Changes to RAF laws held up in court

2010-11-26 09:34

The Constitutional Court (Concourt) has decreed that road accident victims are entitled to expensive emergency and other medical treatment at private hospital tariffs, to be paid for by the Road Accident Fund (RAF).

Judge Dikgang Moseneke declared current tariffs prescribed by the Road Accident Fund Amendment Act inconsistent with the constitution and ordered the public transport minister to replace them with tariffs that would buy victims private sector medical care.

This generosity was the only victory scored by legal institutions who challenged the amendment act, which threatened their income from RAF court cases, in the Concourt.

Moseneke upheld contentious 2005 changes to the RAF Act objected to by the country’s lawyers. This includes caps on compensation paid out to victims by the RAF.

The action was brought by the Law Society of South Africa (LSSA), the South African Association of Personal Injury Lawyers, the Quadpara Association of South Africa and the National Council for Persons with Physical Disabilities in South Africa.

The LSSA attacked three sections of the RAF Amendment Act:
» section 21 which abolishes a motor accident victim’s common law right to claim compensation from a wrongdoer for losses which are not covered under the RAF Act;

» section 17(4)(c) which limits the amount of compensation that the Road Accident Fund is obliged to pay for claims for loss of income or a dependant’s loss of support arising from the bodily injury or death of a victim of a motor accident;

» regulation 5(1) in which the Minister for Transport prescribed tariffs for health services which are to be provided to accident victims by public health establishments.

Prior to the amendment act the liability of the RAF to a third party injured in a road accident was unlimited – the RAF was legally obliged to compensate the victim in full for any loss or damage arising from the driving of a motor vehicle by another person.

The amendments were necessitated by an ever-growing funding deficit of accident claims and also by the constitutional obligation to remove arbitrary forms of differentiation in the compensation of accident victims.

The Constitutional Court heard that despite increases in the fuel levy from two cents per litre in 1988 to 72 cents per litre at present, the RAF funding deficit increased year by year, rendering the fund technically insolvent.

A vital part of its efforts to render the scheme sustainable was to place a cap on various heads of damages. The act also excludes all claims for general damages that are not a result of serious injury.

The excluded general damages claims, the Concourt heard, amounted to 61% of all claims for damages. Their exclusion would reduce the RAF’s compensation obligations by more than a third.

The primary and ultimate mission of the RAF was to render a “fair, self-funding, viable and more effective social security service to victims of motor accidents,” the judge pointed out. “The new scheme is a significant step in that direction.”

‘Financially viable and sustainable’
The judge rejected the LSSA objections to the amendments, pointing out that their prime purpose of was to provide “reasonable, fair and affordable compensation to all innocent victims of motor accidents”.

It was to be expected, he said, that a scheme which depended on public funding would at times have income less than the compensation victims may be entitled to.

“It is thus fair and reasonable that the scheme should have a cap as to the character and extent of the compensation each victim is entitled to.”

Moseneke declared that the amendments properly advanced the governmental purpose to make the fund financially viable and sustainable and to “render the compensation regime more transparent, predictable and equitable.”

But the judge had, as he put it, “no hesitation” in finding the RAF’s new prescribed tariffs “wholly inadequate and unsuited for paying compensation for medical treatment of road accident victims in the private health care sector.”

The tariffs were so inadequate that road accident victims would not be able to obtain treatment from private health care institutions, he said.

The evidence showed that virtually no competent and experienced medical practitioner in the private sector would consistently treat victims at the current prescribed rates.

“This simply means that all road accident victims who cannot afford private medical treatment will have no option but to submit to treatment at public health establishments.”

The prescribed tariffs were inadequate, could not pay private health care services, did not cover all services which road accident victims required, particularly with regard to spinal cord injuries which lead to paraplegia and quadriplegia and public hospitals were not able to provide adequate services.

A quadriplegic or paraplegic was constantly at risk in a state hospital as a result of the chronic lack of resources, paucity of staff and inexperience in dealing with spinal cord injuries, the judge said.

Tariffs furthermore were inadequate for other needs of quadriplegics, such as home visits by a psychiatrist, counselling by a psychologist, home nursing services and home-based physiotherapy.

He declared Regulation 5(1) inconsistent with the Constitution and ordered the transport minister to publish new (private sector) tariffs.

Until the minister published the tariffs, the judge decreed, road accident victims whom the RAF was obliged to compensate, was entitled to compensation or health services as if he or she had been injured before the amendment act came into operation.

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