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On the 'time barring' clause and your constitutional rights

13 April 2007 Gareth Stokes

On 7 of April 2007, the Constitutional Court ruled in the matter of Barkhuizen versus Napier with regards an application to appeal a Supreme Court of Appeal ruling. The case stems from a refused insurance claim which was first lodged in 1998. The nearly 1

Barkhuizen was involved in a motor vehicle accident on 24 November 1999. His vehicle, a BMW 328i, which was insured for a value of R181, 000 at the time was written off as a result of the accident. A claim was lodged with the insurer on 2 December 1999 for the total sum insured.

This claim was repudiated by the insurer on 7 January 2007 as the vehicle was allegedly used for business purposes, and not private purposes as stated in the insurance policy. A full two years passed before Barkhuizen instituted a legal claim against the insurer for the full amount of the repudiated claim and interest. The legal claim also sought to challenge the fairness of the time-barring clause on the grounds that it was inconsistent with provisions contained in section 34 of the constitution.

The time-barring clause explained

A time barring clause is usually included in the small print in a policy document of a short-term insurance. The clause essentially limits the time period in which the insured is allowed to contest a claim refusal made by the insurer.

In the case in question, the insured failed to take legal action within the permitted period as stipulated in Clause 5.2.5 of his contract. The clause in question reads: "if we reject liability for any claim made under this Policy we will be released from liability unless summons is served . . . within 90 days of repudiation."

The majority of judges felt that, given the circumstances of this case, Barkhuizen had more than enough time to lodge his legal claim. As part of the judgement, Judge Mosoneke noted that: "In effect, the applicant's personal attributes and station in life played a decisive role in the determination of the majority judgment that the time bar clause is fair and just and thus accords with public policy."

Perhaps unconstitutional but cannot be viewed in isolation

The ruling in the Constitutional Court decision was made by Judge Ngcobo and supported by the majority. In his ruling, Ngcobo commented on Barkhuizens contention that the 90 day period was too short to sue:

"The fact is that the period of 90 days began to run once the claim had been lodged with and repudiated by the insurance company. At this stage, the applicant not only knew what his cause of action was, but he also knew the identity of the defendant as well as the amount of his claim. All that remained was for the applicant to issue summons against the respondent. This he could do either himself or through a lawyer as he eventually did.

"In these circumstances, I am unable to conclude that the 90 day period allowed to the applicant to sue is so unreasonable that its unfairness is manifest and that therefore its enforcement would be contrary to public policy."

The judge went on to discuss certain difficulties posed by the case. One of his key concerns was the failure of Barkhuizen to present reasons as to why he had not been able to institute his legal claim within the 90 day period mentioned in the time-barring clause. Ngcobo went on to say that without such information it was impossible to determine if the time-barring clause ran contrary to public policy, and by default the.

Right to appeal was granted, and the appeal dismissed.

The Office for Short-Term Insurance

The Ombudsman for Short-Term Insurance is fairly clear on how they handle cases of this nature. In their view, the decision in Wimbledon Lodge (Pty) Limited versus Gore No and Others 2003 (5) SA 315 at 321 SCA holds sway. This ruling stated that "No one is allowed to improve his own condition by his own wrongdoing."

On that basis, the Ombudsman expects insurers who have wrongfully repudiated a claim to compensate the insurer, regardless of stipulations contained in the time-barring clause.

Editor's thoughts:
In essence Brokers must inform their client of this clause, the moment a claim is repudiated.  It seems the commonsense thing to do is institute claims against your insurer in good time. One should consider what the reasonable person would do in such circumstances - and that is to seek compensation in a timely fashion. Have you encountered any time-barring clauses that have negatively affected your clients and do you believe these clauses should be done away with? Send your comments to


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