Written by Hennie Klopper | Published on 24 Sep 2023
New legislation is not the answer to the fund’s problems.
The Road Accident Fund (RAF) Act aims to protect citizens and society against the serious and insidious financial and socio-economic consequences of road traffic crashes (RTCs).
This is achieved by the suspension of the common law right of a person whom an RTC has harmed to claim from the wrongdoing driver and the deviation of such liability to a fund financed by contributions of those members of society (a fuel levy of R2.18 c/l) who create the risk of RTCs and ensuing harm.
The objective of the RAF Act is to protect the road crash victim (RCV) against the possibility of an inability to recover the damages an RCV is entitled to from the negligent indigent motorist.
South Africa’s annual road crash fatalities are approximately 50/100 000 of the population. The World Health Organisation sets the average for middle-income countries at 19/100 000.
Based on hospital admissions, 364 000 are injured in SA, of which 73 000 are serious. Road traffic crashes cost our economy R184 billion annually and directly and indirectly affect 1.7 million South Africans. These statistics result from the breach of the government’s constitutional duty to ensure safe road travel.
High number of compensation claims
The road crash fatality count has more or less remained static for the past five years. The high rate of road traffic crashes results in a simultaneous high number of compensation claims. The average annual number of claims for damages suffered by road crash victims for the past 20 years is 93 000.
The average RAF staff count for the period was 2 400. The annual RAF claims completion rate is estimated at 30% of the total claims lodged in a calendar year. At the end of 2021, the total number of outstanding claims was about 360 000.
This situation was mainly the result of a policy implemented by the RAF from 2002 onwards to defend all claims irrespective of whether a defense was warranted and to settle matters only once a court trial date was allocated.
This resulted in the RAF eventually spending some R11 billion (roughly 25% of its income) annually on litigation, where 99% of litigated claims were settled on court steps. RAF administration has been judicially criticised in 34 judgments.
In a recent matter, the RAF board and its CEO were personally ordered to pay the legal cost in two Mpumalanga claims. Currently, the RAF and its board have proceeded on a path of introducing measures, challenging and litigating recognised legal principles and has, in some instances, abrogated to itself the power to implement measures which are responsibilities linked to the Minister of Transport and Parliament.
An example is the refusal to repay road crash victims for medical costs paid by their medical aid. The average claims completion time of a claim against the RAF is approximately 55 months. Once a claimant obtains a judgment, he joins a payments queuing system delaying payment for up to 3 years.
The RAF litigated an interest holiday of 180 days on outstanding judgments where the Act states 14 days – the annual RAF bill for interest on deferred judgment payments amounts to about R1.8 billion per year.
Against this backdrop, the RAF and Minister of Transport have tabled the RAF Amendment Act Bill 2023.
The main thrust of the Bill is the reduction of the liability of the RAF by introducing measures that curtail RCV rights to claim and reduce RCV compensation. These proposed measures include:
- The bill converts compensation into benefits. The benefits are not quantified in the Bill and are left to be determined by regulation. Undoubtedly, benefits will be less than compensation to which claimants are currently entitled to.
- Loss of income and support paid in a lump sum will be less than the current limit of R319 810 per annum, irrespective of the actual income forfeited. Future loss of income/support will be paid in instalments and not in a lump sum.
- Medical expenses will be paid according to a tariff, likely far less than private medical care tariffs. An RCV will have to personally fund medical treatment which exceeds the RAF tariff, irrespective of whether the more expensive procedure is necessary.
The Bill excludes benefits where:
- Crashes did not occur on a public road. A family watching television in their living room and injured or killed by a runaway truck will be excluded. Likewise, a golfer on a golf course, a farm worker on a game farm or a leisure use of a motor/quad bike at a private resort.
- A claim is instituted by any person on behalf of a claimant and listed in a regulation to be published. Currently, only non-attorneys are excluded.
- Claimants fail to submit an affidavit stating how their claim arose and prescribed documents simultaneously with the claim, and the claim will be excluded. The existing position is that the affidavit must be lodged within a reasonable time after it is possible to do so. The same applies to documents that are prescribed by regulation.
- Where a bus passenger and his dependants are compensated by the carrier’s insurance (new measure).
- The medical costs paid by a claimant’s medical aid are excluded, as is the facility of medical suppliers to be paid directly out of an RCV’s compensation. Later, this will cause the reluctance of medical suppliers to treat RCVs (new measures).
- Where the blood alcohol content of a claimant being the driver or a cyclist exceeded the legal limit or was under the influence of a drug. Also, a driver over the legal blood alcohol content limit is liable to the RAF for benefits paid resulting from his negligent driving (new measure).
- The claimant is a pedestrian crossing a highway (new measure) despite 40% of RCVs being pedestrians and some living in informal settlements adjacent to freeways where sometimes there are no pedestrian bridges.
- The claimant is not a South African citizen (new measure).
- The claimant was injured, or his breadwinner was killed in a hit-and-run crash (new measure).
- When a valid claim is lodged, the prescription extension of two years is scrapped. Considering that not all RCVs are well-informed, this is a harsh measure that will detrimentally affect many RCVs.
- Claims for pain and suffering are abolished for all RCVs, while all other claimants against the State retain their right to claim non-patrimonial loss. This compensation can be between R60 000 and R3 million, even though for a large portion of the RCV population, this is probably the only compensation they may be entitled to.
- The Bill does not set out claims procedures, which are left to regulation.
- The Bill severely limits a claimant’s court access by compulsory alternative dispute resolution and an RAF-appointed adjudicator.
- The RAF Board is empowered to frame the provisions governing the administration of claims.
- Substantive elements of the Bill are left to regulations. This is legally questionable and removes those elements from Parliamentary supervision and public comment. It excludes a full and proper evaluation of the impact of the Bill on the RCV.
The Bill is in conflict with the main object of the Act and callously reduces and limits the common law right of an RCV without any compensating advantage and is thus constitutionally flawed.
Any “savings” resulting from the Bill is at the sole expense of the RCV. The government’s erosion and limitation of RCV’s right in the proposed Bill to balance its books when it fails in its constitutional duty to ensure the safety of its citizens using roads and the RAF in its duty to promptly, fairly, and efficiently administer RCV claims, is unconscionable.
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Added to this, it has the unwanted consequence that the exclusions introduced by the Bill may expose taxi drivers and ordinary motorists to substantial claims.
Finally, legislation is not the answer to the RAF problem.
Measures to cure the decades of RAF delinquency and maladministration are called for.
It must be noted that the RAF Commission in 2002 recommended disbanding the RAF and forming a new administration. If the RAF in its present form is to be retained, a thorough recalibration of the functioning of the RAF is required. In addition, urgent steps to ensure road safety and the drastic reduction of RTCs must be urgently prioritised.