ROAD ACCIDENT FUND AMENDMENT ACT & THE CHALLENGE THAT LIES AHEAD !!
The Road Accident Fund Amendment Act, No 19 of 2005 introduces fundamental and far-reaching changes to the Road Accident Fund Act, 1996, and the system of compensation of the victims of motor vehicle accidents which has endured in South Africa since 1942.
This Amendment Act was brought into effect on 1 August 2008 and is applicable to all motor vehicle accidents which take place on or after this date. All accidents which have occurred before this date are still governed by the old RAF Act.
The Amendment Act brought about numerous changes, many of which are detrimental to your rights as a claimant. The change has resulted in many people who would have been entitled to claim under the old act not being able to qualify in terms of the new amended act.
However, it was only a matter of time before the Road Accident Fund Amendment Act, 2005 (“the Amendment Act”) was constitutionally challenged. This challenge was launched in the Pretoria High Court. The parties responsible for challenging the Act are the Law Society of South Africa, the South African Association of Personal Injury Lawyers, the Quad Para Association of South Africa and the National Council for Persons with Physical Disabilities.
The major changes to the RAF Act which are being challenged are:
| Section 21 | Declaring that this section is inconsistent with the Constitution and is invalid, to the extent that it has been substituted by section 9 of the Road Accident Fund Amendment Act 19 of 2005 | Under the Amended Act, the claimant is not entitled to claim any compensation from the wrongdoer, even though the amended Act limits the damages recoverable from the RAF (see 2 below), thereby depriving claimants from obtaining proper compensation for their loss. |
| Section 17(4)(c) | Declaring that this section is inconsistent with the Constitution and invalid. | Section 17(4)(c) caps the earnings of a claimant to R160 000.00 per annum, whereas previously no limitation was in place, and the actual income of a claimant was used as a basis to calculate his loss. Income earners above R160 000.00 per annum will therefore not be able to claim their entire loss of earnings under the amended Act. |
| Section 17(4B)(a) | Declaring that this section is inconsistent with the Constitution and invalid. | Other than for emergency medical care, compensation for medical and hospital expenses for all victims is limited to a tariff based on the tariffs for state medical facilities, which is approximately a third of the costs of medical care in the private sector. This deprives poor victims of the proper access to healthcare that they enjoyed under the previous Act, and will force road accident victims to receive treatment in state medical facilities. |
| Regulation 3(1)(b) | Declaring that this regulation is not authorised by the Road Accident Fund Act and is therefore invalid, in that the First Respondent has purported to determine what constitutes a “serious injury” in terms of the Act. | The definition of ‘serious injury’ is not a reasonable definition as it excludes many serious injuries, which deprives many victims of compensation. |
| Regulation 3(1)(b) | Declaring that this regulation is not authorised by the Road Accident Fund Act and is therefore invalid, in that it prescribes a method of assessment which does not ensure that injuries are assessed in relation to the circumstances of the third party. | The method of assessment of a ‘serious injury’ prescribed in the regulations does not comply with the Act because it does not ensure that the assessment takes into account the circumstances of the victim. |
| Regulation 3(1)(b) | Declaring that this regulation is not authorised by the Road Accident Fund Act and is therefore invalid, in that it prescribes a method of assessment and a procedure for lodging claims which unreasonably impede road accident victims’ ability to enforce their statutory right to compensation. | The system prescribed for lodging claims is an intricate and complex process. For example, the medical assessment in terms of the American Medical Association (AMA) Guides prescribed by the RAF is highly complex and costly, and doctors have to be specifically trained in order to use it, and to date very few have done so. |
| Regulation 3(1)(b)(ii) and (iii) | Declaring that these regulations are not authorised by the Road Accident Fund Act and are therefore invalid, in that they exclude road accident victims who have suffered serious injury from the right to claim compensation for general damages. | A claimant has to prove that they have a bodily impairment of 30% and above, in terms of the AMA Guidelines in order to be able to claim general damages from the RAF. The AMA Guidelines specifically exclude an injured person’s personal circumstances, and as a result many claimant’s whose injuries are serious, would be excluded from claiming general damages. Under the previous Act, general damages were paid in respect of all proven injuries. |
| Regulations 3(4) to 3(13) | Declaring that these regulations are inconsistent with the Constitution and invalid on the grounds that they deprive victims of road accidents of access to courts and the right to a fair trial to which they are entitled in terms of section 34 of the Constitution. | These regulations create an administrative tribunal to which victims who are dissatisfied with the compensation from the RAF can appeal. This tribunal’s decisions are ‘final and binding’. However, the tribunal is not impartial or independent from the RAF. This deprives victims of the right to have their dispute settled by a court of law and to a fair trial in terms of s 34 of the Constitution. |
| Regulation 3 | Declaring that this regulation is not authorised by the Road Accident Fund Act and is therefore invalid, in that it was promulgated without prior consultation with the Minister of Health. | Section 26(1B) of the RAF Act requires the Minister of Transport to consult with the Minister of Health before making any regulation concerning the method of assessment. According to a narrative of consultations obtained by the Law Society from the Minister, he did not consult with the Minister of Health before prescribing the method of assessment. Regulation 3 was therefore promulgated without complying with section 26(1B) and is not valid. |
| Notice R.771 | Declaring that the emergency medical tariff, is not valid as the tariff for emergency medical treatment applicable under section 17(4B)(b) of the Road Accident Fund Act, on the ground that it was not negotiated between the Road Accident Fund and health care providers contemplated in the National Health Act, 2003. | The tariff for emergency medical care and the state hospital tariff for other hospital and medical treatment decided by the Minister is based on State Hospital tariffs, which deprives poor victims of the proper access to healthcare that they enjoyed under the previous Act. They will be able to receive treatment only at State hospitals where treatment is either not available, or of an unacceptably low standard. Furthermore, the procedure as set out in section 17(4) of the RAF Act was not followed in determining the tariff for emergency and other medical care. |
In addition to the above mentioned constitutional challenge which has been mentioned above another victory for Law Society of SA against the Road Accident Fund came on 11 June 2009 in the Cape High Court. Judge Denis van Reenen granted a final interdict against the RAF, confirming an interim interdict granted in August 2008. The outcome of the proceedings are that the RAF have been stopped from implementing the new Direct Payment System (DPS), as well as declaring the administrative decision by the RAF to implement the DPS as invalid.
The abovementioned victory has confirmed the RAF’s failure in trying to implement a new system of dealing with claimants directly and attempting to remove attorneys from the claim procedure.