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R.I.P. Road Accident Fund … arise Road Accident Benefit Scheme
7 February 2012
THE Road Accident Fund (RAF) has been bravely fighting a terminal illness first diagnosed over a decade ago when its successor, the Road Accident Benefit Scheme (RABS), was conceived and approved in principle by cabinet.
The recent confirmation by the Constitutional Court of the validity of the removal an accident victim’s right to sue the wrongdoer for the balance of his or her common law damages has paved the way for the implementation of RABS.
This dealt a massive blow to any recuperation efforts of the RAF to the extent that its demise is imminent. We must prepare ourselves for the inevitable.
The main reason for the change is unquestionably a financial one. The RAF is not sustainable as it is. It has long been insolvent and as at March 2010 had run up a deficit of around R42 billion.
A large contributing factor is its liability for the full extent of loss of support and income claims and claims for general damages.
On August 2008 the RAF significantly restricted its liability in this regard in its Amendment Act, and these restrictions and caps will continue under RABS.
Another reason for the change, given by those required to give reasons, is that the current system is open to abuse in the form of fraud, inflated claims, professional malpractice and human failing. How the new system will prevent abuse is unfortunately not clear.
Also, proponents of RABS magnanimously claim that a problem with the current system
is that it encourages perverse incentives. Injured people want the “big pay-
The thinking is that by not providing a benefit to the full extent of the loss, RABS will encourage the injured to return to work, thereby reducing a culture of dependency.
Perhaps the biggest change is the move away from the element of fault as a requirement for liability. Claimants will no longer need to prove negligence on the part of a driver. It is a policy devised in accordance with social insurance principles as opposed to liability insurance principles.
Whether this successor will have a long and peaceful reign is anyone’s guess. What is certain is that the RABS adherents have purged the lawyers from the system. Whether that is a good thing remains to be seen.
Michael Browning
TMJ Litigation
(Courtesy of The Witness on 07 February 2012)