Recent amendments to the Road Accident Fund Act 56 of 1996 (the “RAF Act”) came into effect on the 1st August 2008. Transport Minister Radebe said that these amendments intend to remove any inequitable provisions in the RAF Act and ensure that all road users are able to claim for their loss of income and medical treatment.

 

However, the amendments introduce strict caps on claims for loss of earnings, support and general damages so as to address the sustainability of the Road Accident Fund (the “Fund”); which seemingly took a major hit after some R500 million was only just paid out to a Swiss claimant, Joachim Schoss.

 

Claims in respect of accidents that occurred prior to 1st August 2008 will continue to be dealt with in terms of the original RAF Act however the key changes that will effect claims after this date can be summarised as follows:-

 

A.) Categories of claimants

1. The current statutory limit of R25 000 on claims by certain categories of passengers (namely commuters using minibus taxis and passengers travelling in an offending car) has been abolished and now all claimants will be treated on an equal basis.

 

2. Where the claimant has been conveyed for reward on a motorcycle the Fund will in the future be prepared to entertain such claims.

 

3. In a single motor vehicle accident where the claimant is in law responsible for the maintenance of the driver, or where the claimant is a member of the same household as the driver the Fund will in the future be prepared to entertain such claims.

 

4. Any claims arising from secondary emotional shock, that is where the claimant suffered shock as a result of witnessing an accident or hearing thereof, the Fund will not accept liability and the claimant will have to claim against the wrongdoer directly under the common law.

 

5. A claimant’s common law right to claim against the wrongdoer (namely the negligent owner or driver of a motor vehicle, or the vicariously liable employer of the negligent driver of such motor vehicle) will arise only in instances where the Fund is unable to pay any compensation and in instances of secondary emotional shock. This is a severe limitation on the previously available common law claim which afforded the third party the widest possible protection.

 

B.) Personal Assessment

1. The Fund will only be liable for compensation in respect of claims for non-pecuniary loss (general damages, which include pain and suffering, disfigurement, scarring and loss of pleasures of life) where a “serious injury” has been sustained. A serious injury is an injury which results in 30% or more of total body impairment or one which results in serious long term impairment.

 

2. Medical tariffs will be used to limit the Fund’s liability, allowing private sector rates for emergency treatment and lower public sector rates for all other treatment. 3. Claims for loss of income will be limited to a maximum of R160 000 per year, or R160 000 per year for each deceased breadwinner in the case of a claim for loss of support.

 

C.) Legal Fees

1. The Fund will be entitled to pay the compensation to the claimant or directly to the medical service provider. However on the 8th August 2008 the Cape High Court issued an urgent interdict brought against the RAF by the Law Society of South Africa resulting in this provision being temporarily suspended.

 

Although the amendments were set to reduce the possibility of fraudulent claims and enhance the Fund's long-term sustainability it seems that it creates a situation nowhere near as equitable as the only comparable legislation, Compensation for Occupational Injuries Act 130 of 1993, since there are no effective guidelines for determining the personal circumstances of each claimant nor any formula for calculating their loss of income and earning capacity. Instead high-income earners are prejudiced as well as those with less serious injuries.

 

The Act creates a prerequisite that each individual have adequate personal accident insurance cover and its most pertinent changes are in conflict with the original purpose of this compensation system, neglecting the road-accident victim’s right to claim damages. It does not seem constitutionally viable and as such one may expect further changes to this legislation in the very near future.

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