The Department of Transport published the Road Accident Benefit Scheme Bill, 2014 (“the bill”) for public comment on 9 May 2014. The bill provides for a new benefit scheme called the Road Accident Benefit Scheme (“RABS”) to compensate victims of road accidents and will replace the Road Accident Fund (“RAF”) as well as the compensation system administered by the RAF.
RABS is intended to replace the current fault based system, which according to the Department of Transport often results in extensive and costly litigation, prolonged claims finalization and high administrative costs. The current dispensation in terms of the Road Accident Fund Act 56 of 1996, as amended, (“RAF act”) currently provides for liability of the RAF upon proving that the road accident was caused by the fault of the driver of another motor vehicle.
Under RABS, fault on the part of the claimants or any other person involved in the accident will not be considered. It follows that the person responsible for the accident will also be allowed to receive benefits. It is argued by the Department of Transport that a no-fault scheme will create a new era of socio economic balance and will also remove the unintended negative consequences and financial burden on the families of the wrongdoer. In contrast with the current RAF dispensation, RABS will therefore provide benefits to all accident victims and their dependants, irrespective of who was at fault. However, these benefits will be extremely limited in comparison to the benefits that are currently available to the innocent victims of road accidents.
Limitations would apply in respect of the claims for long term loss of income or loss of support. The RABS bill provides that no beneficiary of temporary or long term income support may receive less than the average annual national income, but this is merely an amount the Minister of Transport will decide in consultation with the Minister of Finance.
In terms of the draft regulations the current average annual national income amounts to R43 965.00. The effect hereof is that a person who is unable to prove that he or she earned an income at the time of the accident, or what the amount thereof was, would be regarded as having earned an annual income of R43 965.00. However, wealthier beneficiaries’ loss of income will be limited (as is also currently the case in terms of the RAF dispensation.) The basic principle of quantification of damages entails that a person should be placed in the position he or she would have been in had the accident not occurred. If a person was therefore not earning an income at the time of the accident or prior thereto he or she does not suffer any loss of income as a result of the accident. There might in certain circumstances be a reduction in future earning capacity. The effect hereof is that a person who may have negligently caused an accident and who did not work prior to the accident, will now receive an income of at least R43 965.00 per year until such time as the person has been rehabilitated while innocent victims of road accidents’ loss of income, to the extent that it might be proven, will be limited.
A long term income support beneficiary is not entitled to inflationary adjustments of the amount of the benefit paid by the administrator but the Minister may, subject to affordability, from time-to-time, adjust the long term income support benefit by notice in the Government Gazette to take account of the effects of inflation.
Consider the following scenario: a minor child, who has not had the opportunity to qualify himself and earn an income sustains injuries in a motor vehicle accident leaving him severely incapacitated and unable to continue with his schooling or obtain employment in the future. Would his annual income be regarded as being equal to R43 965.00 while in terms of the current RAF system, he would be entitled to prove what he would have been capable of earning by taking account of parents’ and siblings’ academic and employment levels.
Family support benefits, payable in cases where the breadwinner passed away as a result of injuries sustained in an accident, will be capped as prescribed by the Minister of Transport. Benefits may be reviewed from time-to-time and terminated, suspended or revised at any time. A surviving spouse’s benefits would only be payable for a period of 15 years or until the surviving spouse turns 60, whichever period is the shortest. Currently a surviving spouse is entitled to loss of support until such time that she would have been dependant on the deceased spouse which is usually regarded as the deceased’s date of retirement.
The RABS bill also aims to introduce a system of preferred healthcare providers in terms of which the treatment that a claimant must undergo may be prescribed and the medical service provider to whom the injured person must submit himself may be designated. Furthermore no payments will be made in respect of general damages (commonly known as “pain and suffering”).
The scheme will be administrated by the Road Accident Benefit Scheme Administrator (“RABSA”) which will eventually replace the current RAF as soon as the bill is enacted. It will be funded by means of a fuel levy and monies appropriated by Parliament. It is envisaged that benefits will be paid in instalments as opposed to the current system of lump sum payments. Proponents of RABS argue that the structured or monthly payments of benefits will ensure that the benefits are used for its intended purpose and also that they are available when needed in the future and payment will cease when the beneficiary is successfully rehabilitated and returns to work. Lump sum payments results in claimants being over compensated, so the argument goes. As previously indicated, these payments will not increase in line with inflation.
It is however uncertain how the administrator will cope with the workload incumbent upon administrating monthly payments if the current RAF is not able to cope with its workload and within a system wherein once off lump sum payments are being made. No doubt more personnel will have to be appointed, obviously at additional costs, to administer the new system.
The Association for the Protection of Road Accident Victims (“APRAV”) was established by concerned parties in response to the RABS bill and argues that the bill is not reasonable, fair, equitable, practical, sustainable or cost effective. In its current form, it has far reaching adverse effects for the road users of this country.
The current RAF act excludes the liability of the owner, driver or employer of the driver of the vehicle responsible for the accident and no civil action may be instituted against these persons. The position under RABS will remain the same despite the fact that benefits payable under RABS would be less than in terms of the current dispensation and without ever being able to hold the common law wrongdoer financially accountable.
In terms of the bill RABSA must accept or reject a claim within 180 days of receipt of the claim and if it fails to do so, the claim is deemed to have been rejected. A claimant would then have the right to appeal to the appeals body established by the administrator. The claimant may also appeal within 30 days after the administrator has made a decision. The appeal body would only be subject to the review jurisdiction of the courts in terms of the promotion of Administrative Justice Act 3 of 2000. Claimants would therefore not have a right to appeal to the courts.
The overall effect of the proposed legislation is that a person who has for example been paralysed as a result of the negligence of a drunken driver, would be entitled to the same benefits as the person who caused the accident without a right to claim compensation from the individual who caused the accident.
It is therefore essential for all road users to ensure that they have made provision for sufficient personal insurance in the case of injury or death to provide for their and their families’ financial needs.
- An insert regarding the RAF / RABS was aired on Carte Blanche on Sunday, 13 March 2016.
By: Aneen De Wet (LL.B; LL.M)