The national transport department has been accused of planning to “short-change” crash victims to save the struggling Road Accident Fund (RAF).
Legal experts, medical aid schemes and civic organisations say draft amendments gazetted by transport minister Sindisiwe Chikunga this month are intended to help the cash-strapped state entity, which posted an R8.4bn deficit for the 2022/2023 financial year.
The RAF, which collects at least R43bn from the fuel levy each year, owes almost R10bn to claimants. Some of them have been waiting for years and now there are fears their claims will be jeopardised by the new proposals.
October 8 — the deadline for public comment
R17.4bn claims backlog
— BY THE NUMBERS
The amendments would remove the right of drivers, passengers and pedestrians to claim compensation.
Victims would receive zero compensation for general damages — including pain and suffering, and disfigurement — no matter how serious their injuries are.
They will also not be paid for past and future medical expenses, loss of income or earning potential. Instead, they will receive an unspecified “social benefit”.
Lump sum payments would fall away and more structured instalments would be introduced.
Pedestrians crossing a highway, as well as their dependants, would be excluded. If the proposals become law, the fund will also not compensate hit-and-run victims or foreigners.
Medical aid schemes, which claim from the RAF, will not be able to recover expenses paid on behalf of members who are involved in accidents.
The standing committee on public accounts (Scopa) heard last month that the department of transport, which is driving the bill, will do everything in its power to turn the RAF around.
Deputy minister Lisa Mangcu said the amendments would “resolve the current issues the RAF [is] grappling with”.
At least R9.7bn is owed to claimants, which Scopa believes indicates an organisation in trouble, but the RAF feels it is on a recovery trajectory.
Mangcu said the fund was comfortable that it could meet its financial obligations but acknowledged there was a long way to go to get it on a financially sustainable path.
During the fund’s audit outcomes report on Thursday, RAF chair Collins Letsoalo denied it was in a crisis, saying that unlike other state entities, it did not need a bailout.
He said the auditor-general had given the RAF a glowing report as it had achieved 91.3% of its targets for the 2022/2023 year.
Letsoalo claimed the deficit was a result of the RAF not receiving an increase in the fuel levy despite rising inflation.
He said the proposed amendments would tighten the RAF’s role as a social security fund.
The significance hereof is that despite the fact that road users will continue to pay a significant premium by way of the fuel levy, currently R2,18 per litre, the RAF will only be liable to pay very limited social benefits, leaving it vulnerable to be looted.
— Outa
The legal fraternity and medical aid schemes have come out strongly against the bill, saying the biggest losers would be accident victims and taxpayers.
Dave Campbell, co-chair of the KwaZulu-Natal Personal Injury Attorneys Association, said that in common law a person had the right to sue another party who caused them personal injury as a result of negligence.
“If this bill should pass, the state is still collecting ‘insurance premiums’ in the form of the fuel levy but now it intends taking away virtually all the claims an innocent victim may bring, while excluding the victim’s common law rights to claim against the wrongdoing driver,” he said.
Attorney Gert Nel, who approached the Constitutional Court to intervene in RAF matters last year, told the Sunday Times that the true impact of the bill remained to be seen but it appeared that the public would be negatively affected.
“We do not believe that these changes will address the financial and administrative challenges faced by the RAF other than just kicking it down the road. Why should victims be victimised further by having their constitutional rights eroded [because] of the government’s inability to successfully manage the RAF? Why must road crash victims be prejudiced in not receiving due compensation for having to negotiate the very roads government is failing to keep safe?” he said.
Discovery Health CEO Dr Ryan Noach said if the RAF didn’t reimburse medical aid schemes, members would have to pay higher contributions to cover the loss.
“It confers a greater cost of health care to road users who are medical scheme members, who would continue to pay fuel levies plus marginally higher medical scheme premiums,” he said.
Organisation Undoing Tax Abuse senior legal project manager Andrea van Heerden said it was clear that if the amendments were accepted they would leave the RAF vulnerable to corruption.
“Furthermore, we believe that the proposed amendments blatantly discriminate against the poor and disempowered. Road accident victims will be uniquely prejudiced and their right to be compensated for harm suffered by the fault of another will be taken away,” she said.
Letsoalo said most criticism of the changes would come from lawyers, who he claimed enriched themselves from the fund.
“People are distorting this for obvious reasons. But I want South Africans to apply their minds. You’re going to be told our people are done in, they will be paid less benefits, but you’re going to see a very strange phenomenon. It’s going to come from lawyers. And they are going to call themselves civil society. They are going to form organisations that are going to try to fight this,” he said.
The department of transport did not respond to requests for comment.
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