| Contingencies
Exposure to errors and omissions in ordinary course of business
As for any business with similar operations, the Group is exposed to various potential claims relating to alleged errors and omissions or non-compliance with laws and regulations in the conduct of its ordinary course of business. At the date of these annual financial statements, the Group is unaware of any material claims, actual or contemplated, by any of the Group’s stakeholders or customers, except for those listed below.
Neil Harvey & Associates (Pty) Ltd
Neil Harvey & Associates has instituted a claim against Medscheme Holdings (Proprietary) Limited and three of its employees in 2008. The allegations concern alleged copyright infringement and a breach of the Medware licence agreement. The maximum capital amount of the claim as presently pleaded is R390.4 million. An amendment sought by the plaintiff was the cause of this. The increased sum has no impact on the merits of the claim which remain the same as before. The parties are still engaged in private arbitration; however, it is unlikely that the matter will be finalised during the current financial year. Medscheme Holdings (Proprietary) Limited will continue to vigorously defend the claim and is confident that there will still be no liability in this matter.
Bonitas Medical Fund (“BMF”) / Louis Pasteur Hospital (“LPH”)
BMF instituted action against the LPH, some four years ago, for damages suffered as a result of the cession of two Sanlam policies to LPH. In the alternative, BMF also instituted an action against Medscheme Holdings (Proprietary) Limited as the administrator. The maximum capital amount of the claim is R44 million. BMF was successful in its claim against LPH, but the order has been set aside and is to be reargued later. BMF has indicated it will withdraw the action against Medscheme if the LPH is unsuccessful with its appeal. It has not done so as yet but for the reasons which follow this is not regarded in a sinister light. Medscheme has been advised that the merits of the claim of BMF against it in the alternative are in any event not legally sound and that the likelihood of any liability on the part of Medscheme Holdings (Proprietary) Limited is far removed under the circumstances. |