Johannesburg - Two years ago, a friend had a car crash. The other driver was at fault, having driven into him intentionally. She died. He suffered severe injuries and almost did too.
But he pulled through, thanks to medical care and access to the Road Accident Fund (RAF).
He’ll never be the same person again though.
Thanks to a handsome payout from the fund, he has a chance at life. Not to live it up but for life-long therapy and the care for his family.
Then last month, a radio ad caught my attention.
“The Truth about RABS” ads from the Law Society of the Northern Provinces (LSNP) warned under proposed amendments to the RAF that claimants will get no more than a R44 000 annual payout.
Meaning that despite the R1.56/litre we pay to the fund, if you’re involved in an accident, it’s your baby. With just short of 2000 fatalities on our roads over the festive season and an untold number of injuries, the amendments should be of profound concern to all road users.
The RAF was set up to compensate accident victims who sustained injuries or suffered loss caused by another.
It makes lump-sum payments calculated against the value of past and future medical costs – to a maximum of R228 430 a year. It also allows for damages payments for pain and suffering for severely injured victims and covers funeral expenses.
WHAT’S SET TO CHANGE?
Under the proposals for the Road Accident Benefit Scheme (RABS), regular, reviewable small payments will be made to victims. It’s a no-fault system, so even the person who caused the accident can claim. Health-care, income and family support benefits would be payable in accordance with government-specified tariffs.
And funeral benefits won’t exceed R10 000.
The Department of Transport published the revised RABS bill in 2014 which is now due to be debated in Parliament for approval. The new scheme will replace both the RAF and its compensation system.
As the LSNP points out: “In 2014, the Road Accident Fund paid out R22.2 billion, with up to R1.5bn spent in a single month. Transport and Public Works MEC Donald Grant has released statistics that reflect this exorbitant cost. In a recent release, he was quoted as saying: ‘The Department of Transport estimates road trauma costs the South African economy R306bn annually, which is 8 percent of the country’s GDP.’
UNABLE TO COPE
“These figures sound massive, and they are. So huge in fact that the current RAF system has been unable to cope with the demands – especially due to a failing system that is grossly mismanaged.
“With plans to bring in a new system that is no-fault, the costs to the economy are not expected to be reduced if the new system is introduced… “Costs to individuals are even more shocking. Depending on the nature of the injury, and the injured party’s ability to continue performing key functions, compensation varies fairly significantly. Often, it falls under the lowest spectrum of under R50 000 in a lump sum. For those who are already financially insecure, families losing a key breadwinner, single-parent families and those injured severely enough to cease work indefinitely, even a higher compensation is seldom sufficient replacement for regular income.”
Pretoria attorney Gert Nel, who is representing the LSNP and has worked for the RAF, told me: “The current RAF is social legislation which is indemnity-based insurance aimed at providing the road accident victim with full compensation.
BENEFITS DRASTICALLY REDUCED
“But the proposed RABS is a ‘no-fault’-based system in terms of which a road accident victim will be awarded a structured benefit, not aimed at full compensation. Benefits are drastically reduced to sustain a ‘no-fault’ system.
“Worryingly, no career pathing is catered for under RABS so the victim’s future earning potential will not be considered. The excess of the true financial loss a victim suffers under would have to be provided for by the victims themselves through insurance policies. Students would be regarded as unemployed if involved in an accident and would only receive a structured benefit based upon the annual national income which amounts to R44 000 a year, regardless of what they would have been able to earn as a doctor or engineer.”
As it’s estimated, the “no-fault” system would double the claim demand, taxpayers would have to pay more fuel levies. Already, the RAF is plagued with severe administrative backlogs so you have to question how this will work.
NO LONG-TERM SECURITY
Nel says there isn’t long-term security for victims either as benefits may be withdrawn and they only last 15 years.
The government argues that attorneys will lose out as laymen will now be forced to submit and self-finance their own claims.
“Under RABS, each victim is expected to administrate, finance and manage their own claims; no financial assistance to do this will be provided.”
And the law society says if you read the act, victims won’t have recourse to court and if they later die from their injuries, the benefits stop – claims the RAF denies.
“In an interview with Kaya FM, in which the implications of RABS were discussed, a Department of Transport representative told me: ‘You should stop scaring the public’ – which begs the question if he is scared, what should the taxpayer be?”
WISE UP - HERE’S HOW!
The new claim process under RABS means:
Do-it-yourself: Road crash victims cannot claim within the first 60 days after an accident. After 60 days a victim may lodge a claim and will have to wait another 180 days for a reply from the administrator. The administrator is not obliged to respond to the claim and the victim would have to accept that after 180 days, if no response is received, the claim is denied. A victim then has 30 days in which a written appeal has to be addressed (to the same administrator), based upon the available information.
Money trail: RABS discourages claiming from the administrator so what will be happening to all the funds? The government says fuel levies under RABS will fall in the general fiscus as opposed to the current RAF, which has a dedicated fund.
No recourse: The law society believes victims will lose their constitutional rights to approach the courts for relief and say RABS administrators will dictate which doctors road crash victims should visit. The fund though says: “It is expected the role of attorneys in the new scheme will be limited considering the removal of the requirement to prove fault and due to the fact that benefits are defined. However, RABS will continue to administer claims that arose under the RAF scheme which will mean that attorneys will continue to play a significant role in respect of those particular claims.”
Cumbersome: The RAF is already an administrative nightmare and RABS is expected to require a much larger workforce: a medical staff and opening branch offices in every town and city, which will exponentially add to the workload and costs.
And the role of lawyers? “The RAF maintains legal costs are increasing even though only 1% of all RAF matters ever go on trial, which begs the question: Why does the RAF litigate to the extent that it does? The current act actually discourages litigation as the RAF is compelled to make an offer within 120 days, far less than RABS.
Active citizenry: The law society says things need to change – but RABS is not it. Visit their site, www.truthaboutrabs.org, where you can learn more about the proposed changes and how they will affect you. Then sign their petition.
Think about your cover: If you can afford it, explore insurance options because you don’t want to find yourself without. Lump sum disability cover can help you cover once-off expenses but income protection cover may help funding ongoing expenses. You might want to take out combination cover.
Georgina Crouth is a consumer watchdog with serious bite. Write to her at email@example.com.
Follow Georgie on Twitter: @askgeorgie