What is paramount: assisting the victim of a motor vehicle accident or the liquidity of the Road Accident Fund? What is the driving force behind the recent Road Accident Fund (RAF) amendments? Is it the RAF’s inability to manage the claims backlog?RAF’s stated objective is to ensure the payment of compensation for injuries or death caused by negligence in the use of motor transport. South Africa has one of the highest motor vehicle accident rates in the world. Of 866 536 motor vehicles involved in accidents on the road in 1998: 541 779 were motorcars (62.5%), 141 581 (16.3%) were light delivery vehicles and 69 710 (8.0%) were minibus taxis.
The RAF’s ability to compensate for accidents and adequately manage funds should concern all South Africans. The CEO of RAF, Jacob Modise, appearing before the Parliamentary Transport Portfolio, stated that: “We are running out of cash and it has become impossible to manage the RAF. If the situation does not improve, we will have no option, but to invoke section 21 of the Road Accident Fund Act.”Modise also said that claims lodged (over R1bn per month) were far higher than their income of Â±R700m a month (mainly derived from fuel levies) and that the fund had a R27bn claims backlog. “Our business will not be manageable unless we get money from somewhere,” said Modise. “At the moment, what we are doing is investigating several options.”Is this the driving force behind the changes to the RAF Act? Are victims’ interests still paramount? Law Talk thinks that liquidity is the driving force behind the proposed changes. It has nothing to do with adequately compensating accident victims.
Imagine being involved in an accident. Despite being insured by the RAF through the petrol levy (currently 46.5c/l) you are unlikely to be admitted to a private hospital so you will be sent to a public hospital, especially if you have no medical aid. Your medical bills (now and future); loss of earnings (now and future) and general damages for pain, suffering and loss of amenities of life are all supposed to be paid for, provided that the person who caused the accident was negligent, but all these will be limited.But guess what? Over the last many years, various strategies were devised to reduce payouts to victims and save the RAF from bankruptcy. One example is the so called “Section 17 Undertaking” sometimes called “ Certificate of Undertaking”. It means that no payment for future medical expenses and treatment is made to victims. The misguided reasoning is that victims spend that part of the lump sum payout intended for their medical expenses and treatment on other things. You must pay your medical bills first and then claim the money back from the RAF. Was the intention to assist victims and protect their rights? Is it working?
Law Talk doesn’t think so. In reality victims do not often use the Undertaking as RAF bureaucracy makes claiming difficult and medical practitioners are not willing to accept the Undertaking as the RAF is notoriously slow in paying. Whose interest is this Undertaking serving? Certainly not the victims.I have listed three contentious amendments to the RAF Act below and Law Talk’s thoughts on them:
The purported reasoning is that lawyers are unethical and embezzle victims’ moneys. This is a generalisation of the worst kind. It is no different to saying that all Government Officials are lazy and corrupt.
Innuendos, insults and gross generalisations about lawyer integrity have been the ethos of RAF. The other distortion is that more than 50% of victims’ money goes to the lawyers and medical practitioners. The reality is that a substantial amount goes to RAF lawyers who waste money by defending matters for years only to settle them on court room steps. Is the direct payment another means for Jacob Modise to obtain money for his bankrupt RAF? Law Talk thinks the attack on lawyers is a deliberate attempt to save the RAF from bankruptcy by excluding lawyers who are fighting for and protecting the interests of their clients. The RAF’s dislike of lawyers is mind-boggling and sometimes blinds their rationality.
Judge Jeanette Traverso ruled in the Cape High Court in early August that RAF should put its new accident victim payment system on hold and ordered the RAF to pay the legal costs of the applicants, a group of lawyers affiliated to the Law Society of SA. They had also argued, and Judge Traverso agreed, that the new system would impact negatively on existing contracts between lawyers and their clients.In a Constitutional democracy you would expect a Senior Government Official to respect the rule of law and the Judiciary even when a judgment goes against you. But no! “The Judge is biased against us and I now know why the application was launched in Cape Town,” Modise further spluttered that the applicants “might have won this battle but not the war”.