Big changes coming for the Road Accident Fund in South Africa

 ·8 Sep 2023

The Department of Transport has gazetted the draft Road Accident Fund Amendment Bill, 2023 for public comment.

The draft bill contains a host of proposed changes to how the Road Accident Fund (RAF) will operate in South Africa, including a new set of limitations for claims.

More broadly, the bill aims to change various definitions and insert new ones into the act while also giving effect to findings and recommendations made by the Road Accident Fund Commission, reorganising the power and functions of the fund and various other factors.

One of the bigger proposed changes is to remove the RAF’s ability to appoint agents to administer claims.

The RAF has come under immense pressure and criticism over the years for failing to execute its mandate. It has been beset by delays, backlogs and heavy litigation – all while alleging that unscrupulous legal agents have been milking it dry.

“The RAF continues to be a victim of crime syndicates involving legal practitioners, medical experts, actuaries, law enforcement and internal staff members. In most instances, these involve collusion to defraud the RAF of millions of rands,” it said.

“The RAF continues to collaborate with investigative and law enforcement agencies to reduce instances of fraud and corruption.”

Not only is the fund severely financially constrained due to the significant number of claims made against it, but its litigation bill has run into the billions of rands – before even hitting the courts.

The group’s latest available annual report (2020/21) cites research showing that almost 90% of all civil litigation in South Africa’s courts are RAF-related. Almost all of these are settled “on the steps of the court” but still carry a hefty legal bill of R10.6 billion.

The group paid out R35.5 billion in claims in 2021, with the average claim totalling R235,141. Personal claims averaged almost R400,000.

The proposed laws look to address at least some of these hardships by limiting the liability of the Fund to motor vehicle accidents occurring on public roads and removing the obligation for the Fund to compensate a third party for losses that carry no direct monetary value.

The draft bill also moves away from a “compensation” structure to a “benefits” structure, where it can provide injury and death benefits subject to prescribed limits and periodical review.

Explicit exclusions

However, one of the more direct proposals is the amendment of Section 19 of the principal Act, which deals with liability exclusions.

As it currently stands, anyone involved in a road accident in South Africa can claim from the RAF, including motor vehicle drivers and passengers, motorcycle drivers and passengers, cyclists and pedestrians or other third parties.

Where these claimants experience of loss of income – or their dependents a loss of support through death – the claim is limited to R347,730 (as of July 2023).

However, drivers can still claim for all medical expenses arising from injury – provided it wasn’t a pre-existing injury before the accident – with no cap or limit applying.

Under the new proposals, the amendment bill adds a list of circumstances that are explicitly excluded from receiving this compensation, or “benefits”, as it were.

This includes zero liability on the fund where:

  • The vehicle operator’s passenger liability insurance cover provides cover in relation to the passengers injured or killed in the motor vehicle accident;

  • The third party’s medical aid cover or medical insurance cover provides cover in relation to the treatment of the third party’s injuries sustained in the motor vehicle accident and to the extent that cover is provided for assistive devices and related works, goods and services;

  • The third party was a driver of a motor vehicle, or a pedestrian, or a cyclist, and at the time of the accident was over the legally prescribed alcohol limit or under the influence of a drug, or was a pedestrian crossing a highway;

  • The third party is a dependent of a person mentioned in the above;

  • The motor vehicle accident involved a train or an aircraft;

  • The motor vehicle accident occurred in circumstances where a producer, importer, distributor, or retailer is liable for the harm caused by or arising from the driving of a motor vehicle involved in the accident, as is contemplated in section 61 of the Consumer Protection Act, 2008 (Act No. 68 of 2008);

  • The motor vehicle accident occurred in circumstances where the motor vehicle was driven while filming a movie or an advertisement, or during drag racing, or during the performance of a stunt, or a similar event;

  • The claimant is a not a South citizen or direct permanent resident as defined in the Immigration Act, 13 of 2002 (as amended).

The full draft proposals can be read below:

Read: Road Accident Fund hikes claim limits

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