The Administrative Adjudication of Road Traffic Offences (Aarto) Act and Amendment Bill is a controversial issue.
Aarto's main goal, says the Transport Department, is to "make roads safer by removing habitual traffic offenders from South Africa's roads and highways". Of course, while most will agree that more needs to be done to improve road safety, government's last attempt at regulating drivers (i.e e-tolls) caused more chaos than order.
That aside, companies need to understand their responsibilities as well as ways to protect themselves from possible liability relating to employees’ driving offences.
"While there is no proxy system when it comes to the demerit system, companies are responsible for their company fleet, and need to ensure a system is in place for company drivers to comply with the Aarto Act," says Jakkie Olivier, CEO of the Retail Motor Industry Organisation (RMI).
Does the demerit system have merit?
Despite its good intentions, the demerit system can also pose a significant threat to the insurance industry, which traditionally has low penetration among motor and other vehicle class owners.
A few years ago, the Automotive Association (AA) estimated that 65% of all vehicles on our roads are uninsured. Vera Nagtegaal, Executive Head of Hippo.co.za, explains that implementing the demerit system has numerous implications for the insurance industry: "The suspension of a motorist’s license is likely to increase their insurance premiums or excess, influenced by greater perceived risk on the insurer’s part."
More questions left unanswered
This poses further applicable considerations: How will an insured motorist afford higher premiums or excess when their license gets suspended? Will the motorist with the suspended license forfeit their insurance cover and thereby be precluded from obtaining vehicle insurance from any other service provider? How will this affect the insurance industry at large? A reduction in the industry’s size will invariably lead to job losses – how will these individuals be absorbed into the labour market?
We asked readers to share their thoughts on the demerit system below: