Proposal to change RAF will rip off road usersComment on this story
The Department of Transport published a revised version of the Road Accident Benefit Scheme Bill in the Government Gazette on May 9. Interested persons are invited to submit comments within 60 days of the publication.
The new bill provides for a no-fault benefit scheme and a new administrator called the Road Accident Benefit Scheme Administrator (Rabsa), which will replace the current Road Accident Fund (RAF).
Rabsa would move away from an insurance-based system, which has been in operation in South Africa for many years, to a system of defined and structured benefits. An insurance-based system endeavours to place the victim of a motor vehicle collision in the same position financially he or she was before the accident.
Under the new system, claimants’ rights have been drastically reduced. Claims for loss of income or support are capped, resulting in a considerable reduction in the value of claims.
Claimants are also entitled to general damages for pain and suffering and loss of amenities of life only in cases where their injuries are regarded as serious in terms of the American Medical Association guides. The amendment act also takes away a claimant’s common law right to sue the wrongdoer for any damages resulting from bodily injury that cannot be recovered from the RAF.
Unfortunately, administration in the RAF is in dire straits. The RAF is funded by a levy on motor vehicle fuel, but a large percentage of it is spent on administration and does not reach the victims of motor vehicle collisions.
The Department of Transport now wishes to further reduce the rights of claimants by introducing Rabsa. The government should not hoodwink the public into believing this further amendment is to serve their best interests. The amendment is designed to serve no other interest than that of the government. It will result in victims facing huge bills, receiving little or no compensation and not being able to claim damages other than the defined and structured benefits Rabsa allows for.
In addition to the reduction of claimants’ rights described above, Rabsa would also reduce rights as follows:
- Foreigners are only entitled to emergency health-care expenses;
- The administrator is not responsible for contributing to the costs of a claimant, such as legal or medical costs to prepare and submit a claim or lodge an appeal;
- The administrator allows for an internal appeal, the decision of which is final;
- Claims for loss of income are drastically reduced.
A distinction is drawn between temporary and permanent injury. In cases of temporary injury, a claimant is then compensated through a complex formula that does not take into account loss of future promotions, early retirement, loss of productivity, chances of future surgery, the working environment of the claimant and the fact that a seriously injured claimant is an unequal competitor in the open labour market.
A claimant deemed to be permanently injured is also compensated through a formula of defined and structured benefits. Claimants are paid on a monthly basis and are not entitled to lump sum awards. No provision is made for inflationary increases in monthly payments. Payments terminate on the death of the beneficiary, leaving dependants of claimants destitute.
Rabsa results in the administrator becoming the proverbial judge, jury and executioner, at the cost of the public, who will ultimately fund it.
* Jean-Paul Rudd is a partner at Adams & Adams.