KAPIL SUBMISSION ON THE PROPOSED ROAD ACCIDENT FUND SECOND AMENDMENT BILL.
1. The proposed amendments are a destructive erosion of the common law rights of the individual.
2. There is carnage on our roads. It is the responsibility of the State to provide protection to the individual both as regards compensation for injuries in terms of the common law and to indemnify the wrong-doer in respect of any claim for compensation by an injured party. The proposed amendments radically reduce this cover and protection which has been in place since 1946.
3. The amendments are in a number respects grossly unjust and inequitable to the
4. The amendments seek to provide the Road Accident Fund with autocratic powers and to deprive the individual with his/her right of recourse to the Courts to determine just compensation.
1.1 UNDERTAKINGS IN RESPECT OF FUTURE HOSPITAL, MEDICAL AND RELATED EXPENSES
As it is the Road Accident Fund is unable to properly administer Undertakings in terms of
Section 17(4)(a) of Act 56 of 1996. Untold hardships are being experienced by individuals to
whom Undertakings have been issued. The Undertakings are under utilised. According to the
Satchwell report only 14.8% of Undertakings are active (see pages 623 to 630 of the Satchwell
report) the recommendations of which have been accepted by the Cabinet.
There are frequently delays in the issue of Undertakings in terms of Section 17(4)(a) (see the
reported case of Mouton vs The Road Accident Fund referred to in page 632 of the Satchwell
It is not desirable that the Fund be deprived of it's discretion as to whether or not it wishes to
provide an Undertaking. There are numerous cases where it is appropriate not to issue an
Undertaking. Special circumstances often dictate that Undertakings be discounted for cash,
for in certain circumstances where future medical expenses are limited to insignificant
amounts, discounted cash amounts can and are being paid in respect of such future medical
The Satchwell report is highly critical of the manner in which the Fund is administering
Undertakings, and by making the issue of Undertakings compulsory without leaving the Fund
with any discretion is going to further prejudice the individual and burden the Undertakings
Department of the Fund.
Sections 33 and 34 of the Constitution of the Republic of South Africa relate to the Just
Administrative Action and Access to the Courts.
The Constitution requires that Administrative Action be "lawful, reasonable and procedurally
fair" and that "National legislation must be enacted to provide for the review of administrative
action by a Court or, where appropriate, an independent and impartial tribunal". Disputes that
can be resolved by the application of law are to be decided in a fair public hearing. Finality and
fairness are clearly intended.
The effect of Section 17(4)(a) in its proposed amended form is to compel the Fund to furnish
Undertakings in respect of future hospital, medical and related expenses. Neither the Court
nor the Fund has any discretion irrespective of the circumstances of any particular case and
irrespective of whether or not the consequences are fair and equitable. The Court should be
allowed a discretion as to whether or not an Undertaking is to be given or monetary
compensation paid in lieu thereof.
What good is an Undertaking for 50% for such future expenses to an impecunious amputee ?
Section 17(4)(a) further provides that compensation for such future expenses is to be paid
"after the costs have been incurred and upon proof thereof".The effect of this is that an injured
party is frequently called upon at great expense and inconvenience to prove his case over and
over again. At his/her first trial the injured party presents his/her case with all the necessary
medical expert evidence, in relation to future medical expenses and the estimated cost thereof.
The Fund then issues an Undertaking which makes the production of the evidence a farce and
a waste of money and effort only to be forced to repeat the presenting of the evidence to Court
in the countless disputes which arise with the Undertakings Department of the Fund.
The proposed amendment further entrenches the glaring injustice of the situation.
1.2UNDERTAKINGS IN RESPECT OF FUTURE LOSS OF INCOME OR SUPPORT
At page 643 of the Satchwell report it is stated, inter alia : "It is thus difficult to comprehend why
the RAF should believe that it is equitable or reasonable for compensation to be paid "in
arrear". How long will the disabled wait for their compensation ? On what must they live in the
meantime ?" As it is, the Undertakings Department of the Road Accident Fund is painfully
inefficient and obstructive, as has been detailed in the Satchwell report. The reservations
about the efficiencies of the Road Accident Fund in general and the Undertakings Department
in particular are of application.
The proposals with regard to the obligatory nature of Undertakings appear to be motivated
solely by the desire to reduce the RAF's expenditure. Having regard to the available data that
indicates that in excess of 80% of Undertakings issued are never utilised by the recipients, the
expectation of denying compensation and thereby saving money is probably well founded. This
motivation is clearly contrary to the interest of the individual. The Road Accident Fund appears
to be unconcerned about whether or not Road Accident victims are justly compensated. "The
efficacy of Undertakings and the interests of injured and disabled claimants appear to have
played no part in this proposal" (see paragraph 22.137 on page 643 of the Satchwell report).
Again the Courts are denied any say as to whether or not an Undertaking be issued.
Compensation for future loss of earnings and support is capitalised as it is paid "up front". If it
is to be paid in arrears it will attract interest on the unpaid portion. When and how will this be
Is it intended that the Court decides the capitalised amount of such compensation and that the
Fund then decides how and when to make payment thereof or does the Fund decide what the
capitalised amount is to be and how and when it is to be paid ?
As it is the Undertaking Department of the Fund is a disaster. Its inefficiency is manifest.
Injustices abound. How could it ever cope with the added burden of undertakings in respect of
future loss of earnings and support ?
Sections 33 and 34 of the Constitution are being ignored.
To add insult to injury it is sought to make the proposed enactment retrospective. This will
result in gross injustices. Injured road accident victims have submitted claims and instituted
action against the Fund on the basis of legislation that existed at the time of the accident. That
legislation is the Governments agreement with the individual. To alter that legislation
retrospectively is to renege on an Undertaking. It would not be worthy of the State to indulge in
such dishonourable conduct.
Actions have been instituted and fought and advice given on the basis of existing legislation.
Lives have been planned, loans obtained to tide victims over and time, money and effort put
into the pursuit of claims with existing legislation in mind.
1.3UNDERTAKINGS IN RESPECT OF CLAIMS FOR NON-PATRIMONIAL LOSS
General damages for pain and suffering, disability, disfigurement and loss of enjoyment of
amenities of life falls into the category of non-patrimonial loss. Such awards are by their very
nature lump sum payments and for the most part an assessment of the pain and suffering,
thus far suffered by the injured party, together with an assessment of what he/she is likely to
suffer in the future. The proposed amendment provides that such general damages are to be
paid "by instalments as prescribed". It is the intention of the Fund to provide for threshold
amounts in respect of general damages to be prescribed by regulation and that amounts
exceeding that threshold amount are to be paid by instalments over a future period. An award
for general damages is not a capitalised amount but it is an assessment in monetary terms of
the pain and suffering suffered and to be suffered by an injured party. It takes into account
both past and future pain and suffering and such awards are based on Court awards in similar
cases. An injured party, in receiving his lump sum award for general damages is afforded the
opportunity of investing the award to provide him with comforts for the future. Not infrequently
such awards are utilised to pay for hospital and medical expenses because of difficulties that
are experienced in making recovery from the Undertakings Department of the RAF.
If general damages over the prescribed threshold amount are to be paid by instalments, an
injured party will be deprived of earning interest on the full capital sum of the award and will
further over a period of time not receive increased instalments to keep abreast of inflation, and
trends in increased awards for general damages. There is uncertainty as to what will be
prescribed and whether amounts paid by instalments which exceed the threshold will be
suitably increased with the effluxion of time.
The proposed amendment is unjust, inequitable and provides the Fund with autocratic
authority. It deprives the Courts of their inherent right to award just compensation. In a 1997
judgment by the Honourable Mr Justice Broome DJP in the case of Wright vs MMVA Fund
reported at E3-31 vol. iv of Corbett and Honey, the Judge in dealing with the question of
general damages pronounced "I consider that when having regard to previous awards one
must recognise that there is a tendency for awards now to be higher than they were in the past.
I believe this to be a natural reflection of the changes in society, the recognition of greater
individual freedom and opportunity, rising standards of living and the recognition that our
awards in the past have been significantly lower than those in other countries."
The proposed legislation is a step backwards. It totally disregards the fundamental rights of
the individual as expressed in the abovementioned judgment.
If the proposed legislation is enacted it will inevitably result in awards for general damages
being substantially increased to compensate for the fact that the injured road accident victim is
being discriminated against and paid his compensation on the never never.
If I am assaulted and injured or if I am negligently shot by a policeman, or if a dog bites me or if
my surgeon negligently leaves a scalpel inside me or if I am poisoned in a restaurant or if a
brick is dropped on my head by a construction worker, I correctly and in terms of what is fair,
right and proper have the right of recourse to the Courts for compensation for my injuries.
I am entitled to claim :-
1.Past and future hospital, medical and related expenses.
2.Past and future loss of earnings.
3.General damages for pain and suffering disability, disfigurement and loss of enjoyment of
amenities of life.
I am entitled to immediate payment with interest and costs.
Why should there be discrimination against the injured innocent road accident victim ?
Section 21 of the Road Accident Fund Act 56 of 1996 provides "...that third party may not claim
ompensation in respect of that loss or damage from the owner or from the person who drove
the vehicle, or if that person drove the vehicle as an employee in the performance of his/her
duties, from his/her employer, unless the Fund.....is unable to pay the compensation". The
victim is left with nowhere to turn to. What is proposed is a flagrant disregard for the
entrenched common law rights of the individual. It is autocratic legislation at its worst.
The situation exists that if the Fund is "unable to pay the compensation" one may sue the
driver, owner or employer as the case may be and recover from that person ones full common
law damages. There is a total imbalance as to what is recoverable from the Fund and what is
recoverable from the individual.
2.PRESCRIBED MEDICAL TARIFF
In many cases emergency treatment is required. Major surgery needs to be undertaken as a
matter of urgency. It is inappropriate in such circumstances that any form of pre-authorization
should be obtained from the RAF. The intended amendment is vague. Again it provides the
Fund with autocratic powers. Healthcare ought to remain a matter of private and personal
choice, it should not be governed by bureaucracy. Until such time as the Regulations have
been promulgated it is difficult to know what is envisaged. By introducing a tariff many victims
desperately in need of the best specialist treatment and hospital care will be deprived of the
same because they cannot afford to pay the difference. The Fund should be liable for
whatever is reasonable and necessary and it should be left to the Courts to decide what is not.
The proposed amendments are outrageous. It will give rise to gross hardship and inequities.
By way of an example, two breadwinners may die in the same accident, one of them having
frugally contributed to insurance and pension, and the other having contributed nothing. The
dependants of the person who has insurance and pension will have deducted from their
compensation such collateral benefits whereas the dependants of the other person who has
not contributed anything towards pension and insurance will have no deductions made from
their compensation. The individual who has lived prudently and with thrift is to be punished for
having done so. This piece of legislation is absurd in the extreme and if it wasn't such a
serious matter it would be laughable.
Insurance is a compulsory form of saving. The individual should be encouraged to save and
rewarded, not punished for it.
4.CAPPING OF CLAIM BY NON-RESIDENTS
The proposed amendment is blatant discrimination against non-residents. If it is introduced
there are bound to be repercussions. Such legislation discourages tourism particularly with the
carnage on our roads that is uncontrolled and has been allowed to develope. There is a
culture of driving in the R.S.A. that is unhealthy and does not compare favourably with driving
cultures in other civilised countries which impose rigid disciplined standards of driving. If one is
honest one would be saying to prospective tourists "Come and visit our beautiful land, but
venture onto our roads at your peril. Our drivers are some of the worst in the world as is borne
out by the statistics of our road accidents and fatalities. If you are injured or killed only limited
compensation will be paid, so you had better at your own expense take out suitable insurance
cover for the duration of your stay." The Minister of Environmental Affairs and Tourism needs
to be consulted.
Again, the proposed legislation is vague and autocratic. It is not known specifically what is
5.INCLUSION OF CLAIMS FOR EMOTIONAL SHOCK IN CERTAIN CIRCUMSTANCES
This is a further erosion of the common law rights of the individual. The proposed amendment
discriminates against persons who suffer from a certain type of injury. Does the anguish of a
mother who witnesses her child being mutilated in a motor accident count for nothing ? The
Road Accident Fund Act is intended to provide fair and reasonable compensation to the road
accident victim, not to deprive him/her of such compensation. We want to be a compassionate
society and the Act should demonstrate this.
6.RESOLUTION OF DISPUTES THROUGH MEDIATION AND ARBITRATION
The proposed amendment is badly worded and does not make sense. It is difficult to
understand what is intended. Is it in cases where the Fund has repudiated that it becomes
necessary to exhaust the procedure or mediation and arbitration, or is it intended that it apply
to all claims ? What is the "prescribed" procedure. It should be clearly spelt out.
Mediation and arbitration ought to be an option available to the parties. A successful pilot
scheme was launched by the Fund in Cape Town where it was optional. It is inappropriate that
all cases be referred for mediation and arbitration. Mediation and arbitration can be of great
advantage to both parties but there are cases which are best dealt with in the Court. It is in the
Courts that judgments are delivered which are reported, which establish norm and precedent.
It is intended that the amendments regarding Undertakings for future hospital and medical
expenses, Undertakings for future loss of income or support, payment of compensation for
non-patrimonial loss (general damages) and the question of mediation and arbitration are to
apply to all claims for compensation that have not been finalised prior to the commencement of
the Act. This is outrageous for reasons detailed in paragraph 1.2 above.
It is a moving of the goal posts which is dishonourable and not worthy of an organ of State.
8.AUTOCRATIC RULE BY REGULATION AND OTHERWISE
The following are examples.
8.1Section 17(4)(a) "must".
8.2Section 17(4)(b) "must" and "by instalments in arrear" - whatever that means.
8.3Section 17(4)(c) "pay in prescribed manner", "in instalments" and "that exceeds the
8.4Section 17(A) "the prescribed medical tariff".
8.5Section 17(B) "must be deducted".
8.6Section 18(5) "limited to the amount determined by the Minister".
8.7Section 19 "as a result of emotional shock".
8.8Section 24(6) "has exhausted the prescribed procedure".
By and large the proposed amendments are dictatorial and unconstitutional, and are strongly opposed by KAPIL. I respectfully request an opportunity to address the Committee.
K A COHEN
PRESIDENT : KAPIL