RAF - Don’t dread costs of fair compensation – expert

26 July 2012 Roy Barendse, Director in the Dispute Resolution practice at Cliffe Dekker Hofmeyr

The recent Constitutional Court ruling that it was unfair for the Road Accident Fund (RAF) to limit compensation to no more than R 25000 if victims were passengers in taxis whose driver caused an accident, meant that Parliament was obliged to further a

According to Roy Barendse, Director in the Dispute Resolution practice at Cliffe Dekker Hofmeyr, “The RAF (Transitional Provisions) Bill currently under discussion in Parliament notes that an accident victim may either be subjected to the old limitation of R25 000 or be compensated in terms of the provisions of the 2008 amendments.

“Since the 2008 amendments, all claims for loss of earnings are capped/limited and general damages are only paid to victims who can prove that they suffered serious injuries. All indications are that the effect of the 2008 amendments was to erode the deficit,” he says

“It follows from this week’s discussions, that in the more serious cases, passengers will now receive higher compensation, yet also be subjected to the capping of loss of earnings and will also only be compensated for general damages if they can prove that they suffered serious injuries. Some limitations will therefore still apply.

“Further, in view of the current legislation, much less costs will be spent than previously, on the determination of the merits of passenger claims.

“The impact of this new Bill may therefore not be as huge as predicted,” says Barendse.

“While the Road Accident Fund does have a deficit of over R42 billion, we must not lose sight of the fact that this developed over many decades when claims were uncapped. Also, huge amounts were paid as compensation to foreigner claimants who could recover loss of earnings quantified in their own currency.

Barendse adds, “The Department of Transport should do more to address the carnage on our roads. We should not be looking for ways to unfairly limit compensation of innocent victims. Instead, we should be looking at ways of preventing them from becoming victims in the first place.”