RAF in trouble unless bill halts claims

2012-07-25 09:04

The Road Accident Fund (RAF) is under pressure to find ways to fund thousands of road accident victims, who as passengers in taxis where the driver was at fault, were limited to compensation of no more than R25 000.

The Constitutional Court ruled that this is inequitable and unfair.

According to Business Report, the National Assembly’s transport portfolio committee on Monday considered the RAF (transitional provisions) bill that seeks to provide interim measures in dealing with claims that were limited until 2008.

If the law is not changed, the fund could face unlimited claims that could come to R2.2 billion.

However, if claims were limited this could be reduced to R1.3 billion, a department of transport legal adviser is quoted as saying.

The RAF has a backlog of claims estimated at well over R42 billion.

Newly-appointed Transport Minister Ben Martins said in reply to a parliamentary question that 250 000 claims to the RAF remained either unpaid or unresolved.

Earlier this year, RAF chief operating officer Andre Gernandt told Parliament’s portfolio committee on transport that new laws were necessary to prevent attorneys from holding back on pay-outs and running up legal costs.

He said the RAF currently paid everything to lawyers who held back the money “sometimes for months”.

Attorneys were taking “R3 million to R4 million” or 25% to 30% of the lump sum. It would be preferable to see payments done in instalments instead, Gernandt said.

Gernandt also said he wanted MPs to draft a law that will specify a list of documents attorneys must give to the fund, so that claims can be settled within 120 days.

The transport portfolio committee decided to meet again next week to finalise the bill.

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