WHAT ARE THE CONSEQUENCES OF THE NEW ROAD ACCIDENT FUND AMENDMENT BILL 2023

Published Date: September 27, 2023

The Department of Transport published a draft Road Accident Fund Amendment Bill on 8 September 2023. The amendment bill aims to make a lot of changes to the way the RAF actually works, but one of the more contentious points is moving away from a compensation model to a “social benefits” model.

Should the draft bill come into effect as law, the rights of drivers, passengers and pedestrians to claim compensation for injuries which they have sustained in a motor vehicle collision will be severely prejudiced.  This article aims to highlight some of the more important restrictions on existing rights that the public should be aware of.

Loss of earnings

Loss of earnings are currently paid out to claimants in a lump sum. This amount is capped subject to inflation. However, under the new system, a claimant will receive annual payments that will eventually equate to the lump sum. The amount payable to victims will be subject to a periodic review of the RAF’s liabilities. If the claimant dies before the full amount is received, the payment will automatically stop, and heirs will not benefit.

A periodical re-assessment means that a claimant will have no certainty on whether future benefits will be payable.  Essentially, the loss of earnings compensation is put into place to put a claimant back in the financial position they would have been but for the accident and without a lump sum payment or a guaranteed annual payment, a claimant would have little or no chance of attaining financial rehabilitation.

General Damages

Currently, claimants receive compensation referred to as general damages, which is an amount of money awarded for pain and suffering for claimants that have sustained serious injuries.  The new system seeks to abolish the claim for general damages. It must be taken into consideration that by removing the claim for general damages, some victims may end up receiving no benefits from the RAF, even if they sustained serious injuries.

An example may be of a pensioner or an unemployed person who was rendered a paraplegic or quadriplegic, or who may have suffered an amputation or significant brain injury.  All these injuries have a severe impact on the victim’s activities of daily living and emotional well-being and have permanent and lasting consequences for the victim for the rest of his/her live, yet the victim will not be compensated for the pain and suffering he/she will suffer for the rest of their lives.

Medical expenses

Another major effect of the amendment which will have a direct impact on the public is that medical aids will no longer be able to be reimbursed for accident-related medical expenses which they pay out. This will drastically increase premiums for all medical aid members because the industry is forced to mitigate the risk of members not being covered by the Road accident Fund.

Other exclusions

The amendment bill adds a list of circumstances where claimants are explicitly excluded from receiving compensation. This includes zero liability on the fund where:

  1. The accident did not occur on a public road. Currently, a claimant is covered for negligent driving of a motor vehicle irrespective of where the accident took place. The draft bill proposes that in order for a claimant to qualify for compensation, the accident must have occurred on a public road. For example, injuries suffered by persons in a parking lot, driveway of their home or other private roads will not be covered.
  2. Hit and run accidents. Currently a claimant is covered if there is a hit and run accident. The bill seeks to abolish the so-called hit and run accidents and excludes claimants from claiming compensations where the motor vehicle is unidentified.
  3. Any driver, pedestrian, or cyclist is over the legally prescribed alcohol limit, regardless of who caused the accident, or was a pedestrian crossing a highway. This also excludes their dependents from claiming a loss of support, should they pass away as a result of the motor vehicle accident.
  4. The vehicle operator’s passenger liability insurance cover provides cover in relation to the passengers injured or killed in the motor vehicle accident.
  5. 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).
  6. 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.
  7. The claimant is a not a South African citizen or direct permanent resident as defined in the Immigration Act, 13 of 2002 (as amended).

As highlighted above, should the proposed bill come into effect this will have dire consequences for the public as a whole. Therefore, the public is encouraged to participate by objecting to the proposed bill before 8 October 2023.  Objections can be made at https://dears.africa/have-your-say-on-the-road-accident-fund-amendment-draft-bill-2023/

Raznae Narayanasami
Associate | Attorney

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