The Road Accident Fund and How it Works

On the 1 August 2008 the Road Accident Fund Amendment Act was implemented. It brought about some major changes in how the fund operates. We will first review what the Road Accident Fund is all about and then we will take a more in-depth look at the changes and how it affects all of us. Any accidents that took place before the 1 August 2008 still fall under the old rules.

What is the Road Accident Fund?

The fund is controlled by government and was formed after the approval of legislation to cover drivers and passengers for any bodily injuries, or death, sustained as a result of a road accident caused by a negligent driver. The negligent driver is not allowed to claim from the fund, only the third parties.

The fund falls under the jurisdiction of the Department of Transport. Money to sustain the fund comes from a levy included in the price of fuel so every motorist in South Africa contributes to the fund every time you fill your car with petrol. Contributions to the Road Accident Fund are also referred to as Third Party Insurance but is should not be confused with Third Party Insurance cover that you will take out to protect yourself against personal claims by third parties, or to pay for the damage to the property of third parties.

How does the Fund operate?

A third party, or his dependants, can implement a claim against the fund for injuries sustained, or for death, that resulted from the negligence of a driver. What happens is that the Road Accident Fund takes over the responsibility of the negligent driver.

What and how much can be claimed?

The new act removed certain inequalities to ensure that all innocent road users will be able to claim for injuries, medical treatment and loss of income. Before the amendments came into effect there was no limit to the amount that could be claimed as loss of income, now a maximum limit of R160 000 per year applies for income loss or loss of support, irrespective of the number of dependants.

The Road Accident Fund stipulates that the driving of a car must have led to the injuries or death; if a car falls on a mechanic while he is working on it, he cannot claim from the Road Accident Fund.

The right to sue the guilty party

Another very important change, that goes hand in hand with the one above, is that a claimant no longer has the right to sue the guilty party in the event of an accident. This will restrict the claimant’s potential to sue for full compensation. As an example, if you have earned more than R160 000 a year and are totally disabled after the accident, you can only claim the maximum of R160 000. The implication is that you should ensure that you have sufficient income protection insurance, medical aid and disability cover to make up for the shortfall, if you fall in this category.

Medical Costs

Medical cost claims will now be limited to the rates charged by public health authorities so if you are treated in a private hospital the difference will have to be covered by your medical aid or by yourself.

Passenger Limitation and General Damages

Previously passengers was limited to a maximum claim of R25 000, this limitation has been removed and passenger claims will be settled in full, subject to the maximum limits applicable. General Damages will compensate claimants for pain and suffering and disfigurement. However, take note of the fact that the Road Accident Fund’s liability for general damages will be limited to “serious” injuries as determined by certain laid-down rules and by a medical practitioner. Previously one could claim for things such as “loss of pleasure,” this will probably not be classed as a serious injury under the new rules.

Property Damage

As has always been the case, no claims for any damage to property can be made to the RAF. You can still claim for the damage to your car from the guilty party or his insurance company.

A common law right

The amendment act has removed a person’s common law right to sue the guilty party for injuries or death. This is a very emotional issue and it is probably only a matter of time before we see this being tested in the constitutional court.

What should you do?

If you are concerned about the new limits that apply, as you fall into a higher income bracket, the best advice is to consult your insurance broker and review your total insurance portfolio to ensure that you and your family are adequately protected in case of death or serious injury.

Previously some claimants could claim unlimited compensation from the fund while others, such as passengers, were limited to R25 000. The new amendment act has now brought about a fairer dispensation to all road users.

If you were injured in a car accident and want to lay a claim against the Road Accident Fund you can do so in your own capacity but we would rather recommend that you contact a lawyer to do it on your behalf. It can become a very long and cumbersome procedure to handle on your own.