Road Accident Commission: Briefing

Meeting report

TRANSPORT PORTFOLIO COMMITTEE
27 June 2001
ROAD ACCIDENT FUND COMMISSION: BRIEFING

Chairperson: Mr. J. P Cronin

Documents handed out:
Road Accident Compensation & Rehabilitation in South Africa (Appendix 1)
Road Accident Fund Commission Powerpoint presentation
Extension of Duration of Commission: Feb 2001 Memo to Cabinet (Appendix 2)

SUMMARY
The Road Accident Fund Commission has faulted the current system of compensation for not allotting funds for the rehabilitation of persons seriously injured in road accidents. The Commission lamented the fact that taxpayer money is, for the most part, spent on payment for "minor" injuries such as contusions, sprains, and lacerations.

It will recommend the discontinuation of the lump-sum payments system in addition to shifting the focus away from a fault to a no-fault system. The Commission also hopes to look into ways and means of drastically reducing the current high expense of transaction costs.

MINUTES
Road Accident Fund Commission (RAFC)
The RAF Commission delegation was headed by Judge Kathleen Satchwell accompanied Mr Zakhele Sithole and Ms Riah Phiyega.

Judge Satchwell told the Committee that the impact of the current system of road accident compensation on healthcare is predicated upon exclusion from rather than inclusion in the benefits of Compensation Fund.

The Commission pointed out that many road accident victims are incapable of negotiating the minefields of legal technicalities and bureaucratic complexities to successfully access compensatory benefits.

The Commission noted that much emphasis and focus is put on blame apportionment in evaluating claims. This is at the expense of the pressing needs of genuine claimants. Consequently it has the effect of consuming all the skills, time, money and energy that should have been dedicated to road safety measures, emergency medical services, trauma care and early, effective medical and rehabilitative intervention. During this protracted and unproductive period of fault finding, the road accident victims are left without entitlement to compensation. As a result trauma care and rehabilitative intervention are not provided to the victims during what it called the "golden" period after their accidents. Appropriate health care may not be forthcoming for a considerable period of time.

Judge Satchwell said that the greater part of compensation is paid to claimants who have suffered minor injuries and that a disproportionately large portion (34%) is spent on non-pecuniary loss i.e. general damages.

The effect of this lopsided approach was that not much money is provided to those who have sustained catastrophic or life changing injuries, for whom rehabilitative intervention and life-care are of utmost urgency. Further, the administrative costs for the Fund unnecessarily consume tax revenues intended for the accident victims. Facilitators of the system are enriched instead of the accident victims.

The Commission faulted the lump-sum payment system for offering no security to disabled accident victims as patients cannot be reassessed or their needs reviewed so that their benefits can be adjusted accordingly. Lump-sum payments are based on guesswork estimates as to the future needs of victims. The process presupposes that the victims are wiser, more disciplined and better able to manage their expenditure of these monies than professional persons are. The lump-sum system is unreliable in this age of HIV/AIDS. It is inadequate for unanticipated healthcare needs, insufficient for increasingly expensive life-care arrangements and leaves the victims financially unprepared for the future.

The Commission noted that in most cases the victims are left in destitution or fall back upon the States’ already overburdened resources.

Discussion
Mr S Farrow (DP) asked what interim measures will be put in place to address the more pressing matters.

Judge Satchwell stated that the Commission had in the first instance undertaken a fact-finding mission, which had achieved a great measure of success. The present system operates within a specific legal framework and it would not be possible to make any radical changes without first addressing the legal framework. It is up to the State and the Legislature to take up the recommendations that would be tendered by the Commission.

Ms T Shilubane (ANC) referred to the issue of lost files the Commission had alluded to and asked if there were any recommendations to address the matter.

Judge Satchwell said that during the Commission’s investigations, many reasons were given as to why accident victim’s files went missing. She said that the Commission had been satisfied with some of the explanations but many of them were not satisfactory. The Judge noted, however, that the new board at the Road Accident Fund was more transparent and would no doubt address all these concerns.

Mr G Schneemann (ANC) asked whether the Commission was addressing the endemic lack of information on the operations of the RAF.

Judge Satchwell acknowledged the problem of inadequate and easily accessible information on the operations of the RAF and said that this is one of the areas the Commission was looking into. Mr. Sithole added that currently the RAF information structure is on "a need-to-know" basis. He said that much of the information is available within RAF itself.

Mr A Ainslie (ANC) asked whether the Commission was considering introducing tariffs on legal costs and whether the option of arbitration was on the cards.

Judge Satchwell said that the Commission had had fruitful interactions with arbitration representatives. She added that the Commission had noted that arbitration in the Western Cape had very meritorious ways of settling disputes. The Commission would definitely put the merits of arbitration before Parliament.

As for tariffs, the Judge said that the Commission had received many imaginative suggestions on how to address the contentious issue of legal costs. She pointed out that lawyers in the private sector were very distressed with regard to this issue. She said the Commission must at the end of the day consider all the views before reaching a concrete decision.

Mr. Ainslie asked whether there was a commitment by the RAF to contribute towards the Arrive Alive Campaign.

Judge Satchwell said that in the past the RAF did not have data on which to base its contributions to this worthy initiative. There was also the question of the lack of enabling legislation.

The Chair interjected that the issue of legislation has been settled and that the RAF is now legally empowered to make appropriate contributions.

Mr Ainslie asked whether there were sources of funding other than the fuel levy. Have the RAF ever considered the option of out-sourcing some of its operations to improve on its administration?

Judge Satchwell replied that the Commission has been very circumspect towards the RAF Board. The Commission did not want to antagonise the Board especially given the fact that the latter has been most helpful in their work. The private sector has been invited to make proposals on the issue of out-sourcing.

Mr. Sithole said that the board is not happy with the current composition of the RAF Board. He said that there are serious issues of conflict of interest. Mr Sithole acknowledged that the RAF did not have the capacity to perform all its functions and so out-sourcing must be resorted to.

Dr W Odendaal (NNP) asked what action, if any, was being taken to address the perennial reports of incompetence and corruption at the RAF.

Ms Phiyega said that the Commission had no competence to look into the management of the RAF but that they had not given up on future interaction with the RAF Board on issues of mutual interest.

The Chair said that the Commission had offered a window of opportunity to make a difference in this tremendously important area. He added that what was emerging from the discussion was, really, the fact that the greater scandal was the systematic neglect and exclusion more than corruption and incompetence of the RAF. This, he cautioned, was a more hideous problem than one could possibly imagine.

The Chair added that on the whole the proposals were less costly and called for systemic change to inject equity in the system. To which Judge Satchwell enjoined that she looked forward to a system of compensation based on equity and rationality.

Appendix:
ROAD ACCIDENT COMPENSATION AND REHABILITATION IN SOUTH AFRICA
Kathleen Satchwell

Introduction
South Africa is a country of vast geographical extent with a widely disparate population and which continues to reap the legacy of its troubled past. Environmental, socio-political and economic factors provide the context for road use and road carnage in South Africa, our current system of road accident compensation, vast disparities in living conditions of South Africans injured in road accidents and great anomalies with regard to the provision (or lack thereof) of social security (including healthcare, rehabilitation and lifecare) for the victims of road accidents.

Socio-Political Context
With systematic application of the phenomenon of "apartheid", legislation and custom sought to ensure separation of the various ethnic and racial groups from one another and the economic exploitation and domination of all other racial groups by the "white" race group of European ancestry.
Of an unreliably estimated population of some 40.6 million, 76.7% are black South Africans, 10.9% are white South Africans and the balance of 12.4% are Indians and so-called "Coloureds". Approximately 54% of the population is urbanised. In 1996 only 57.4% of the working age population was economically active whilst 60% of those who were in employment received incomes of less than R1500 per month . Nearly 3000 families were homeless and 21% of African households lived in informal dwellings ("shacks"). Some 7.5 million people had no access to running water while 21 million people had no sanitation. Only 59% of households had electricity.

Road use and road accidents
Vast distances are regularly travelled across South Africa by all South Africans and particularly by the formerly disenfranchised participants in the evil social experiment of apartheid.
There are about 6 million licensed drivers and some 6.3 million licensed and registered vehicles on South African roads.
In 1998, 866 536 motor vehicles were reported to have been involved in accidents on the road: 62% involved motorcars, 16% light delivery vehicles and 8% minibus taxis. The majority of accidents have been recorded as taking place in urban areas.
In that same year an underreported total number of 129 672 persons were injured or killed in motor accidents. Some 9 068 people were killed on South African roads. Of the survivors, 36 246 people sustained serious injuries while 84 358 people sustained slight injuries.

Road Accident Victims in Research Sample
During the 1999 financial year compensation was paid out by the Road Accident Fund to 78 290 claimants, being persons injured in road accidents or the dependants thereof. The greater proportion of claims were in respect of passengers (44%), followed by pedestrians (29%) and drivers (24%). Africans were the largest group of road accident victims (56%) followed by whites (27%).
Some 18%of road accident victims were younger than 20 with 66% between the ages of 20 and 49. More than half of employment age road accident victims were employed in the formal sector of the economy (56%). A further 13% were employed in the informal sector while 13% were unemployed. Of those who were not economically active 12% were students, 3% were homemakers and 3% were retired. Of those road accident victims who were either formally or informally employed, the majority of claimants (75%) earned less than R4 000 per month. Only 3% of earners fell into the highest income category of R15 000 or more.

Injuries, disablement and loss of functioning
Approximately 8% of road accident victims in the sample suffered fatal injuries whilst 48% sustained light injuries, 27% moderate injuries and 17% serious injuries. Primary injuries were most frequently found to be fractures (34%) and sprains and strains of joints and muscles (24%) with the neck muscle and tendon (13%), lower leg (10%), ankle and knees (9%) the most frequently injured primary body part.
Approximately 5.4% of claimants were found to have sustained permanent disablement of whom 41% were less than 27% disabled while 20% were more than 71% disabled.

Case studies
Rose Ntshangase was a 10-year-old scholar in 1990 when she was knocked over by a motor vehicle and left paraplegic. She lives in a remote rural area with her mother, two siblings and four other family members only one of whom is in employment. Water is fetched from a river. The pit lavatory is not accessible to her. She is incontinent – she puts on a diaper in the morning, leaves for school at 06h30 and it is only when she returns home at 13h30 that she is able to change her diaper. Her wheelchair is old and giving problems and it is on this chair that she is wheeled to school by her brother. In 1996 her left leg became oedematous and was amputated above the knee. She developed bedsores while in hospital. Large deep sacral, left trochanter and lower lumbar bedsore scars were visible and one active bedsore on the sacrum was found during the 1999 visit.
Martha Mathao sustained spinal cord damage in July 1997. She was brought to a clinic in critical condition in April 1998. The attending doctor diagnosed her having bedsores with septicaemia and some elements of hypostatic pneumonia. She died in hospital, the cause of death recorded as "paraplegia with bedsore anaemia".
Banele Ntambo was 5 years old when he was knocked over by a minibus, sustaining a large wound in the occipital area, and was rendered severely mentally and physically disabled. His home is a two-roomed structure in an informal settlement with no provision for electricity, water or sewerage. Cooking is done on a small two-plate coal stove, there is an outside pit lavatory and water is collected from a communal tap. He is totally reliant upon his mother for all aspects of care. He is transported in an old buggy without cushions on the bottom or sides. His mother advised that the child had no nappies or other clothing except two or three tee-shirts. In the past Banele had been taken to hospital but his mother was now unable to do so by reason of the cost of transport.

Social Security
The apartheid regime catered by and large for the protection of the White community and social assistance was thus set up as a safety net for poor Whites who were, in reality, not the poorest. Separate welfare departments were established to serve for each official race group (White, Coloured, Indian and Black). This fragmentation was further compounded with the establishment of homelands and Bantustans each of which had its own welfare department which, results in duplication, inefficiencies and ineffectiveness in meeting the needs of the whole population.
The prevalence of disability has been identified as a national average of some 5.9% of the population of South Africa. Yet many categories and groups of people (such as the self-employed or informally employed or non-citizens) are statutorily excluded or marginalized from the formal system of social security. In the same study 68% of disabled people were found not be receiving the State disability grant (currently R540 per month) let alone any private insurance pension.
However, those who are or have been in formal employment benefit from fairly well-developed social insurance coverage and are usually in a position to top-up social insurance protection by occupation-based and/or private coverage against risks. The result is to confirm glaring disparities between the (relatively) rich and the poor thus reinforcing and perpetuating inequality and poverty in the country.

Road Injuries, Disablement, Healthcare and Lifecare
The majority of South Africans (85,2% of the sample) do not have private medical insurance and are not members of medical aid schemes. A "wallet biopsy" will be performed and they will eventually be transferred to the State hospital in an ill-equipped ambulance driven by an untrained driver possibly staffed with a paramedic. At the State hospital there will be queues and forms to fill in. There will be long waiting periods until such time as a nurse or junior doctor becomes available. The shortage of beds (and an absence of sheets and blankets and pillows) mean that only seriously injured road accidents victims are even admitted to hospitals as inpatients. Only 42% of claimants in the sample attended hospital.
In meetings held with the Occupational Therapy Association of South Africa, individual therapists, the Neuropsychological Society of South Africa, the Orthopaedic Association of South Africa, the Private Hospital Association of South Africa, the Board of Healthcare Funders, individual medical practitioners, the Department of Health and patients, we have learnt of the decline in the provision of rehabilitative intervention and assistance to persons who have sustained serious injury in road accidents. Posts have been frozen in the State sector and there are fewer and fewer and sometimes no neuropsychologists, occupational therapists, physiotherapists, and other essential rehabilitation specialists available in State hospitals. State hospitals are not always able to provide patients with wheelchairs on discharge. Prostheses are frequently unavailable and persons in need may only be provided with wooden or fibreglass sticks. In one study, it was found that "only 2 out of every 5 persons needing medical rehabilitation and assistive device services actually received the service"
In the private sector, hospital and medical care is of high standard. Rehabilitation is available at a price. The ability to access such services requires not only funds (in the form of cash or medical insurance) but also access to a telephone, facility with languages used by professionals, transport and the time to travel from one therapist to another.

Road Accident Compensation Legislation
The legal response to suffering caused by road accidents is twofold. The criminal law searches for a wrongdoer who may be prosecuted on charges of murder or culpable homicide, reckless or negligent driving, driving under the influence of alcohol or other traffic violations. The civil law is used by aggrieved and prejudiced road accident victims or family to extract a financial remedy for the damage caused.
The South African Law of Tort or Delict is founded on the principles and concepts of Roman and Roman-Dutch Law and is much aligned to the principles and practice in English common-law jurisdictions. A delict (or tort) is "wrongful and blameworthy conduct which causes harm to a person". That which the road accident victim or family seek, by way of forfeit or remedy from the wrongdoer, is known in law as "damages". Damages is the financial value placed on the loss suffered by the road accident victim or family.
The 1942 Motor Vehicle Insurance Act compelled owners of motor vehicles to take out insurance in order to cover damages suffered due to physical injuries or the death of breadwinners arising from negligent and unlawful driving of motor vehicles. Since 1986 road accident compensation has been financed not by insurance premiums but by levies introduced by Government on the sale of fuel (petrol and diesel). Presently, liability resulting from the unlawful driving of a motor vehicle has been displaced to the Road Accident Fund (RAF) (a parastatal falling under the political authority of the Minister of Transport and under the financial control of the Financial Services Board and the Minister of Finance) which both underwrites liability for and administers all claims for damages sustained in road accidents.
Road accident legislation has two goals: on the one hand, it indemnifies the wrongdoer against a possible large claim from the victim whilst, on the other hand, it ensures that the victim will get satisfaction against the wrongdoer who is otherwise uninsured and has little or no means to satisfy the claim.

Process of Compensation
Legislation has not fundamentally altered the delictual requirements for liability as found in common law. A claimant is still required to prove all the elements of the delict.
Claims must be submitted to the RAF within three years of the accident. If the matter is not settled then the claimant must issue summons against the RAF within five years of the accident. Outside these periods, the claim prescribes.
Once the claim is lodged with the RAF, the RAF then commences its own investigation to determine whether or not the claim is valid (i.e. was there a road accident etc.), what are the merits of the case (i.e. the degree of fault, blame or negligence to be ascribed to the driver of the vehicle and the claimant) and to determine the quantum (i.e. the amount of damages or loss suffered). The RAF may enter negotiations towards settlement. Should such negotiations between the RAF and claimant be unsuccessful then the claimant may institute legal proceedings against the RAF. Litigation either results in further negotiations and settlement or trial action and court order.
Average time in the sample from occurrence of the road accident to receipt of compensation was 2.6 years.

Transaction Costs
Disputes can be expected wherever and whenever the victim of a road accident avers that he or she has sustained a loss which can be made good in money by the RAF. At issue may be the event itself, whether or not there was any wrongdoing, who was to blame, the injury or death resulting, loss of income or support, healthcare and rehabilitation, life care and general damages. Even where there is no dispute, the majority of road using South Africans are not in a position to satisfactorily manipulate their way through the minefield of bureaucracy which is required in order to prepare and then lodge a well-documented and substantiated claim for road accident compensation.
Consequently, both claimants and the RAF rely upon solicitors and barristers and medico-legal experts (neurosurgeons, orthopaedic surgeons, neurologists, psychologists, occupational therapists, architects etc) to formulate, prepare and present opposing points of view as regards the merits of the claim and the quantum thereof.
In this context, it is not surprising to learn that of total income (fuel levies and investment income) of R2 375m for the 2000 financial year R548m (23%) was expended on transaction costs and only R1 743m (73%) was actually expended on compensation for the victims of road accidents.
In addition the claimant bears the burden of the balance of the fees of solicitors, barristers, hospitals, medical practitioners, therapists, accountants, actuaries and other experts reports which are usually paid by the claimant out of compensation received.

Compensation
The object of the damages awarded for personal injury sustained in a road accident is intended to put the claimant in the same position, financially, as if he or she had not been injured.
In most cases the claimant will have suffered several kinds of loss. Some losses can be easily expressed in terms of money (medical and other bills which have already been paid or earnings which have been lost through being unable to work) while other losses have no obvious money equivalent (pain and suffering and loss of the amenities and enjoyment of life) or cannot be valued with the same degree of accuracy (loss of future income or support, the future costs of continuing medical, rehabilitation and life care).
In common law countries, such as South Africa and Australia, one finds the "single recovery" rule. This provides that damages for personal injury are to be recovered in a single action in the form of a single payment of money. The greatest difficulty with these lump sum payments is that there can be no certainty as to what would have happened if the accident had not taken place and as little certainty as to what may happen in future. Damages are assessed on the basis of many assumptions about the future both as it may affect the claimant personally and wider society.

Compensation paid in 2000
Of settled claims, a significant proportion (95%) was for amounts of less than R50 000. In this smaller class of claims, compensation paid in respect of "general damages" was by far the greatest category (50%). The conclusion is that smaller claims are submitted in respect of less serious injuries or where claimants income is low or non-existent. Those claimants are less able to prove the nature and extent of injures, healthcare and rehabilitation treatment and costs and are more able to motivate for the less exact "general damages" (for pain and suffering, emotional shock, psychological trauma, disfigurement, loss of amenities and loss of enjoyment of life).
Smaller claims paid out more in respect of future medical expenses than in respect of past medical expenses notwithstanding that several years had elapsed since the date of accident. At face value this would suggest that such claimants would require more medical treatment and care in future than they had received by the time the claim was settled. It is more likely that the majority of claimants initially received medical treatment at State Hospitals (where they paid nominal or no fees for medical care) or were not hospitalised (57.4%) and that their claims for future medical expenses are predicated upon receiving treatment at private hospitals or from private health providers. In short, the realities of past medical treatment are likely to have been at State expense whilst speculative future care which may never be required is conjectured to take place at the maximum rate charged by private hospitals and clinics, private medical practitioners and therapists. In fact, research into utilisation of substantial sums of compensation has disclosed the recipients do not earmark the monies for healthcare and rehabilitation purposes but tend to make other expenditures with their compensation and to revert to State provided free healthcare or to their own private medical insurance.
More serious injuries with greater disablement are found in claims exceeding R400 000. Claimants with long term and often lifetime loss of functioning in personal and public life require more in respect of future loss of income, healthcare (sometimes rehabilitation but mainly lifecare) expenses and receive proportionately less in respect of general damages.

The impact of the current system of road accident compensation on healthcare, rehabilitation and life care
The current system of road accident compensation is predicated upon exclusion from rather than inclusion in the benefits of a compensation Fund financed by a tax imposed on all those who consume petrol or diesel:
· Non-road accident victims are treated less favourably than road accident victims. People injured in the home, in the course of sporting activities, as victims of crime and even in the workplace are excluded from this particular system of compensation.
· Many victims of road accidents are unable or struggle to negotiate the minefields of legal technicalities and bureaucratic complexities and successfully access the system to receive benefits therefrom.
· Where the road accident victim is unable to establish negligence or there is no negligence on the part of the driver or on the part of another motor vehicle (for example, the accident is caused by a kangaroo which jumps in front of a motor vehicle or the road itself is a hazard) then the victim is not entitled to compensation.
· Many victims of road accidents are entirely excluded from the current system of road accident compensation or receive limited compensation by reason of their own negligence.
The result is that the cause of the accident takes priority over the need for healthcare and rehabilitation. The denial of access to compensation is frequently denial of the only opportunity which might exist for rehabilitative intervention. Exclusion continues to perpetuate disparities between urban and rural sectors, the employed and the unemployed, the rich and the poor which is not conducive to concepts of social security.

The focus of the current system of road accident compensation is the presence or absence or degree of fault in road accidents rather than on preventing or ameliorating the consequences of road accidents:
· Skills, time, money, energy are all expended on attributing or denying blame instead of dedicating these scarce resources to road safety, emergency medical services and trauma care, early and effective medical and rehabilitative intervention.
· During the considerable period that fault is in dispute the road accident victims has no entitlement to any compensation.
· Transactions costs financially advantage "experts" in issues of fault (accident investigation and reconstruction and the legal profession).
The result is that trauma care and rehabilitative intervention are not available during the "golden" period (whether hours, days, months and even years) and appropriate healthcare may not be accessible for a long time thereafter until such time as the patients’ entitlement to rehabilitative assistance is established.

Compensation funds are not allocated in a manner conducive to optimal rehabilitation outcomes for persons seriously injured in road accidents:
· The greater number of claims paid out by the RAF are in respect of "minor" injuries such as contusions, sprains and strains, lacerations.
· A disproportionately large amount (34%) is expended on non-pecuniary loss, i.e. general damages.
The result is that money is not available or is less generously applied to those who have sustained catastrophic or life changing injuries and disablement and for whom rehabilitative intervention and lifecare are vital.

Transaction costs enrich facilitators and not the victims of road accidents:
· The administration of the RAF, the costs of experts utilized both by the RAF and claimants consume tax revenues intended for those who have suffered injury and loss.
· Claimants are usually obliged to utilize portion of their compensation to pay their own costs and thus funds allocated to "future medical costs" (physiotherapy, hip replacements, wheelchairs) are further expended on legal and administrative purposes.
The result is that "party-party" transaction costs reduce the availability of already limited resources for seriously injured patients while "attorney-client" transaction costs oblige the patient to expend monies earmarked for healthcare and rehabilitation for other purposes.

Payment of compensation in lump sums offers no security to disabled road accident victims:
· Patients cannot be reassessed, needs cannot be reviewed and benefits cannot be adjusted upwards or downwards.
· Lump sum payments are based on guesstimates as to future needs and costs which are frequently inaccurate or not borne out by real experience or often overtaken by unanticipated events.
· Once-and-for-all lump sum payment presuppose that road accident victims are wiser, more disciplined and better able than other persons to manage expenditure and investment of large sums of money. Road accident victims are frequently in dire financial straits after months or years of waiting for compensation while they are disabled, unemployed, in debt, faced with high healthcare expenses and legal costs. It is not surprising that lump sum compensation, which has been specifically earmarked by the courts or in settlement for healthcare and rehabilitation purposes, is often expended for other purposes such as food, clothing, housing and education for the claimant and his or her extended family. Compensation can also disappear or be reduced by investment mishaps.
· With the advent of the HIV/AIDS pandemic, life expectancy tables are less reliable. Claimants may die earlier than anticipated of causes unrelated to the motor accident and compensation monies are then retained by heirs who have no need for healthcare or rehabilitation and for whom the system of road accident compensation was not intended.
The result is that the payment received may be inadequate for unanticipated healthcare needs, insufficient for increasingly expensive lifecare arrangements and leaves the patient financially unprepared for the remainder of his or her lifespan. Road accident victims are frequently left destitute or fall back upon the States’ already overburdened resources.

Conclusion
As a system for ensuring access to timeous and effective healthcare and rehabilitation, providing protection against impoverishment and offering solace for suffering, the current system of road accident compensation is inequitable, inefficient and unsustainable. Many road accident victims receive no assistance from the Road Accident Fund. Those who do, receive it long after medical treatment and rehabilitative intervention was required. Frequently, compensation is available too late to assist in optimal rehabilitative outcomes.

The way forward
With the advent of democracy in South Africa, the Constitution of the Republic South Africa was enacted containing a Bill of Rights which provides, inter alia, that "everyone has the right to have access to health care services ..[and].. social security, including, if they are unable to support themselves and their dependants, appropriate social assistance".
Government has committed itself to elimination of discrimination within the country and improvement of living conditions for all South Africans. The "White Paper for the Transformation of the Health System in South Africa" has identified the need to restructure the health sector in order "to unify the fragmented health services at all levels into a comprehensive and integrated National Health Service; to reduce disparities and inequities in health service delivery and increase access to improved and integrated services". The White Paper on integrated National Disability requires integration of disability issues in all Government development strategies, planning and programmes. Key policy areas include: prevention, healthcare, rehabilitation, public education, barriers to access, transport, communication, data collection and research, education, employment, human resource development, social welfare and community development, social security, housing, sport and recreation.
In 1998 the Road Accident Fund Commission was established by State President Nelson Mandela to inquire into and make recommendations to the State President on "a reasonable, equitable, affordable and sustainable system for the payment of compensation or benefits to the victims of road accidents in South Africa". The Commission has met with and learnt from many hundreds of interested persons and experts including, in Australia, regulatory authorities, disabled persons and organisations thereof, medical and rehabilitation experts and legal representatives. The research process is still underway but it can be expected that the recommendations of the Commission will give high priority to the needs of persons who have been seriously injured in road accidents and whose lives have been dramatically and lastingly affected thereby as also the imperative to address issues of early and optimal rehabilitative intervention and dignified life care options.

Appendix 2:
TO CABINET OF THE GOVERNMENT OF THE REPUBLIC OF SOUTH AFRICA
FROM ROAD ACCIDENT FUND COMMISSION (ACT NO. 71 OF 1998)
DATE 22 FEBRUARY 2001
TITLE EXTENSION OF DURATION OF COMMISSION

SUBJECT
The Road Accident Fund Commission is required to "inquire into and to make recommendations regarding a reasonable, equitable, affordable and sustainable system for the payment by the Road Accident Fund of compensation or benefits, in the event of the injury or death of persons in road accidents in the Republic".

The Commission was appointed with effect from 1 June 1999. The Report of the Commission was originally required to be handed to the State President on or before 31 May 2000. The period within which the Commission may present its Report has been extended to 31 May 2001 (the Road Accident Fund Commission Amendment Act, 2000).

PURPOSE
The purpose of this memorandum is to inform Cabinet why the Road Accident Fund Commission is not in a position to present its Report to the State President by 31 May 2001 and to obtain approval for the extension of the duration of the Commission by an additional period of fourteen (14) months.

The RAFC Amendment Act 2000 provides in Section 7(4)(b) "the President may, by proclamation in the Gazette, extend the period referred to in paragraph (a) if the Commission requests the extension of the period in writing".

SUMMARY
At the conclusion of a six-month period of public hearings, it was apparent to the Commission that a considerable body of information was required for the Commission to formulate opinions and make recommendations as required by legislation. The Commission required data on road accidents, injuries resulting therefrom, the demographic profile of victims of road accidents, nature of and degree of disablement resulting from such injuries, compensation paid to victims of road accidents, categories of such compensation, the transaction costs of the current scheme of road accident compensation and claims procedures. The Road Accident Fund does not capture such information electronically and was unable to furnish the Commission with all the data required.

Accordingly, during 2001 the Commission proceeded to create its own electronic database:
1.The Human Sciences Research Council (HSRC) accessed a sample of RAF files; claims handlers in the four branches of the RAF were trained to capture data from RAF paperwork onto a specifically designed computer programme; a questionnaire/database was created; the data has now been captured.

2.The areas of investigation cover some 300 variables. The focus for analysis includes accidents (months and years of occurrence, provincial as also urban-rural distribution); profile of road accident victims (age, population group, gender, roaduser class, nationality, employment status); injuries and fatalities (according to population group, age, roaduser class); claims (claim type, claims lodged and paid according to severity of injury, compensation paid compared to number of claims according to severity of injury, compensation paid according to claim category and claim size) claims process and costs (claims repudiated, settlements, time periods from accident to lodgement of claim to settlement, costs paid in relation to compensation paid, distribution of the costs between RAF and claimants). This electronic database has only now become available and the research team is currently engaged in the process of analysing and reporting on such data.

3.Managed Comp Technologies have been engaged to use the electronic database created by HSRC to conduct a detailed injury and disablement analysis. Injuries are classified according to body part and trauma sustained. Each one of approximately 200 injury types are now in the process of being analysed utilising some 200 variables. These variables enable compensation amount and categories as also transaction costs to be analysed according to injury type and disablement, public and private medical care.

4.The HSRC and Managed Comp Technologies research will be incorporated into one Report. The Commission is working closely with both research teams. It is expected that the final Report will only be available towards the end of May 2001.

Other research to be undertaken by the Commission is dependant upon the electronic database and injury analysis:
1.The impact of HIV/AIDS on compensation required and paid and the format in which it is paid is to be conducted by the University of Cape Town;

2.Detailed costing of the provision of trauma care, healthcare, rehabilitation and lifecare at provincial hospitals/public facilities as also at private hospitals/private facilities is to be conducted by health economists.

3.The services of consulting actuaries have been engaged to prepare actuarial models of the various options to which the Commission is giving consideration. Using the data and analysis from the Commission research (HSRC database, injury analysis, healthcare costing, impact of AIDS) the actuaries will use the actuarial models prepared by them to cost possible recommendations to be made by the Commission. It is only with such costing that the Commission will know whether or not its recommendations will be "affordable and sustainable". This actuarial work will take between two and three months. The earliest that the actuarial report could be expected would be the end of November 2001.

4.The Commission has arranged that, on receipt of the actuarial costing, Econometrix will evaluate the impact of any recommendations to be made by the Commission on the portion of the fuel levy currently paid over to the RAF and the impact that any increases or decreases in such levy would have upon the economy of the country.

During these months of research, the Commission continues in its meetings and discussions with interested parties, its search for information and in drafting of its Report. Once all data, analysis and actuarial costing are to hand, the Commission will be in a position to formulate its final recommendations for inclusion in its Report.

The Report will possibly run to three volumes and will also be published in electronic form on CD. An editor has been engaged to prepare the final version thereof. That process will only commence in February 2002 and will take approximately two to three months. The typesetting, printing and binding of the hard copies of the Report will take an additional two to three months. Accordingly, the Report should be available for presentation to the State President by the end of July 2002.

DISCUSSION
The work of the Commission has previously been reported to the Parliamentary Portfolio Committee on Transport on 12^th April 2000. A detailed written report as also a verbal presentation was made to the Parliamentary Committee on that date.

ORGANISATIONAL AND PERSONNEL IMPLICATIONS
The Commission currently employs one administrator/typist and one telephonist/messenger. The Chairperson of the Commission, Judge Kathleen Satchwell, is seconded to the Commission on a fulltime basis at no additional cost to the fiscus. No changes to the present organisational structure or personnel are or will be required to be undertaken.

FINANCIAL IMPLICATIONS
The Commission has not yet utilised its budget for the first year of its operations ending 31 May 2000. An additional budget to cover the cost of research undertaken was prepared for the second year of operations ending 31 May 2001. The Commission will not exceed that budget. It is unlikely that any additional budget will be required for the Commission by reason of the extension of the life of the Commission.

OTHER DEPARTMENTS CONSULTED
The only Department involved is the Department of Transport whose Minister has been consulted. The Road Accident Fund is affected by this request for an extension of time. The Acting CEO of the RAF accepts the need for the extension of the term of the Commission.

RECOMMENDATIONS
It is requested that Cabinet approve the extension of the duration of the Road Accident Commission by a further period to 31 July 2002.

JUDGE K SATCHWELL
CHAIRPERSON