The controversial Road Accident Fund will be overhauled in line with the recommendations of the Satchwell commission and the new structure will be based on a no-fault system of compensation.

The controversial Road Accident Fund will be overhauled in line with the recommendations of the Satchwell commission and the new structure will be based on a no-fault system of compensation.


CARtoday.com reported earlier this year that the fund is technically insolvent with an actuarial deficit of about R16 billion and there were reports that the fund would be bailed out by hiking the fuel levy - which would increase the fuel price - paid by motorists.


On Wednesday, Transport Minister Dullah Omar told a parliament an interdepartmental task team had been appointed to formulate an implementation plan including time frames and costing but said it would cost "billions" to set up the new system of compensation.


The no-fault system will mean that accident victims would not have to prove they were not negligent to receive compensation, saving hundreds of millions of rand spent on legal fees.


Judge Kathleen Satchwell's commission of inquiry made 178 recommendations to Parliament and Omar said all the documents would be thoroughly studied by the task team.


Legislation would be needed to bring in the new system, but Omar said a large number of cases would have to be dealt with under the existing act. Therefore, both the new and old systems would have to coexist during the transitional phase.


Transport deputy director-general Sipho Khumalo said the department was looking at a number of short-term measures to stem the losses of the fund, including curbing the claims from foreigners involved in accidents who claimed in their own currency, reported.


In addition, instead of making lump sum payments, which are proving a drain on the fund, victims will be paid out claims as costs are incurred, Khumalo added.