The Satchwell Commission of Inquiry has recommended that the technically bankrupt Road Accident Fund be replaced by the Road Accident Benefits Scheme, which will be run as a social-security scheme.
The Satchwell Commission of Inquiry has recommended that the technically bankrupt Road Accident Fund (RAF) be replaced by the Road Accident Benefits Scheme (RABS), which will be run as a social-security scheme.
In a long-awaited 2 067-page report, tabled in Parliament on Tuesday, the commission suggested billions of rands in outstanding claims against the RAF should be ring-fenced. The RAF will be responsible for all claims arising out of accidents that occur before legislation creating the new scheme is enacted.
After that date, the commission said, the RAF’s fuel levy funding will be redirected to the new body, and the existing claims should be funded by special allowances from the finance department. The new scheme should be funded through a flat-rate levy on fuel purchased on land and partial exemptions for fuel used in the forestry, agricultural and mining industries.
According to , there should be secondary sources of funding in the form of a surcharge on the registration fees of light delivery vans, trucks, buses and minibus taxis, as well as a surcharge on traffic fines.
The commission, headed by Judge Kathy Satchwell, was tasked with investigating possible changes to road accident legislation, to ensure a reasonable and affordable system. The RAF currently has liabilities of more than R16-billion, and as CARtoday.com has reported over the 12 months, has been dogged by legal wrangles, corruption and fraud.
Satchwell recommended introducing a "no fault" principle and capping the amount of compensation that an injured person could receive for any particular injury. Those injured would retain their common law right to sue for the balance of the damage suffered.
The move would help reduce the current high administrative costs, and legal costs incurred in attributing blame, which took up between 30 and 55 per cent of the fuel levy income.
The method of payment, which has been a bone of contention between the fund and the legal profession for some time, is to be overhauled. Payments should no longer be paid out in a lump sum but periodically, and in line with actual medical expenses and income lost, reported.
Initial medical costs - for trauma and acute care - would be covered by RABS at public healthcare rates, while the scheme would assess initial and ongoing payments for future costs. Benefits for loss of income or loss of support from a family member could, preferably, be paid monthly in arrears, the commission’s document read.
Furthermore, people who did not sustain bodily injury but suffered from psychiatric illness or post-traumatic stress as a result of observing or learning of the injury of another person would no longer be able to claim compensation.
The report says elements of the current system were “inequitable, as well as inefficient, unsustainable and unreasonable”. Most claims were currently paid out for “minor” injuries such as contusions, sprains, strains and lacerations, and disproportionately large amounts were spent on general damages, the report said.
"Expenditure of fuel levy income on administration and provision of compensation for minor injuries with negligible impact on health and no lasting effect should be eliminated or reduced," it says.
The commission also recommended that the National Treasury regularly adjust the fuel levy to ensure sufficient funding for the scheme, and that a reserve be set aside to guard against unexpected contingencies.
The report says the commission was divided on the question of which government department should be responsible for the proposed RABS.
Two commissioners, including Satchwell, recommended the ministry of social development carry overall and political responsibility, while one commissioner suggested it fall under the authority of the ministry of transport.
The commission said although the board of the RAF, and its new management, had indicated a commitment to create an efficient organisation, there were still many examples of deterioration.