The rapid depletion of the Road Accident Fund’s reserves may mean that South African motorists have to pay for damages themselves after causing accidents in which people are badly injured.
The rapid depletion of the Road Accident Fund’s reserves may mean that South African motorists may to pay for damages themselves after causing accidents in which people are badly injured.
Following the fund’s decision to pay claimants money on an instalment basis, lawyers acting for accident victims would probably start suing drivers, vehicle owners and the employers of drivers who cause the accidents.
Personal injury lawyer and past president of the SA Association of Personal Injury Lawyers, Malcolm Lyons, told the the decision was taken after one of his clients was offered a lesser cash settlement by the fund than what he had originally tabled. After waiting four years for the case to come before the courts, the settlement would be paid in monthly instalments and his medical expenses covered for life.
Lyons said that since the fund did not have the money to pay settlements, he would have to start suing drivers, their employees and vehicle owners. Though this practice is not allowed when claiming from the Road Accident Fund, the law does make provision for these individuals and companies to be sued where the fund is unable to pay.
The move could cost motorists and their employers millions of rands if they have claims the fund cannot pay. With a deficit of R23,8 billion, the fund is practically insolvent though it does receive a monthly cash stipend from fuel levies.
And though it has been rumoured that the Road Accident Fund may be closing down, it has said it would continue to pay claims and that its current financial situation was simply the result of inadequate funding.
