Road Accident Fund Amendment Bill: Transport Department briefing

Meeting report

PUBLIC SERVICES SELECT COMMITTEE
24 August 2005
ROAD ACCIDENT FUND AMENDMENT BILL: TRANSPORT DEPARTMENT BRIEFING

Chairperson: Mr R Tau (ANC)

Documents handed out:
Road Accident Fund Amendment Bill as on 12 August 2005
Road Accident Fund: An Overview
Trengove Opinion on Road Accident Fund Amendment Bill: August 2005

SUMMARY
A Department of Transport official informed Members on the background, development and latest situation of the proposed Road Accident Fund (RAF) Amendment Bill. Their PowerPoint presentation conveyed statistics on road accidents, claims, payment and RAF income trends for 2000 to 2004. Members expressed concern about
- the exorbitant fees claimed by some legal (and medical) practitioners;
- the omission of a limit on the amount claimed for funeral costs;
- the cover which people from the Southern African Development Community (SADC) countries enjoyed in South Africa while there was no cover for South Africans in those countries;
- the unfriendly and/or aggressive attitudes of South African drivers; and
- fraud and corruption in the system.

MINUTES
The Chairperson welcomed the outgoing RAF Director, Mr Dave Mitchell, who attended in a personal capacity. It was noted that Committee Members’ constituents were complaining about the slow payments by the RAF.

Department of Transport briefing
Ms M du Toit (Department Director Policy, Advocacy and Co-ordination) presented 33 overhead slides with her informal overview of the environment within which the RAF had to operate. She also elaborated on the latest thinking on the best way to structure the RAF to render stable, equitable, fair and sustainable cover for people against injury in motor vehicle accidents. Research spanning five years, of which the Human Sciences Research Council’s research for three years formed a part, was available but provided only limited, broad trends on the system of compensation. Accident statistics showed that the average number of accidents in South Africa in four days were equal to those occurring in a full year in Ireland. It was clear that there were no quick fixes for the situation.

The key amendments to the Bill were aimed at:
- improving governance of the Fund;
- the removal of limitations on the claims by passengers;
- the limit of R160 000 per annum for loss of income;
- payment for general damages to be limited to seriously injured people;
- fixed medical tariffs; and
- emergency medical treatment to be paid by the RAF.

Concerning tariffs for legal costs, the Fund would pay for reasonable costs in the preparation of claims, and for specified actions by lawyers. Assessment of the seriousness of an injury would be within the capability of a clinic in a rural area. Injury due to an accident anywhere, also on a farm, where a motorised vehicle, even a tractor, was involved, was eligible for compensation. No limit on the amounts for funeral expense claims had been set out. The backlog on claims had risen to 450 000. She said it might be advantageous to tap into the expertise of the medical aid companies.

Discussion
Mr L van Rooyen (ANC) was concerned about the omission in the proposed Bill of a cap on legal costs. Clear limits on legal tariffs, as was the case with medical costs, were required. It was unclear whether the Fund took into consideration the private insurance that an individual might have with a private company.

Ms du Toit replied that a legal cost limit could still be included in the Bill or, alternatively, guidelines for negotiation with legal practitioners. A stronger role for private insurance would be beneficial, especially for more affluent people who wanted to insure their life-style in addition to the basic survival cover provided by the RAF. The Bill had to guard against double public insurance. All motorists had to have the right to claim from the RAF because rich and poor alike paid the same fuel levy at the fuel pump. The expert opinion of Adv Wim Trengove on the constitutionality of the barring of claims against guilty parties was available on the PMG website.

Mr M Mzizi (IFP) agreed that the stipulation of a standard consultation fee had to be considered. Funeral expenses were dictated in the African culture by the requirement that a beast had to be slaugthered, but a limited claim amount had to be stipulated. It was unclear whether the cost for continuous or repetitive treatment was adequately covered by the Fund.

Ms du Toit replied that a fixed fee of R5 000 for a funeral had been proposed, but that the quantum was so hotly disputed that it was dropped. Only the basic cost of putting a deceased person to rest had to be covered. The concern expressed would be raised again, and information from Members would be useful. Continuous treatment would be compensated in cases where an injury changed during the course of treatment. Control systems were required to ensure that emergency medical care was not dragged on and on. The devil had to be caught in the detail.

The Chairperson enquired about the cover which South African citizens enjoyed outside the RSA. He expressed concern about the corrupt practices of and exorbitant fees charged by some members of the legal fraternity, and suggested that those gaps be closed. Payments for funeral costs had to be limited as was done by Municipalities, and doctors’ fees had to be prescribed and a system of control established. He did not agree that comfortably off people who could afford private insurance should also benefit from the RAF cover.

Ms du Toit explained that the citizens of other SADC countries were covered in South Africa by the RAF, but that South Africans, like freight drivers, were without cover there unless they had private insurance. This applied to all other countries in the world except New Zealand. It was imperative that the different systems such as fuel levies within SADC be aligned. The proposed Bill did not have much on corruption, what was needed was an adequate number of dedicated prosecutors. The RAF had to tighten its own control.

Rev P Moatshe (ANC) was shocked by the unfriendly and aggressive attitude of South African drivers, as opposed to the situation in Holland where drivers respected pedestrians. It was an indication of a sick society and research on this was needed.

Ms duToit gave the assurance that road traffic enforcement was in place and that adequate administrative systems would improve matters.

The Chairperson wondered whether the RAF was not better placed within Social Services rather than the Department of Transport.

The meeting was adjourned.