the massive delays in the processing of blood alcohol test results.

Now while there is no delay associated with evidential breath testing, sometimes it is necessary to draw blood samples – for example where a person is injured and a breath sample would not be practical. It would therefore be beneficial to have blood samples processed without delay. Private accredited pathology laboratories can provide these results inside 24 hours, so why can’t State pathology laboratories? 

The elephant in the room however is that there is no law in South Africa which prescribes that all drivers involved in collisions must be tested for alcohol (and drugs) and there really should be.

Both, South Africans Against Drunk Driving (SADD) and Justice Project South Africa (JPSA) have been actively lobbying for mandatory testing of all drivers involved in collisions for ages now. Interestingly, neither of these two organisations receives a red cent from any short-term insurance company, despite the fact that SADD’s core function is combatting “drunk driving”.

My question therefore is why don’t insurance companies get actively involved, invest in initiatives which could make a difference in road safety and lobby for mandatory testing? After all, the investment they would need to make would pale in comparison money they could save from lawfully and ethically repudiating claims.

Well, I would suggest that there is a very good reason why they are acting this manner and that reason is “why should they when they can get away with their current practices and thus ensure their own profitability without making any investment”?

I therefore suggest that for as long as short-term motor insurers are allowed the latitude (and backing of their Ombudsman) to employ the ridiculous notion of the “balance of probabilities” evidential standard in repudiating claims they will continue to do so and there is absolutely no motivation for them to actively contribute to tackling the very real scourge of intoxicated driving in the wider interest of road safety and the broader South African public. They are therefore, in my view, part of the problem and not part of the solution, and that is both, sad and shameful.

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