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About the proposed Road accident benefit scheme: are there any benefits?

In terms of the RAF’s Integrated Annual Report for 2013/2014, the benefits of the proposed Road Accident Benefit Scheme (RABS) are listed as follows:

  1. Providing for a fully funded scheme that is reasonable, equitable, affordable and sustainable;
  2. Expanding access to benefits by removing the requirement to establish “fault” as a determinant to qualify for benefits and reducing disputes by removing the “fault” requirement and by providing pre-determined benefits;
  3. Making available timely and appropriate healthcare benefits based on a reasonable tariff;
  4. Simplify claim procedure;
  5. Wider cover to persons in road accidents;
  6. Fewer exclusions from benefits;
  7. Defined benefits which promote affordability;
  8. Alleviate the burden of our Courts through the establishment of an internal appeal procedure

Find out more about the problems with the current RAF system and contact us about RABS today.

Are these benefits? Let's examine these points.
1. Providing for a fully funded scheme that is reasonable, equitable, affordable and sustainable

During the CEO of the RAF’s annual submission to the Transport Portfolio, Dr. Eugene Watson admitted that the Fund’s Actuaries have not yet quantified RABS. During a recent, so called public consultation session held in George on the 18th of September 2014, Mr. Chris Willemse of the RAF confirmed that RABS will not be dependent on NHI as a pre-requisite for its implementation.

Mr. Willemse admitted in Kroonstad on the 25th of September 2014, that no tariffs had been agreed upon between RAF and any private sector, as it would be premature in the light of the fact that the Act is still in its early stages of development. According to Mr. Willemse confirmed that RABS will be funded by the fuel levy and the current and remaining RAF claims from Parliamentary concessions.

No service level agreements had been secured between RABS and private health care victims under RABS will be no better off than under the current system.

Question
More Affordable?

How can the RAF say that this would be a more affordable alternative to the current RAF system of compensation if they are nowhere close to know how much the system is going to cost the taxpayer?

2. EXPANDING ACCESS TO BENEFITS BY REMOVING THE REQUIREMENT TO ESTABLISH “FAULT” AS A DETERMINANT TO QUALIFY FOR BENEFITS AND REDUCING DISPUTES BY REMOVING THE “FAULT” REQUIREMENT AND BY PROVIDING PRE-DETERMINED BENEFITS

Expanding benefits based upon a “no fault” system would imply a more expensive system as more road accident victims will be able to apply for benefits.

“No fault” would add to the already “top heavy” demand on claims and compensation and had been proven to be a costlier that a fault based system.

The fact that a system is “no fault” based does not automatically grant a victim access to all the benefits, only emergency medical care.

Consecutive commissions of enquiry into the compensation system held that no fault is unaffordable as it would just about double the government’s compensation bill.

Question
Is A No Faults System The Answer?

Do we really want to compensate the hijacker and habitual criminal? Would this be appropriate for South African circumstances?

To speak of pre-determined benefits is a fallacy, as each and every individual victim’s circumstances and requirements differ and change as they progress through the trauma of an accident and the recovery period that follows.

The RABS Administrator will be able to review, revise and terminate the claimants’ benefits with a system of medical peer review that is supposed to facilitate objectivity and consistency of the medical and disability assessments.

The fact that the administrator may withdraw benefits at any given time (taking into account budget constraints and changes in personal circumstances) would imply that the road accident victim would have no long term financial security under the RABS Administrator.

3. Making available timely and appropriate healthcare benefits based on a reasonable tariff

As at the date hereof no tariffs let alone reasonable tariffs had been agreed upon with any of the private health services, according to Mr. Willemse of the RAF. The RAF claims, according to Mr. Willemse, that RABS will not be dependent on the implementation of a National Health Insurance nor will they wait for it to be implemented. Road accident victims already receive appropriate healthcare where available at private, alternatively provincial health care service providers.

A victim would be expected to finance further medical treatment until such time that a claim has been approved (a claim may only be submitted 60 (sixty) days after the accident).

The nature and extent of treatment falls within the sole discretion of the administrator. This will imply that the injured will be denied the freedom to choose the nature and extent of treatment.

Question
What is a reasonable tariff?

Road accident victims currently enjoy access to immediate medical care and do not have to qualify under stringent rules to qualify for long term medical care.

Under RABS a victim will receive emergency medical care and would have to apply for long term medical care under the scrutiny of the RABS Administrator.

How can RABS promise or promote a service which is far from being secured and may only amount to “lip service” should the RABS Administrator fail to secure service agreements with private health care services.

Under the current RAF Act, a road accident victim is far less at risk of being held liable for medical expenses as it would be covered by his/her claim.

In terms of RABS only a “reasonable tariff” would be paid to contracted health care providers. This would result in the victim being liable for the excess of non-contracted service providers.

It is doubtful that service providers will render a service under these uncertain circumstances.

A cumbersome system of claiming for payment and pre-authorization will most likely result in delays.

To our knowledge no tariffs has been published for comment (if any reference is taken to the 2005 Amendment Bill) the tariffs will be so low that the private sector will not participate.

RABS is aimed towards rehabilitation rather than compensation and as such is dependent on the availability of the necessary infrastructure to accommodate the influx of victims having to be rehabilitated.

It is common knowledge that there are not enough proper rehabilitation centres available to address the demands of a no fault system.

As a result, it is our opinion that for RABS to be successful, NHI would have to be in place (even if agreements are reached with private health care providers) as it would be highly irresponsible to implement RABS before this has happened.

4. Simplify claim procedure

“no fault” is supposedly the “silver bullet” the RABS Administrator will be depending on for the quick and effortless administration of claims. In reality the victim would still have to proof that he/she was in an accident by submitting the statutory required documents, in exactly the same way as a current victim would have to do (Section 43(2) stipulates that the Administrator shall not be liable for the provision of a benefit until a claim for such benefit is submitted in the manner set out in the rules). Further, a victim would still be required to proof a nexus between the accident and injuries. To be able to do this medical reports and the necessary police documentation would have to be obtained and submitted at the victim’s own expense, as the administrator will not pay for any of these costs.

No costs would be paid towards legal fees and as such a road accident victim would be required to prepare, lodge and champion his or her own claim.

RABS affords no financial assistance to formulate and file a claim. In terms of Section 44(1) of the RABS Act:

 

  • A victim may be required to attend an interview by the Administrator or its agents;
  • Furnish a written statement or affidavit regarding any aspect of a claim or benefit;
  • Furnish the administrator with the further particulars of the road accident or any other relevant information regarding any aspect of a claim or a benefit;
  • Furnish a document in his or her possession or under his or her control, relevant to a claim or a benefit;
  • Provide his or her consent to the administrator to access the records held by third parties relevant to his or her claim or benefit.

 

In terms of Section 44(2) of the RABS Act:

The Administrator shall not be obliged to process any claim until a claimant has complied with any requirements imposed on him or her in terms of this section.

This would imply that if the victim cannot travel or afford to obtain any of the documents i.e. medical and supporting vouchers etc. his or her claim will be denied. What will a victim do if he or she are not able to obtain medical records or his or her name does not appear on the accident report as does often happen with taxi accidents? These claims will be lodged unrepresented and the victim would be at the complete mercy of the RABS Administrator.

Having regard to these requirements the high rate of illiteracy and an unemployment levels at 25, 5% it would be very difficult for the regular road accident victim to prepare a claim, let alone afford it.

RABS is complicated and does nothing to simplify the claim procedure in fact it rather discourages than invites road accident victims from claiming from the administrator.

According to Mr. Willemse, the RAF will conduct an internal audit to access the need to appoint or obtain additional resources to deal with the additional claim demand.

If no changes are made it would imply that the current RAF claims handlers would be left to assess claims.

As far as we know the current claims handlers are not medically trained and in our opinion unqualified to assess claims under RABS.

The current RAF act makes provision for claims to be settled within 120 days from lodgement.

In terms of RABS a victim is prevented from claiming within 60 days of an accident.

After 60 days had lapsed he/she may submit a claim but will have to wait an additional 180 days for RABS to decide whether or not he/she would qualify for benefits.

This means a victim would have to wait 240 days to receive an answer on whether or not a claim has been successful.

In terms of Section 48(1) the administrator is not obliged to even reply to a claim and the victim must accept that, if he has not heard from the administrator within 180 days, his claim had been denied.

It is our opinion that RABS would be an administrative nightmare and almost impossible to objectively assess without appointing qualified medical experts to assess each and every claim which will add to RABS cost expenditure. It is well documented in relevant case law that the RAF’s administration is poor at best and often the result of unnecessary litigation and costs being occurred. In March 2014 the following was said by a presiding judge in the North Gauteng High Court in a matter against the RAF: “in my view the courts ought to adopt a stricter approach to the obstructive and ineffective role played by the defendant (the RAF) in third party cases in allowing cases to go on trial when such cases could and should be settled”. No mention is made of how RABS plans to administrate the whole country’s claim demand under a “no fault system” without drastically expanding its personnel and recourses.

According to the RABS Bill the current RAF structures will be absorbed into RABS.

The fact that RABS has no accountability and leaves the victim totally vulnerable and at the mercy of the RABS Administrator.

Criminal charges have been laid against the CEO and the Board by the DA for acting outside of the RAF Act in particular Section 19 thereof by misleading the public into thinking that the RAF can administrate their claims on the public’s behalf.

Currently thousands of direct claims are left unattended, are under settled or left to prescribe (a recent report shows that in the past 24 months the RAF allowed 9000 direct claims to prescribe in their own hands).

Clearly the RAF does not have the resources to administrate these claims and are a clear indication of what could be expected under the Administration of the Benefit Scheme.

These charges have been escalated to the Hawks under Case number: 491/04/2015 and 715/04/2015 and these matters are being attended to in all earnest.

5. Wider cover to persons in road accidents;

The fact that “no fault” applies under RABS does not mean wider cover, as the victim would still have to proof a nexus and compliance with the Act, before qualifying for any benefits.

No fault is not the answer that would magically dispel all the RAF’s current problems.

Numerous Commissions of enquiry found that “no fault” should be thoroughly researched and Judge Satchewell confirmed that no fault should only be considered if the victim retains his common law right to sue the wrongdoer and general damages are retained.

It is certainly not a fit and proper substitute for general damages as it affords no compensatory advantage for the road accident victim under RABS.

6. Fewer exclusions from benefits;

In reality, RABS introduces far more exclusions and less benefits than the current road accident victim enjoy.

 

  • The claims of children are limited to emergency medical care;
  • General Damages are abolished;
  • Funeral expenses are limited to R 10 000.00;
  • Loss of earning capacity “career pathing” is abolished;
  • Benefits terminate on death of the beneficiary (leaving the defendants destitute);
  • Claims for loss of income support are capped;
  • The claims of foreigners are limited to emergency medical care;
  • Save for emergency medical care road accident victims older than 60 years have no claim.
  • Save for emergency medical care victims who earn more than R 219 820.00 per annum, will have no claim against RABS;
  • Loss of support benefits are forfeited after 15 years or the dependent reaching the age of 60, whichever comes first;
  • Loss of support benefits are terminated when a dependent child turns 18;
  • No contribution towards legal or administrative costs.
Question
Are there fewer exclusions?

It will provide a benefit which would not cover the full extent of the loss as the purpose is to encourage an injured victim to return to their workplace as to curb the culture of dependency.

This is a wonderful concept but what about the people who were not employer, lost their jobs subsequent to the accident or simply cannot secure employment?

It is unclear how the administrator will deal with people who are economically inactive at the time of the accident;

As the RABS Bill currently stands it will have devastating consequences for children, students and young adults.

If the victim is a final year graduate student and left incapacitated after a motor vehicle accident, he would be regarded as an unemployed person and his income benefits would be based upon the annual national income without the prospect of having his academic history and/or prospective income taken into account.

By excluding “career pathing” which is manifestly unjust victims in this category will not be able to afford additional top-up insurance and will result in a higher rate of dependency on the state as an alternative income resource.

7. Defined benefits which promote affordability;

What this actually means is Government offers the victim less benefits whilst having to pay the same, if not more, to allow the RABS Administrator to balance the books.

It is generally accepted that the enactment by Parliament of laws governing personal injuries caused by or arising from motor vehicle accidents was in order to provide the road accident victim with the “widest possible protection”.

The RABS Administrator offers exactly the opposite but sugar coated with the promise of wider accessibility under a no fault system.

The Government can in principle and constitutionally speaking not plead poverty when it has a constitutional duty and has of its own accord undertaken the affording of citizens’ social security benefits.

The right to bodily integrity was identified as a constitutionally protected right by the constitutional court.

It is the right to bodily integrity and the right to maintenance which is compromised in a motor vehicle collision.

These rights cannot be compromised for the sake of expediency and in order to balance the books – especially where it is doubtful that the need to do so is entirely systemic.

It would be complicated to define benefits as there are so many variables to consider when administrating a claim on behalf of a particular road accident victim.

The RABS Administrator is able to review, revise or terminate a claimant’s entitlement to benefits at any time.

A victim will never truly be financially independent as he will be continually scrutinized by the RABS Administrator on an ongoing basis.

Children under the age of 18 and people over 60 are excluded from income benefits, it is a well-known fact that many people over the age of 60 are still economically active.

Even though a child under the age of 18 would ordinarily not qualify for this benefit, RABS will not take the child’s particular circumstances (careers of parents etc.) into account when evaluating his/her loss of income.

Benefits are forfeited the moment a beneficiary die (the result would be that the family of a beneficiary would be left destitute).

The benefits received should fall into the estate of the deceased in order to support the families of beneficiaries should they fall away.

Annual inflationary adjustments cannot be guaranteed and will be subject to affordability.

We are of the opinion that benefits should be adjusted annually in line with inflation. Funeral benefits are limited to R 10 000.00, under the RABS Administrator. However, funeral expenses are costly and in in many cases the cost of a casket alone can be in excess of R 10 000.00.

Under the current system the RAF pays for necessary funeral expenses, which if proven, may be in excess of R 10 000.00 (this includes the plot, the service and transport costs of the deceased).

According to the 2013/2014 annual report by the RAF the average funeral claim is R 11 245.00.

The report confirms that funeral expenses increased by 11% per year since 2010. The amount should be increased to a more realistic lump sum amount or funeral expenses should be paid upon proof of payment as per the invoice provided.

Income benefits will be capped and general damages be abolished under RABS to ensure affordability.

The perception exists that the current compensation system favours the rich at the expense of the poor.

Ostensibly based on this perception, the compensation of higher than average income earners have since 2008 been restricted to the national average income (currently R219 965.00 p.a.).

According to the 2013/2014 RAF annual report the average value of a personal claim was R 194 6786.00 per claim. Only 3.8% of all claims finalized exceeded R500 000,00 and in value is less than 50% of compensation paid.

There is nothing sinister in this phenomenon. It is simply a reflection of the fact that high income earners are more likely to own a motor vehicle, travel more and be exposed to motor vehicle accidents.

Why should the seriously injured (only they qualify for this level of compensation) including the quadriplegic and paraplegic road accident victims (also referred to by protagonists of RABS as instant millionaires) be made a victim twice?

Once by negligent driving and then by being discriminated against and denied the social security they as citizens are equally entitled to?

The RAF Commission found that a typical South African road accident victim likely to be a black male approximately 29 years of age who is lightly injured and if employed, earns less than R8 000,00 per month.

A sizeable section of road accident victims has no income whatsoever. Only 3% of road accident victims earned more than R270 000,00 per annum.

Pedestrians constitute 28% (second largest group after passengers) of all road accident victims.

Pedestrians are indicated as the highest socio economic risk group because of high rates of unemployment (60% unemployed) with an average income of less than R4 000,00 per month.

According to the RAF’s 2013/2014 financial report the total pay-outs on general damages has decreased over the past three financial years.

On average the amount of claims in respect of general damages has decreased by 26% per annum from 2010.

It is expected that the RAF Amendment Act will result in further decreases in general damages pay-outs making it a more affordable yet equitable, system.

Why benefits under RABS Administrator needs to be limited in any way seems to be driven by another principle other than equity.

Rehabilitation, which includes vocational rehabilitation, is apparently a primary objective of RABS.

Question
How do they plan to achieve that goal?

Our question is, how do they plan to achieve this goal when there are no or little supportive structures in place?

Secondly, is the intention of RABS to attempt to restore the claimant to his/her pre-accident condition by means of rehabilitation and/or vocational rehabilitation in order to prevent paying benefits in the end? With this last question, it should be kept in mind that only 16% of claims constitute serious injuries, requiring some kind of rehabilitation.

From this percentage, only a small part would be suitable candidates for vocational rehabilitation. Seeing that such great emphasis is put on rehabilitation in the Bill, it appears that there might be a perception that rehabilitation will restore function, when in fact it facilitates the process of recovery from injury, yet will in only a few cases restore full function. Although rehabilitation is necessary for all serious injuries to some extent, it is not a miracle maker that will erase the injury and automatically reinstate full function. Supposing an injured person does receive successful vocational rehabilitation, it should be kept in mind that the employment rate for working-age people with disabilities remains low in this country. Road accident victims, with residual difficulties, wishing to return to work are no exception. What about the majority of claimants that had been unemployed pre-accident and where vocational rehabilitation is not the answer to restoring function?

They will need training from private facilities or collages, does RABS, in such a scenario, intend to pay for training where before the accident they were unqualified (thus not restoring function, but dramatically enhancing opportunities for some individuals which might be considered “lucky” by some)?

It is clear that our current health care system is lacking from the very foundation. It would be an enormous task to develop a holistic health care system which is according to RABS already in place and such a project needs to be rolled out at a national level. What is already in place and working very well, is an assessment system whereby appropriate candidates who would benefit from rehabilitation and vocational rehabilitation can be identified. This part of the machine is working effectively and should be kept in working order, while the rest of the vehicle to take the person with disabilities forward is developed to the same high standards. It is our believe that people with disabilities in general and road accident in particular, should be provided the full benefit of specialized medical care, rehabilitation and when appropriate vocational rehabilitation and we offer our full support in developing such a system but are mindful of the fact that it will take years to develop (recognizing the cost and complexity of the framework of establishing National Health Insurance, Governments green paper proposes a 14 year transition period).

Dr. Eugene Watson, CEO of the RAF, told the Business Day Live on 2 July 2014 that general damages will not be awarded under RABS to ensure that sufficient resources are available to prioritize rehabilitation.

With only 16% of all road accident victims that could benefit from rehabilitation it is doubtful that rehabilitation is an adequate substitute for abolishing general damages – what about the other 84%?

8. Alleviate the burden of our Courts through the establishment of an internal appeal procedure

The RABS Act offers the disgruntled road accident victim no access to Courts. The appeal process will be internal in nature handled by officers appointed by the RABS Administrator and the decision is final.

A victim will be required to lodge a written appeal within 30 days after being informed by the Administrator that his/her claim was denied.

With the high level of illiteracy and lack of financial means the victims may not be in a position to lodge their appeal in time. Some victims are completely unable to act on their own behalf for instance those who are comatose or mentally incompetent.

Even if a RABS representative is posted in every local government clinic the chances are high that many victims would remain unaware of their right to appeal the decision of RABS Administrator.

This process by its very nature could be regarded as non-objective and unfair and opens the RABS Administrator to the charge of violating the beneficiaries’ rights to administrative justice.

The appeals process cannot be supported by a legal representative which would result in a further disadvantage to less resourced, less educated and more historically disadvantaged members of the South African population.

The fact that a victim will have to “self-fund” expert evaluations in support of an appeal will make the process of appealing economically unaffordable to the average road accident victim.

RABS is open to attack on Constitution grounds which include but are not be limited to:

  • The issue regarding the discrimination between different classes of road accident victims – Section 9(1) of the Constitution. This approach is in direct conflict with section 9(1) of the Constitution. The fact that a road accident victim is denied nonpecuniary loss as opposed to a victim of medical malpractice, rail accident or assault who will still qualify for non-pecuniary loss.
  • The fact that General Damages is abolished under RABS. RABS abolishes this right to achieve a financial saving. Financial constraints provide no ground for the curtailment of common law rights. The 2013/2014 annual report shows a yearly decrease in pay-outs for general damages which according to the report will increase as the 2005 RAF amendment act takes effect. The legislature must provide an adequate and compensatory advantage should they wish to abolish common law rights. RABS affords no compensating advantage whatsoever and to the contrary severely restricts the road accident victim’s rights.
  • The fact that a road accident victim right to claim the excess of his claim from the wrongful party. The RABS bill abolishes the road accident victim’s right to claim compensation not paid by RABS while for example Section 39(1)(a) of COIDA, retains such rights (except against his/her employer).
  • There is a Constitutional duty on the RABS Administrator to ensure that claims are processed timeously and effectively and to ensure that benefits are allocated as soon as possible;
  • The RAF is mandated to provide “compulsory cover to all users of South African roads, citizens and foreigners, against injuries sustained or death arising from accidents involving motor vehicles within the borders of South Africa”; this cover is in the form of indemnity insurance to persons who cause the accident as well as personal injury or death insurance to victims of motor vehicle accidents and their families.”
  • The fact that the number of unpaid or unresolved claims has been allowed to grow to such an extent is a travesty. With the RAF bleeding funds due to a backlog of claims estimated at well over R42 billion, it is clear that not enough is being done to manage the situation.
  • Recent news reports have also indicated the RAF has been accused of continuously losing files and letting down road accident victims. Case in point are the Zithwane orphans from the Eastern Cape, who, according to reports, have been waiting for the past three years to get compensation from the RAF after their mother had been killed in a road accident during July of 2008. This is but one example and my Shadow Deputy Minister, Greg Krumbock and I receive countless requests and complaints about claims being ignored. Transport Minister Ben Martins must step in to rectify the situation. I will be raising the DA’s concerns and will call on Minister Martins to put forward solid and urgent proposals as to how the situation will be addressed during a meeting of the Transport Portfolio Committee, scheduled for Wednesday 25 July 2012, where committee members are set to be briefed by the Department of Transport on the RAF transitional provisions bill. The situation cannot be allowed to continue. The Department must act urgently to ensure that the victims of accidents on our road are properly taken care of. Statement issued by Ian Ollis MP, DA Shadow Minister of Transport, July 22 2012
  • The fact that a road accident victim is prevented and/or limited in his right to access the Courts – Section 34 of the Constitution. Under RABS the road accident victim has no legal recourse or sanction to compel the Administrator (RABS) to attend to his or her claim.
  • In terms of RABS no claim may be submitted within 60 (sixty) days of the cause of action. The administrator then has 180 days (six months) to decide whether or not benefits may be allocated – in terms of the Act the administrator need not even reply to the claim the road accident victim must accept that his claim was denied if not replied to within the prescribed period.
  • The right to bodily integrity, fact that a victim will not be able to choose where and how he/she would like to receive medical treatment – Section 12(2) of the Constitution.
  • The fact that a child’s right to support is affected as no support is payable to a child living abroad regardless of the fact that the deceased had a legal obligation to pay support – Section 28 of the Constitution. In an article in NEWS 24 on the 26th of July 2014, it was said: ANC Lekgotla agreed to avoid rushed legislation Johannesburg – The ANC wants to re-assess the passing of rushed legislation which may lead to it being deemed unconstitutional or excluding certain sectors of society, the SABC reported on Saturday. “We are walking away from rushing legislation because we want to finish, we have to look at laws thoroughly because we do not want any piece of legislation to produce unintended consequences,” African National Congress chief whip Stone Sizani was quoted as saying. “This is one serious issue we have agreed we should re-look.” • Sizani was speaking at a two-day ANC Lekgotla in Parliament, chaired by the party’s deputy president Cyril Ramaphosa. He was standing in for President Jacob Zuma. The ruling party wanted to make sure all laws that were tabled, debated and passed by both Houses of Parliament were in line with the Constitution, Sizani reportedly said. The traditional courts bill was criticised for excluding women.
Question
Are there fewer exclusions?

It will provide a benefit which would not cover the full extent of the loss as the purpose is to encourage an injured victim to return to their workplace as to curb the culture of dependency. This is a wonderful concept but what about the people who were not employer, lost their jobs subsequent to the accident or simply cannot secure employment? It is unclear how the administrator will deal with people who are economically inactive at the time of the accident;

As the RABS Act currently stands it will have devastating consequences for children, students and young adults.

If the victim is a final year graduate student and left incapacitated after a motor vehicle accident he would be regarded as an unemployed person and his income benefits would be based upon the annual national income without the prospect of having his academic history and/or prospective income taken into account.

By excluding “career pathing” which is manifestly unjust victims in this category will not be able to afford additional top-up insurance and will result in a higher rate of dependency on the state as an alternative income resource