Will the new scheme fix the broken one?
“It’s very disruptive to be working, and then the sheriff of the court arrives to take your chair, leaving you sitting on a dustbin to finish your work.”
This is what RAF employees in the more than 100 offices nationwide have experienced, according to Phumi Dhlomo, the Road Accident Fund’s (RAF’s) chief marketing officer.
It can take more than 120 days to pay out a claim, by which time an inevitably angry defendant will have approached the court to seize the fund’s moveable assets, Dhlomo said.
To avoid losing furniture, the RAF now leases it.
According to the Public Finance and Management Act, a claim should only take 30 days to process. But a backlog of claims and not enough funds to pay them out result in delays.
The RAF is compulsory insurance providing social security for victims of a road accident.
At a media briefing on Tuesday, the RAF admitted that its “legislative framework has resulted in it being insolvent since 1981”.
The Road Accident Benefit Scheme (RABS) is intended to replace the current system administered by the RAF, and cut long and costly litigation, high administrative costs and a prolonged claims process.
One of the big changes the RABS proposes is that “fault will not be considered on the part of the claimant or other persons involved” in a vehicle accident. The “no-fault” system is meant to “create a new era of socioeconomic balance” and cut down the negative consequences felt by the family of the driver at fault.
Because there will be no need to find fault, individuals could submit claims without having to seek legal help.
Under the current RAF system, claimants need to prove a third party’s negligence before they can be compensated by the fund.
“It is expected that the role of attorneys in the new scheme will be limited considering the removal of the requirement to prove fault and due to the fact that benefits are defined,” the RAF said in a statement on Tuesday.
More than R25-billion was paid to claimants last year while lawyers acting for the RAF and claimants earned about R8-billion.
Lawyers, however, believe their services are already capped. “The vast majority of claimants, and especially poor or unemployed road accident victims, are represented by attorneys via the provisions of the Contingency Fee Act 66 of 1997, which is closely regulated by the courts and the profession,” said Jacqui Sohn, the chairperson of the personal injury committee of the Law Society of South Africa (LSSA).
“In terms of this Act, legal fees are both limited and capped ensuring that the claimant receives a fair proportion of the settlement or award.”
The Act also allows the claimant to challenge the fee charged, Sohn said.
The LSSA rejected the notion that lawyers benefited unduly from the RAF; they provide a valuable service by helping the claimant to understand a complicated system.
“An attorney representing a road accident victim has a professional duty to ensure the most just and fair outcome for the client,” Sohn said.
He added that the no-fault clause was a big issue. The LSSA had proposed a hybrid scheme for the RABS Act, in which claimants could opt in or out of the no-fault policy.
“The LSSA believes that the common-law right of an injured party to sue the negligent party for the balance of her/his loss not covered by the scheme must be retained,” Sohn said.
Another proposed change would be that claimants be paid monthly instalments rather than a lump sum.
“The RAF payout has traditionally had a lotto effect,” RAF acting chief executive officer Lindelwa Jabavu said, “and is not used for what it is meant for, which leads to claimants coming back to claim again from the RAF or reaching out to the South Africa Social Security Agency.”