Road Accident Fund: briefing

Meeting report

TRANSPORT PORTFOLIO COMMITTEE
09 NOVEMBER 1999
ROAD ACCIDENT FUND: BRIEFING

Documents handed out:
Road Accident Fund: An Overview In Summary

Chair: Mr JP Cronin (ANC)

SUMMARY
The committee was addressed by a delegation from the Road Accident Fund who discussed the essentials of the RAF as well as proposals for cost-saving arbitration as an alternative dispute resolution mechanism.

MINUTES
The presentation was given by the Acting Chief Executive Officer (CEO) of the Road Accident Fund , Mr CN Greenland. He was assisted by the deputy CEO Mr HL Kgomongwe and the Human Resources (HR) executive Mr SS Mkhize.

Mr Greenland said that the RAF was a juristic person, which could make investments, own property, transact business, incur obligations and discharge liabilities, sue or be sued like any natural person. He said that the RAF was essentially a state entity, a parastatal, and therefore controlled by government. It reports to the Minister of Transport. It has a long history, having started in 1942, and has existed in various forms for over 50 years. Before 1996 the fund's business was conducted through what was called the agency system - where various insurance companies acted as its agents. Only since 1996 did the Fund act as a true parastatal.

He explained that the personality of the RAF had both a legal and financial component to it and the two worked hand in hand as it needed finance to discharge its legislative mandate. As a public entity the RAF was non-profit making.

Some Important Financial Aspects
He said that the RAF was financed by way of a fuel levy. In other words, whenever a motorist purchased fuel automatically a portion of the price he/she pays for the fuel is diverted to the RAF. The levy was 14.5cents per litre of petrol and 10.3cents per litre of diesel. He said that for 1999 the fuel levy income was 2.1 billion rand. He said that the purpose of the income was obviously to fund its core business. He said that what he called the "basic financial approach" would be of interest to the members. He explained this as follows: The income received from any one year should finance the total expenditure for that year. He said however that in practice, because claims for any year are lodged in later years the RAF could in fact not achieve this neat way of balancing income and expenditure. Therefore the RAF invests the unused income for that year in order to try to meet the claims arising in that year which are only lodged in subsequent years. This is what the RAF aspires to and tries to achieve.

He referred to the RAF's Provisional Balance Sheet as at 30 April 1999 (see document) and pointed out that the investments he had spoken about (called the Portfolio Investments) amounted to 1.5 Billion Rand at present.

Legal Personality
The presenter sketched a typical scenario of a head-on collision involving two cars and said that it was the core business of the Fund to deal with the loss involved in the ensuing human carnage. Victims from both vehicles involved in the accident would claim. Thus the driver of car N who had left its side of the road (causing the accident) would also claim along with others for the loss suffered. The Fund's business would be to process this claim. He explained that the system is fault based. It was pointed out that the RAF was not a Social Welfare or Benefit Fund. He said that this was a popular misconception. Its function is to indemnify the guilty driver - in other words it steps into the shoes of the guilty driver's insurer and meets all claims the guilty driver would have been responsible for in law. Thus when buying fuel, and the levy is diverted to the RAF, people are actually paying their 'insurance' premiums. If you cause a motor vehicle accident, the persons suffering loss as a result of your mistake, instead of claiming damages from you, claim from the RAF. Thus because of the fact that the system is fault based, the driver of car N would not succeed with his own claim against the fund, irrespective of the seriousness of his circumstances as a result of the accident (e.g. he became a paraplegic) since the driver of car S was completely faultless. However the driver of car S would have a claim against the fund if he can prove fault on the part of the driver of car N.

He said that the fund attended to past, present and prospective medical costs, loss of income as well as general damages. Compensation thus has two aspects:
Reimbursement of actual expenses incurred as a result of injury or with regard to dependants as a result of death - whether they are medical or income; and
General Damages - the notional value that a court pays a person, ascribing a value to your degree of injury - and this has components, e.g. Pain and suffering, loss of amenities (to what extent a person will not be able to do what he could do before and what is the reduction in enjoyment in that field).

It was stressed that these were not benefits. It is what you are entitled to in law - it represents the damages payable if the Fund did not exist. He said that it was important to note that the RAF steps in for the guilty wrongdoer.

He referred to a table, Payment of Claims and Claims Statistics, in the document which set out what the fund had been paying over the years in respect of compensation. It had been 654 million rand in 1994 and had increased systematically every year. For 1999 it stands at 1.4 billion rand. In terms of the cost of delivery, the fund has paid claimants or their attorneys a provisional amount of 227 million rand for 1999 and 122 million to its own attorneys, for legal costs. It was explained that because the other party's fault must be proved by claimants, the RAF often disputes the fact that a claimant could in fact prove fault or that the claimant was not partly to blame in which case a value would be ascribed to the contribution of that blame and if the blame was 50-50 in respect of the drivers, then the claim of each would be reduced by 50%. Because this type of dispute can become litigious, the fund often becomes a professional litigant and enormous legal costs could be incurred.

He said that the extent of these costs were presently unacceptable, and would be reviewed by a commission - the Satchwell Commission headed by Judge C Satchwell. The outgoing Minister of Transport was particularly unhappy with the cost and slow delivery of compensation - this is why he sought to review the whole system. Mr Greenland said that on average it would take the fund 3 years to settle claims simply because it in lots of cases only heard of the claim 18 months after the accident and then engaged the claimant which would only end 18 months later.

The number of claims finalised in 1994 was 24406 and in the 1999 financial year it was 50913. The reason for so many claims and so much cost involved was because of the horrific statistics of fatalities with respect to road carnage. He said that South Africa was a world leader in this respect. Whilst the RAF had a legislative mandate to process claims and whilst it was ideal that its income matched its expenses, the fund had an 8 billion rand deficit.

He insisted that this had nothing to do with inefficiency on the part of the fund or lack of capacity but rather that the income simply did not match the expenditure. Mr Greenland said that he owned a car worth R200 000 and paid a premium of R10 000 per year. He said that every person in South Africa was paying R200 - R300 as premiums for unlimited cover which in certain cases had to cover claims which ran into millions of rands. This situation was being reviewed by the Satchwell Commission.

He said that the RAF, as a public institution, was committed to transformation,
not only racial but in respect of service delivery as well

Mr Greenland said that the Arbitration pilot project had proven that it was possible to act in a mutually constructive way. It proved that 95% of claims could be settled within 9 months. The cost saving in respect of employing attorneys would result in a saving of 70-80 million rand per year. He was thus very optimistic that in the near future arbitration, as an alternative dispute resolution mechanism, would to a large degree eliminate civil proceedings in courts. He said that with arbitration there was no adversarial element. All peripheral issues and technicalities are disposed of and parties must define the true nature of their disputes very quickly. They cannot deliberately waste time. The process is conducive to a quick and easy settlement of disputes. Parties can jointly choose their own arbitrator who they both have confidence in. He would be required to sit for the full proceedings and then make a finding, for example within 10 days. Mr Greenland was anxious to sell this idea to the committee.

Questions and Comments
Advocate P Swart (DP) said that he had been privileged to attend the Satchwell briefing on 5 October 1999. On that day the RAF's accounting department or its accountant had handed a document to Judge Satchwell indicating a provisional deficit of 10.2 billion rand for 1999 whereas now the committee had been told the deficit was 9.2 billion rand (see the Provisional Balance Sheet in the document). He wanted clarity on the 1billion rand discrepancy.

Mr Kgomongwe said that there was a 1 billion rand difference since the figures for 1999 were provisional figures being refined to the point where the Auditor General issues a certificate to say that the books can be closed.

Whilst accepting that there was no Board to make an official statement on this, Adv Swart wanted to know how the acting CEO felt the future would lie with the RAF with a fault-based approach. He wanted to know whether there should in fact be a no fault principle in relation to paying claims.

Mr Greenland said that the Fund could only articulate its position in terms of a formalised structure provided for in the enabling legislation, being the Board which did not exist at present. He said that he could only express his personal view on the matter which was that the no-fault principle was the ultimate goal but said that as an immediate step, the present system had to be refined towards that ultimate goal. He said that there were too many aspects which could not be stabilised to take that step. He said that the present system resulting in a deficit of 5-10 billion rand required a claimant to prove fault as well as loss. However it was common sense that a system where a claimant does not have to prove anything, would prove infinitely more expensive. Even if legal costs were completely eliminated, it would do very little to the deficit of 5 -10 billion rand.

Ms D Mbombo (ANC) wanted to know why the liability of the fund was limited to R25 000 in certain situations. She disagreed with this.

Mr Greenland said that when you look at the history of South Africa and the system where it was decided to have a controlling body in place to provide for this type of insurance, it was purely for business reasons and for the viability of the RAF that in certain categories, passengers would only be covered for up to R25 000 and others would not be covered at all. He said that there was no submission on the table, despite the acrimony of the present debate, that this anomaly should be retained. He insisted that ideally, the R25 000 limit should be done away with.

Ms P De Lille (PAC) referred to the chapter on Income in the document which spoke about negotiations which had been initiated with the Central Energy Fund (CEF) to try and produce 2 million rand per month for the RAF. She wanted to know whether this would come from the 14.5 cents per litre. She also referred Actuarial projections: Request for Increase of Fuel Levy where there was a proposal that the levy be increased by 1.5cents per litre as soon as possible. She wanted to know whether this increase in the levy would go to servicing the debt, saying that the debt was ballooning.

Mr Kgomogwe said that the 2 million rand would be extra money to the fund. He explained that in terms of agreements the oil companies credit the RAF bank account with the levy money only a month after they have sold the fuel and received the money from the petrol dealers. The RAF felt that this was too long and had to be speeded up and approached CEF about it. The reasons were that the sooner the money was paid, the sooner it could be invested, which could easily produce an income of 2 million rand per month for the RAF coffers. With regard to the proposed increase in the levy, it was clear that the government had not responded yet. Mr Greenland pointed out however that firstly this increase did not tackle the RAF deficit at all. This money was needed for cash flow purposes. Secondly he pointed out that if the increase was not allowed within a year and a half, either the RAF would have to dig into its own reserves or cheques would bounce.

Ms P De Lille asked what had happened to the Board.

Mr Greenland said that the board , by law, seized to exist on 26 July 1999 in terms of the governing Act. Legal personality by operation of law was taken away. He said that the process of putting a new board in place rested in the Western Cape Province.

A committee member remarked on the reduction in fatalities in road accidents achieved in Kwazulu Natal. He wanted to know what they were doing achieve this.

Mr Greenland said that it had to do with management of the campaign to reduce fatalities. The progress being made was related to the promotion of a culture of tolerance amongst drivers.

Another committee member wanted to know how a successful claimant received the money from the fund. He objected to the fact that it probably went to his lawyer first. He said that it should rather go straight to the claimant. He wanted to know with regard to the question of fraud by attorneys whether the acting CEO was saying that the allegations were exaggerated. He quoted the statistics that in 143 cases investigated, 36% of RAF pay-outs which should have gone to claimants had allegedly gone to attorneys. Mr J Slabbert wanted to know whether the rumours about attorneys "ripping off" clients were true or not.

Mr Greenland said that he wanted to contextualise the whole issue of attorneys. He said that because of the way the RAF had worked historically, it was regrettably not made very accessible to the public. Attorneys assisted by informal helpers known as touts exploited this situation. Thus the first time many victims would hear about the RAF and the right to claim would be in a hospital bed from a tout. From here he would be taken or directed to the attorney. Clearly attorneys had a monopoly and there were bound to be instances of fraud. He said that there was a whole industry built up around this issue of lack of accessibility. He therefore conceded that there were instances of fraud and overreaching by attorneys but insisted that contrary to the sensationalised speculation in the media, this was only true of a very small section of the attorney profession. He said that the Fund did have certain documentation showing attorneys' involvement in such a scam but insisted that they constituted a miniscule minority. He added that further questions in this regard should not be directed to him but to the Heath Special Investigating Unit who had been tasked with looking into these scams.

Mr G Schneemann (ANC) firstly wanted to know whether SA citizens and foreign nationals were both paid out in South African currency.

Mr Greenland said that foreigners were paid in their own currency but the calculations were computed in terms of South African currency.

Mr Schneemann asked what had happened to the Joffe Report which had dealt extensively with the Fund and had discussed ways of curbing the deficit.
Mr Greenland said that when the white paper debate, dealing with the report, ended, the Satchwell Commission took over the whole process of reviewing the RAF. He said that Judge Satchwell was aware of the report and had access to it.

Mr Schneemann asked whether there were any fraud scams in relation to the levies payable to the RAF by oil companies. He wanted to know how much revenue was lost in the event that this had occurred.

Mr Kgomongwe said that oil companies were audited by the CEF, who supervised the whole process. The Fund thus has access to the auditors certificate from the CEF. He said that there had been no incidents of fraud in respect of the levies.

A committee member was of the opinion that the staffing of the RAF presented a problem in that many of the staff complement could not speak the claimant's language. He said that this was a major reason for people being swindled out of RAF money owed to them. He said that ordinary people sign documents without knowing what they are. In addition many people, especially from the rural areas do not appreciate the value of money. They would for example consider R5000 to be lots of money and would enthusiastically accept same from a lawyer who in fact had collected R50000.The member said finally that he thought that foreigners were taking the cream from the fund leaving the citizens with the scraps. He thought that they should when entering South Africa, take out their own insurance and thus suggested reviewing their status in terms of the RAF.

Ms S Mnumzana (ANC) asked whether a person who already had insurance could claim from the RAF.

Mr Greenland said that even if you have private insurance you can still claim, but added that because the RAF has the monopoly in this area, most insurance companies simply did not cover this loss type of loss but instead covered for example damage to property.

Ms Mnumzana asked how long a claim would take to be paid out.

He replied that on average, from the day of the accident it would take three years to settle. The reasons were that most claimants cause most of the delay themselves by only lodging the claim for example eighteen months later. The RAF would often dispute the fault aspect and investigating and processing the claim would then take another eighteen months. Litigation could cause the process to even exceed three years. He thus reiterated that the arbitration option would bring the whole process down to under nine months.

Ms Mnumzana wanted to know in relation to legal advisors who assisted claimants, whether they were part of the staff of the RAF or whether they were private legal advisors - outsiders assisting with claims. Finally she wanted to know whether in fact one needed a lawyer to institute a claim.

Mr Greenland said that in the past, independent lawyers were the sole persons to assist claimants. He said that there was no reason why people could simply not institute claims themselves without the assistance of lawyers. He however pointed out that the issue of fault and quantum of damages were legal ones best dealt with by lawyers, but agreed that the fund should develop the capacity to give people this kind of legal assistance.

Advocate P Swart asked to what Undertakings by the Fund referred.

Mr Greenland explained its relevance by way of an example. He said that in the case where a person claims for future loss of support or for an operation which the person may need in the future due to an accident, the RAF, would normally not pay out the claim in respect of these damages, but would give an undertaking to do so. Two problems which could arise if the fund simply paid out the full amounts for the loss of support or the operation, are that the money is not spent for its intended purpose or the person is hit by a bus the next day and the Fund has paid out money unnecessarily.

The Chairperson Mr J P Cronin (ANC) said that the process for the selection of a new board had begun but because of some technical hitches as regards the advertising for nominations to the board, the process was somewhat delayed. He requested that the RAF delegation provide more information concerning the Arbitration suggestion which he thought could very well be an important part of a solution to the RAF's problems. He was also of the view that the incidence of the escalation of claims should not only be viewed in a negative light. He said that this could also be interpreted to indicate that the RAF was actually succeeding in being more accessible to the public. He said that, whilst it was tempting to keep the RAF as low profile as possible in order to decrease the number of claims and improve its financial position, among the advantages of being more visible for example in the form of posters in hospitals and adverts in papers, would be that touting would be undercut. The meeting was adjourned.

Appendix 1:

Road Accident Fund: An Overview In Summary
Presented by Acting CEO, Mr Chris Greenland

Its Essential Nature

1. Status

The fund is constituted by an Act of Parliament, Road Accident Fund Act 56 of 1996, and operates as a parastatal under the control of a 12 person Board that reports to the Minister of Transport.

2. What it does

The Fund steps into the shoes of the negligent driver and pays the victim such amount as would be payable at common law. The amount payable is reduced by the monetary value put on the victim's contribution to the cause of the accident or resultant loss.

In certain circumstances the Fund's liability is either limited or excluded.

A contentious example of a limitation is in regard to passengers where its liability is limited to

R25 000 if the accident is due to the sole negligence of the driver of the vehicle conveying the passenger.


Quasi-judicial personality.

In thus processing a claim according to law, (the claim is met or not met according to delictual principles of common law,) the Fund acts in a quasi-judicial capacity. The integrity and ethic required of quasi-judicial office has fundamental implications for the operational mode and culture of the Fund as a public entity.

3. Its Income

Its derives its income from a levy on fuel which at present is 14,5 cents per liter on petrol and 10,3 cents per liter on diesel. The money is paid over monthly via the Central Energy Fund.

Convention and specific statutory prescriptions to manage and account for its finances at a particular level of integrity bind the Fund. Because the claims for any one year hardly present during the course of that year the Fund is obliged to invest the unused portion of its income. Notionally the capital and investment return should at least match the value of the claims as they present over the years.


Personality of public trustee

In thus being required to manage and expend public funds in accordance with a prescriptive mandate the Fund also acts as trustee. The integrity and ethic required of the office of trustee has fundamental implications for the operational mode and culture of the Fund as a public entity.

4. Historical Legacy

The Fund only commenced operating in its present format of parastatel in July 1996. Prior to that date its core business was being attended to by commercial insurance houses who acted as agents for the Fund.

There is little doubt that the twin aspects of its personality, quasi-judicial and public trustee, were neglected and this has greatly contributed to the present unsatisfactory state of affairs. This fundamental proposition is supported on every count including the following:-

1. internally the Fund has staff assimilated from the erstwhile agents, some of whom have no legal qualifications, who have difficulty in presenting as quasi-judicial officers or trustees in the classical sense; (fortunately this aspect, being a challenge to management, is being remedied)
2. externally, exploiting a "market niche" a whole industry has developed, including touts, which is now dependent on the Fund;

all of which has resulted in service delivery which takes too long and is too expensive.

Hence the appointment of the Satchwell commission.

STATUS, MANAGEMENT, HISTORY

Legal Status

The Road Accident Fund (the RAF) is a parastatal organization, reporting to the Minister of Transport, established by the Government for the purpose of paying compensation for loss or damage wrongfully caused by the driving of motor vehicles within the Republic of South Africa. It is a statutory creation, having been established by section 2(1) of the Road Accident Fund Act, 1996 (Act No. 56 of 1996), which came into operation on 1 May 1997. The Fund is a juristic person and may sue and be sued.

 

How Managed

The RAF is governed by a Board of eleven or twelve members complying with certain requirements, appointed by the Minister of Transport in accordance with a transparent procedure laid down in the Act. In addition, the Director-General : Transport also serves on the Board. One of the appointed members of the Board is its Chairperson, who presides at all meetings of the Board. The Board's function is to exercise overall authority and control over the financial position, operation and management of the RAF. It serves for a period of three years.

The current business of the Fund is conducted by its Chief Executive Officer, who is appointed by the Minister upon the recommendation of the Board and holds office for the period determined by the Minister. The Chief Executive Officer is assisted by a senior management team.

 

Branches

At present the Road Accident Fund itself administers all claims for compensation submitted by accident victims. These claims are handled at the four regional offices of the Fund : in Pretoria, Randburg, Cape Town and Durban. Until 1997 the investigation and finalization of claims was outsourced to private short-terms insurance companies who had done this work on an agency basis since 1986. As it was found that this agency system was not in the best interests of functional integrity, it was phased out over a period of five years, commencing in 1992.

 

History

The Road Accident Fund is the successor to the Multilateral Motor Vehicle Accidents Fund (the MMF) which existed from 1989 until 1997 as an "international" or "multilateral" co-operative body joining together the old South Africa and the four "independent homelands" of Transkei, Bophuthatswana, Venda and Ciskei (prior to 27 April 1994) in a common motor vehicle accident compensation system. The Multilateral Motor Vehicle Accidents Fund itself was the successor to the Motor Vehicle Accident Fund (the MVA Fund) of the old South Africa and of that Fund's counterparts that had over the years been established separately in the "homelands" that took "independence". The Motor Vehicle Accident Fund was established in 1986 to replace the Motor Vehicle Assurance Fund (also abbreviated as the MVA Fund) that had since 1965 operated as the regulatory body and State re-insurer of the motor vehicle accident compensation scheme governed from 1972 until 1986 by the Compulsory Motor Vehicle Insurance Act, 1972.

 

Funding

The establishment of the Motor Vehicle Accident Fund in 1986 saw the introduction of an entirely new system of funding for the motor vehicle accident compensation scheme. Under the old system (in operation since 1946) of compulsory insurance by the owner of a motor an annual premium was payable to one of a consortium private short-term insurance companies approved of by the State , who in turn had an obligation to insure signified by a written declaration of insurance comprising a token or disc displayed on the windscreen of the vehicle. This was replaced by a system of automatic funding by means of the imposition of a levy (included in the price of petrol and diesel) on the sale of all petrol and diesel products within South Africa. This new funding system not only immediately and effectively disposed of the problem of uninsured and/or unidentified motor vehicles, which was becoming more and more of a headache, but also brought about a greatly simplified and highly efficient revenue collection procedure. Regrettably however, successive governments since 1986 have for a variety of reasons demonstrated a considerable reluctance regularly to adjust the amount of the levy upwards in order to allow the compensation scheme's income to keep pace with the appalling increase in the road accident rate over that period and with the rate of inflation, which in the case of medical and health care costs, was and still is considerably higher than the general rate. This has unfortunately endangered the financial survival of the whole scheme. As jurisdictional difficulty persists to the present day in that the imposition of the levy lay not with the Minister of Transport who had to account for the expenditure and performance of the road accident compensation scheme, but with the Minister of Mineral and Energy Affairs (via the Central Energy Fund), with whom the Minister of Finance had to concur.

Fundamental Implications of the system

The introduction in 1986 of this fuel levy-based funding system also accelerated the process, already begun in 1946, of removing the costs of road carnage from the sphere of private law, legal disputes between private individuals, into the sphere of public law, the sphere of State responsibility. Nevertheless, incongruously, the State's financial obligations under the road accident compensation scheme (with regard to both liability and quantum) remained firmly anchored in the common law principles of delictual liability, even though the role of the actual wrongdoer, the negligent driver, became reduced to nothing more than a witness whose testimony could very often not be relied upon and who frequently could not even be traced. This had the result of exposing the State, on a continued basis, to all the vicissitudes, variables and uncertainties of litigation and judicial pronouncement, of causing settlement delays and of turning the whole scheme into an extremely costly exercise, thereby undermining its viability. It also continued to exist and develop in isolation from other State social security schemes, thereby leaving numerous gaps, overlaps and deficiencies in the public welfare safety net.

THE ROAD ACCIDENT FUND: INFORMATION PROVIDED FOR THE PURPOSES OF THE ARRIVE ALIVE CAMPAIGN

1. INTRODUCTION

The Road Accident Fund (RAF) is the instrument by which Government compensates victims of motor vehicle accidents for bodily injuries or loss of support suffered following the death of breadwinners.

2. HISTORICAL BACKGROUND

The RAF is the product of a long history spanning more than fifty years, which commenced with the introduction of compulsory motor vehicle insurance in 1942. The Motor Vehicle Assurance Act 29 of 1942 was the first statute in South Africa, which provided for compulsory insurance to ensure that victims could recover damages, which were caused unlawfully by motor vehicles. The main thrust of the initial legislation was to afford protection to persons not in or on a particular vehicle, i.e. pedestrians. During the sixties it became apparent that certain insurance companies had insufficient income to cover claims. Several companies were liquidated and this lead to the establishment in 1965 of the Motor Vehicle Accident Fund to act as reinsurer of companies which undertook compulsory MVA insurance.

From 1942 to 1986 the legal basis and the funding of the MVA system essentially remained unchanged. With the introduction of the Motor Vehicle Accidents Act 84 of 1986 the method of funding the payment of claims was radically changed. The compulsory insurance system with its statutory annual premiums was abandoned in favour of a levy on fuel sold. The 1986 Act also introduced the agency system in terms of which certain insurance companies acted as agents for the Fund to handle and settle claims. This agency system and funding method through fuel levies were retained in the Multilateral Motor Vehicle Accidents Fund Act 93 of 1989. The purpose of this latter Act was to introduce a uniform system of compensation for road accident victims in the so-called SA TBVC states. The legal basis for compensation payable for bodily injuries sustained and personal losses suffered following road accidents, remained unchanged. The agency system was undesirable and ineffective and was phased out from 1993 to 1997 and now all claims are attended to by the RAF.

The Road Accident Fund Act 56 of 1996 came into operation on 1 May 1997. This act established the present Road Accident Fund whose object it is to pay compensation in accordance with applicable statutes for personal loss or damage wrongfully caused by the driving of motor vehicles.

3. THE LEGAL BASE

The present MVA system indemnifies the driver or owner of a motor vehicle against liability incurred as the result of loss of damage wrongfully caused to another person in road accidents. The RAF only indemnifies the driver or owner to compensate for losses suffered due to bodily injuries sustained or the death of a person, and not also for liabilities which the driver or owner may incur for damage to property (e.g. damages to motor vehicles, personal affects, buildings, luggage or goods conveyed in a vehicle). Common law principles of delict are incorporated in the legislation. Thus during the assessment of claims the respective degrees of fault of the victim and the wrongdoer have to be determined. The victim's claim is reduced by such own degree of fault or blame for the accident.

4. THE CLAIM PROCESS

4.1 Who may claim?

Any victim who sustained a bodily injury or suffered loss due to such injury or the death of a person, which resulted from a road accident and the negligence of someone else, may lodge a claim for compensation. Dependants of a deceased victim may lodge claims for loss of support suffered and recover funeral expenses. Various categories of road users are compensated as victims of road accidents, including drivers, passengers, cyclists and pedestrians.

When a claimant is legally incompetent (e.g. a minor or a person incapable of conducting personal affairs), the parent, legal guardian or curator has to lodge the claim on the victim's behalf.

Certain claims are excluded: i.e. the injured spouse of the person who caused the accident, an injured member of the household when the head of the household caused the accident, a paying passenger on a motor cycle.

4.2 What is paid to victims?

The RAF attends to claims under the following headings:

• medical expenses - actual medical costs incurred from date of accident until settlement of the claim for accident-related injuries, and costs of on-going medical care or future medical interventions as the result of accident-related injuries;
• loss of income and reduced earning capacity, or in the case of the death of a breadwinner, the loss of support suffered by dependants;
• funeral expenses;
• general damages - the non-financial loss for pain, suffering, disfigurement and loss of amenities of life.

Except for claims of certain passengers, the RAF's liability to pay compensation is unlimited, i.e. the RAF is obliged to compensate the victim in the amount of actual damages proven. Claims of certain categories of passengers are limited to R25 000 against their own driver, but claims against other drivers are unlimited.

No compensation is paid to the extent that the claimant or victim contributed to the personal losses or damages, e.g. if the claimant was 30% negligent or to blame, only 70% of the damages will be paid by the RAF.

4.3 When must claims be lodged?

Claims must be submitted to the RAF within 3 years (in the case of hit-and-run claims, within 2 years) of the accident. If the matter is not settled, the claimant must issue summons within 5 years of the accident. Outside these periods, the claims prescribe.

Prescription does not run against minors, or legally incompetent persons (mental health patients or persons under curatorship), except in the case of hit-and-run accidents.

4.4 Where must claims be lodged?

Claims must be submitted by hand or registered mail to an office of the RAF. Branches of the RAF are situated in Cape Town, Durban, Pretoria and Randburg.

4.5 What is the claims procedure?

The claim is lodged on a prescribed statutory claim form (Form 1) which provides basic information on the claimant, the vehicles and parties involved in the collision, the date and place of accident and the amounts claimed. It also contains a medical report by the treating doctor. This claim form is accompanied by an affidavit setting out the full particulars of the accident, statements of witnesses, police reports, hospital and medical records, as well as vouchers and documents in support of amounts claimed.

The drivers of the vehicles involved in the collision must furnish details of the accident to the RAF on a statutory accident report form (Form 3) together with information of witnesses which the RAF may request.

Once a claim is submitted, the RAF registers it on its claim system and commences with its investigations. The RAF determines whether the claim is valid (i.e. was there a road accident, does it comply with statutory provisions, was it submitted in time, etc.) and what the merits of the case are (i.e. the degree of fault, blame or negligence to be ascribed to the drivers of the vehicles and the claimant respectively). The quantum is also determined (i.e. the amount of the damages or losses suffered).

If a claim is incomplete, the RAF calls for additional information and supporting documentation to enable it to better assess the matter.

4.6 Problems in the current claims system

There are seven major areas of shortcomings in the current compensation delivery system:

(a) Growing Deficit

The RAF has been underfunded for many years. The RAF's deficit doubles every 3 to 5 years. Further details of the RAF's financial position are contained in paragraph 7.

(b) High Settlement Costs

Settlement costs represent the costs involved in proving and agreeing the entitlement to, and the amount, of the compensation. Such costs are paid to professional experts such as attorneys, advocates, medical doctors and medical service providers, accident investigators and actuaries to assist claimants, the RAF and the Courts to determine the merits and quantum of cases. Over the past two financial years the RAF paid out more in settlement costs than it did on claims for medical expenses, loss of earnings and loss of support. The RAF operates in a very litigious environment, which adds to overall expenditure on legal costs and thus reduces the resources available to victims to receive compensation.

Road accident victims may receive less than 70 % of the RAF claims expenditure as attorneys recoup fees on attorney own client basis from the compensation paid by the RAF to the victim.

(c) Settlement Delays

On average claims and supporting evidence are submitted to the RAF about 18 months after the accident, and often almost 36 months or longer after the accident. Once claims are submitted, the RAF must assess the validity, merits and quantum referred in paragraph 4. On average most claims are settled and paid out 2,8 to 3,8 years after the accident. Government recently suggested measures to speed up the lodgment and settlement of claims.

(d) Passenger Claims

In terms of present legislation the compensation of certain passengers involved in single vehicle accidents is limited to R25 000,00, and in some cases general damages are excluded. This is anomalous.

(e) Benefits payable to Dependants

Presently the dependants of a deceased victim receive compensation for loss of support which is virtually a no fault benefit: if the other driver was only marginally at fault, the dependants are entitled to compensation without apportionment of fault of the deceased, however reckless, negligent or intoxicated the deceased might have been.

(f) General Damages

The RAF pays damages for pain, suffering, disfigurement and loss of amenities of life. This is a financial consolation for a non-financial loss. A disproportionate percentage of the RAF's limited resources is paid out as general damages for non-economic loss.

(g) High Accident Rate

South Africa's exceptionally high road accident rate places undue strain on the restricted resources of the RAF.

5. THE FUNDING OF THE RAF

The RAF is mainly funded by a levy on fuel sold. This levy is part of a general fuel tax, which is channelled to the RAF on a monthly basis, and it is not a dedicated levy designed to specifically finance the operations and liability of the RAF. To assist with computation, the levy is expressed at a rate per litre of fuel sold. As from 1 February 1998 the levies on petrol and diesel are 14,5 and 10,3 cents per litre respectively.

Additional income is generated from investments on assets held by the RAF.

The fuel levy rates have yielded the following levy income during the financial years indicated:

Year ended 30 April Levy Income (R million)

1994 1 111

1995 1 181

1996 1 244

1997 1 439

1998 1 764

1999 2185

6. THE PAYMENT OF CLAIMS AND CLAIMS STATISTICS

The amounts paid towards compensation and settlement costs on claims for claimants and the RAF are reflected in the following table:

	Financial year ended 30 April
Amounts in R million	1994	1995	1996	1997	1998	1999
Compensation	654	798	880	978	1104	1453
Settlement costs: claimants	77	95	120	144	172	227
: RAF (and former agents)	81	92	103	104	112	122
Total claims paid	812	985	1103	1226	1388	1802
Amounts as stated
Number of claims finalised	24 406	26 492	32 443	40 500	46 555	50913
Average amount paid per claim	33 256	37 190	33 993	30 263	29 762	35389

Claims flow:

The following table reflects the number of claims received and settled by the RAF during the

following financial years:

	1996	1997	1998	1999
Claims outstanding at beginning of financial year	65 709	70 401	73 418	77 883
+ New claims lodged during financial year	37 135	43 417	51 020	62 340
- Claims finalised during financial year	32 443	40 500	46 555	50 913
= Claims outstanding at end of financial year	70 401	73 418	77 883	89 310

The above table shows claims flow statistics according to the number of wrongdoers (blameworthy drivers) who caused or contributed to the claims of victims. A different picture emerges once these claims flow statistics are analysed according to the number of injured victims or deceased persons.

	1998	1999
Claims outstanding at beginning of financial year	120 291	128 231
+ New claims lodged during financial year	78 938	98 688
- Claims finalised during financial year	70 998	87 233
= Claims outstanding at end of financial year	128 231	139 686

7. THE FINANCIAL PICTURE OF THE RAF

Over the last decade the financial condition of the RAF (and its predecessors) deteriorated progressively. This is due to the ongoing mismatch between the income and the actual liabilities of the RAF. The financial statements of the past financial year ended 30 April 1998 again reflect that the RAF continues to operate with a deficit of large proportions. For some time Government, the Ministry of Transport and the RAF's Board of Directors have been searching for solutions to address the RAF's financial problems.

A White Paper on the RAF was published early in 1998. It proposed interim and far-reaching changes to contain the worsening financial position as well as the appointment of a Commission of Enquiry to review the entire system of compensation available to road accident victims. Government decided not to proceed with the interim measures, but to establish the Commission urgently. Legislation was enacted in October 1998 and it is hoped that the Road Accident Fund Commission will complete its mandate by the end of 1999.

 

The following table illustrates the RAF's worsening financial position over the past 5 years:

	Financial year ended 30 April
	1994	1995	1996	1997	1998	1999
Income from:			(Rm)
- Fuel Levy	1 111	1 181	1 244	1 439	1 764	2185
- Investments	45	35	89	110	133	102
Cash Expenditure to:
- Claims Paid	812	985	1 103	1 226	1 388	1 802
- Administration	42	30	43	57	100	125
- Road Safety	-	-	-	-	44	55
Nett Cash Flow	302	201	187	266	365	305
- Depreciation	1	1	1	2	3	5
- Increase in Provision for Outstanding Claims	950	600	2 350	1 150	1 514	1186
Operating Loss	648	400	2 165	886	1 152	886
Deficit Beginning of Year	3 135	3 783	4 183	6 347	7 233	8 385
Deficit End of Year	3 783	4 183	6 347	7 233	8 385	9 271
Provision for Outstanding Claims	4 400	5 000	7 350	8 500	10 014	11 200
Less Nett Resources	617	817	1 003	1 267	1 629	1 929
Deficit End of Year	3 783	4 183	6 347	7 233	8 385	9 271

8. HIGH ACCIDENT RATE AND ROAD SAFETY

Compared with international norms South Africa has an exceptionally high road accident rate. In the first draft White Paper on the MMF published in June 1996, statistics were published on 1992 fatality rates, comparing South Africa with other countries:

COUNTRY	PER 100 000 POPULATION	PER 100M VEHICLE - KM	PER 100 000 VEHICLES
Australia Canada France Germany Britain Japan USA Brazil Chile Egypt Kenya RSA	12,09* 13,81* 15,93 13,20 8,16* 9,20 16,35* 3,93* 12,05* 7,92 7,63* 31,78	1,51* 0,87* 2,03 1,63* 1,11* 1,69* 1,19* 10,50* 8,27* - 35,90* 10,37	21,63* 21,51* 28,45 25,34 18,90* 14,60 21,53* 31,10* 151,49* 222,67 589,94* 181,83

 

* These figures relate to various years prior to 1992

In 1996 more than half a million accidents, of which 60 000 can be described as serious, caused almost 10 000 deaths. According to the report from the Central Statistical Services on road traffic collisions for 1996 (No 71-61-01 (1996)) there were 520 774 collisions, 135 049 casualties and 9 848 deaths following road accidents in 1996. A total number of 881 805 drivers were involved in these accidents. According to the CSS report less than 1% of the total collisions were reported from former TBVC countries. This suggests that the actual figures will be even higher as many incidents were not reported to the CSS.

The RAF is funding road safety measures in an effort to "invest" in the reduction of road accidents and claims arising therefrom. Such "investment" is made with the reasonable expectation that it will yield fewer and smaller claims. In the 1998 financial year the RAF invested R44 million in road safety campaigns, in particular the Arrive Alive Campaign. During the 1999 financial year the RAF will again contribute 2½ % of the annual fuel levy income to the Arrive Alive Campaign.

Government has also devised a comprehensive Road Traffic Management Strategy in an effort to reduce road accident fatalities by 10% by the year 2000. A Road Traffic Safety Board, involving national and provincial government, the RAF and other role players has been established to act as guardians of the Strategy.

9. THE RAF IN THE CURRENT SOCIAL SECURITY SYSTEM IN SA

In terms of current RAF legislation, the RAF may only deduct from compensation payable to victims the final awards made by the Compensation Commissioner. No similar provision applies in respect of awards may by other government departments or social welfare schemes. However, if the RAF ascertains during the course of investigation of claims that the victim received benefits from collateral sources, e.g. disability grants, the RAF deducts those amounts from the compensation payable.

 

ROAD ACCIDENT FUND

PROVISIONAL BALANCE SHEET AS AT 30 APRIL 1999

	1999	1998
CAPITAL EMPLOYED	R	R
ACCUMULATED DEFICIT	-10, 151, 193, 614.46	-8, 385, 893, 393.68
INVESTMENT RESERVE	319, 023, 281.02	319, 023, 281.02
LONG TERM LIABILITIES
Provision for outstanding claims	9, 611, 200, 000.00	8, 011, 200, 000.00
	-220, 970, 333.44	-55, 670, 112.66
EMPLOYMENT OF CAPITAL
FIXED ASSETS	12, 578, 714.84	12, 535, 212.62
PROPERTY LEASE DEVELOPMENT	31, 952, 521.02
PORTFOLIO INVESTMENTS	1, 684, 738, 583.01	1, 494, 638, 583.01
NET CURRENT ASSETS	-1, 950, 213, 152.31	-1, 562, 843, 903.29
CURRENT ASSETS	524, 854, 490.61	495, 030, 958.53
Stock	130, 405.12
Debtors	13, 437, 246.36	5, 974, 916.84
Income receivable	196, 874, 708.62	190, 868, 540.86
Cash and short-term investments	314, 412, 130.51	298, 187, 500.83
CURRENT LIABILITIES	2, 475, 067, 642.92	2, 057, 874, 866.82
Creditors and provisions	72, 267, 642.92	55, 074, 866.82
Provision for outstanding claims	2, 402, 800, 000.00	2, 002, 800, 000.00
	-220, 970, 333.44	-55, 670, 112.66

ROAD ACCIDENT FUND

PROVISIONAL INCOME STATEMENT FOR THE YEAR ENDED 30 APRIL 1999

	1999 R	1998 R
INCOME
Premiums - Fuel levies
Investment income
EXPENSES
Claims - incurred
- paid
- net increase in provision
Road Safety
Handling fees paid to Agents
General administrative expenses
OPERATING LOSS FOR THE YEAR
ACCUMULATED DEFICIT BEGINNING OF YEAR (NOMINAL VALUE)
ACCUMULATED DEFICIT AT END OF YEAR (NOMINAL VALUE)

 

 

 

INCOME

Fuel Levy Income

The Road Accident Fund is mainly financed by an appropriation from the general fuel tax this fuel levy income is calculated at respective rates per litre of petrol and diesel sold. Currently the rates are 14,5c/l on petrol and 10,3c/l on diesel. The above calculations are monitored by the Central Energy Fund and the funds are deposited directly into the RAF's current account by the different oil companies. For the 1998/1999 financial year, an amount of R2,2 billion was received.

Negotiations have been initiated by the RAF with Central Energy Fund with a view to improving cash flow management that can add up to R2,0 million per month to the coffers of the RAF.

Investment Income

The RAF's assets were in the past handled by 5 portfolio managers. During the 1998/1999 financial year, total amount of R190,1 million was transferred to these managers. The book value of these investments at the end of April 1999 had accumulated to R1,4 billion.

Due to the difficulties that the financial markets experienced during the past year, the unrealized capital on these investments decreased by R129 million.

The RAF normally keeps a buffer of short-term capital of R100,0 million for it's running expenses. This capital is invested by the Fund with the major financial institutions.

The asset managers have since been reviewed and reduced to three. The newly appointed managers have the right empowerment credentials and investment philosophy. They are:

• Old Mutual
• African Harvest, and
• Metropolitan

 

EXPENDITURE

Claims paid

This can be viewed as the product of the number of finalized claims and the average settlement amount. Claims amount to almost 91% of the total expenditure of the Fund i.e. R1,802 billion for the past financial year.

Road Safety

During the past year, the RAF has contributed 2,5% of its fuel levy income towards the Arrive Alive campaign i.e. R54,7 million. For the current financial year, the Board provisionally approved a budget of R50,0 million dependent on the approval of the fuel levy increase as requested.

Administrative Costs

This item has grown considerably over the past years. Salaries, premises, telephone, stationery and computer maintenance were the main contributors to this item. This amounts to R129,8 million i.e. 5,7% of the total expenditure of the Fund.

 

BALANCE SHEET ITEMS

Fixed Assets

This item consists of:

Motor vehicles: book value - R0,608 million.

Computers: book value - R6,73 million.

Office equipment: book value - R0,876 million.

Office furniture: book value - R4,4 million.

The Fund is currently committed to property lease development agreement of R52,5 million (excluding VAT) for new offices in Menlyn. This will only be capitalized by 1 October, the official take over date.

 

ACTUARIAL PROJECTIONS:

REQUEST FOR REVIEW / INCREASE OF FUEL LEVY

1. Background

The financial position of the Fund will continue to deteriorate over the coming years, as set out in the accompanying schedules of actuarial projections. These schedules are extracted from the White Paper on the Road Accident Fund. The model and the assumptions used in the compilation of the schedules have been tested with external actuarial experts and do carry their support.

There are basically only three ways of ensuring that the mounting actuarial deficit is contained/stabilized, or even reversed. These are:

1. to increase the fuel levy,
2. to reduce the total outlay, and/or
3. to combine the two above.

The purpose of the submission, as endorsed by the Board, is to consider (a) above, viz., to propose to the Minister of Transport to increase the fuel levy by 10% (average of 1,5 cents per litre) as soon as practically possible. As regards (b) above, internal processes are being worked on, including some legislative amendments that management will propose in the near future.

1. Discussion

Schedule 1 presents a scenario of nil increase in fuel levy. Without any adjustment in the fuel levy, year 2000/1 will be the turning point when total outlay will start to exceed total income. By the end of 2007/8 financial year the accumulated deficit on a discounted basis will have risen to R64,3 billion, compared to R5,2 billion at the end of the 97/98 previous financial year.

The success rate of the Arrive Alive campaign in the reduction of accidents on the roads will no doubt have impact on some of the assumptions made in the compilation of the schedules. This would however have little impact on the need to review the fuel levy.

Scenario 2 assumes that the fuel levy will increase automatically every year by at least 9%. In this instance the outlay will start to outstrip total income by year 2003/4. The actuarial deficit will reach the level of R40,5 billion by 2007/8.

It is on the basis of the projections that management proposes an increase of at least 10% rather than 9% suggested in the schedule.

 

Representivity

A comparative table

This table is a detailed breakdown of the preceding schedules.

The table show the progress made on the important matter of racial representivity over a 10 month period.

The exercise will continue in terms of the dictates of the Employment Equity Act with a plan being prepared for approval.

 

RAVE: COMPARISON JULY 1998 AND JUNE 1999

	JUL'98	JUNE'99	Growth	JUL'98	JUNE'99	Growth	JUL'98	JUNE'99	Growth
GRADE	BLACK			WHITE			TOTAL
F	0	0	0.00%	1	0	-100.00%	1	0	-100.00%
E	2	5	150.00%	4	6	50.00%	6	11	83.33%
D	2	5	300.00%	20	17	-15.00%	22	22	0.00%
CU	18	33	83.33%	62	56	-9.68%	80	89	11.25%
CL	95	156	64.21%	212	218	2.83%	307	374	21.82%
BU	139	130	-6.47%	167	59	-64.67%	306	189	-38.24%
BL	48	111	131.25%	27	66	144.44%	75	177	136.00%
A	27	16	-40.74%	0	0	0.00%	27	16	-40.74%
TOTALS	331	456	37.76%	493	422	-14.40%	824	878	6.55%

 

 

In Addition:

All post at all levels have been regraded so as to conform to conventional grading standards.

Salaries attaching to a post are being standardised.

The net effect of this will be to ensure uniformity of remuneration, i.e. "rate for the job".

Road Accident Fund

 

Panel of Attorneys

Because the Fund has had so many queries as regards this issue a standard form letter has been adopted as the only practical method of response.

1. Background
1. It should first be noted that the Fund has never actually had a "panel" of attorneys. The mode was that certain attorneys were routinely instructed in terms of subjective factors.
2. Obviously this was unsatisfactory and led to much dissatisfaction especially as the ensuing relationship was by and large extremely lucrative for the attorneys involved.
3. The fact that this "de facto" panel was also not racially representative aggravated the climate of dissatisfaction.

4. Philosophical and policy Approach - Criteria

The following aspects were determinants of the final outcome:

1. A Board directive that no Fund attorney could be permitted to also act against the Fund.
1. With respect the directive has merit on two grounds. The first of these is the undoubted conflict of interest that will present to an attorney who has a professional litigant such as the Fund as a client. On an objective test the interests of a client who may have to seek confrontation with the Fund are not served if the person who is to assist in that process also holds a brief to protect the interests of the very entity which is being confronted.
2. Secondly, and this is a natural sequel to the above, it was anticipated that there would be a big enough pool of attorneys in respect of whom the issue would not present. This has proved to be the case.
2. A policy requirement, as stipulated in the public invitation to tender, that a preference would be given to emergent black attorneys.

This approach is founded on the proposition that it makes more sense in equity to assist those who are still confronted with disadvantage in terms of the historical legacy as opposed to assisting those who have made meaningful progress on this front. The issue is resolved on the basis of quality of choice.

3. A paradigm shift as to the deliverables of the intended contractual relationship:
1. A primary objective is the real reduction of costs. By this is meant that the amount expended on legal fees has to be reduced in real terms.
2. No enrichment. By this is meant that what is guaranteed is no more than the opportunity to earn fair and reasonable fees. It is no longer the position that the Fund actually sustain the financial viability of any attorney or firm. Neither is it the position that such attorney or firm expect dependency on the Fund.
4. Although the threshold has, as yet, not been determined, it is the position that by transparent consultative process such a threshold will be set in due course and the panel actually expanded if this is to achieve the "no enrichment" objective.
5. Selection Process

This was done in committee comprising the senior managers from each branch. Profiles were scrutinized and the merits discussed at two sequential meetings.

It is to state the obvious that selection was not any easy process. The committee was confronted with nearly 300 applications

7. The Panel

The panel finally agreed on comprises attorneys who, as a group, fairly represents the racial diversity of society as presenting in the profession.

It achieves the goals of:

1. ensuring representivity;
2. ensuring full protection of the Fund as professional litigant;
3. black empowerment by "favouring" less advantaged black members of the profession.
8. Condition of appointment

As regards all the white attorneys or firms appointment is subject to the condition of "continued compliance with the provisions of the Employment Equity Act"

As regards the group as a whole appointment was made subject to acceptance of the paradigm shift set out above.

7. Conclusion

The Fund does not aver that its approach is perfect. The issue, wholly and in part, will always present as a vexed issue on which consensus is not possible.

However what it does aver is that the model now in place is reasonable especially in terms of a public interest" and "equity" test.

It is hoped that the above information will provide understanding of the complexities of the matter and thereby facilitate acceptance.

If you have not been contacted as yet then it is the position that regrettably you are not on the panel.

Details of the panel will be published in the mass media in the near future.

PANEL OF ATTORNEYS

 

PRETORIA

 

 

	FIRM	CONTACT PERSON	TEL. & FAX NO.	ADDRESS
1.	DYASON	Mr Ben Laubscher Mr Johan Gouws Mr Rick Martin	TEL. (012) 334-3500 FAX (012) 334-3635	Docex 54 Pretoria
2.	GILDENHUYS VAN DER MERWE	Mr Ferdie Quass Mr Henk Kruger Mr T. Malatji	TEL. (012) 427-3700 FAX (012) 427-3777	Docex 4 Pretoria
3.	MATLALA	Mr Ramushu	TEL. (012) 342-5128 FAX (012) 342-2219	P. O. Box 3217 Pretoria 0001
4.	MAPONYA INC.	Mr Radebe	TEL. (012) 322-4221 FAX (012) 322-4231	Docex 184 Pretoria
5.	LAMOLA, MOKHUSE & MAHLANGU	Mr Edgar Mokhuse	TEL. (012) 326-0842/3/4 FAX (012) 326-0845	P. O. Box 13652 The Tramshed 0126
6.	SHABANGU BEAUCHAMP	Mr Benoch Shabangu	TEL. (012) 324-1883/4/5 FAX (012) 324-1886	P. O. Box 1165 Pretoria 0001
7.	CHOONARAS	Mr Mohamed Hassim	TEL. (012) 323-6668 FAX (012) 323-6668 ask for fax line	P. O. Box 9159 Pretoria 0001

 

 

JOHANNESBURG

 

 

 

	FIRM	CONTACT PERSON	TEL./FAX NO.	ADDRESS
1.	DENEYS REITZ	Mr Thys Jacobs	TEL. (011) 833-5600 FAX (011) 838-7444	Docex 215 Johannesburg
2.	BRUGMANS	Mr Trevor Fagri	TEL. (011) 331-0131 FAX (011) 331-3992	Docex 93 Johannesburg
3.	LINDSAY KELLER	Mr Danie Weideman	TEL. (011) 880-8980 FAX (011) 880-9182	Docex 140 Johannesburg
4.	M. F. JASSAT	Mr Fareed Jassat	TEL. (011) 837-8413/7/8 FAX (011) 837-3986	P. O. Box 45424 Mayfair 2108
5.	MOHLALA	Mr Mamudupi Mohlala	TEL. (011) 787-4928 FAX (011) 789-7661	Docex 229 Randburg
6.	MOLEFE DLEPU	Mr Potie Dlepu	TEL. (011) 331-9861/2 331-9891 FAX (011) 331-9892	Docex 673 Johannesburg
7.	BORMAN RAPHELA	Mr Isaac Raphela Mr Francois Joubert	TEL. (011) 886-3675 FAX (011) 787-9016	Docex 86 Johannesburg
8.	DU PLESSIS, SWARTZ	Mr Enver Swartz Mr Martin du Plessis	TEL. (011) 331-6043/4 FAX (011) 331-7830	Docex 66 Johannesburg
9.	CHOONARAS	Mr Ismail	TEL. (011) 331-5519/27 FAX (011) 331-2963	P. O. Box 42920 Fordsburg 2033

 

 

 

Note: Kwazulu Natal is being reviewed.

 

DURBAN

 

 

 

	FIRM	CONTACT PERSON	TEL./FAX NO.	ADDRESS
1.	KRUGER NGCOBO INCORPORATED	Ms Wendy Hughes	TEL. (031) 306-4352 FAX (031) 306-4340	Docex 92 Durban
2.	A. S. KADER	Mr Riaz Haffejee	TEL. (031) 306-3386 FAX (031) 301-1524	P. O. Box 61065 Bishopsgate 4008
3.	MAGAGIBA DLAMINI	Mr Dlamini	TEL. (031) 307-7666 FAX (031) 307-7577	P. O. Box 6271 Bishopsgate 4008
4.	J. KISSOON SINGH INCORPORATED	Mr J. Kissoon Singh	TEL. (031) 306-2262 307-7671 FAX (031) 306-0778	Docex 81 Durban
5.	LINDA MAZIBUKO & ASSOCIATES	Ms Linda Mazibuko	TEL. (031) 304-3341 304-5629 304-4629 FAX (031) 304-1082	Suite 602 Nedbank House 30 Albert Street Durban 4001
6.	P. A. JOHNSTONE	Mr P. A. Johnstone	TEL. (031) 301-0349 FAX (031) 301-0358	P. O. Box 11271 Marine Parade 4056
7.	CHAPMAN DYER	Mr Mike Adams	TEL. (031) 304-2511 304-3591 FAX (031) 304-2522	P. O. Box 81 Durban 4000

 

PINE TOWN/CHATSWORTH

 

	FIRM	CONTACT PERSON	TEL./FAX NO.	ADDRESS
1.	REUBEN NAICKER & PARTNERS	Mr Reuben Naicker	TEL. (031) 709-2984 FAX (031) 709-2985	Docex 38 Pinetown

 

PIETERMARITZBURG

 

 

	FIRM	CONTACT PERSON	TEL./FAX NO.	ADDRESS
1.	HOSKINS NGCOBO	Mr Hoskins	TEL. (0331) 94-3952 FAX (0331) 94-3961	Docex 66 Pietermaritzburg
2.	DESAI, CHETTY, MASTROS & NAIDOO	Mr Chetty Mr Maharaj	TEL. (0331) 45828/945792 FAX (0331) 945790	Docex 69 Pietermaritzburg
3.	B. A. MBILI & CO.	Mr B. A. Mbili	TEL. (0331) 946711/2 (ask for fax line)	P. O. Box 7376 Pietermaritzburg 3200

 

 

UMTATA

 

 

	FIRM	CONTACT PERSON	TEL./FAX NO.	ADDRESS
1.	NTSEBEZA INC.	Mr M. P. Mnxandi	TEL. (047) 531-4400 FAX (047) 531-2081	Docex 25 UMTATA

 

 

CAPE TOWN

 

	FIRM	CONTACT PERSON	TEL./FAX NO.	ADDRESS
1.	HOFMEYR HERBSTEIN GHIWALA & CLUVER INCORPORATED	Mr Etienne Lombard     Mr Barendse	TEL. (021) 418-3333 FAX (021) 419-5909   TEL. (021) 696-6319 FAX. (021) 697-4898	Docex 39 Cape Town   Docex 1 Athlone
2.	JIMMY YEKISO	Mr Jimmy Yekiso	TEL. (021) 697-1236 FAX (021) 697-4870	Docex 7 Athlone
3.	EBRAHIMS INCORPORATED	Mr N. Ebrahim	TEL. (021) 683-0480 FAX (021) 683-0561	2 Dingle Road Cnr Rosmead Ave. Kenilworth Cape Town
4.	MAYATS INCORPORATED	Mr A. A. Mayat	TEL. (021) 637-8162 FAX (021) 633-5665	P. O. Box 183 Gatesville 7766
5.	PAPIER, CHARLES INCORPORATED	Mr Robert Charles	TEL. (021) 397-4241/2/3 FAX (021) 397-4404	Docex 5 Mitchell's Plain
6.	SONNENBERG HOFFMAN & GALOMBIK	Steve Levetan	TEL. (021) 410-2500 FAX (021) 410-2555	Docex 14 Cape Town

Management

1. A problem Start

The first task for present management was to establish its own culture and interpersonal ethic. Because the issue of the appointment of a replacement CEO had not been seamless the resultant negative context induced a difficult environment in which to build morale and cohesiveness. However real progress has been made especially on account of support from certain Board members. Some confidence in the executive team would now not be misplaced.

2. The Balanced Scorecard

Virtually every aspect of the Fund has been identified as requiring attention. In the result the management team has had to craft a defined performance management model called "The Balanced Scorecard" which has the critical attributes of being holistic in approach with measurable deliverables within time scales. As the model induces a highly focused approach a spin-off has been that the team has become more united.

Management is confident that by year end most of its remedial and progressive objectives will have been largely achieved. The scorecard captures both "bread and butter" issues such as structure, remuneration policy, advancement criteria etc., which underpin functional integrity and service delivery issues in a climate and context of transformation. See the vision statement and objectives herein.

3. Real Transformation

Accepting that there can be no real transformation unless service delivery is actually improved the following operational programs were contrived:-

1. A pilot project in the Western Cape in order to test the efficacy of arbitration as an appropriate alternative dispute resolution mechanism. The results are appended hereto under separate cover.
2. A "Patient Outreach" project designed to tackle the vexed issue of the lack of utility and equity when an undertaking as regards payment for future medical services is issued to the disadvantaged. A report is available under separate cover.
3. The appointment of "Information Officers" for the specific purpose of assisting and interfacing with the general public so as to improve accessibility.
4. An initiative in terms of which the Fund with astute selectivity timeously investigates those accidents with greatest potential for later embarrassing the Fund. By thus "locking up the facts" timeously the potential for "fiction" and other deviance is reduced and claims are settled sooner and more accurately.
5. The appointment of a representative panel of attorneys committed to a culture of responsibility on the twin issues regarding speed and cost of delivery.
6. Aggressively promoting a culture of mutual respect with our private sector colleagues who have a common interest in ensuring that claims are processed according to law.
4. The Motive

Management would respectfully submit that the above aspects are critical not only in terms of a public interest test but in particular as regards assisting the Satchwell Commission with proven utilities.