The Road Accident Fund (RAF) has long been a subject of scrutiny and criticism in South Africa. Time and again, it has faced challenges in fulfilling its responsibilities to those affected by road accidents. Now, in light of these issues, the Department of Transport introduced the draft RAF Amendment Bill, 2023.
A Brief Overview
The draft bill, made public in August 2023, aims to alter the RAF’s future operations.
The public has less than a month to add their voice to these amendments.
What are the significant amendments?
Overall, the draft suggests moving away from the current system, which compensates victims based on the actual damages suffered to a “structured benefit” structure.
The amendment Bill represents a watered-down version of the RABS Bill which was rejected in its entirety in August 2017.
1. Structured Benefits Over Compensation
Instead of compensating for actual damages, the RAF would cater for a structured benefit that will be paid in the form of an annuity, rather than a one-time “lump sum” payment.
How does compensation under the proposed Amendment compare with the current RAF system of compensation?
The current RAF system of compensation is common law based which means that each individual enjoys the same rights under the Act. The aim of the current RAF Act is to provide the widest possible cover for all road crash victims.
The RAF indemnifies the wrongdoer and fully compensates the seriously injured victim.
Amendment Bill provides a limited structured benefit which is not aimed at full compensation.
| RAF | RAF Amendment Act |
|---|---|
| Indemnity and insurance based | Social benefit scheme |
| Provides lump sum compensation | Provides reviewable structured payments |
| Allows for career pathing | No career pathing considered (possibly) |
| Allows for general damages | No general damages |
| Settlement form part of estate | Benefits forfeited upon death of the beneficiary |
A medical student is injured in an accident...
Under the current system: he / she will be compensated taking into account “career pathing” bringing him / her as close to their income expectation as possible plus general damages in accordance with the injury sustained;
Under the amendment bill: no career pathing will be taken into account and only a minimum wage would apply with no award as to general damages.
Having regard to the above the new proposed RAF Amendment Bill will no doubt create a larger state dependence from road crash victims unable to attain financial viability.
2. Doing Away with "General Damages"
The bill is set to exclude general damages, a decision that has serious constitutional implications especially in the light of the fact that the Bill makes no provision for an alternative or better form of compensation whilst still indemnifying the wrongdoer at the cost of the victim.
3. Impact on Taxi and Insurance Industries
According to the bill, if passengers are injured in vehicles covered by public liability insurance, the RAF would be indemnified as the claim would then lie against the owner and or insurance companies which is sure to ruffle feathers in the taxi and insurance sectors.
4. Medical Aid Schemes
Another notable amendment is that medical aid schemes would not be able to recover medical expenses paid on behalf of their members that were involved in accidents.
This issue is currently being heard in the Constitutional Court.
5. Introduction of RAF Adjudicator
A victim would be prevented from any further legal action pending the decision of the so-called RAF Adjudicator. Having regard to the current challenges faces by victims to secure trial dates this approach would surely add to the victim’s plight for swift and efficient access to justice (another potential Constitutional issue).
We have no indication what this will cost the SA taxpayer.
6. Foreign Nationals and Claims
7. Penalties for Bad Driving
The RAF aims to cut costs by penalizing poor driving behaviours including driving whilst over the legally prescribed alcohol limit and not wearing safety belts. However, there are concerns over the effectiveness of enforcing and recovering these penalties from indigent drivers.
8. Electronic Lodgement of Claims
While a move towards digital is welcomed, there are concerns that the RAF will require stringent compliance with the required documentation to be submitted; effectively being able to reject claims at will in order to balance their books.
9. Hit & Run, Pedestrians injured on a Highway and accidents on non-public roads
These are all matters that will fall outside of the RAF’s liability. The inherent risk are that any claim not claimable from the RAF might potentially lie against the wrongdoer, putting every road user at grave financial risk. Ironically each one of these road users contributed to the RAF why should they be discriminated against. Statistically the people impacted the most by these exclusions (40% pedestrians) will be the poorest of the poor; why the DoT are targeting these victims are a mystery.
10. The correct tagging of the Bill to determine the procedure to be followed.
This would be essential to ensue that the proposed bill is subjected to the due diligence required for an Act that has such a potential impact on the Constitutional and socio-economic rights of road crash victims and the public in general.
What's Next?
- The true impact of this proposed bill remains to be seen, particularly given the absence of complete regulations at this juncture.
- What is apparent is the fact that the public in general will be adversely affected by the implementation of the amendments.
- In all likelihood very few people will succeed in successfully engaging the RAF under the new dispensation which might be exactly what the intention behind the proposed amendments are;
- With limited benefits and claim totals that can be regulated by the RAF the nett result would inevitably result in savings to Government at the expense of road crash victims;
- We do not believe that these changes will address the financial and administrative challenges faced by the RAF other than just kicking it down the road.
- One must appreciate that by implementing the new amended version Government would essentially be liable to run two systems in parallel at huge financial and administrative cost and recourses:
- We are yet to see the actuarial calculations done to prove a financial saving would be attained through the proposed amendments.
- In conclusion, while legislative changes are essential for growth and to address the system it supports it cannot be done at the expense of the victim and / or taxpayer.
Key questions
- Why should victims be victimized further by having their constitutional rights eroded at the expense of Government’s inability to successfully manage the Road Accident Fund;
- Why must road crash victims be prejudiced in not receiving due compensation for having to negotiate the very roads Government is failing to keep safe;
- Who are the biggest losers: road crash victims and the SA Taxpayer.