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RAF – Really A Farce

26 May 2014, 12:07

Most of us have heard of the Road Accident Fund or RAF for short.

The RAF is supposed to provide compensation for injuries and losses suffered by victims of motor vehicle accidents within the borders of South Africa.

Like all government institutions they’re complaining that they are underfunded and looking for ways to streamline their processes to reduce costs.

Streamlining

To reduce the legal costs involved in their claims processes they encourage people to rather go through the claims process themselves rather than enlisting the services of a lawyer to do it for them. They’ve also started a campaign called “RAF on the Road” where they go to a specific area and settle people’s claims on the day that they are there.

These “better” ways of claiming aren’t always as beneficial as they would want you to believe.

Here are three scenarios I’ve come across where it was to the detriment of the injured.

Jackson* sustained a brain injury in a car accident. They decided to do the claims themselves.

Not fully recovered yet, but appearing normal, Jackson* and family complete the required paperwork and takes copies of whatever else is required to the RAF to finalise his claim. He gets awarded R650,000 for damages and medical expenses.

Six weeks later he wants to return to work. Work requires him to complete a vocational assessment following his type of injury because he’s responsible for other peoples’ safety in a high risk environment. He fails and cannot work in his profession any more.

Because of the streamlined process and because he appeared normal Jackson* was not completely evaluated. Now his claim was finalised and he lost out on compensation for loss of income.

Maggi* loses a large part of her bodily functions in a car accident.

She can’t move around freely any more and her family takes her to a “RAF on the Road” event to do her claim.

Because she can’t work any more she has to prove that she earned an income. She provides it to them and her claim is finalised on the information at hand.

What was not accounted for was the fact that this was Maggi’s* first job after school and she was still working through a training period. After the training period her income would’ve increased by 30%.

Because of the streamlined process this was never factored into her compensatory settlement.

Duncan* suffers a severe disability due to a car accident and cannot work any more.

He tries to claim himself but fails to reach an agreement to his liking.

He goes the legal route and the claim is settled for a better settlement than the RAF offered.

In my opinion one needs to be an expert to get a fair settlement – which almost none of the people are that do it themselves.

According to one of the slides shown on the RAF website on 23 May 2014 “RAF on the Road” has assisted in the settlement of 10433 claims to the value of R 125 740 196.45.

That looks like a substantial settlement amount, however if you calculate the average it comes to R12 052.16.

On the day when you get to “RAF on the Road” that R12 052.16 might seem like a lot of money because you’ve been struggling to get by but is it fair compensation? And how would you know?

It seems to me that “RAF on the Road” and having you do the claims yourself is a way of settling claims on the cheap.

Underfunded

The RAF, almost on every occasion where they have to present themselves, find a way to mention that they are underfunded.

According to the RAF’s 2012 annual report (2013 not yet available on their website) they spent R 15,992,506,583.00 on litigation costs from 2007 – 2012. To be honest I did not know the value of that many digits next to each other until Google told me it was just shy of R 16 billion.

If you do a payment comparison according to the information on the 2012 annual report you’ll also notice that more money was spent on litigation than money paid towards medical compensation and funeral costs combined.

While in some cases litigation is necessary I don’t think R3,2 billion a year is an expense that can be considered reasonable.

From what I have found out from claimants is that the RAF will agree to court dates only to make you an offer on the court steps outside. Then they will not uphold that offer only to have the next court date set. This will carry on until a claimant sees the pattern and refuses to accept out-of-court offers. Now the court process goes its course.

Why don’t they just make fair offers, keep to them and have the matters settled? This would mean reduced costs and no 5 year backlogs surely.

Here’s a theory: If they settle faster and avoid unnecessary legal cost, let’s say they can save a conservative R10 billion. Now let’s average the value of a claim that needs litigation at R 5 million.

Had they worked more efficiently with legal costs 2000 more massive claims could have been settled from 2007 to 2012.

Then there’s their choice of advertising – During the Dec 2013/Jan 2014 holiday period they had primetime TV advert space slap bang in the middle of the evening news broadcasts on SABC and full page adverts is newspapers and certain lifestyle magazines – some of the most expensive advertising times. And come middle January they’ve disappeared again...

Surely it would be better to have a continuous media footprint albeit smaller rather than 6 weeks of expensive advertising and after that disappearing?

The RAF also blame the Undertakings they issue for the drainage of their funds when, according to the information on the 2012 annual report, they’ve actually spent less than R1500 per newly registered Undertaking per year. Also not all undertakings get fully utilised due to the excessive hassle people experience – either themselves not getting refunded in a timely manner or medical providers refusing to claim directly from the RAF.

It gets worse

In 2008 the RAF act was amended to cap the yearly loss of income one can claim. As a result we all pay the same fuel levy, but not all will receive the same benefits. I’ll explain: If you earn below or up to the capped amount per year you will be compensated your full loss of income for a serious injury. However, if you earn more than the capped amount you will only be paid up to the capped amount. But the levy is the same for all.

The above was declared Constitutional – for the sake of the fund’s survival.

Now government is proposing changing it to the Road Accident Benefit Scheme. You won’t get compensated any more but you’ll get paid “allowances” according to a set of requirements determined by the RAF.

This is to save costs to ensure the continued existence of the fund...so the administration of the 100,000 claims that gets added yearly will be free?? To me it sounds more like job creation than more efficient and fair.

A copy of the bill for commentary can be found here:

 http://www.raf.co.za/Media-Center/Pages/RABS-Bill-Published-.aspx

or in the government Gazette 37612 General Notices 337 and 338.

Do leave your comment on the proposed changes.

I fail to see why the RAF is allowed to senselessly spend the taxpayer’s money while the victims of accidents have to struggle to get decent service from them.

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