Pretoria - While the Road Accident Fund (RAF) has been criticised and come under immense pressure over the years for failing to execute its mandate, an amended bill proposing changes is in the pipeline.
The Department of Transport gazetted the draft RAF Amendment Bill, 2023, last month. It proposed changes to how the RAF will operate in South Africa in future.
The Department of Transport has called for public comment on the bill by October 8.
The proposed amendments include a complete restructuring of the RAF, moving away from a “compensation” to a “social benefits” structure.
Gert Nel, the head of a law firm that specialises in RAF matters, said the proposed amendments were a watered-down version of the erstwhile Road Accident Benefit Scheme.
One of the proposals is to replace compensation with structured benefits.
“This would mean that victims will not receive compensation for actual damages suffered, but rather a pittance of what the government would consider is owed to them in terms of loss of earnings and/or support (if any),” Nel said.
This would be paid in the form of an annuity and not a lump sum.
The bill also proposes to do away with general damages, known as “sorry money”.
“This has been a hot topic. The government would be infringing on a victim’s constitutional rights if this approach is taken. A victim is compensated by the suspension of his common law right to claim from the wrongdoer and guaranteed payment of compensation from a dedicated fuel levy,” Nel explained.
He said that without a lump sum, a victim would have little or no chance of attaining financial rehabilitation.
In terms of the draft bill, the RAF would also be indemnified if the vehicle in which the parties to an accident were travelling had public liability insurance.
“This approach will surely impact gravely on the taxi and insurance industry and interesting comments are sure to follow in this regard,” Nel said.
Another major change will affect medical aid schemes. They will not be able to recover the portion they paid on behalf of car crash victims.
This issue is before the Constitutional Court and the viability of this amendment to the bill would be tested before the apex court.
The proposed bill does make provision for a RAF adjudicator.
“This is probably aimed at reducing litigation, as one would be prevented from pursuing the court prior to the decision of the adjudicator,” Nel said.
Another concern is that foreign nationals will not be able to claim from the RAF.
“This will most certainly be a hot debate and one that will find its way to the Constitutional Court,” Nel said.
He said the RAF was attempting to save costs by penalising bad driving, finding recourse in people not wearing a safety belt, for instance.
“The Department of Transport is punting this as a key cost-saving initiative, however, policing and recovering these expenses/liability has historically proved to be a futile exercise.”
He raised concerns about the proposal that interest on the amount due to a claimant was only payable more than 120 days after settlement.
“This should raise concerns as the current act provides for 14 days.”
He welcomed the proposed approach of electronic lodgement of claims. However, he raised concerns about how effective this would be in light of the RAF’s “almost impossible” requirements have to be met in lodging a claim.
Nel said in the absence of the regulations at this stage, it was difficult to comment on the exact impact the proposed bill would have.
“However, the proposed amendments do little in the way of mitigating the financial administrative challenges of the RAF, other than just ‘kicking it down the road’.
“What it will do is have an adverse effect on the capacity of victims to regain at least some form of personal integrity and independence in the wake of a traumatic car crash,” he said.
Nel said the rights of victims should be at the forefront of any proposed legislative changes.
“Why should victims’ rights be eroded at the expense of government’s failure to ensure the viability of the RAF, through a system of good governance and due diligence?”