Road Accident Benefit Scheme (RABS) Bill: public hearings day 2

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22 May 2018
Chairperson: Ms D Magadzi (ANC)
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Meeting Summary

The Black Lawyers’ Association (BLA) accepted that changes should be made to the Road Accident Fund (RAF), but did not agree with all the changes in the Road Accident Benefit Scheme (RABS). RABS was said to be unreasonable because it did not award general damages to victims of road accidents. Removing the common law right to damages rendered the Bill unconstitutional. The BLA argued that the Bill was not pro-poor. It did not fund legal costs. Claimants would be represented by the administrators of the RABS. By not allowing legal representation, a victim’s rights would not be protected.

The Law Society of the Northern Provinces (LSNP) and the BLA were against the no-fault system in RABS, as it excluded from liability the owners, drivers and employers of drivers involved in road accidents. A no-fault system incentivised people to be involved in accidents so as to get income and medical benefits. If the no-fault system was introduced, claims would increase by two-thirds of the current claims to the RAF, which meant that RABs would not be viable. The R10 000 funeral benefit in RABS was not enough because it did not cater for African burials, which were generally big events.

The LSNP called on the Minister of Transport to formulate a tariff which would guide private hospitals in providing medical services to road accident victims. A tariff was requested because RABS provided that victims of road accidents would be given quality medical care. The LSNP relied on a Constitutional Court matter to support the provision of quality medical care from private hospitals for road accident victims. The Minister had not formulated the tariff but had appointed Ernst and Young to formulate a tariff. The Ernst and Young report had not been made public, and not even given to the Portfolio Committee.

The LSNP was against absorbing the RAF into the RABS, as it went against the Satchwell Report which had recommended that if RABS was introduced, it should not be burdened by the baggage of the past, and should thus be financially and administratively independent of the RAF. The RABS Bill contradicted the Satchwell recommendations, as it was simply the RAF rebranded.

The LSNP and BLA did not support the RABS Bill because they felt it was not pro-poor. There was little information for the public to assess and ensure that proper benchmarking had been done to ensure that RABS was viable. The Department was asked to ensure that RABS was more equitable by balancing the flexibility in determining economic losses with the affordability and equity objectives of the scheme. They asked that the Portfolio Committee value the contributions of the legal profession and use them to ensure that the rights of all South African citizens and victims of road accidents were protected under the law.

Members asked why the RABS should cover legal costs, because there had been cases of lawyers defrauding claimants of their RAF benefits; why lawyers believed victims could not claim without their help; if RABS were to award legal fees, whether lawyers would accept fixed legal fees; why general damages should be awarded; and why private, and not public, medical services should be offered to victims of road accidents.

Meeting report

Black Lawyers’ Association: Submission

Mr Lutendo Sigogo, President: Black Lawyers Association (BLA), said the BLA had previously made two written submissions regarding the Bill -- one in 2014 and the other in 2015 – and summarised the issues in both. He that there should be changes to the current road accident legislation to fit the current times, and parts of the Bill were problematic and did not meet the interests of society.

The Preamble of the Bill stated that the intention of the legislature was to enact an Act that was reasonable, equitable, affordable and sustainable. Some of the proposed changes in the Bill did not support this intention. Doing away with non-patrimonial damages against the scheme and insured driver brought about the question of whether that amendment was reasonable and equitable. Reasonableness and equity would be given effect if compensation was made available in the form of non-patrimonial damages, which were commonly known as general damages.

The Bill proposed that the Road Accident Benefit Scheme (RABS) would save 15% of what was currently being claimed from the Road Accident Fund(RAF). The BLA was concerned that the Bill would actually be more expensive to put into effect than it intended. He reasoned that recent amendments to the RAF were supposed to reduce expenditure, but had resulted in a higher expenditure of funds.

The BLA was also concerned that the Bill was not pro-poor members of society. The only thing pro-poor was the cap on the pre-accident annual income cap of claimants. The cap indirectly favoured the poor because people who earned above a certain income would be capped in terms of how much they could claim from the scheme. A direct initiative that would benefit the poor was the average annual national income. The rest of the Bill’s clauses were pro-rich. Only the rich could afford insurance to supplement their RABS benefits. Only the rich could afford legal representation. This meant that only the rich, not the poor, would benefit from this scheme. The Bill did not fully protect the rights of the poor. Therefore, doing away with legal cost would disadvantage the poor, as they would not have legal representation to protect their rights.

Clause 28 of the Bill dealt with the liability of the owner, driver and employer of the driver of a vehicle. He found no problem with that clause, as that was the position in the Road Accident Fund Act. However, clause 29 was problematic as it excluded general damages from the categories of benefits that may be claimed. Victims of road accidents would be the first class of victims in South Africa to be denied their common law right to be compensated for general damages. This amendment would disadvantage the poor.

Mr Sigogo said that the Department of Transport (DoT) had relied on the Compensation of Occupational Injuries Act 130 of 1993 (COIDA) to exclude damages from RABS. He was against such reliance on the basis that although section 35 of COIDA excluded general damages, section 36 of COIDA included general damages against all persons, except the employer. This meant that an employee may claim non-patrimonial damages if not paid under COIDA, whereas under RABS a road accident victim could not claim non-patrimonial damages. Furthermore, COIDA did not operate a complete no-fault system. Section 56 of COIDA took into account negligence of employers. Where an employer had been negligent, the injured employee’s compensation may be increased either in the form of actual loss suffered, or a penalty to the employer. RABS would be the first law of its kind in South Africa to exclude non-patrimonial damages.

Recently, the High Court and Constitutional Court had found reasons to enforce claims against employers, irrespective of the compensation commissioner, in terms of COIDA. In Mankayi v Anglogold Ashanti (Constitutional Court, 2011), the court had ordered general damages against the employer. In Nkala v Harmony Gold Company Limited (High Court, 2016), the court had allowed employees who had contracted silicosis to bring a class action against the employer. Silicosis was an occupational disease covered by COIDA. The matter had been settled at R5 billion for general damages. General damages were an important right of victims, and these cases showed that COIDA could not be relied on to take that right away. The Nkala case had been well received by the Minister of Mineral Resources.

Mr Sigogo said that road accident legislation (including RABS) must be aimed at protecting the victims, and not the culprits. Culprits must take personal insurance to cover their legal costs and other expenses arising from an accident they caused, or else the victim then became burdened. The BLA had observed that the narrative in the country was that victims’ rights did not matter. Persons may be injured and rendered unemployable, but nothing was done unless legal action was taken to put the victim where they would have been if they were not injured. Road accident victims were also left uncompensated unless they took legal action. The Constitution guaranteed equal protection of the law. Road accident victims must be protected by the law. Victims of assault, rape and medical negligence could sue and claim for general damages. Therefore, RABS should not deprive road accidents victims of the right to claim for general damages. Removing the right to general damages was taking away a constitutional right. Even if the Portfolio Committee tried to invoke section 36 of the Constitution, which provided that rights may be limited, it would not suffice. RABS applied to road accident victims, therefore it did not qualify as a ‘law of general application,’ as required under section 36 of the Constitution.

Mr Sigogo was against the no-fault system in RABS. In its first submission, the BLA had said that if a criminal caused an accident while trying to get away from the police, both the victim and culprit would be compensated if the culprit’s act was not deemed to be terrorism. This was an anomaly, and should be changed. Also, an employed person who caused an accident and injured a final year student would be paid out more than the final year student, because the legislation did not consider the earning potential of the student. The RABS Bill must ensure that earning potential was compensated.

The Bill also negatively affected South African students studying abroad. Such students may be disqualified from claiming because they may be classified as foreigners under the Bill if they were in South Africa for less than six months in a year for three consecutive years. The BLA was also against the limitation of claims for loss of support at the age of 60. The Bill did not consider those who work over the age of 60, like lawyers, accountants and politicians. The clause which gave the administrator the discretion of how to pay the victim (ie monthly or yearly) was welcomed, but had shortcomings in that it would not be based on actuarial calculations, and inflation would not be taken into account.

Mr Sigogo said that clause 38(4)(b) provided that dependents of a deceased person would be paid out only if they could prove that the deceased’s death was caused by a road accident. Families may not always be able to prove this. Experts may be needed to provide such prove. For example, a lawyer may be needed for inquest investigations into the death. The poor may not be able to pay for the services of experts to prove their case, and would not be compensated. For that reason, the Bill could not simply remove legal costs from a victim’s benefits.

Mr Sigogo said that in terms of the Bill, the Minister of Transport had a discretion as to whether he should include inflation in the compensation or not. The BLA was against such a clause in the Bill, because inflation affected everything and should therefore not be excluded from compensation. He disagreed with the prescription period given to vulnerable people in the Bill. Claims of people with full legal capacity prescribed after three years, whereas those of people with limited or no capacity prescribed after one year. Such a clause did not protect children and people with disability, and that should be addressed.

Finally, clause 48(2)(a) excluded advocates from appeal committees and was therefore incompatible with the Legal Practice Act 28 of 2014. It excluded advocates because it stated that members of the appeals committee must be members of the Law Society of South Africa. Not all advocates were members of the Law Society, and therefore this clause should be amended. This clause also disregarded the amendments to be introduced by the Legal Practice Act, which stated that advocates and attorneys shall belong to one body, the Legal Practice Council.


Mr L Ramatlakane (ANC) asked whether the BLA had worked on RAF matters and whether they protected victims of road accidents. Lawyers generally did not represent the poor. In 2015 and 2016, attorneys’ legal fees had gone up by 46%, but the legal costs for aids of the poor had gone up by 25%. Legal fees were spiraling out of control, as lawyers had made R8.3 billion in the 2017 financial year. Awarding legal costs to road accident victims benefited attorneys more than the victims, and that was why legal costs had been excluded from the Bill.

Mr Sigogo’s statement that the general narrative in the country was that the rights of the victim did not matter was a loaded statement. It was accusing Parliament of not caring for the victims of road accidents and the poor. If not, then who did Parliament represent? The BLA needed to help the legislature instead of accusing it. Mr Ramatlakane asked Mr Sigogo to list clauses as examples, to clarify his statement that some of the clauses of the Bill did not fulfill the objectives of the Bill and were unconstitutional. Mr Sigogo needed to be clear, because public hearings were organised by the Portfolio Committee so that the laws passed were good law. Laws were made to protect everyone, with or without a lawyer. Therefore Mr Sigogo could not suggest that people’s rights in terms of the law would not be protected without lawyers’ services.

Mr Sigogo responded that his statement that the Bill was not pro-poor was not an accusation, but a form of assistance to produce good laws for South Africans. The BLA had identified something that might not have been intended by the Committee. The BLA worked to protect the vulnerable in society, and they did not turn away people who could not afford legal services. They handled many pro bono cases. Members of the BLA worked with road accident victims. The work was done not to benefit financially at the victim’s expense. Unfortunately, there were some lawyers who sought to benefit themselves and not the victims. There were very few lawyers like this, and they needed to be rooted out to protect the name of the legal profession.

The Road Accident Fund Act 56 of 1996 was supplemented by the Contingency Fee Act 66 of 1997, which determined how much lawyers could charge for legal costs. The Contingency Fee Act provided that a road accident victim was entitled to a minimum of 75% of the payout from the RAF. This meant that victims were entitled to more than attorneys. If this provision was implemented well, victims would be better compensated and not charged high legal fees.

He had dealt with section 36 of the Constitution extensively when he said that the RABS Bill could not limit the victim’s common law right to claim against the wrongdoer and the right to general damages, because that clause was not a law of general application. It targeted victims of road accidents and not everyone in society. Many law firms would be affected if the RABS Bill was passed and the RAF was done away with, but lawyers were able to adapt. If RABS was not properly implemented, there would be many court cases challenging it, and the purpose of excluding attorneys from the process of claiming from RABS would be defeated. The BLA wanted a system that would be beneficial to all South Africans. Lawyers services were not simply used all the time. They were used when rights were violated. They were not the first port of call, but the last resort.

The Chairperson said that claimants generally got less than 75% of their claim because lawyers put additional fees to the 25% of their legal costs, often resulting in the lawyer getting more than the claimant. In drafting the Bill, the Portfolio Committee took into account that not all lawyers practiced the law in good faith, therefore the awarding of legal costs to claimants had not been included in the Bill.

Ms S Xego (ANC) said that the RABS Bill had been drafted based on good and bad experiences. The BLA had suggested that the Bill was not pro-poor. That was not true. Generally, when a victim was compensated, the money was deposited into the attorney’s fund. The role of attorneys was to protect the general public, but some attorneys were struck off the attorney’s roll because of bad practices linked to defrauding victims of road accidents. Also, if the lawyer died before the payout, the time taken to pay the victim was prolonged. The Bill had been drafted to address such challenges faced by victims, especially the poor.

Ms Xego asked Mr Sigogo to expand on his submission regarding the exclusion of advocates from the Bill. If the Portfolio Committee (PC) were to introduce legal costs into RABS, would lawyers accept fixed legal costs for representing claimants? She asked whether the BLA had considered that many claims were made, but that road accident funds were depleted.

Mr Sigogo said that the BLA was not opposed to change, because changes were generally introduced to solve identified problems. However, the change must be good. The ideal law reforms of compensating road accident victims had been addressed in the BLA’s submissions to the Committee. Its submissions were to ensure the constitutionality of the RABS Bill, and to protect the poor. The exclusion of legal costs was uncalled for, because the vulnerable need to be protected. Lawyers were expected to be fit and proper when representing clients. However, there were a few lawyers who had defrauded claimants. When lawyers misappropriated claimants’ funds, the Attorneys Fidelity Fund paid out the claimant plus interest. The legal profession did not treat fraudulent behaviour by attorneys lightly. Fraudulent lawyers were struck off the roll. This was a mechanism for protecting the vulnerable.

Mr Sigogo said it did not take a long time to pay out a claimant from an attorney’s fund when the attorney died. A slight inconvenience may be caused, but it was not for a long time. The curator’s office from the Law Society appoints a curator to ensure that clients of the deceased attorney were paid out.

Regarding the exclusion of advocates in the Bill, he restated that advocates should be allowed to be part of the appeals committee because when the Legal Practice Act was passed, it stated that advocates and attorneys shall belong to one body, the Legal Practice Council.

Regarding the depletion of funds, he said that even if there were enough funds, there would still be a backlog of claims because of the slow administration process.

He suggested that solutions to all the problems identified needed to be found. The RAF was once paying claimants out in instalments. Regarding attorneys’ fixed costs being included in RABS, he responded that such a system could work if it did not compromise legal services.

The Chairperson asked whether all claimants should be paid a fixed amount, regardless of the injury.

Mr Sigogo responded that fixed amounts should be set for different injuries because, for example, the compensation for losing an arm would not be the same as that for the loss of a finger. Other factors must also be taken into account, such as the consequences of the injury. Compensation to claimants should be determined on a case by case basis. General damages should not be completely done away with. In some instances, general damages did not need to be compensated, but claimants who lost limbs and mental capacity should be awarded general damages.

Mt T Mpanza (ANC) did not agree with M Sigogo’s statement that the RABS Bill was not pro-poor. The Bill protected both the poor and the rich. The BLA’s statement did not consider middle-class victims who were neither rich nor poor. He asked whether Mr Sigogo was in favour of a fault or no-fault system. He disagreed with Mr Sigogo about the time taken to pay out victims when an attorney died. Victims were generally paid out long after the attorney’s death. Portfolio Committee Members had investigated the process and it was very cumbersome and discouraging to claimants.

He said that Mr Sigogo had raised constitutional challenges against the Bill, but the challenges were not facts, merely opinion. He asked Mr Sigogo to make a submission with a compromise which could be reached relating to the issues that he had raised relating to the Bill. The Committee considered public recommendations in drafting legislation so that good laws were passed and were not taken to court.

Mr Sigogo responded that the BLA had considered the middle-class in its submissions. He supported putting a cap on claims from rich people to fund the poor. He supported the national average benefit in the Bill which provided that if the road accident victim was earning a minimum wage, the RABS would ignore his salary and pay out the higher national average income. The R10 000 funeral benefit in RABS was not enough. What standard had the Committee used to reach that amount? Were African or western standards used? RABS must take into account that Africans had big burials and RABS had to provide enough financial support for them. Not all road accident victims should be covered - only no-fault victims should be covered. Perpetrators of road accidents should not be compensated. He agreed to make a submission containing a compromise on the issues he had raised.

The Chairperson asked the BLA to deliver on its agreement to make a submission with suggestions relating to the issues in the RABS Bill.

Mr M Sibande (ANC) said that some of the submissions did not relate to the agenda of the meeting and therefore had not given the PC direction. For example, the comments on employer and employee relationships and the Nkala and Mankayi cases on mining were irrelevant for the Portfolio Committee for Transport, as they do not give the Committee proper direction. The Committee had removed legal costs from RABS because some attorneys benefited at the expense of poor people. The laws relating to road accidents were outdated, as they had been established in 1942, so they needed to be changed. Lawyers should come up with solutions and not threaten to take the legislature to the Constitutional Court, as that was not helpful. Lawmaking required solutions, not critiques.

Mr Sigogo asked the Portfolio Committee to accept the criticism because the BLA was merely trying to build the law. If criticism was not given at the drafting stage of the RABS Bill, then the Committee risked the Act being challenged when the Bill was passed. When the PC went around the country consulting the public, the BLA had encouraged its members to attend and make submissions so that good laws were produced. The BLA was not threatening the Committee with the Constitution, as it was drafted by Parliament. Parliament and all South Africans must protect the Constitution.

Mr M Shelembe (NFP) asked what portion of a claim was given to a middleman who helped the road accident victim and attorney with the claim. Were they paid according to the time that they had worked on the matter?

Mr Sigogo said such a middleman was called a “tout.” Touting was not allowed in the legal profession; therefore the cost of a tout could not be charged to a client. The majority of road accident victims were black people. Many of them did not know about prescription of claims. The objective of the RAF was to protect these victims. Time-billing should be reconsidered, because it benefited lawyers who did not know how to do their work. A claimant should only use the services of a lawyer who agreed on costs which had been agreed from the outset. Claimants must receive a minimum of 75% of their claim after lawyers had deducted their fees.

Law Society of Northern Provinces: Submission

Mr Gert Nel, Council Member: Law Society of the Northern Provinces (LSNP), said he worked with road accident victims, had worked for the RAF, and was also a member of the personal injuries committee at the Law Society of South Africa. He apologised for those lawyers who had brought the profession into disrepute by being fraudulent.

He said that the RABS Bill needed to find a balance between being pro-poor and the affordability of the scheme. The primary objective of the Bill was to provide medical care. In the matter of the Law Society of South Africa and Others v Minister of Transport and Another 2011, the court had found that road accident victims must be given quality medical care, which was generally found in private hospitals. The Minister of Transport had been directed to formulate a tariff which would guide hospitals in providing such services to members of the public. The Minister had not formulated a tariff at which RABs could be costed. The DoT had appointed Ernst and Young to formulate a tariff, but the finds of the report had never been made public. The Department had said that a tariff would be set after the Bill was passed. He disagreed with that approach because before the Bill was passed, its affordability needed to be assessed. If the Department argued that RABS was a viable scheme, the public must be given reasons and evidence of this assertion.

Mr Nel said that by having a no-fault system, the Bill incentivised people to be involved in accidents so as to get income and medical benefits. If the no-fault system was introduced, claims would increase by two-thirds of the current claims to the RAF, which meant that RABs would not be viable. Given the high accident rate in South Africa, the cost implications for government would be high if it had to provide road accident victims with private medical schemes. If the Bill was passed before the tariff was set, victims of a road accident would risk paying top-up insurance for the difference between the cost of private medical care and what the scheme would pay. The Department had argued that the scheme would operate at contracted private hospitals, so the victim’s risk of liability for excess payment would be done away with. That was unlikely, because there were many medical practitioners who charged more than what the scheme would be willing to pay.

Mr Nel asked why the Department had been delaying since 2014 to set a single medical tariff so as to allow the public to make informed assessments of the viability of the RABS Bill. The answer to this was in a report prepared for National Treasury by Mr Alex van den Heever. The report had said that to negotiate a single tariff suitable to all parties was virtually impossible. Even if a tariff was negotiated, considering rising medical costs, there would always be irreconcilable differences, which would result in an agreement that was uncompetitive.

The DoT had not told the public whether hospitals would be willing to accept a single tariff set by the Department. It had previously consulted with Alexander Forbes regarding an appropriate tariff. Alexander Forbes had stopped the consultations because the RAF could not pay the company’s consultation fees. Because of the no-fault system, RABS may not afford to pay private hospitals.

Mr Nel said that the LSNP had previously asked why the DoT considered the RABS Bill to be pro-poor if unemployment was high and the minimum wage was R3500 per month (R42 000 per annum). The Department’s response had been that the RAF Act provided no compensation for the loss of income for the unemployed. Those who earned the minimum wage were compensated with that wage. Under RABS, the unemployed and those who earned below minimum wage would have more benefits, as they would be compensated on a deemed income of R52 527 per annum -- an amount higher than the minimum wage. The LSNP had made a written submission stating that the Department’s response was misguided and an attempt to mislead the public into thinking that the RABS Bill was pro-poor.

The RAF offered better relief for road accident victims. It made provision for an increase in salary over and above the minimum wage, whereas the RABS offered a fixed deemed income. This meant an unemployed person would be better off claiming from the RAF than RABS. There was little security under RABS, because the administrator had wide discretionary powers and may reduce or stop the benefits if he realised that the benefits were unaffordable. In 2014, the Department had acknowledged that offering the average annual national income on a no-fault basis would be unaffordable, and would open RABS up to constitutional challenges.

Mr Nel said that the LSNP had previously asked the DoT why general damages had been removed and other benefits limited under the RABS Bill. The Department had responded in writing, saying that removing general damages under RABS was aligned to social security principles. Instead of compensating something that was not a loss, general damages had been removed so that RABS could compensate more people while remaining affordable and sustainable. Basically, RABS would substitute general damages with rehabilitation. Mr Nel found the rehabilitation benefit problematic, because only 15% of road accident victims qualified for rehabilitation. Therefore, rehabilitation was not a just substitute for general damages. Any deviation from the RAF system would not be viable.

Mr Nel referenced the Satchwell Report, which had said that there should be a no-fault system, but the right of the victim to sue the wrongdoer should be retained and that RABS should provide life-enhancement benefits. This was a different description of general damages, but favoured the retention of general damages for people who suffered life-changing injuries. He asked whether providing rehabilitation for severely injured victims was reasonable. The Satchwell Report indicated it had not been proved that removing general damages and introducing a no-fault system would result in more people being paid out. LSNP had consulted actuaries who had said that when RABS was introduced, the fuel levies funding the RAF would be redirected to fund the RABS, and any surplus would be used to pay RAF claimants. This was alarming, because victims with existing claims already had to wait for nine months to be paid out even where they had a court order instructing the RAF to pay. This showed that the RABS scheme would be unaffordable, because RAF victims may not be paid out because funds would be redirected to RABS.

The Department had previously said that the RAF would be absorbed into the RABS. This was against the Satchwell Report, which recommended that if RABS was introduced, it should not be burdened by the baggage of the past, and should thus be financially and administratively independent of the RAF. The RABS Bill contradicted the Satchwell recommendations as it was simply the RAF rebranded.

Mr Nel noted that clause 42(3) of the RABS Bill allowed RABS administrators to help claimants lodge claims, and clause 42(2) stated that the administrator would not be liable to pay out until a claim was submitted. A claimant needed to prove that he was in an accident and the extent of his injuries. RABS used the no-fault system, which meant that all persons injured in a road accident may claim, but they also needed to prove that they were in an accident. People involved in road accidents did not automatically qualify for RABS benefits. For example, this meant that each person injured in a taxi full of people needed to prove to the administrator that he was in an accident and the extent of his injuries in a medical report. Clause 42 applied to people who had already qualified for RABS benefits. The Bill was not accessible and pro-poor because not all people could get a medical report. Without a medical report, the poor could not lodge a claim for RABS. Clause 43(2) problematic, as it gave the administrator discretion when deciding whether to process claims. The Bill did not make RABS accessible to people, as they would be lodging claims to the administrator unassisted. The Bill was drafted in a way that discouraged people from claiming.

Mr Nel compared the assistance of the administrator in RABS to RAF representatives. He said that the RAF had representatives who assisted claimants in hospitals and administrative offices. The RAF representatives advised claimants on how to claim and discouraged them from consulting lawyers, claiming that lawyers would steal their money. The RAF was poorly administered. Many claims lodged using a representative prescribed, or were under-settled. It was likely that the same would happen under RABS. The Department had previously said that the no-fault system would result in many claims. If the claims increased uncontrollably, the RABS benefits would be reduced. RABS had not set fixed benefits because its affordability was not guaranteed, and the Department did not know how much would be needed to fund the benefits. Therefore, inflation would not be applied to claims and claims may be reduced or stopped by the administrator when the scheme could not afford it.

Mr Nel said that the Satchwell Report had stated that the no-fault system would increase claims made to the RABS. If a no-fault system could not be done properly, then it should not be done at all because it would prove to be more expensive than the RAF. RABS did not give long-term security to unemployed claimants, as claims would be subject to review based on the affordability of the scheme. The Bill was not pro-poor, because it offered no financial rehabilitation, and lump sum payments were only made subject to clause 36(10).

The LSNP had previously asked the Department whether the no-fault system had been compared to other jurisdictions. Its response had been that the no-fault system had been tested against other countries by the Satchwell Commission, which had recommended a no-fault system. The no-fault system had been approved by Cabinet because its benefits were designed for South African conditions. However, the countries used in the comparison were other third world countries, which had lower accident rates than South Africa. The comparison in the report was not on accident rates, but rather the quality of service delivery. The Department had not addressed how it intended to deliver services in relation to the administration of RABS. He advised the Department to use the recommendations in volume two of the report relating to the administration of the scheme.

Mr Nel found clause 35(5)(c)(i) problematic because it stated that claimants would not get benefits for the first 60 days after an accident so that assessments may be done. Claimants would get medical treatment during that time, but the extent of the medical benefit was not clear, because a tariff had not been set. The Bill was unconstitutional because it did not allow for private medical care, but referred to a tariff which was unknown. If the Bill was passed without a set tariff, it would be found to be unconstitutional on the basis of the Law Society of South Africa and Others v Minister of Transport and Another 2011 matter. Clause 35(7) and 38(14) state that claims would not be adjusted with insurance. This proved the unaffordability of the Bill.

He had an issue with clause 47(1), as it gave administrators 180 days to process claims. Victims would be prejudiced by the unreasonable delay, and claims should be processed in 120 days. He asked that the Department address how it would pay medical service providers. Medical service providers could claim payment for their services from RABS if they submitted the requisite documents. He asked what measures medical service providers could take to claim from the fund if they could not get all the information relating to victim accidents.

The Department had previously said that the RABS Bill was not dependent on the introduction of the national health insurance (NHI) scheme. The Bill in its current form could not provide for private medical care and victims would have to go to state hospitals if the Department did not negotiate a medical tariff with private hospitals. The DoT should include the Minister of Health in RABS discussions.

Mr Nel said that the LSNP would like a Regulatory Impact Assessment (RIA) of RABS to be done. An RIA was a method to assess the impact of a regulatory measure. It showed the costs and benefits of the measure, the implications for compliance and the state’s cost of enforcement. He said that the RABS Bill could not be passed without going through an RIA, and he asked the Portfolio Committee to propose the RIA to promote transparency and a proper costing analysis.

Mr Nel did not support the RABS Bill because he thought that it was not pro-poor. There was little information to assess and ensure that proper benchmarking had been done to ensure that the RABS was viable. A lot still needed to be done by the Department to ensure that RABS was more equitable by balancing the flexibility in determining economic losses with the affordability and equity objectives of the scheme. He asked that the Portfolio Committee value the contributions of the legal profession and use them to ensure that the rights of all South African citizens and victims of road accidents were protected under the law.


The Chairperson said that the Ernst and Young report would not be circulated, because Ernst and Young had put a disclaimer in the report that it should be seen only by the RAF unit, the board and executive. Even the Portfolio Committee could not see the report. She asked whether Mr Nel had received permission from his client to distribute images to the Committee. The image was of a woman’s body from the stomach down. The lady was wearing underwear and her leg was injured

Ms Xego said that the Portfolio Committee could not answer many of the questions, as they had been directed to the Department and not the Committee. She asked Mr Nel to expand on his statement that the no-fault system would be more expensive than the system under the RAF. The Committee would continue gathering information through public participation. It would interview victims who had used lawyers to help them claim from the RAF to determine the feasibility of removing legal costs in RABS. She asked what would prevent victims from claiming without help from lawyers.

Mr Nel responded to the Chairperson’s statement by saying that the Ernst and Young report should be circulated so that the public knew whether RABS was a more viable option.

 He had asked his client for permission to use the images of her injury. He had shared the image to show the severity of the injury and how the client would be able to claim under the RAF, but not under the RABS.

In response to Ms Xego’s question, he said that an actuary would be presenting the following day to comment on how the no-fault system was more expensive. The written submissions of the actuary would show that although RABS would not be paying out lump sums like the RAF, rehabilitation was the most uncertain and expensive benefit in RABS. Victims claiming from the RAF would be negatively affected if the RABS Bill was passed, because their claims would be considered only after funds had been allocated for RABS. More details would be provided in the actuary’s presentation.

Mr Nel introduced one of his RAF clients, Mr Lebereko, and asked if Mr Lebereko could give his account of being a road accident victim and how Mr Nel had helped him lodge his claim to the RAF.

The Chairperson and Committee Members were against allowing Mr Lebereko to make a submission. The Chairperson said that the Committee did not want to create a precedent of allowing organisations to bring people to give testimony. Members of the public would be given an opportunity to make submissions at the public participation stage, when the Committee visited the provinces. The Chairperson pointed out the time constraints of the meeting, which would not allow Mr Lebereko to make a full submission, and once he presented, the Committee would ask him questions. To protect him from questions he would not be unable to answer, the Chairperson asked him not to make a submission.

Mr Ramatlakane referred to Mr Nel’s statement that there must be a set tariff which was known by health care service providers. If that was not done, then the Bill would be unconstitutional. He said that passing the RABs Bill did not rest on whether a tariff was set. Road accident victims could go to public hospitals. Setting the tariff was determined by the DoT and not the Committee. He asked why the LSNP was against the removal of legal fees from RABS. Victims should have a choice as to whether they wanted to be assisted when claiming. Not being helped by a lawyer was a cheaper option, and that was why RABS did not cover legal costs. He asked Mr Nel what reform the LSNP suggested. Did it believe there must be a change? Did it agree with the changes that the Committee had proposed? Must the RAF be left intact?

Mr Nel said that the point of RABS was to provide quality health care. Some state hospitals were good, but some were not. There had been a rise in medical negligence cases, and that was why victims of road accidents must be treated at private hospitals to get quality medical care. If RABS did not pay for private medical care, the Department should consult the Department of Health about improving its health care services.

The Chairperson asked Mr Nel to understand that the Department of Transport, the RAF and the Department of Health, through the NHI, would work together to ensure that public hospitals complied with offering proper medical services. Public hospitals must not be looked down on, because when medical aid members exhausted their benefits, they moved to public hospitals.

Mr Nel responded to Mr Ramatlakane by quoting the Law Society of South Africa and Others v Minister of Transport and Another 2011 matter, which stated that the public sector could not provide adequate services. The objective of compensating road accident victims was to give them reasonable healthcare (paragraph 99). Mr Nel said that giving victims quality health care was not unreasonable, because that was the suggestion of the Constitutional Court. The RABS Bill would be a quality Act and would not be challenged in the Constitution if it included the recommendations from the Satchwell Report. The Department had picked only a few recommendations from the report to suit its own requirements. If a constitutional right was removed, it must be replaced with an equal or better right. Therefore, if general damages were removed, they must be replaced with something similar or better.

Since the Committee had not allowed Mr Lebereko to speak, Mr Nel gave an account of Mr Lebereko’s story. He had been involved in a road accident and his face had been disfigured. While in hospital, a representative of the RAF had approached him and asked him how much he wanted. He had asked for R120 000. The representative had said that that was little, and had offered him R200 000. Mr Lebereko had seen an advert for a lawyer and had contacted him. When Mr Nel had helped Mr Lebereko with his claim, he had been paid out R2.3 million.

Mr Nel said that claimants became victims doubly because they were injured in road accidents and then mistreated by RAF representatives. The RAF and RABS could not play the role of judge and jury by helping victims claim and processing the claim. Victims should have the option to get help from lawyers. The Satchwell report even recommended the representation of clients. Attorneys’ fees may even be capped, but they should not be completely removed. He disagreed with the point that legal fees were removed from the Bill to make it more cost effective. Claimants who would not be satisfied with the outcome of their claim would appeal and review the decision. A review cost R50 000. This would result in higher legal costs, because there would be more claims in RABS because of the no-fault system. To avoid many appeals and reviews, representation should be allowed in RABS. There had to be a balance between benefits and affordability.

Mr Ramatlakane said Mr Nel could not rely on the Constitutional Court matter to say that public hospitals did not provide quality health care and that road accident victims should be treated at private hospitals. Public health care services had to be improved and should not be completely disregarded. He asked Mr Nel how the tariff should be introduced. It could not be put in the Act because tariffs were not determined by the Portfolio Committee. He asked the LSNP to work with the Committee in finding solutions to the problems identified. The Satchwell Report had recommendations which were not binding in law, so the Committee was not obliged to include them in the RABS Bill.

Mr Sibande asked that questions for the Department should be directed to the DoT and not the Committee. The Committee still needed to decide whether victims should be represented by big law firms or lawyers appointed by the government. He commented that tariffs were not set by the Committee, as that was done by the Competition Commission. He asked Mr Nel who the tariff should be set by. Lawyers should not be the ones to determine the tariff. Compensation for injures should not be determined by lawyers, but by doctors. There were lawyers who had lodged claims and kept the compensation for themselves without giving the client any money. RABS would protect victims from such covert operations by lawyers.

Mr Nel responded to Mr Ramatlakana’s statement about provision of quality health care by saying that the DoT had previously affirmed that RABS was not dependent on the establishment of the NHI, but would have its own medical network. Such a network had not been established.

He responded to Mr Sibande by noting that at the beginning of his presentation, he had apologised on behalf of the legal profession for the behaviour of fraudulent lawyers. Lawyers should be allowed to represent clients, as they used precedents to determine compensation. Previously, the RAF had used the “vleis lys” (meat list) to determine compensation when different body parts were injured, but that was no longer done.

The meeting was adjourned.

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