The proceedings, thus far, have patently demonstrated the importance of the role fulfilled by parliamentary standing committees in fostering transparency in government as well as reinforcing the independence of parliament as a legislator and the right of civil society to participate in the process.

Numerous written submissions have been handed to the committee and verbal presentations made by a wide range of individuals and organizations. For the sake of convenience we have briefly summarized, hereunder, the proceedings to date for consideration when commenting on the current amended draft bill before the committee.

The bill was officially published on 3 October 2003 and public hearings commenced on 14 October 2003.

On 14 October 2003 after presentations were made by the ROAD ACCIDENT FUND and THE DEPARTMENT OF TRANSPORT verbal submissions were heard from: -

All of the above strongly opposed payment of compensation by way of compulsory installments. The Coalition, the Law Society, SAAPIL and the GCB also vigorously objected to the proposal to make changes retrospective. All complained that they had not been properly consulted.

Andre Calitz, speaking for the COALITION expressed concern with the pace at which the bill was being considered. He pointed out that the amendments to 17 (4)(a) (b) &(c) totally disregarded the findings of the Satchwell Commission, and that the bill, itself would be impractical to implement and would lead to great hardship for road accident victims. It would also effectively deny them health care of choice and legal representation.

Ari Seirliz, speaking for QASA, opposed installments on two main, grounds, namely, that this would deny a seriously injured person the finances to make essential life style changes and that the current experience is that undertakings simply do not work. He described the undertakings department of the RAF as obstructive and unhelpful and said that they made people’s lives a misery. He quoted the SATCHWELL COMMISSION’S findings that only 14.8% of undertakings are used and that 90.8% of undertakings issued to blacks are dormant.

Reg Munro, an actuary, speaking as part of the delegation for the Law Society addressed the cash flow and long-term liability impact on the RAF flowing from the bill. He pointed out that whilst there may be a short term easing of cash flow requirements, the crisis would resurface in the near future and the actual liabilities of the RAF would increase, considerably, as a result. On an example of a loss of income of R3 000.00 per month the RAF’s end liability to the claimant would increase by 38% by paying in installments as opposed to a lump sum as per the current system.

Advocate Renata Williams, speaking for SAAPIL pointed out that no vision emerged from the proposals and there was no indication that the proposals were based on any long term or strategic planning for the future of road accident benefits in South Africa.

Advocate Eric Dane, speaking for GCB pointed out that the intended beneficiaries of the RAF were the victims of road accidents whose rights required protection. The current bill seriously eroded those rights.

After the sessions on 14 and 15 October 2003, the public hearings were extended to 27 and 28 October 2003.

On 27 October 2003 the DEPARTMENT OF TRANSPORT introduced a further draft, which differed materially in several important aspects from the bill. It was later made clear, however, that the bill was still the official proposal for consideration by the committee.

Verbal submissions were heard from the following: -

Mr S Sangweni, the president of SACO supported all clauses in the bill. He explained that SACO lobbied on behalf of any person using public transport.

Mr M Nkhwashu the National Development Facilitator of NCPPD commented that there had been a lack of consultation particularly within the disabled sector. He also said that the RAF attempted to play too many roles in the claims process thereby not doing justice to the claimant. He called for a regulator to monitor the RAF and urged the committee to interview claimants and to pay random visits to the RAF to observe operations. Lack of professionalism by RAF staff has caused havoc in the administration of claims.

Ms Howitson, Vice President of NCPPD said that the NCPPD viewed the bill as an affront to all persons with disabilities whether injured in a motor vehicle accident or disabled in a different way. The manner in which the disability sector had been ignored resulted in unmitigated discrimination and called into question the seriousness of the RAF in easing the life of its petitioners. She also said that the bill made it apparent that there were no persons with disabilities within the RAF. The NCPPD was strongly opposed to installments.

Ms G Humpheries, speaking for FEDUSA opposed installments. She also expressed concerns regarding the consultative process, administrative spending at the RAF, taxation and the cost of additional insurance.

Dr S Kariem, speaking for GSH, seemed to support a mixed system of lump sums and installments. GSH, as part of a pilot project in the western Cape had appointed DELOITTE & TOUCHE to identify potential claimants, assess, submit and collect outstanding payments due to GSH by the RAF.

Ms S Carter on behalf of HEADWAY pointed out that the poor did not have money to pay for treatment up front. Current staff at the RAF could not cope with the process of reimbursing suppliers or therapists. The installment process would make purchases of special equipment impossible. The bill might improve the cash flow of the RAF but it would be catastrophic for families of brain-injured victims.

Ms Anderson said that there were many problems with undertakings. They were often not accepted by pharmacies and other providers. Those that did accept undertakings had to wait for long periods for payments. In general the RAF did not administer undertakings well and made life very difficult and confusing for victims.

Advocate J Hattingh for AFCT concentrated on tariffs and compulsory mediation/arbitration. Reasonable payment cycles should be created and the risk component should be accommodated in the tariff.

Mr M Toni for DPSA argued that the RAF focused more on minimizing payment than it did on providing adequate compensation to victims. He was in favour of no fault and integrating the RAF into a holistic social security framework.

Advocate K Worrall-Clarke representing HASA expressed concern regarding the tariff and possible prejudice in relation to emergency medical treatment.

On 28 October 2003 further submissions were heard from the following: -

Mr H Smuts from the office of THE STATE LAW ADVISER expressed the opinion that the bill did not contain any provisions that could be construed as unconstitutional.

Advocate Abri Meiring, representing SACOB said that the bill should be referred to NEDLAC before proceeding any further. He expressed concern regarding the constitutionality of the provisions regarding collateral benefits and pointed out the difference between indemnity insurance and sum assurance.

Ms P Coetsee gave a case history of a victim who had an apportioned undertaking, who after ten years still had not had his bathroom modified. She voiced her concern regarding the increase of the ambit of undertakings, which she believed would dis-empower future claimants.

Mr G Maggot who supplies wheelchairs and who, himself is paraplegic, stressed the importance of getting the right equipment from the start and receiving lump sums. He also urged the RAF to speed up administration and payment on undertakings.

The committee reconvened on 5 November 2003.

Submissions were heard from: -

Mr S Kgara representing COSATU recorded that THE DEPARTMENT OF TRANSPORT and the RAF had failed to table the bill at NEDLAC. This was against a background of a series of such omissions, including the failure to table for discussion in PARLIAMENT and at NEDLAC the SATCHWELL REPORT and the recommendations of the INTERGOVERNMENTAL COMMITTEE made to CABINET.

He also expressed serious concerns relative to the RAF’s operational deficiencies. He went on the say that: -

• COSATU cannot support this bill even though it is merely intended as an interim intervention, unless the Department and the RAF management first engage NEDLAC social partners on the RAF COMMISSION report and the INTERGOVERNMENTAL report to CABINET on which basis this bill has been proposed;
• In making the issuing of undertakings mandatory the RAF should also take drastic measures to improve it’s undertaking’s department’s performance firstly in relation to it’s current estimated up to 80% short-fall before it could be ready for legislatively compulsory issuing of Undertakings to all awarded victims

Ms A Rosenberg speaking for LOA opposed the provision on collateral benefits, which she described as a major policy shift from the original Act.

Advocate Meiring, also representing LOA pointed out that the common law currently did not permit double indemnity and there was therefore no need to legislate for this.

Professor Krige for BHF supported the stance taken by LOA and pointed out that many medical aid schemes excluded payment for expenses when a third party was liable. Strict interpretation of the clause would have serious economic effect on all members. He also stated that the prescribed tariffs should not be lower than the appropriate BHF tariff. There were extensive consultations in the past regarding other tariffs.

Ms K Lowenherz representing DOH requested clarity regarding payment at the UNIFORM PATIENT FEE for acute and rehabilitative treatment rendered to road accident victims and the establishment of rehabilitative centers of excellence based on best clinical practice.

Dr E Allers speaking for SASOP said that it would be irresponsible and unconstitutional to exclude patients who suffered from emotional shock while witnessing a road accident. He said that there should be strict guidelines determining eligibility.

After the submissions were heard, THE DEPARTMENT OF TRANSPORT introduced yet a further draft, WORKING DOCUMENT 3. In this document the concept of partial lump sums for general damages was introduced. The initial draft provided for a lump sum of R25 000.00 or 20% of general damages, the balance payable over 15 years. However this was quickly changed to

R15 000.00 or 40%, as a lump sum, the balance payable over 7 years. It was somewhat difficult to understand the motivation for the changes or for that matter, the final proposal. Alternative proposals were also made in respect of collateral benefits and mediation arbitration.

During the course of the afternoon deliberations the DEPARTMENT OF TRANSPORT advised that THE MINISTER OF TRANSPORT had agreed to withdraw the bill rather than rush through "botched" legislation.

In response to this the CHAIRPERSON said that whilst he appreciated the offer he would rather that the bill be redrafted leaving out the most contentious issues for consideration by the committee by the following Wednesday, 12 November 2003. The most contentious issues are the proposed amendments to 17(4)(a)(b) & (c) and the transitional arrangements.

We have, above, briefly, summarized only the verbal submissions. There are many more written submissions from various persons and associations (including THE BLACK LAWYERS ASSOCIATION) before the committee. Most, if not all of these submissions are opposed to compulsory installments for all heads of compensation and retrospective application.

The overwhelming public response to the bill has been to reject compulsory installments. It was observed by the committee that the proposed amendments to 17(4)(a)(b) & (c) had provoked considerable anxiety in the public mind for several reasons, not the least of which being the inability of the RAF to deliver. There has also been strenuous opposition to retrospective application of any amendments.

On 12 November 2003 the committee reconvened and the DEPARTMENT OF TRANSPORT introduced certain redrafted clauses to be read with the original bill. The redraft retained compulsory undertakings for all heads of damages, a watered down retrospective provision and the partial lump sum provision in respect of general damages, first introduced in WORKING DOCUMENT 3.

THE CHAIRPERSON stated that in the light of the new document, which had not incorporated the suggestions of the committee made the previous week, it would not be feasible to proceed with formal consideration of the redrafted bill, as this would not give credence to due process. The committee agreed that they would have to familiarize themselves with what was now before them and embark on a fact-finding exercise before proceeding to formal deliberation on the amended bill.

The committee has made a preliminary analysis of the public response to the bill to date and has categorized the proposals under two broad headings, namely, controversial clauses (" the real issues") and non-controversial clauses (" the inner clauses").

Section 17(4A) has been introduced which softens the effect of section 17(4)(a). Whilst any cash payment for future medical expenses (especially in apportioned claims) is welcomed, it is hard to see how this concession can improve the cash flow situation of the FUND, which currently tenders undertakings in respect of all future costs including passenger’s limited claims and apportioned claims.

As an apparent "sop" to the several concerns raised regarding the amendments to section 17(4)(b) & (c) it is now proposed that R15 000.00 or 40 % of general damages be paid as a lump sum, the balance to be paid over 7 years in "equal annually adjusted inflation related installments"

It is apparent from the brief summary of the submissions made above that lump sums are needed by accident victims to assist them in: -

• purchasing essential equipment and making essential life style changes;
• making up the difference on apportioned undertakings for future expenses;
• regaining some form of independence;
• regaining some form of dignity
• empowering themselves and allowing them to regain control over their own lives;
• ensuring that they have access to legal and other professional assistance in pursuing their claims for compensation in a delict based system and in enforcing their undertakings.

It is quite clear from the submissions made by, inter alia, QASA, NCPPD, MR MAGGOT, PETRA COETSEE, HEADWAY and SUE ANDERSON that paying a portion of general damages (with a minimum of R15 000.00) will not even begin to address the concerns voiced by the public. It should also be bourn in mind that, for the most part, awards for general damages for pain and suffering, disfigurement and loss of amenities are relatively moderate. The submissions made it clear that installments for general damages and loss of income/support are strongly opposed and will give rise to great hardship.

It is suspected that the RAF’s statistics on general damages are inaccurate and are probably distorted by the inclusion of reduced earning capacity as a component of general damages. There is a gray area between future loss of earnings and reduced earning capacity. At present the distinction has little practical effect. Should the proposed amendment be introduced this will no doubt become a contentious issue that will result in increased litigation.

The fundamental premise for installments is, ostensibly, to improve the cash flow of the RAF and ensure its sustainability as an interim measure. The presentation and further submissions to be made by REG MUNRO will demonstrate that the current bill, as amended, will create increased liability for the RAF and that any temporary short term easing of cash flow that might result, may be more than offset by the costs of implementation and transaction costs.

The fact that the installments are adjusted for inflation may not relieve the RAF of paying mora interest on the outstanding balance from time to time. As it is clear that the RAF will not be investing the unpaid capital this will result in a further increase in the future liabilities of the RAF. This is an aspect that may well generate considerable litigation.

It is also apparent that the proposed provisions will spawn a spate of litigation, to "determine the amount payable" from time to time in respect of loss of income or support as well as the amount of the "equal annually adjusted inflation related installments". The same claim will have to be re-visited time and time again in order to resolve disputes on the "amount payable".

We are further advised that it may well by impossible to create any kind of automated system to calculate the "annually adjusted inflation related installments". This will mean the appointment of many highly paid actuaries and other professionals to make the periodic calculations necessary in each claim.

There is serious doubt that a system of payment of compensation in installments over many years will be practical to implement. Apart from the cost of delivery and the potential for fraud, there is also the reality that many persons entitled to compensation will simply not receive payment. Regard should be had to the COIDA and DEPARTMENT OF SOCIAL WELFARE experience. At present a once off payment is made to the attorney involved who has a duty to report and ensure that the claimant receives payment. The attorney is accountable and readily identifiable. The claimant has recourse to professional governing bodies in the case of abuse and is, by and large, covered by the Fidelity Fund and professional negligence insurance. A responsible attorney can advise a claimant on how to protect the capital payment, assist in setting up trusts, advise on investments and/or refer the claimant to an appropriate and accountable professional adviser.

The current proposal seeks to draw a distinction between claims that are submitted and claims that have already arisen but have not yet been submitted to the RAF. With respect, this distinction is artificial and discriminatory. It can sometimes take many months from the time when a claimant consults an attorney to make a claim and when the claim is actually submitted. In some cases, submission is held up for years, pending an inquest report or co-operation from the OFFICE OF THE COMPENSATION COMMISSIONER. To suggest that a claimant or a claimant’s legal advisor has not yet embarked upon a strategy or that rights have not yet vested just because the claim has not been physically delivered to the RAF is unfair.

From the moment that an accident takes place the claimant incurs liability for expenses and suffers damages.

From a constitutionality point of view, there may be some merit in attempting to draw a distinction between pending claims and a claim that has not yet been initiated. From a fairness and public policy point of view there can be no merit in such an argument.

We would suggest that the section provides that the tariff prescribed shall be not less than any national tariff prescribed in terms of the NATIONAL HEALTH ACT.

It is noted that the operation of this section will be delayed pending promulgation of the appropriate tariffs.

The common law already prohibits double compensation by virtue of the collateral source rule. If there is felt to be a further need for disclosure (in addition to section 19 of the Act) it is suggested that section 19 (e) be appropriately amended.

Whilst in principle it is agreed that claims by foreign claimants need to be addressed so as not to expose the RAF to catastrophic payments, the current wording needs more thought. How often will THE MINISTER have to make determinations? Depending on the overall cap, will it, for example, be necessary to present evidence to THE MINISTER as to what a foreign doctor would have earned had he been ordinarily resident in South Africa? How would one determine what a ski instructor would have earned as a South African resident?

We have not had any input from the RAF as to whether foreign claims are re-insured and if so to what extent and the cost thereof. We also have no indication as to what the cap will be.

This is a policy decision as to whether parliament wishes to change the common law as restated in the SAULS’ judgment of the SUPREME COURT OF APPEAL. The LAW SOCIETY maintains its position as per its first submission.

It should be clarified that the mediation process is not compulsory. The wording is somewhat vague. The present draft states that the claimant and the RAF "shall endevour" to mediate. What precisely does this mean? If the claimant sends a letter to the RAF inviting them to mediate and no reply is received within 7 days has the claimant complied with the provision? What will be the availability of "in house mediators"? What time frame is contemplated for the mediation process? Will this merely serve to further delay processing of a claim and add to the transaction costs? What about prescription? Will this be interrupted during the mediation period? Will mediation take place before or after the 120 days waiting period?

If the RAF is sincere about speeding up delivery then we would suggest that the clause be altered to provide that the RAF shall be entitled to call for mediation within 60 days of the claim being submitted, that the process shall be completed before expiry of the120 days and that on expiry of the 120 days, if the claim is not settled at the mediation process the claimant will be entitled to proceed with litigation or arbitration.

Our understanding is that the mediation provision was inserted to try to save the RAF the costs of the First Meetings. The reality is that at many First Meetings the RAF is not ready to deal with the matter, the files are unavailable or "lost" and the official delegated to attend the First Meeting has no instructions as to how the claim could be resolved, has not read the papers and is not able nor authorized to make any offer.

Surely the answer is to impose more efficient claims and disciplinary procedures within the RAF that will obviate the necessity for formal mediation. The problem often is that the claimant can get no meaningful response from the RAF and so has to resort to litigation or arbitration. There is no doubt that if a RAF official telephoned a claimant’s attorney and offered to meet, informally, in order to attempt to settle the claim, virtually every claimant’s attorney would agree. Even more so, if realistic offers were made early on in the claims process many more matters would settle without the necessity of any formal proceedings.

There are, of course, matters where the RAF has applied its mind properly and there is a dispute or difference of opinion. It is unlikely in these cases that mediation in front of an in house mediator will produce significant success. To a large extent it will depend on the skill and experience of the mediator and the objectivity with which the proceedings are conducted. Properly qualified and experienced people will come with an appropriate price tag. We have no indication what the projected costs for the mediation program are and the savings it is hoped will be achieved.

• There are many aspects of the bill, as amended that require further thought and investigation;
• There has been a strong lobby for the whole bill to be referred to NEDLAC for consideration in conjunction with the TAYLOR COMMISSION REPORT and the SATCHWELL COMMISSION REPORT;
• The overwhelming majority of opinion has been to reject the proposals for payment of compensation by way of compulsory installments and retrospective application of the amendments, despite which the current amended bill contains these very provisions;
• The proposals do not appear to achieve any savings for the RAF either in the form of cash flow or long-term liabilities and, in fact, will serve to increase both the cash flow demands and long-term liability of the RAF;
• Serious and cogent doubts have been raised as to the ability of the FUND to deliver in an installment system, particularly if regard is had to its track record on undertakings currently issued in terms of section 17(4)(a). This is not the first time that the FUND has been taken to task in regard to delivery in general and undertakings in particular. If its mode of operation has not changed in the past several years, what sustainable grounds are there to argue that there will be any change in the future, particularly, if claimants do not have legal and other professional representation;
• Having regard to the facts and the findings of the SATCHWELL COMMISSION on the reasons for the FUND’s failure to deliver (which are attached to our original submission) it is incomprehensible why it is claimed that this legislation will improve the efficiency of the FUND
• It is submitted that this legislation and particularly the "REAL ISSUE" clauses: -
• has provoked public opposition from many and varied quarters;
• requires further extensive consultation, debate and investigation;
• does not achieve the very purpose for which it was ostensibly promoted;
• is discriminatory;
• is not in the public interest; and
• still contains provisions which may be susceptible to constitutional attack.