Despite an imminent increase in the fuel levy, a part of which will bolster the troubled Road Accident Fund, the Parliamentary transport committee has been advised that payments for victims’ general damages, pain and suffering and disability, should be capped at R100 000.
Despite an imminent increase in the fuel levy, a part of which will bolster the troubled Road Accident Fund, the Parliamentary transport committee has been advised that payments for victims’ general damages, pain and suffering and disability, should be capped at R100 000.
That was one of various major amendments proposed to legislation governing the technically-insolvent Fund, reported on Thursday.
CARtoday.com reported last week that Finance Minister Trevor Manuel had announced that, as from April 6, motorists would have to pay 10 cents more per litre of petrol or diesel. Of the 10 cents, five would be added to the coffers of the Road Accident Fund, while five cents would go towards the general fuel levy.
However, a draft bill tabled in Parliament yesterday suggested that payments for general damages would be paid only in the event of serious injury (a permanent injury that leads to total disablement or paralysis, or dysfunction of a vital organ).
That would include brain injuries, the loss of sight or a limb or the use of limbs, and other serious injuries. The current legislation has no limit on compensation.
It is well-documented that the Fund, with actuarial liabilities of about R25 billion, has been plagued by fraud and mounting debt for many years. The amendments aim to bolster its finances and improve liquidity pending its total restructuring.
In future, serious injuries will be assessed by provincial medical panels consisting of a representative of the fund and independent medical experts.
Transport department deputy director general Nonkululeko Msomi told Parliament’s transport portfolio committee yesterday that the figure of R100 000 was based on analysis of claims finalised over five years, which showed that only one per cent were higher than R100 000 and 84 per cent were below R20 000.
A cap of R160 000 a year could be introduced in respect of loss of income or support. “Payments for future loss of income to a third party will cease on the death of the third party or when he or she turns 65. The liability of the fund for loss of support will cease upon the date the deceased would have reached 65 years of age,” the report quoted Msomi as saying.
Another proposed change in the revised Road Accident Fund Amendment Bill was to remove the limit of R25 000 on claims by passengers of minibus taxis as it is “believed to be unfair to have a specific limitation on such claims”, the memorandum noted.
No payments for emotional shock suffered by observers of accidents will be paid, and only R5 000 will be paid for funerals.
In most cases the fund will be required to compensate service providers directly in accordance with a prescribed tariff, which will be based on tariffs used for public and private service providers. However, where the third party has already disbursed funds, he or she will be paid directly.
The part of the claim not covered by the fund can be claimed elsewhere, from the owner or driver of the vehicle concerned, the bill says, and repeals a provision making the fund liable for the legal costs of claimants.
