Road Accident Fund Amendment Bill: deliberations

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28 October 2003
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Meeting Summary

A summary of this committee meeting is not yet available.

Meeting report

28 October, 2003

Chairperson: Mr J Cronin (ANC)

Documents handed out:
Road Accident Fund Amendment Bill [B64-2003]
Submission by the Office of the Chief State Law Adviser
Submission by the South African Chamber of Business (SACOB)
Submission by Ms P Coetsee

The Committee heard submissions on amendments to the Road Accident Fund Amendment Bill. Mr H Smuts (State Law Adviser) concluded that it did not contain anything that could be construed as unconstitutional. SACOB was concerned about the constitutionality of certain clauses, and particularly clause 17b relating to collateral benefits. Ms Coetsee voiced her concerns regarding the Road Accident Fund's desire to increase the ambit of the Undertakings Department, to pay for loss of future income and general damages claims in instalments. Mr Maggott's submission stressed the need for lump sum payments, especially at the initial stages of recovery. He also urged the RAF to speed up the whole administrative process.


Submission by the Office of the Chief State Law Adviser (Mr H Smuts)
Mr H Smuts (State Law Adviser) commented on the previous submissions that had questioned the constitutionality of certain provisions. He concluded that the Bill did not contain anything which could be construed as unconstitutional.

Proposed section 17(4)(a)
The proposed section sought to remove discretion and to make it obligatory for the Fund to compensate the claimant after costs had been incurred. The Coalition's view was that it infringed on Section 27(1) of the Constitution on the right to access to healthcare, and Section 9 (3) on the right not to be unfairly discriminated against. It might also infringe upon Section 12 on the right to bodily and psychological integrity, and Section 10 on the right to dignity. The State Law Adviser explained that section 17(4) merely prescribed how the Fund should deal with certain claims. The section did not limit or negate a persons right to access to health care, discriminate, or diminish a third party's claim against the Fund.

Proposed section 17(4)(b)
The proposed section was not in conflict with the Constitution as it did not deny persons the right to be legally represented.

Proposed section 17(4)(c)
The new provision sought to oblige the Fund to pay in instalments, and in accordance with the regulations, that portion of the amount payable with respect to non-patrimonial losses that exceeded the prescribed sum, and was hence not unconstitutional.

Clause 6(2) sought to provide that sections 17(4)(a), (b) and (c) applied to all claims under section 17 of the Act that had not been finalised prior to the commencement of the Amendment Act. The Bill merely sought to deal with future claims, as well as claims not yet finalised, in a different manner. Legally, no fault could be found in having the proposed section 17(4) apply to unfinalised claims when the Amendment Act effected.

Collateral benefits (proposed section 17B)
The proposed section 17b sought to limit the Fund's liability by providing that if a person was already covered against loss or damage from extraneous sources, such sources had to be taken into account when compensation was determined. The State Law Advisers were not obiliged to question how this provision would affect the insurance industry, and to what extent individuals would be willing to insure themselves.

Mr S Swart (ACDP) questioned the point of debating the legal issues and proposed that the Committee only seek clarifications. He did not want the process to be delayed by constitutional challenges.

The Chairperson described an example of a claimant who was made an offer by the Fund, and later went to a lawyer who advised that he was eligible to much more. The non-resident claimant who was entitled to claim for future loss of earnings, declined the offer and undertook legal expenses. Would that individual be prejudiced by retrospectivity, and would that not pose a constitutional challenge?

Mr Smuts said that his opinion was based on the fact that the claimant would be paid the same amount, only in a different manner. There might be an issue of individual expectations, but the described case did not pose a constitutional challenge.

The Chairperson said that with instalments, the claim payment would be paid out in a different form. However in some other cases, the Committee's aimed to ensure that there was a curb on expenses from the Fund, as in the cases of non-residents. The same idea corresponded to prescribed tariffs, where there might be inflated claims which did not reflect the appropriate necessary treatment. He proposed retaining retrospectivity and introducing some appeal mechanism for cases that were not yet finalised.

Mr Smuts suggested giving discretion to the Fund, with the necessary parameters, to decide whether to pay out in instalments.

Mr S Mphahlele (Department) had also obtained legal opinion from Senior Council that was almost the same as that one presented by the State Law Adviser. There was, however, a slight difference in the principle. The main concern was whether particular legislation would affect substantive rights of individuals, or whether it was just a merely a procedural issue. If a Bill adversely affected the substantial rights of an individual, that Bill could then be regarded as unconstitutional. However, if it was only a procedural issue, there was no grounds to find that Bill unconstitutional. The issue of instalments, for instance, was classified as a procedural issue.

Mr Smuts said that assuming that the Third Party and the claimant were the same (like the service provider), the Bill actually tightened up on the question of undertakings. Discretion was removed and the Fund was obliged to pay.

The Chairperson said that these were practical and policy issues, rather than of issues of law. Based on Mr Smuts' submission, it was clear that the Committee need not worry about constitutional flaws.

Submission by the SA Chamber of Business (SACOB)
Adv Abri Meiring (Chairperson of SACOB's Parliamentary Committee) said that the Bill should be considered by the National Economic Development and Labour Council (NEDLAC) before proceeding any further. SACOB was concerned about the constitutionality of particularly clause 17b relating to collateral benefits, notwithstanding the guarded and equivocal comments of the Chief State Law Adviser in paragraphs 6.3 and 6.4. Insofar as insurance was concerned, no distinction had been made between indemnity and sum insurance, for example. A successful constitutional challenge could be made on this ground alone. If passed in its present form, the Bill would have a negative impact on business. Its provisions would also not necessarily be in the best interests of accident victims.

Adv Meiring said that some reference to insurance indemnity, as opposed to sum insurance, would be helpful. The Chairperson agreed that it could be crucial.

Mr S Khumalo (Department) said that had already been brought to the Department's attention. There was also a reference to it in the document submitted on the 27 October, under collateral benefits.

The Chairperson said that the Committee should concentrate on the sustainability of the Fund in its present form, and the legislative issues. The members should also be careful not to pass a Bill that would pre-empt broader transformation in the future.

Submission by Ms P Coetsee
In the past ten years, Ms Coetsee had been involved in many aspects of housing for the disabled. She has assisted road accident victims by compiling architectural reports for compensation claims and had also been involved in the construction of suitable accommodation. Regarding the granting of an undertaking certificate in terms of Article 43, the Fund had been relieved of the need to pay the claimant immediately for estimated future costs such as renovations to property. In many cases, these costs were not incurred as a result of the lack of available cash or knowledge of the system. For many people, the honouring of the certificate could be deferred indefinitely. She voiced her concern regarding the desire of the Road Accident Fund to increase the ambit of the Undertakings Department, to pay for loss of future income and general damages claims in instalments. She believed that it would prejudice future claimants and disempower them to institute necessary changes to their home environments.

Mr P Zulu asked for an explanation on how the apportioning of fault further complicated the life of the disabled person.

Ms Coetsee said that the victim had to fund 20% of any item claimed, whether this was a wheelchair or the remodelling of a bathroom for easier accessibility. It was very difficult to put 20% of a major renovation expense up front. The project could not begin until he collected 20% of the total cost in cash. If such a person had to rely on monthly instalments, it would make acquirement of equipment much more difficult
At present, lack of necessary cash blocked improving their standard of living.

Mr H Kgomongwe (CEO of RAF) said that about two years ago, the RAF initiated a Patient Outreach Programme to do the field work and to activate some dormant undertakings, with a focus on severe injuries. This year the project was extended by establishing additional offices across the country to to reach more people.

Submission by Mr G Maggott (no written submission)
Mr Maggott, who runs a company that manufactures wheelchairs, said that the first two years after injury were the most important years for the victims, when many changes took place in their lives. The important part of rehabilitation was getting patients out of hospitals and supplied with proper wheelchairs. Instead of concentrating on individuals, he had to spend much time and energy on getting money from the RAF, which was mostly a slow process. He stressed the importance of getting the right equipment from the start. Unfortunately, the budget constraint often made the process difficult and in the end, prolonged the rehabilitation. Lump sum payments were essential. He also urged the RAF to speed up their whole administrative process.

The Chairperson said that the Committee was exploring the possibility of implementing a mixed system (also recommended by the Satchewell Commission) to pay lump sum amounts to cover expensive initial essentials, and later changing to regular monthly instalments.

Mr S Swart (ACDP) asked Mr Maggott how long the compensation process took.

Mr Maggott said that it took about a year before he received any money after his own accident. The wheelchair itself was about R10 000. The wheelchairs needed to be semi-customised and fully adjustable to fit different bodysizes. The individual needs also changed with time but that a disabled person was only allowed a new wheelchair every 3-5 years. Tariffs could be effective but there needed to be some flexibility in determining their values.

The Chairperson thanked all presenters and the meeting was adjourned.


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