1.UNDERTAKINGS OBLIGATORY

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

Report).

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

expenses.

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

paid ?

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.

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 :-

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.

3.COLLATERAL BENEFITS

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

intended.

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.

7.RETROSPECTIVE IMPLICATIONS

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

prescribed amount".

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.

Yours faithfully