/ 27 February 2015

On the bumpy road to RAF reform

Crash course: Advocates of the Road Accident Benefit Scheme Bill say it will allow claimants to save on lawyers' fees.
Crash course: Advocates of the Road Accident Benefit Scheme Bill say it will allow claimants to save on lawyers' fees.

The debate about the Road Accident Benefit Scheme Bill is heating up, with lawyers in the personal injury sector warning that it is likely to be the subject of a Constitutional Court challenge when it becomes law. 

Its supporters have dismissed objections to the Bill, however, suggesting that opposition to it is rooted in misinterpretation of the proposed law and fuelled by the prospect of lawyers being largely unnecessary in the settling of claims. 

The Mail & Guardian spoke to a number of lawyers who argued that if the Bill is passed claimants would receive significantly less compensation from what is currently known as the Road Accident Fund (RAF).

Critics from within the legal fraternity have also said that the removal of the common law right that allows a victim to pursue claims directly against a perpetrator for damages and pain and suffering would more than likely be challenged at the highest level.

“We could be heading to the Constitutional Court,” said Roy Barendse, a director at Cliffe Dekker Hofmeyer who has practised personal injury law for 25 years, but now focuses on insurance law. “There is not sufficient reason to exclude the common law right from victims.”

Eugene Watson, the RAF’s chief executive, said the common law right has already been abolished under the fund’s mandate. 

“Therefore, the Bill will be a continuation of what is already the law,” he said. “At the time when the common law right was abolished, the Law Society of South Africa and others launched a legal challenge — which failed when the Constitutional Court, as far back as 2010, confirmed that the abolishment of the common law right was not unconstitutional.”

But Jacqui Sohn, the chairperson of the Law Society of South Africa’s RAF committee, said that in promoting the draft Bill the department of transport has claimed that it is implementing the recommendations of the Satchwell commission.

“This is only partially correct,” said Sohn. “While the Satchwell commission did recommend a system of no fault compensation, it also recommended that the common law right — to look to the wrongdoer for compensation not covered by the scheme — be retained, and that road accident victims who are catastrophically injured be awarded life enhancement benefits [general damages] by the statutory scheme.” 

“The victim is confined to the Road Accident Benefit Scheme for compensation,” said Barendse. “This wasn’t a recommendation from the Satchwell report.”

“To compound the catastrophic impact of a serious injury, income support benefits are only claimable after a waiting period of 60 days,” said Sohn. “There is no ‘arrear’ payment and this loss of income must be suffered by the injured party without compensation.”

Someone who is incapacitated because of their injury and consequently off work for six months can only claim from the third month and there is no back pay, Barendse said. So those injured only receive four months’ compensation. 

According to the RAF, the 60-day exclusion period is intended to provide priority to more serious injuries.

“[But] what if you are the breadwinner and you don’t have private insurance?” asked Barendse. “They will pay after two months, but in order to claim you have to submit medical reports, which you will have to pay for — you will not be reimbursed for that.”

If you manage to pay for these expenses, you can be awarded 75% of your salary if you were employed, but this is capped at R13 700 a month. This temporary income benefit will be paid for up to two years of incapacitated leave.

If the claimant is incapacitated for longer than two years they can claim a long-term income benefit, if they are between the ages of 18 and 60 years old.

This is again calculated on 75% of income as the temporary income benefit. Should the claimant die, say at age 50, his family will not receive the last 10 years of income benefit.

“What happens,” Barendse asked, “when the person injured is a street vendor who would have problems proving income, or a promising student about to embark on a lucrative career?”

 It is unclear how a student would be compensated, under the Bill. 

“The provisions regarding those who are unable to prove an income or who are economically inactive are confusing: on one reading they will receive no compensation for loss of income, regardless of the fact that they may have been about to embark on a career,” said Sohn.

Sohn argued that the removal of the common law right leaves the injured party or a deceased breadwinner’s family, through no fault of their own, without any right to fair and equitable compensation from the wrongdoer.

There is family support, payable for a maximum of 15 years but if the claimant is a child, support is cut off at 18. This does not take into account a child who is going to a tertiary institution to study further, said Barendse. 

There is a funeral benefit of R10 000, which can be applied for 30 days after the accident, but the benefit does not take into account the costs of transporting the body home. 

Michael de Broglio from De Broglio Attorneys said of the Bill: “When one considers how badly those who approach the RAF directly now have their cases settled, one fears for anyone who is ever seriously injured in an accident should this law come to pass.”

 “In a desperate attempt to remove attorneys from the system,” he said, the RAF is doing everything it can “to ensure people who bring cases are not represented by lawyers”.

Ronald Bobroff, the president of the South African Association of Personal Injury Lawyers, said that the association had little confidence that the proposed scheme would work.

Bobroff argued that the entire administrative scheme that has been proposed — in which victims have no rights at all and in which normal common-law principles are excluded and access to the courts is restricted — will not improve the lot of victims.

“Government should desist from the ongoing erosion of the rights of road accident victims,” said the Association for the Protection of Road Accident Victims (Aprav) in their written comments on the Bill.

Aprav said that claimants are currently forced to issue writs of execution to get the RAF to pay out.

Watson said that under the current RAF dispensation more is paid towards legal fees than is paid out in medical compensation. 

“The existing scheme is not effectively achieving its purpose,” he told the M&G. “The current RAF scheme is open to abuse due to fraud, opportunistic claims, nuisance and overinflated claims, professional malpractice and human failure.

“A major driving force under the current system is the attempt to present the accident victim to the RAF as a permanently disabled and maimed person, irrespective of their actual condition, whose capacity of earning an income and living a quality life has been irreversibly harmed, in an attempt to secure the highest possible monetary reward from public funds,” said Watson. 

“Once enacted, the envisaged Road Accident Benefit Scheme will leave little room for services of an attorney,” he said. “It is therefore to be expected that many members of the legal profession will criticise the new dispensation, which poses a threat to the vested financial interest of many legal professionals who have, over many years, made billions out of the RAF.”

Judges raise a stink and counsel stick their feet in it

Nicholas Wiehahn, who was acclaimed for, among other things, chairing a commission in the 1970s that resulted in the overhaul of labour regulations in South Africa, recalled an amusing incident. 

“Gas lighting was installed in the new building (the Supreme Court in Grahamstown in 1912) and became such a part of the daily lives of the judges and court personnel that, with the advent of electricity, a change to electric lighting and heating was refused. 

“The story goes, however, that during a trial presided over by … Sir Thomas Graham, the judge president, a peculiar, offensive smell pervaded the court, and grew worse as the proceedings went on. When the judge enquired as to the cause of the smell, counsel retorted: ‘Yes my Lord, we noticed it even before your Lordship came in this morning.’ The judge president then adjourned the court and stood up to leave the Bench, but stumbled and fell. 

“It was then discovered that the unpleasant smell was caused by the sole of his shoe burning on the gas heater under the Bench. Electric lighting and heating followed without delay …

“The electric heaters provided for the court were also in tube form and are situated under the Bench at a convenient height to serve as a footrest. A certain judge, unaware that the heater was switched on, rested his feet on the tubes until the soles of his shoes began to char. 

“As did his predecessor with the gas, he inquired as to the source of the unpleasant smell, and counsel promptly replied: “My Lord, it must be your Lordship’s feet.” — An edited extract from Law, Life and Laughter (1991) by Professor Ellison Kahn, published by Juta & Co