Parliament bins Road Accident Benefit Scheme after six years

The Road Accident Benefit Scheme (Rabs) bill was earlier this week consigned to the parliamentary waste basket after six years of debate. The National Assembly’s Portfolio Committee on Transport decided that the 2017 bill would not see the light of day.

The Democratic Alliance’s Chris Hunsinger persuaded the committee that the proposed legislation was anti-poor and too expensive. The bill was also unlikely to have ever passed constitutional scrutiny.

He stressed that road safety should feature prominently in the improvement of the road crash compensation system.

Government intended for Rabs to replace the Road Accident Fund (RAF).

The RAF has for almost 25 years been insolvent and an institution in serious need of an overhaul or a death knell. Its present model is fault-based.

The road crash victim has to prove that the injuries were caused by a wrongdoer operating a motor vehicle. It also indemnifies the wrongdoer from claims by those who were injured in a crash caused by the former.

Government not entirely at fault

With the RAF in a steady state of decline, government had to come up with an alternative.

The RAF in its present form is incapable of being ‘fixed up’ – but whatever the alternative is, it must pass constitutional scrutiny.

The late US Judge Louis Brandeis once cautioned that: “The greatest dangers to liberty lurk in the insidious encroachment by [people] of zeal, well-meaning but without understanding.”

Legislation in place to protect those injured in road crashes has been run roughshod over. A replacement for the RAF can focus on rogue attorneys and some medical experts who have been fleecing the system and clients for the last 20-plus years.

The real Rabs problem

Professor Emeritus at the University of Pretoria, Hennie Klopper, has studied the RAF compensation system for two decades. He told Moneyweb the fault system produces between 93,000 and 113,000 personal claims per annum. He estimates that 522,000 people are injured in road crashes every year.

The CSIR did a study in 2015 which showed that 266,000 people were injured, 66,000 of whom suffered serious injuries. Road crashes annually affect 1.7 million South Africans.

Klopper estimates that under Rabs there would potentially have been a further 100,000 claims at an average of R112,000 per claim.

This, he says, would require some R60 billion per annum. The RAF currently pays R34 billion annually in claims.

For Rabs to have been implemented, the current RAF actuarial deficit of R216 billion would had to have been ringfenced. Rabs would have cost about R321 billion to implement – more than the RAF’s current actuarial deficit.

One is looking at sums of money that approach Eskom’s present indebtedness.

RAF reform needed

Klopper stresses that the RAF should not fall under the Ministry of Transport but that of social security.

Judge Eberhard Bertelsmann in his 2015 judgment on Ketsekele versus RAF contemplated a “radical change” to the present system.

“Judge Satchwell in her monumental report of the Road Accident Fund Commission commented upon the issue as long ago as 2002,” he wrote.

“The Minister of Transport has now published the Road Accident Benefit Scheme Bill. If implemented, it will create an agency that will compensate accident victims on a non-fault basis by the provision of medical and other services. It will hopefully provide a solution to the present morass of needless litigation and unacceptable delays.

“It does contain a worrisome proposal, however, that the new agency [would] absorb the existing fund’s structures.

“With such assimilation the new agency will be exposed to the risk of perpetuating the fund’s culture of indifference to human suffering and financial waste.

“If so, the new agency would be saddled with an inheritas damnosa, a cursed inheritance, that would doom it to fail virtually immediately.

“The compensation of road accident victims requires a radical change that should be free of the shackles of an institution that does neither comply with its duty to uphold the fundamental rights enshrined in the Constitution, nor with the duties imposed upon it by its statute.”

Parliamentary bills are akin to kites: some of them simply do not fly.

This article first appeared on Moneyweb and has been republished with permission.

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