Big changes for the Road Accident Fund in South Africa – lawyers fight back
Legal experts are crying foul over proposed changes to the Road Accident Fund, which will see the fund severely cut down on the support offered to road accident victims and negate compensation in some cases entirely.
The Department of Transport gazetted the draft Road Accident Fund Amendment Bill, 2023 for public comment on 8 September, giving commentators just one month to provide feedback on the bill.
Broadly, the bill aims to make a lot of changes to the way the RAF actually works, but one of the more contentious points is moving from a compensation model to a “benefits” model for those who are claiming.
According to Advocate Justin Erasmus, Chairperson of the Personal Injury Plaintiff Lawyers Association (PIPLA), an association representing approximately 300 Personal Injury lawyers, legal practitioners are moving heavily against the bill.
He said that over 5,000 objections have already been raised against the bill, arguing that the proposed laws will negatively impact the rights of all drivers, passengers and pedestrians to claim compensation for injuries they suffer in a motor vehicle accident.
Highlighting some of the more important restrictions on existing rights South Africans should be aware of, Erasmus said one of the biggest concerns is loss of earnings.
“Currently, a claim for loss of income is paid out in a lump sum; under the new system claimants will receive annuity (partial) payments that will eventually equal the lump sum.
“here is also the qualification that the amount payable is subject to periodic review of the Fund’s liabilities and if a claimant dies before the full annuities are received the payments will stop and their heirs will inherit nothing,” he said.
The next exclusion refers to pain and suffering. Claimants will no longer receive compensation for pain, suffering, disfigurement and shock as this category of damage will be totally abolished.
Biggest pain points
Commenting from a medical perspective, Dr Herman Edeling, Chairperson of the South African Medico-Legal Association (SAMLA) shared similar concerns.
“I believe it is a tremendous shame if poor people are deprived of general damages compensation, which is separate from loss of earnings and medical expenses. In principle victims can get compensation for medical expenses under section 17, however the RAF does not pay upfront.
“So to put this in perspective, if you are unemployed and have no money, or your life is devastated from the injury, you now cannot pay for treatment. You will be expected to pay for all your medical needs upfront and then claim back from RAF, so in essence, the annuity payments are worthless,” he said.
Further exclusions worth noting around drivers and claimants include:
- Currently a victim is covered if injured by a negligent driver, irrespective of where the accident happens. Under the new system the accident must have taken place on a public road. Injuries suffered in motor vehicle accidents in parking areas, sports fields, farm roads, driveways, private estates, game reserves or any other private road will not be covered. Pedestrians crossing a highway are also specifically excluded.
- Claimants will not be covered if hit by an unidentified vehicle. Under the present system, so-called “hit and run” incidents are compensated.
- Presently anyone, regardless of nationality, who is injured by a motor vehicle in South Africa is covered. The proposed amendments don’t allow for compensation for any person who is not a South African citizen or direct permanent resident.
- The proposed changes also specifically exclude from compensation any driver, pedestrian or cyclist over the legally prescribed alcohol limit, regardless of who was at fault, as well as their dependents should they be killed. Erasmus said it is also probable that this section will be interpreted to mean that passengers of persons who have drunk alcohol will also be excluded from any compensation. “Importantly, the RAF will be able to recover expenditure from persons who have drunk alcohol even if they did not cause the accident that they were involved in,” he said.
Problems for medical aids
Finally, the implication for medical aid schemes and medical aid members is also huge.
Erasmus said there will be no reimbursement of expenses covered by medical aid/insurance.
“We predict this will drastically increase premiums with dire consequences for all medical aid members.”
And then, unlike the current dispensation, all future medical claims will have to be pre-authorised by the RAF or they will not be paid.
“We predict this will create serious time lags for victims who urgently require care,” he said.
Finally the clause relating to claims against the person who caused the accident needs to be reviewed.
Erasmus said that, since 2008, innocent victims have not been entitled to sue the wrongdoer for damages not recovered from the RAF.
“We believe that if we are moving away from compensation this clause definitely needs to be restored so victims have the right to sue the wrongdoer,” he said.
“This amendment affects each and every South African and cannot be allowed to go forward in its current format.”
The other side of the coin
While the legal fraternity pushes back against the changes to the laws, the department has been compelled to go the route of amending the RAF Act largely in part to the financial pressure being placed on it by lawyers and legal cases.
The RAF has come under immense pressure and criticism over the years for failing to execute its mandate. It has been beset by delays, backlogs and heavy litigation – all while alleging that unscrupulous legal agents have been milking it dry.
“The RAF continues to be a victim of crime syndicates involving legal practitioners, medical experts, actuaries, law enforcement and internal staff members. In most instances, these involve collusion to defraud the RAF of millions of rands,” it said.
“The RAF continues to collaborate with investigative and law enforcement agencies to reduce instances of fraud and corruption.”
Not only is the fund severely financially constrained due to the significant number of claims made against it, but its litigation bill has run into the billions of rands – before even hitting the courts.
The group’s latest available annual report (2020/21) cites research showing that almost 90% of all civil litigation in South Africa’s courts are RAF-related. Almost all of these are settled “on the steps of the court” but still carry a hefty legal bill of R10.6 billion.
The group paid out R35.5 billion in claims in 2021, with the average claim totalling R235,141. Personal claims averaged almost R400,000.
Read: Big changes coming for the Road Accident Fund in South Africa
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