Moonstone Monitor 10 April 2008 : Regulators Tested
Powers of Regulators Tested
There has been concerns for some time now about certain determinations made by regulators, and particularly the Pension Fund Adjudicator. While almost every determination of the present incumbent is hailed in the press release as a “landmark ruling”, it actually started when Vuyani Ngalwana was still in the hot seat.
Some commentators expressed the opinion that he was actually tasked with creating greater consumer awareness through some of his more controversial determinations, citing the successful appeals against his decisions as proof of their theory.
In fairness one has to point out that both the PFA and the FAIS Ombud do not have the benefit that others in the legal profession have of numerous cases and appeal court determinations to use as precedents for their decisions. They are doing ground-breaking work in terms of their specific areas of responsibility.
The offices of the PFA and the FAIS Ombud have the same powers as a court of law, but there is a gentle twist in the tail. Legalbrief summarised a report appearing in the Financial Mail as follows:
“PFA claims on precedent-setting decisions disputed
The Pension Funds Adjudicator (PFA), Mamodupi Mohlala – who succeeded Vuyani Ngalwana in June 2007 – has said her findings on the law should be treated as legal precedent until a court sets them aside. According to a Financial Mail report, she argued that ‘the basis for my argument is section 30 O (1) of the Pension Funds Act, which states that the determination of the adjudicator shall be deemed to be a civil judgment of any court of law had the matter in question been heard by such court’. However, Rosemary Hunter, director of employee benefits practice Hunter Law, disagrees: ‘Section 30 O makes it clear the PFA's judgments are deemed to be civil judgments for the purpose of their enforcement only.’ Though PFA determinations may provide an indication of the adjudicator's likely approach to similar matters in the future, she says that ‘they are not legal precedent and the adjudicator is required to consider the legal issues afresh each time she decides a matter.’
This view is echoed by David Geral, employee benefits director at Bowman Gilfillan: ‘Precedent means a judge or adjudicator does not have the authority to depart from the rulings of superior tribunals.’ At issue is Mohlala’s insistence that trustees of pension funds are ‘wasting the resources of the adjudicator's office by not applying their minds’. Many complaints that get to the PFA could have been lodged and resolved first with members' funds or employers. Bowman Gilfillan points out that the PFA ‘has the power of making someone who is wasting her office's time contribute to the other party's costs’.”
This is, of course, exactly the point; clients who take their complaints to the PFA should only do so after the the pension fund or product house proved unable to resolve their problem satisfactorily. If they, the clients, were to waste the PFA’s (and fund or intermediary’s) time, they too should suffer the same penalty. The alternative, as so succinctly put by the FAIS Ombud, is that clients will treat the office of the Ombud and the PFA as a free lottery where they have nothing to lose by complaining.
Constitutional Court stops Medical Schemes Council Registrar
It would certainly appear that this is the week in which the powers of regulators are tested and not found wanting, but rather over-extended in certain instances.
Players in the Healthcare business have for some time now been concerned about exactly how far the powers of the Registrar of Medical Schemes extend, given that he has even challenged decisions made by his own council’s appeal committee. Again, Legalbrief summarises it thus:
”A long-running row between Council for Medical Schemes Registrar Patrick Masobe and Genesis medical scheme has finally come to an end, after the Constitutional Court denied Masobe the right to appeal against a High Court ruling compelling him to register the scheme’s rules for its benefit packages. The decision has important implications, notes a Business Day report, as it provides clarity on the scope of the Registrar’s powers. It upholds the High Court’s finding that the Medical Schemes Act does not give the Registrar the authority to challenge decisions taken by his own council’s appeal committee, as to do so would mean he was defying the very body of which he was a functionary.
Masobe had argued that the Act gave the Registrar administrative powers independent of the council. Yesterday Masobe said he accepted the Constitutional Court’s decision and had registered Genesis’s rules.
Genesis lawyer Cassian Coquelle, a partner at Webber Wentzel, said the Constitutional Court’s decision provided much needed clarity on the powers of the Registrar.
Full Business Day report
Paul se Perspektief/ Paul's Perspective
Ek het verlede week gevra vir hulp met die vertaling vir die "As and when" betaalwyse, en het, snaaks genoeg, meer Engelssprekendes gehad wat reageer het as Afrikaanssprekendes. Baie dankie aan almal wat bygedra het. Ongelukkig kan ek nie almal hier aanhaal nie, maar die onderstaandes het nogal opgeval:
"Tot en wanneer" - Cyril Wides
"Sodra kommissie" - Rykie Perold
"Vat en shut up" - Joe Kotzé
"Klein bietjie klein bietjie" - Shaun Neuhoff
Die laaste een het my nogal laat dink aan hoe sekere liggamsfunksies verander soos wat die tyd aanstap en mens ouer raak; bietjies-bietjies, kort-kort.
Opsommenderwys wil dit lyk of "Soos en wanneer " maar nog die naaste is, hoewel ek glo dat "Dan en wan" ons lesers se gevoel die beste omskryf.
When I received the story hereunder from Kaveer Singh, it reminded me very much of what is happening in our industry at the moment. Some readers have even expressed the opinion that the authorities are trying to get rid of us. Maybe there is some consolation in the following:
One day a farmer's donkey fell down into a well. The animal cried piteously for hours as the farmer tried to figure out what to do. Finally, he decided the animal was old, and the well needed to be covered up anyway; it just wasn't worth it to retrieve the donkey.
He invited all his neighbours to come over and help him. They all grabbed a shovel and began to shovel dirt into the well. At first, the donkey realized what was happening and cried horribly. Then, to everyone's amazement he quieted down.
A few shovel loads later, the farmer finally looked down the well. He was astonished at what he saw. With each shovel of dirt that hit his back, the donkey was doing something amazing. He would shake it off and take a step up. As the farmer's neighbours continued to shovel dirt on top of the animal, he would shake it off and take a step up. Pretty soon, everyone was amazed as the donkey stepped up over the edge of the well and happily trotted off!
Life is going to shovel dirt on you, all kinds of dirt. The trick to getting out of the well is to shake it off and take a step up. Each of our troubles is a steppingstone. We can get out of the deepest wells just by not stopping, never giving up! Shake it off and take a step up.
But enough of that cr@p . . . The donkey later came back and bit the farmer who had tried to bury him. The gash from the bite got infected and the farmer eventually died in agony from septic shock.
MORALS FROM TODAY'S LESSON:
1. When you do something wrong, and try to cover your ass, it always comes back to bite you.
2. Never underestimate the bite left in an old donkey.
De kube yiveki ezayo /Till next time /Tot volgende keer
Mooi loop.
Paul Kruger