Road Accident Fund changes: how the proposed Road Accident Benefit Scheme will affect you

There is hardly a citizen of South Africa who does not use the roads either as a vehicle driver or a passenger. The Road Accident Fund (RAF) was established in 1996 to protect the rights of innocent persons injured in accidents as a result of another's negligent driving. The fund was designed to compensate victims for damages incurred, pain and suffering, medical expenses and loss of income, and also to protect those dependents who suffered loss of support due to a provider's injury or death.

The RAF is funded by fuel levies. For every rand paid for petrol, a percentage is set aside for the fund. The fund therefore should be well supported and maintained with continual growth as road use increases year by year. Those able to prove injuries and expenses incurred as a result of an accident that was not their fault, could apply and expect fair assessment and compensation for costs and/or loss of income to be paid out in a lump sum. 

The problems with RAF 

However, over the years a number of problems developed with regard to the application process through the RAF. Chief of these included unacceptable delays in processing claims, often not at all unless the case was pursued by attorney. Delays of up to 55 months before a victim might receive compensation - and then only when professional assistance was sought by a claimant - were eroding the purpose and fairness of the 'raison d'etre' for the fund's existence.

Because of this incompetence, many claims would only be paid out if litigation was involved, resulting not only in extensive time delays but also unnecessary costs. This maladministration bled money from the fund, and compensation that should have been efficiently assessed and paid out in a reasonable time-span, was instead spent on time-consuming processes through the courts.

The newly proposed Road Accident Benefit Scheme 

So, undeniably, change was required. And this change has finally surfaced in the form of the Road Accident Benefit Scheme (RABS) proposed to replace RAF. The draft RABS bill was published in May 2014. While seeking to institute a fairer spread of compensation to benefit the unemployed, or those earning below the Annual National Average Income (AANI), RABS brings with it a number of negative implications of which the road users of South Africa should be made aware.

• All claims need to be submitted electronically in order to be considered.
• The 'No Fault' system is supported - which means that the person who caused the accident will also be able to claim for injuries sustained.
• If you don't hear from RABS for 180 days after submitting your claim, your claim has been denied.
• There is no lump sum payment - benefits are reduced to small monthly payments.
• Loss of long-term 'career path' earnings are no longer considered - i.e. loss of income (LOI) that would have been in your life had there been no accident, are not relevant.
• LOI benefits will be based on only 75% of the claimant's earnings prior to the accident.
• Benefits are not inflation-linked nor guaranteed as benefits can be reviewed, revised or suspended at any time.
• Claimants access to attorneys is limited, therefore the constitutional right to access the courts is denied.
• The nature and extent of a victim's medical treatment will be decided by the RABS Administrator.
• There will be no general damage claims for pain and suffering.
• There will be no financial assistance for any legal or administrative costs the victim may incur while trying process their claim.
• Costs of obtaining medical and police reports will lie with the claimant - RABS will not refund these costs.
• The claims of children, persons over 60 years of age, and persons earning over R220,000 pa, will be limited to emergency medical care only.
• Funeral expenses will be limited to R10,000.
• Benefits terminate on the death of the claimant, leaving any dependents without support.
• Benefits terminate after 15 years or when the claimant reaches 60, whichever comes first.
• Stringent rules will apply to qualify for long-term medical care - and will only be allowed from healthcare contractors specified by the RABS administration.

The ramifications

• The idea that the poorer members of the community will be better serviced flies out the window with the rule that only electronic applications will be accepted. Many disadvantaged people may not have access to the internet or be capable of completing a complicated questionnaire on line without assistance. This is therefore discriminatory.
• The payout of monthly benefits to unemployed people and their extended families, while having positive effect in this regard, may also simply increase pressure on social benefits.
• The 'No Fault' system will reward people for negligent driving and will immediately double applications, costing the fund far more in payouts. To balance these increased costs, benefit values will have to be reduced. Other countries, wealthier than South Africa, have tried the 'no fault' system and abandoned it because of costs.
• Under current applications, an attorney will carry costs until payout, and only receives monies due once payout has been effected. Under RABS payouts will go directly to the claimant in set monthly installments. The claimant will therefore not have access to the support and expertise of attorneys, and the vital financial 'hammock' this provides at the beginning of the claims process.
• The RAF is based on income from a diminishing source as technological advancements will eventually see reduction in fuel requirements and purchases.
• The same people running RAF at an approximate 10% application success rate, will also be running RABS.
• The Government is approaching the problem from the wrong end, and should invest in preventing the carnage on our roads rather than attempting to compensate for the results.

For over 20 years, Simpsons personal injury attorneys have specialised in motor vehicle accident claims, and we have a reputation not just for excellence, but for ensuring our clients receive the right compensation. While we agree that the RAF needs urgent revision, and that the claims process must be made quicker and more cost-efficient, the reality is that this new proposal will hardly be executable, will end up more costly, and is not seen as fair, practical or sustainable!

ISSUED BY: SIMPSONS ATTORNEYS