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RAF mum on whether it’s halted contentious tariffs for accident claimants

Written by Bongani Hans | Published Mar 12 2023

THE Road Accident Fund (RAF) has been accused of trying to defy a court order that interdicted it and the department of transport from implementing medical tariffs that might leave road accident victims under-compensated for injuries.

Pretoria High Court Judge Ronel Tolmay late last year interdicted the RAF from implementing the tariffs that were promulgated on August 19 by then minister of transport Fikile Mbalula.

The matter against RAF and Mbalula had been brought to court by the National Council of and for Persons with Disabilities (NCPD) and the Law Society of South Africa (LSSA), who opposed the new tariffs.

The new RAF policy, which is meant to prescribe a set of standardised medical tariffs that victims of car accidents submit to the fund, is allegedly prejudicial to the victims whose injuries left most of them disabled or without breadwinners.

It is feared that the new system would lead to victims receiving lesser monetary compensation and “out of pocket and with no other remedy” depending on the extent of their disabilities.

In response to questions sent to RAF, its spokesperson Linda Rulashe said: “The RAF has no comment on this matter at this stage”.

The society’s president Mabaeng Lenyai claims RAF is hell-bent on defying the court interdict as it had not published it on its website and social media for public awareness.

“The RAF’s website includes the ‘RAF Medical Tariffs’ promulgated on 19 August, 2022, despite the operation of those tariffs having been suspended pending the outcome of the review proceedings.

“The RAF has refused to answer the applicants’ letters asking for confirmation that the RAF considers the interim interdict binding while the RAF prosecutes appeals to higher courts,” said Lenyai.

Judge Tolmay had issued an interim interdict restraining RAF from implementing the tariffs pending the court hearing on the main case to review the promulgated policy.

According to the society’s statement, when Judge Tolmay delivered the judgment on December 15, she reprimanded the RAF for opposing the application for an interim order, which Mbalula did not oppose.

“The court also granted a punitive costs order against the RAF on account of the ‘contemptuous attitude’ shown by it toward the directives issued by the court leading up to the hearing of the application.

“The court further invited the CEO of RAF, Mr Collins Letsoalo and its chairperson, Ms Thembelihle Msibi, to file affidavits to explain why they should not be held liable personally to pay the costs,” read the statement.

Prior to the promulgation of the tariff, Mbalula together with Msibi and Letsoalo held a press conference in March where they gave a rundown of the organisation’s financial troubles and justified the need for new tariffs.

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Mbalula announced a process of turning around RAF to curb escalating wasteful expenditure caused by huge amounts paid to claimants’ lawyers and corruption. He said the RAF had operated on a financially unsustainable model for decades and had incurred debts that could not be accounted for.

Mbalula said the current system encourages perverse incentives, which exclude funding for the rehabilitation of victims who are not severely injured so that they could return to work and be self-sustainable.

“Under the system, is to attempt to present the claimant to the RAF as a permanently disabled and maimed person irrespective of the actual condition whose capacity for earning an income and living a quality life has been irretrievably harmed. This is done to secure the highest possible monetary reward from public funds.

“This policy proposes that the RAF should provide a scheme of structure and defines benefit to those seriously affected by road accidents in accordance with social insurance principles and not liability insurance principles,” said Mbalula.

He said R41 billion, which the RAF collected from the fuel levy, could not sustain the number of road accidents

He said he had given the RAF board a mandate to implement changes.

Msibi said the RAF had been technically insolvent since 1981 because of the unsustainability of the design of its scheme.

“As a result, the outstanding claims were increasing year-on-year due to the registration of claims and slow settlement,” said Msibi.

Weekend Argus

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