A glance at the Road Accident Fund Amendment Bill

Road Accident Fund Amendment Bill
08 Mar 2017

Introduction

The start of 2017 has seen the continuation of an effort by the Ministry of Transport to amend the mechanisms which govern the Road Accident Fund (RAF). The RAF, set up by the Road Accident Fund Act of 1996, ensures financial compensation, against certain requirements, for persons involved in motor vehicle accidents in South Africa, where such accidents are not caused by their own negligence. The levy put on fuel contributes towards the payment of compensation to claimants for personal bodily injuries or loss of support suffered in these accidents. (Thus, every time you fill up you effectively fund the RAF to provide compensation for victims of motor vehicle accidents.)

The system, however, is fraught with complications, and often involves extended periods of consultation, bureaucracy, and litigation. A regular critique of the RAF is its inability to quickly pay claims to victims of car accidents and to ensure that such compensation is just and fair in relation to the specific loss suffered.  Perhaps this is unsurprising in a country where roughly 4,500 people lose their lives in car accidents annually.

This latest RAF Bill, B3, proposed by the Ministry of Transport as of 24 November 2016, contains numerous amendments. Their aim is to “create a scheme that facilitates effective financial management and enables the timely, efficient and cost-effective delivery of compensation.Accordingly, the Bill intends to cut costs and limit compensations to equitable amounts whilst curbing red tape (specifically in the case of Funeral Expenses), as well as enhance the efficiency of payments.

The current discussion will centre around some important aspects outlined in the aforementioned Bill, examining its influence on the legal practice and on the actual victims of motor vehicle accidents.

Clause 3 of the RAF BILL

Clause 3 of the Bill proposes certain amendments to the recovery process as a means of expediting payments. The clause’s intention is to increase the RAF’s accountability and pressurise the RAF to make payments timeously. Accordingly, a third party who has not been paid compensation, and/or reimbursed for legal costs by the RAF within 30 days of a final court order (remembering that the RAF has traditionally been required to pay within 14 days), a written agreement, or a taxed bill of costs, may pursue payments by serving the CEO of the RAF, in “terms of the applicable Rules of Court”, with the relevant document according to which the Third Party is entitled to payment. The envisaged process seems, from the RAF’s own memorandum, to emulate the regulations utilised to enforce payments against Organs of State, as per the State Liability Act.

Should the Fund’s failure to pay persist, the sheriff may attach (but not remove) the RAF’s movable property. What occurs in practice, a habit against which the amendment seeks to guard, is that attorneys simply execute on the movable assets of the RAF and the Sheriff is then instructed to remove those assets in a Sale in Execution process. This right to execute and remove assets in a Sale in Execution process has caused the RAF great inconvenience and has hindered the effective service delivery and execution of its functions. The Bill proposes to limit such right and its efficacy on enforcing payments.

Whilst the thought process behind this limitation of the right to enforce court orders is understood, the resulting unenforceability of court orders as a consequence of the restriction of the right to recovery through a Sale in Execution will most certainly be tested. It is doubtful, when viewed in light of previous matters decided on similar points in law, that this amendment will stand constitutional scrutiny (see, for instance, the matter of The Minister for Justice and Constitutional Development v Nyathi and Others (CCT 53/09) [2009] ZACC 29; 2010 (4) BCLR 293 (CC) ; 2010 (4) SA 567 (CC) (9 October 2009)).

Clause 4 of the RAF Bill

Another proposal aimed at cutting costs and expediting the assessment and payment of claims is the creation of a prescribed list of ‘Serious Injuries’, as per Clause 4 of the Bill (amending Section 17 of the Act). Injuries which are deemed as serious by a medical practitioner entitle the injured party to a degree of compensation (as will be explained below) as per the list. It is premised that the prescribed list should ultimately enable an assessor to quickly determine whether or not an injury falls within the list, thereby saving the RAF time and money. The Minister, currently Ms Dipuo Peters, will be empowered to prescribe the list.  Nevertheless, injuries not contained in the prescribed list may still be assessed under the prescribed assessment method.

It is in regard to the term ‘Serious Injury’, which was brought about by the previous amendment (the 2008 amendment of the RAF Act), that the Bill requires further clarification, as the term creates considerable ambiguity. As practice shows, not all injuries are created equal, nor are they perceived by the victims to be equal. According to the amendment, a Third Party / Claimant was required to prove a Serious Injury in order to be entitled to Non-Pecuniary Damages (or in general practice use, General Damages). To the people not familiar with these terms, General Damages refers to compensation for “Pain & Suffering”, “Loss of Amenities of Life”, “Discomfort”, “Disfigurement” and “Emotional Shock” (to which specific provisions apply). In other words, if you are not seriously injured you are not entitled to compensation for the five aspects (or heads of damage) above.

The emphasis of the WBI (Whole Body Impairment, a system incorporated into our law by the 2008 amendment of the RAF Act) has always been impairment rather than the injury itself. It is here that the proposed amendment comes into question. Again, is must be stressed that not all injuries are created equal, and it would be prudent to identify what is meant by this generalisation. For example, the same femur fracture with the exact same treatment and the exact same recovery time and healing process will cause a different impairment to, for instance, a general labourer who has to stand and work with that leg, and an attorney who sits for large parts of the day. This simple example demonstrates how in practice no two injuries are ever the same, and the treatment and recovery from such injuries is even more convoluted. It was in accordance to this principle that the WBI (and the Narrative Test) was eventually implemented as a means of assessing (via an impairment assessment) how a Third Party / Claimant was influenced by the injuries. When assessing the degree of an injury as per the Bill, the question would be what type of injury (without the aid of an impairment assessment) will be significant enough to justify a Serious Injury.

By example, every person will mostly agree that a brain injury is serious and accordingly, this would entitle the Third Party to General Damages as it would be construed as a Serious Injury. However, what if this injury recovers completely? And furthermore, what degree of brain injury would qualify as a Serious Injury (for instance, a mild concussion is a brain injury) and who would be tasked with the “diagnosis” of the degree of such an injury? It could therefore be summarised that the list of prescribed Serious Injuries, however noble the idea, would have numerous challenges and may create more complications than solutions.

Clause 4 of the RAF Bill also proposes new medical tariffs for covering the treatment of road accident victims. The clause seeks to introduce a thirty day period commencing immediately after the cause of action, during which period the injured third party can claim compensation for medical treatment and hospital expenses on a no-fault basis. This new medical tariff aims to ensure that road accident victims will have access to the private health care sector, where necessary. This proposed no-fault based system is an attempt to assuage the fears of the private medical providers which are currently hesitant to treat uncovered victims, for fears of not being reimbursed by the RAF. Not only will this improve and expedite the crucial treatment of accident victims, but it will also decrease the need of medical providers and accident victims to litigate against the RAF. However, this will in practice only result in practical effective implementation if the RAF is able to timeously pay a fair rate to the medical practitioners for services rendered.

Clause 5 of the RAF Bill

Another important cost-cutting mechanism is contained in Clause 5 of the RAF Bill (amending Section 18 of the Act). The clause proposes the capping of all funeral expenses for third party victims at R10 000, as opposed to R25 000 as under the current Act. Accordingly, if a third party is killed in a motor vehicle accident, the RAF is liable only for necessary costs, up to a maximum of R10 000. The Bill contains a predefined list of authorised funeral expenses which should leave little room for abuse of the system. Furthermore, the cumbersome process of proving fault or negligence will no longer be a requirement, thus alleviating much of the stress which is burdening the current system. This amendment, in our view, is long overdue and will eliminate the needless litigation costs associated with proving what is essentially very limited compensation.

Conclusion

The proposed RAF Bill portrays some positive steps towards expediting claims, reducing unnecessary costs, and streamlining some unnecessary and costly burdens placed on Third Parties / Claimants. Nevertheless, many of the ambiguities contained in the Act and the Bill are difficult to avoid under any system, and it remains to be seen whether the new system will in fact improve fairness and efficiency.

We believe that the proposal of allowing a further amendment of the claim forms and revisiting the requirements of lodging statutory compliant claims with the RAF unnecessarily complicates an already too complicated system. However, should this statutory provision be utilised to simplify the claim forms it may well result in a much simpler and streamlined lodgement process which will be to the benefit of claimants. It should also be stressed that the implementation of the proposals in respect of the payment of court orders (and related documents) will not, to our mind, pass constitutional scrutiny, specifically insofar as the seizure and removal by the Sheriff is statutorily vitiated.

Finally, it must be noted that the proposed amendments may decrease the amount of work available to personal injury lawyers as the procedures governing the actions of the RAF become more streamlined. This is specifically relevant to aspects where compensation is limited or prescribed, such as Funeral Expenses and Medical Expenses (within the first 30 days after the accident).

(This article is provided for informational purposes only and not for the purpose of providing legal advice. For more information on the topic, please contact the author/s or the relevant provider.)
Greyling Erasmus

Greyling joined the GMI team as Candidate Attorney in January 2007. While completing his articles, Greyling had exposure to fields of Labour Law, Commercial Law, High Court Litigation and Magistrate Court Litigation. Greyling was admitted as an Attorney in 2009 and appointed as an Associate in the General Litigation and Personal Injury Law Department. His practice has evolved from one focusing on Personal Injury matters to a multifaceted General Litigation practice also dealing with Commercial and Contractual Disputes, claims for Wrongful arrest and Medical Negligence matters.

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