An income protection policy may be essential to make up for a shortfall after a payout from the Road Accident Fund.

You may be unaware that if you are injured or disabled in a motor vehicle accident, there is a limit on what you can claim from the Road Accident Fund (RAF) and you cannot sue the guilty driver for damages. This could leave you financially exposed.

Your only recourse for the injuries you suffer is to claim from the RAF or – if you have one – against your risk assurance policy, which covers you in the event of disability or for loss of income.

And if you are killed in a road accident, your family cannot sue the guilty driver for damages.

An amendment to the RAF Act in 2008 abolished the victim’s common law right to sue the wrongdoer for losses that the RAF does not cover.

The removal of your right to sue was challenged unsuccessfully by the Law Society of South Africa (LSSA) in the Constitutional Court in 2010. One of the lawyers involved in that challenge, Jacqui Sohn, a personal injury lawyer at Sohn and Wood in Cape Town, says many people are still unaware that the removal of this right leaves them exposed to financial risk.

Even passengers in an unroadworthy taxi or bus have no claim against the owner or operator of the vehicle. You can claim against the RAF only, and it is therefore important to know what cover you have from the RAF.

The common law right to sue was abolished because a large portion of the motoring public is uninsured, so they would be unable to pay if a claim against them was successful. The Minister of Transport also argued that abolishing the right is in line with the social security system that government plans to introduce (see “From the RAF to the RABS”, below).

But Sohn says that “the poorest of the poor” are least likely to be sued as drivers or owners of motor vehicles, or as the employers of drivers of motor vehicles. “They are, however, most likely to be passengers in taxis and buses – as recent horrific accidents resulting in the multiple deaths of passengers in buses and taxis show,” she says.

Apart from the removal of the common law right to sue, the LSSA challenged two other changes that were made to the RAF Act:

* The limit on the compensation that the fund must pay for claims for loss of income, or for a dependant’s loss of support; and

* Regulations that prescribed that if you claimed for medical expenses, the RAF would pay out at the tariffs charged for medical services at public healthcare facilities, as set out in government’s Uniform Patient Fee Schedule.

The LSSA’s challenge was successful in one respect only: the prescribed tariffs were found to be unconstitutional, because they were inadequate and unsuitable for determining compensation for the treatment of road accident victims in private healthcare facilities.

The court ordered the Minister of Transport, in conjunction with the Minister of Health, to prescribe new tariffs for healthcare services for road accident victims who were entitled to compensation from the RAF. However, these tariffs have not been published.

When the RAF Act was amended in 2005 – with the amendments taking effect in 2008 – other restrictions on compensation, which had also been found to be unconstitutional, were removed from the Act.

The amendments to the Act included the removal of restrictions on the compensation that, in terms of the old Act, could be claimed by certain types of passengers injured as a result of the sole negligence of the owner or driver of the vehicle. The restrictions applied to the following types of passengers:

* Passengers who were being conveyed for a fee in a vehicle that caused an accident;

* Passengers who were being conveyed in the course of their employment;

* Passengers who were being conveyed in the course of the lawful business of the vehicle’s owner; and

* Passengers being conveyed as part of a lift club.

All the above-mentioned passengers could claim only R25 000 for loss of earnings, medical expenses and general damages. All other passengers – for example, friends of the driver – could claim up to R25 000 for loss of earnings and medical expenses, but they could not claim for general damages.

All the limitations on what passengers could claim were found to be unconstitutional and removed from the Act.

In February this year, the Road Accident Fund (Transitional Provisions) Act came into effect.

In terms of the Act, if you claim for injuries that resulted from an accident that occurred before August 1, 2008, your claim will be dealt with in terms of the provisions of the RAF Act as amended in 2005, unless you “expressly and unconditionally” inform the RAF that you wish to have your claim governed by the provisions of the RAF Act as it was before it was amended. You must inform the fund on or before February 12 next year.

Personal injury lawyers are gearing up for another Constitutional Court challenge over proposals – announced by the Minister of Transport in 2011 – to change how the RAF operates. These proposals, which are contained in a draft bill released earlier this year, are known as the Road Accident Benefit Scheme (see “From the RAF to the RABS”, below).

The LSSA, in its comments on the bill, strongly urged government to reconsider the abolition of the common law right to sue a negligent driver, warning that it is likely to be challenged in the Constitutional Court again.

In the meantime, you should be aware of what you can claim from the RAF and make sure you have cover to fill any gaps. For example, you can claim up to R210 192 a year for loss of earnings as a result of an accident. If you earn more than this, you could be seriously out of pocket, unless you have income protection or disability cover.

Remember, you have no claim if you were the negligent party.

FROM THE RAF TO THE RABS

What is the Road Accident Fund (RAF)? The RAF provides cover to all users of South Africa’s roads against injuries or death arising from accidents involving the negligent driving of motor vehicles.

The RAF is a “fault-based” system, which means that compensation is paid only if an injury or a death is caused by the negligent or other wrongful act of a driver.

The RAF is funded by a levy on all fuel sold in the country.

What is the Road Accident Benefit Scheme (RABS)? Earlier this year, the Minister of Transport published a draft bill for the RABS, which, it is proposed, will replace the RAF.

The RABS is a “no-fault benefit system”, which means the guilty party and their victim or victims are entitled to the same benefits. Irrespective of who was at fault, if you are injured or killed in a road accident, you or your dependants will be able to claim for:

* Past and future medical expenses, although the draft bill does not state the rate at which these will be paid.

* Past and future loss of earnings up to 75 percent of what you can prove was your income before the accident. People who cannot prove their pre-accident income will qualify only for the average national income, which is expected to be more or less equal to the current disability grant of about R1 300 a month.

* Past and future loss of support, within certain limits.

* Funeral expenses up to R10 000.

Road accident victims will not be able to claim for general damages for pain, suffering, loss of amenities, disfigurement, and so on, as is currently the case.

The RABS is expected to reduce administration and legal fees and to speed up the settlement of claims.

The RABS will pay healthcare providers directly for the treatment of your injuries, and the scheme may enter into payment arrangements with healthcare providers.

If you qualify for income and family support, you will be paid directly on a regular basis instead of being paid a lump sum, as is currently the case. You will have to go for vocational training and regular assessments to determine your capacity to earn an income.