Road Accident Fund Draft Amendment Bill

1
Road Accident Fund Draft Amendment Bill

• Presentation to the
• National Council of Provinces Select Committee on
  public services
• 1 June 2005

2
Road Accident Fund Commission
Implementation for the restructuring of the RAF
will be presented to Cabinet in mid 2005. The
Restructuring of the RAF calls for a policy
change in compensation for Road Accident Victims
and is not addressed in this Bill. However, some
recommendations could be incorporated into draft
Bill as they speak to key processes to be
incorporated irrespective of any policy change,
these are Compensation for all road users Injury
threshold to access general damages and related
assessment Medical tariffs Exclusion of secondary
victims Prioritisation of golden hour treatment
Critical to ensure that the risk associated with
restructuring is contained
3
Memorandum
Improve the governance of the Fund and address
issues which would affect the liquidity of the
Fund. Amendment Bill will only apply to claims
that arose after the commencement of the Act. The
Department took the oral and written comments and
inputs given during the consultation process in
the Portfolio Committee Hearings in 2003,
regarding B64-03, into account the Department
presented the Draft Bill to the Road Accident
Fund Board and their comments were incorporated
National Treasury was consulted on both the Bill
and the financial implications of the Bill.
Bill 64 of 2003 as revised based on key
principles of equity, fairness and transparency
4
Long Title
To amend the Road Accident Fund Act, 1996, so as
to extend the powers of the Fund regarding the
conclusion of agreements to alter the financial
year of the Fund to make new provision regarding
the Board of the Fund to further regulate the
Funds obligation to compensate a third party for
non-pecuniary loss, for certain hospital or
medical expenses, for future loss of income or
support and for funeral expenses to require the
Fund to compensate a provider of emergency
medical treatment directly, in accordance with a
certain tariff to repeal certain provisions
limiting the liability of the Fund to R25 000 in
respect of claims to make further provision
regarding the instances where the liability of
the Fund shall be excluded to substitute the
provision authorising the Minister to make
regulations to authorise the Minister to adjust
certain amounts in order to counter the effect of
inflation and to provide for matters connected
therewith.
REVISION
5
Governance Powers and Function of Fund
S(4) addition of s(2)(i) S(4) addition of
s(4)(a)
Conclude any agreement with any person for the
performance of any particular act or particular
work or the rendering of particular services
contemplated in this Act. The Fund may conclude
an agreement with any other organ of State
regarding any matter provided for in this Act in
order to improve or ensure (i) the effective
management of the Fund (ii) the efficiency of
the Fund (iii) co-ordination of
functions (iv) co-operative governance
contemplated in Chapter 3 of the Constitution.
6
Governance Financial year and budgeting
S(6) substitution s(1)
The financial year of the Fund shall run from 1
April of any year to 31 March of the following
year
7
Governance Board of Fund
S(10) substitution s(2)(c) S(10) substitution of
s(6) (7) S(10) deletion of s(8)
hold office for a period of three years as from
the date of appointment of such member, which
period may be extended for a further period not
exceeding three years. The Minister shall appoint
two of the members of the Board as Chairperson
and Vice-Chairperson, respectively. Abolish
Executive Committee
8
Governance Appointment of Board
S(10) deletion of s(9) Revision S(10)
substitution of s(9)
Removal of process of appointment as well as the
provisions for the selection committee. Revision
For the purposes of the appointment of the
members of the Board referred to in subsection
1(b), the Minister must, though the media and by
notice in the Gazette, invite nominations of
persons as candidates for such appointments from
a person or body having an interest in the
operations of the Fund. Proposed by PPC be a
person who commands a knowledge of the management
of insurance or compensation matters
9
Governance Appointment and Functions of CEO
S(12) substitution of s(1) S(12) substitution of
s(2)
The Minister shall with the concurrence of the
Board, appoint the Chief Executive Officer of the
Fund on such terms and conditions of employment
as the Board may determine exercise the powers
and shall perform the functions of the Fund
mentioned in section 4.
10
Transparency Limitation on Compensation for
General Damages
S(17) substitution of S(17) with S(17)(1)
Revision
Provided that the obligation of the Fund to
compensate a third party for non-pecuniary loss
shall be paid by way of a lump sum Provided
further that the Fund's obligation to pay such
compensation shall only extend to a third party
who suffers a serious injury as contemplated in
subsection (1A)
11
Fairness Threshold to access general damages
S(17) substitution of S(17) with S(17)(1)
Provided further that the Fund's obligation to
pay such compensation shall only extend to a
third party who suffers a serious injury
12
Overview General Damages
Road Accidents
Claimants
Average annual growth 3.2
Average annual growth 2.6
Average annual growth 0.8
Trends in compensation payment
Transaction cost
13
Fairness Definition of Serious Injury
S(17) substitution of S(17) with S(17)(1A) (a)
Definition serious injury means a permanent
injury which leads to total disablement or
paralysis or dysfunction of a vital organ, and
includes brain injuries, loss of sight, or loss
of a limb or the use thereof or such other
serious injuries as the Minister may
prescribe. Revision remove definition to include
in assessment method
14
Fairness Assessment of Serious Injury
S(17) substitution of S(17) with S(17)(1A) (a),
(b), (c) (d)
Assessment of serious injuries shall be based on
a prescribed method adopted after consultation
with medical service providers and shall be
reasonable in ensuring injuries are considered in
relation to the circumstances of the third
party. The Fund may, with the concurrence of the
Minister, develop a system in terms of which
medical practitioners may be accredited with the
Fund in order to carry out any assessment. The
method of assessment shall entail assessment by
provincial medical panels consisting of a
representative from the Fund and external experts
representing key medical fields relevant to road
accident injuries.
15
Fairness Remove statutory obligation to pay
party-to-party costs
S(17) substitution of S(17) and deletion of
s(2)
(2) Upon acceptance of the amount offered as
compensation in terms of subsection (1) the third
party shall be entitled to the agreed party and
party costs or taxed party and party costs in
respect of the claim concerned. State Law
Advisor Constitutional opinion that right to
access courts not infringed.
16
Transparency Undertakings
S(17) substitution with S(17)(4)(a)
Fund shall be entitled, after furnishing the
third party concerned with an undertaking to that
effect or a competent court has directed the Fund
or the agent to furnish such undertaking, to
compensate a) the third party in respect of the
said costs after the costs have been incurred and
on proof thereof or b) the provider of such
service or treatment directly, in accordance
with the tariff
17
Transparency Medical Tariffs
S(17) addition of s(4A) (a)
The liability of the Fund or an agent regarding
the tariff shall, in the case of compensation
for (i) public health care, according to tariffs
determined for providers of such services and
(ii) private health care, according to the
reference price list contemplated in section
90(1)(v) of the National Health Act, and such
tariffs shall be prescribed by the Minister after
consultation with the Minister of Health. The
tariff contemplated in paragraphs (i) and (ii)
shall be prescribed after consultation with
medical service providers and shall be reasonable
compensation, taking into account factors such as
the cost of such treatment and the ability of the
Fund to provide the compensation.
18
Transparency Cap loss income and support
S(17) substitution with S(17)(4)(b)
includes a claim for future loss of income or
support, the amount payable by the Fund or an
agent- (i) shall be paid by way of a lump
sum (ii) shall be calculated up to the date the
third party would have reached the age of 65, but
in the case of a claim for support by a dependent
child, shall be calculated up to the age the
child would reach 21 years and (iii) shall be
calculated up to an amount not exceeding R160 000
per year.
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Fairness Emergency Medical Treatment
S(17) addition of s(7)(a,bc) Revision
When a person has provided a third party with
emergency medical treatment, the Fund shall
compensate such person directly, according to the
tariff contemplated in subsection (4A),
irrespective of any negligence or wrongfulness on
the part of any person..
20
Equity Removal on limitation on passengers
S(18) deletion of s(1)(a)(b) Revision 18(2)(a)
and 19(b)

• The liability of the Fund or an agent to
  compensate a third party who, at the time of the
  occurrence which caused that injury or death, was
  being conveyed in or on the motor vehicle
  concerned,
• for reward or
• in the course of the lawful business of the owner
  of that motor vehicle or
• in the case of an employee of the driver or owner
  of that motor vehicle, in respect of whom
  subsection (2) does not apply, in the course of
  his or her employment or (
• for the purposes of a lift club where that motor
  vehicle is a motor car,
• or in the case of a person who was being conveyed
  under circumstances other than those referred to
  in paragraph (a), shall be limited to the sum of
  R25000

21
Transparency Specification of funeral costs
S(18) substitution of s(4)
The liability of the Fund or an agent to
compensate a third party for any loss or damage
contemplated in section 17 which is the result of
the death of any person shall in respect of
funeral expenses be fixed at R5 000.
22
Governance Excluded liability
S(19)(f) addition of (f)(iii) Revision
Revision to attend a meeting arranged at the
request of the Fund in order to elucidate matters
relating to the claim, or at such meeting fails
to respond truthfully and to the best of his or
her knowledge to questions put.
23
Governance Excluded liability
S(19) addition of (g)
suffered as a result of an emotional shock
sustained by that person when that person
witnessed or observed or was informed of the
bodily injury or the death of another person as a
result of the driving of a motor vehicle
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Transparency Claim for compensation against
other
S(21) substitution Revision
Revision When a third party is entitled under
section 17 to claim from the Fund or an agent any
compensation that third party may not claim
compensation in respect of that loss or damage
from the owner or from the person who so drove
the vehicle, or if that person drove the vehicle
as an employee in the performance of his or her
duties, from his or her employer - (a) to the
extent that the Fund or such agent has already
paid or has agreed to pay or is obliged to pay
the compensation or (b) unless the Fund or such
agent is unable to pay the compensation.
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Amendment requested Financing
S(5) Revision
Financing provision for the Fund to be procured
through SARS for fuel produced or imported.