Click to edit Master title style 111 Department of Transport Road Accident Fund Draft Amendment Bill...

Click to edit Master title style

1 1 1

Department of Transport

Road Accident Fund Draft Amendment Bill

Presentation to the

National Council of Provinces Select Committee on public services

1 June 2005


2 2 2


Road Accident Fund Commission

Critical to ensure that the risk associated with restructuring is contained

Implementation for the restructuring of the RAF will be presented to Cabinet in mid 2005. The Restructuring of the RAF calls for a policy change in compensation for Road Accident Victims and is not addressed in this Bill.

However, some recommendations could be incorporated into draft Bill as they speak to key processes to be incorporated irrespective of any policy change, these are:

Compensation for all road users

Injury threshold to access general damages and related assessment

Medical tariffs

Exclusion of secondary victims

Prioritisation of golden hour treatment


3 3 3

Department of Transport Memorandum

Improve the governance of the Fund and address issues which would affect the liquidity of the Fund.

Amendment Bill will only apply to claims that arose after the commencement of the Act.

The Department took the oral and written comments and inputs given during the consultation process in the Portfolio Committee Hearings in 2003, regarding B64-03, into account; the Department presented the Draft Bill to the Road Accident Fund Board and their comments were incorporated; National Treasury was consulted on both the Bill and the financial implications of the Bill.

Bill 64 of 2003 as revised based on key principles of equity, fairness and transparency


4 4 4

Department of Transport Long Title

To amend the Road Accident Fund Act, 1996, so as to extend the powers of the Fund regarding the conclusion of agreements; to alter the financial year of the Fund; to make new provision regarding the Board of the Fund; to further regulate the Fund’s obligation to compensate a third party for non-pecuniary loss, for certain hospital or medical expenses, for future loss of income or support and for funeral expenses; to require the Fund to compensate a provider of emergency medical treatment directly, in accordance with a certain tariff; to repeal certain provisions limiting the liability of the Fund to R25 000 in respect of claims; to make further provision regarding the instances where the liability of the Fund shall be excluded; to substitute the provision authorising the Minister to make regulations; to authorise the Minister to adjust certain amounts in order to counter the effect of inflation; and to provide for matters connected therewith.

REVISION


5 5 5


Governance: Powers and Function of Fund

S(4) addition of s(2)(i)

S(4) addition of s(4)(a)

Conclude any agreement with any person for the performance of any particular act or particular work or the rendering of particular services contemplated in this

Act.

The Fund may conclude an agreement with any other organ of State regarding any matter provided for in this Act in order to improve or ensure–

(i) the effective management of the Fund;

(ii) the efficiency of the Fund;

(iii) co-ordination of functions;

(iv) co-operative governance contemplated in

Chapter 3 of the Constitution.


6 6 6


Governance: Financial year and budgeting

S(6) substitution s(1)

The financial year of the Fund shall run from 1 April of any year to 31 March of the following year


7 7 7


Governance: Board of Fund

S(10) substitution s(2)(c)

S(10) substitution of s(6) & (7)

S(10) deletion of s(8)

hold office for a period of three years as from the date of appointment of such member, which period may be extended for a further period not exceeding three years.

The Minister shall appoint two of the members of the Board as Chairperson and Vice-Chairperson, respectively.

Abolish Executive Committee


8 8 8


Governance: Appointment of Board

S(10) deletion of s(9)

Revision:

S(10) substitution of s(9)

Removal of process of appointment as well as the provisions for the selection committee.

Revision: “For the purposes of the appointment of the members of the Board referred to in subsection 1(b), the Minister must, though the media and by notice in the Gazette, invite nominations of persons as candidates for such appointments from a person or body having an interest in the operations of the Fund.”

Proposed by PPC: be a person who commands a knowledge of the management of insurance or compensation matters


9 9 9


Governance: Appointment and Functions of CEO



The Minister shall with the concurrence of the Board, appoint the Chief Executive Officer of the Fund on such terms and conditions of employment as the Board may determine

exercise the powers and shall perform the functions of the Fund mentioned in section 4.


10 10 10


Transparency: Limitation on Compensation for General Damages

S(17) substitution of S(17) with S(17)(1)

Revision:

Provided that the obligation of the Fund to compensate a third party for non-pecuniary loss shall be paid by way of a lump sum: Provided further that the Fund's obligation to pay such compensation shall only extend to a third party who suffers a serious injury as contemplated in subsection (1A)


11 11 11


Fairness: Threshold to access general damages

S(17) substitution of S(17) with S(17)(1)

Provided further that the Fund's obligation to pay such compensation shall only extend to a third party who suffers a serious injury

Overview: General Damages

Road Accidents

Trends in compensation payment Transaction cost

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

1980 1983 1986 1989 1992 1995 1998 2001

Fatal Major Minor Linear (Minor)

Average annual growth: 0.8%

Average annual growth: 2.6 %

Average annual growth: 3.2 %

0

500

1000

1500

2000

2500

3000

2000 2001 2002 2003 2004

Real Financial Loss Unrealised Loss Total legal costs

R 0

R 200,000,000

R 400,000,000

R 600,000,000

R 800,000,000

R 1,000,000,000

R 1,200,000,000

R 1,400,000,000

R 1,600,000,000

2000 2001 2002 2003 2004

Past Medical Expenses Future Medical Expenses Past loss of Earnings Future loss of Earnings

Future loss of Support Past loss of Support General Damages Funeral Costs

Not admitted60%

Admitted40%

Claimants


13 13 13


Fairness: Definition of Serious Injury

S(17) substitution of S(17) with S(17)(1A) (a)

Definition: “serious injury” means a permanent injury which leads to total disablement or paralysis or dysfunction of a vital organ, and includes brain injuries, loss of sight, or loss of a limb or the use thereof or such other serious injuries as the Minister may prescribe.

Revision: remove definition to include in assessment method


14 14 14


Fairness: Assessment of Serious Injury

S(17) substitution of S(17) with S(17)(1A) (a), (b), (c) & (d)

Assessment of serious injuries shall be based on a prescribed method adopted after consultation with medical service providers and shall be reasonable in ensuring injuries are considered in relation to the circumstances of the third party.

The Fund may, with the concurrence of the Minister, develop a system in terms of which medical practitioners may be accredited with the Fund in order to carry out any assessment.

The method of assessment shall entail assessment by provincial medical panels consisting of a representative from the Fund and external experts representing key

medical fields relevant to road accident injuries.


15 15 15


Fairness: Remove statutory obligation to pay party-to-party costs

S(17) substitution of S(17) and deletion of s(2)

[(2) Upon acceptance of the amount offered as compensation in terms of subsection (1) the third party shall be entitled to the agreed party and party costs or taxed party and party costs in respect of the claim concerned.]

State Law Advisor: Constitutional opinion that right to access courts not infringed.


16 16 16


Transparency: Undertakings

S(17) substitution with S(17)(4)(a)

Fund shall be entitled, after furnishing the third party concerned with an undertaking to that effect or a competent court has directed the Fund or the agent to furnish such undertaking, to compensate:

a) the third party in respect of the said costs after the costs have been incurred and on proof thereof; or

b) the provider of such service or treatment directly,

in accordance with the tariff


17 17 17


Transparency: Medical Tariffs

S(17) addition of s(4A) (a)

The liability of the Fund or an agent regarding the tariff shall, in the case of compensation for–

(i) public health care, according to tariffs determined for providers of such services; and

(ii) private health care, according to the reference price list contemplated in section 90(1)(v) of the National Health Act,

and such tariffs shall be prescribed by the Minister after consultation with the Minister of Health.

The tariff contemplated in paragraphs (i) and (ii) shall be prescribed after consultation with medical service providers and shall be reasonable compensation, taking into account factors such as the cost of such treatment and the ability of the Fund to provide the compensation.


18 18 18


Transparency: Cap loss income and support

S(17) substitution with S(17)(4)(b)

includes a claim for future loss of income or support, the amount payable by the Fund or an agent−

(i) shall be paid by way of a lump sum;

(ii) shall be calculated up to the date the third party would have reached the age of 65, but in the case of a claim for support by a dependent child, shall be calculated up to the age the child would reach 21 years; and

(iii) shall be calculated up to an amount not exceeding R160 000 per year.


19 19 19

Department of Transport Fairness:

Emergency Medical Treatment

S(17) addition of s(7)(a,b&c)

Revision:

When a person has provided a third party with emergency medical treatment, the Fund shall compensate such person directly, according to the tariff contemplated in subsection (4A), irrespective of any negligence or wrongfulness on the

part of any person.”.


20 20 20


Equity: Removal on limitation on passengers

S(18) deletion of s(1)(a)(b)

Revision 18(2)(a) and 19(b)

The liability of the Fund or an agent to compensate a third party who, at the time of the occurrence which caused that injury or death, was being conveyed in or on the motor vehicle concerned, (i)for reward; or

(ii)in the course of the lawful business of the owner of that motor vehicle; or

(iii)in the case of an employee of the driver or owner of that motor vehicle, in respect of whom subsection (2) does not apply, in the course of his or her employment; or (

(iv) for the purposes of a lift club where that motor vehicle is a motor car,

or in the case of a person who was being conveyed under circumstances other than those referred to in paragraph (a), shall be limited to the sum of R25000;


21 21 21


Transparency: Specification of funeral costs


The liability of the Fund or an agent to compensate a third party for any loss or damage contemplated in section 17 which is the result of the death of any person shall in respect of funeral expenses be fixed at R5 000.”


22 22 22


Governance: Excluded liability

S(19)(f) addition of (f)(iii)

Revision

Revision: to attend a meeting arranged at the request of the Fund in order to elucidate matters relating to the claim, or at such meeting fails to respond truthfully and to the best of his or her knowledge to questions put.


23 23 23


Governance: Excluded liability

S(19) addition of (g)

suffered as a result of an emotional shock sustained by that person when that person witnessed or observed or was informed of the bodily injury or the death of another person as a result of the driving of a motor vehicle


24 24 24


Transparency: Claim for compensation against other

S(21) substitution

Revision

Revision: When a third party is entitled under section 17 to claim from the Fund or an agent any compensation that third party may not claim compensation in respect of that loss or damage from the owner or from the person who so drove the vehicle, or if that person drove the vehicle as an employee in the performance of his or her duties, from his or her employer -

(a) to the extent that the Fund or such agent has already paid or has agreed to pay or is obliged to pay the compensation; or

(b) unless the Fund or such agent is unable to pay the compensation.


25 25 25


Amendment requested Financing

S(5)

Revision

Financing: provision for the Fund to be procured through SARS for fuel produced or imported.

Date post:	13-Dec-2015
Category:	Documents
Upload:	flora-stafford
View:	215 times
Download:	1 times

Click to edit Master title style 111 Department of Transport Road Accident Fund Draft Amendment Bill...

Documents