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Transport Committee Briefed on RAF Draft No-Fault Policy

June 9, 2017

Department of Transport

The transport department wants to transform the current fault-based compensation system for road accidents into one more aligned with social security principles.

The department presented its draft policy paper on the proposed introduction of a no-fault policy into the Road Accident Fund (RAF) to the national assembly’s transport committee in Parliament.

Cabinet had approved the policy on 18 November 2009.

In introducing the discussion document to the members, the deputy-minister of transport, Mr Jeremy Cronin, provided a brief background on the history of the RAF, formed in 1996. He described the present system as being in a “crisis”.

The policy document outlines the challenges facing the RAF, including the high cost factor, the present emphasis on finding fault as opposed to addressing the immediate needs of accident victims and long settlement delays. Presently, the RAF faced a backlog of claims totalling R41 bn and an increasing number of accidents to deal with.

The draft policy seeks to “provide an effective benefit system which is reasonable, equitable, affordable and sustainable in the long term”.

Fault or wrongdoing would no longer be the basis on which a decision to award compensation or the amount thereof is made.

It also aims to expand access to the fund by providing benefits on a no-fault basis. The intention is also to reduce payouts to people with minor injuries. The fund would ensure that all road users were provided with emergency medical treatment. An emphasis would also be placed on rehabilitation and accident prevention.

In a nutshell, the draft policy aims to transform the current common law-based compensation system into one more aligned to the principles of the social security safety net.

As the document indicates, “a significant proportion of road users will neither have the financial means to access appropriate healthcare and rehabilitation, nor to commence legal action to recover their loss”.

The reformed RAF, to be known as the road accident benefit scheme, would provide benefits on a no-fault basis to all injured road users and families deprived of a breadwinner in a road accident.

It is hoped that the scheme will speed up the payment process. Payments would be made on a periodic basis as opposed to lump sums. Beneficiaries would be encouraged to return to work as soon as possible.

As regards the financial implications of the proposed scheme, funding will flow from a fuel levy augmented by surcharges on related matters such as the registration of certain types of vehicles and the sale of alcohol.

The scheme’s administrators will strive to ensure that a balance is maintained between costs and revenue.

The draft policy is to be published in the Government Gazette next week for public comment. Mr Cronin stressed that his department would approach all key stakeholders for consultation.

At this stage, the intention is for legislation to be introduced next year.