What are contingencies?
Contingency deductions account for the uncertainties of life. Even if the accident had never happened, there's no guarantee the claimant would have worked continuously until retirement. They might have been retrenched, fallen ill, taken a career break, or simply changed jobs to a lower-paying role. Contingencies express this uncertainty as a percentage reduction to the claim.
There are two sides to consider: the uninjured contingency (risks the claimant faced even without the accident) and the injured contingency (risks they now face given their injury). Both are applied separately.
Typical ranges
There's no formula for setting contingencies — they're a matter of judgment informed by the claimant's circumstances. That said, South African courts have established rough norms:
| Scenario | Past | Future |
|---|---|---|
| Uninjured (stable employment) | 5% | 10 – 15% |
| Uninjured (less stable / young) | 10% | 15 – 20% |
| Injured (partially employable) | 5 – 10% | 10 – 25% |
| Injured (unemployable) | 0% | 0% |
If the claimant is completely unemployable post-accident, there is no injured income to deduct contingencies from — the injured contingency is effectively zero.
Past vs future contingencies
Past contingencies are usually lower than future contingencies. Why? Because the past period is known — you can verify whether the claimant was actually employed or not. The future is uncertain by definition, so courts allow a larger deduction to account for that uncertainty.
How contingencies affect the quantum
Contingencies are applied to the gross loss amounts after the present value calculation. For example, if the future uninjured loss is R2,000,000 and the uninjured future contingency is 15%:
The same logic applies to the injured side. The net loss is then the difference between the adjusted uninjured and adjusted injured amounts. For a full walkthrough, see How to Calculate Loss of Income.
What courts look for
Courts expect contingency deductions to be reasonable and justified. A 0% contingency is rarely accepted unless the claimant was in exceptionally stable employment. Conversely, a 30%+ contingency needs strong justification. The key is to match the deduction to the claimant's actual circumstances — age, industry, employment history, health, and qualifications all play a role.