Articles

THE ROAD ACCIDENT FUND ACT

In an article published on this site earlier this year, we drew the attention of all visitors to this site to the fact that legislation was in the process of being passed which will radically change the present system which as it now stands allows road accident victims the ability to claim the damages they suffer as a result of the injuries sustained in a motor accident from the Road Accident Fund. At that stage a Bill had been drawn and that Bill was going through the process of consideration by all the relevant role players prior to it being signed in to Law.

Well, quietly unceremoniously, with no drum rolls, trumpet blowing, or any fanfare in and during December 2005, whilst most of South Africa were on holiday during the traditional Christmas vacation, our President affixed his signature to the Bill and on 5 th January 2006 the Bill was published in Government Gazette and this publication brought into existence The RAF Amendment Act 19 of 2005 which on this date became Law. As will be seen from the contents of this treatise, although the Act is part of our Law it has not yet come into operation for the reasons which appear below but it soon will be.

We will now briefly detail the changes to the present system this Act when it becomes effective will bring into effect.

1. General damages which embraces claims for pain and suffering and loss of life's amenities will be restricted only to those victims who have suffered serious injury. What is meant by “serious injury” will be determined by a medical practitioner who in making the determination will have to comply strictly with guidelines laid down in the regulations to the Act. These regulations are, at this time in the process of being drawn and in accordance with the latest information we have on the topic, are due to be published on 1 st July 2006. It is expected that the publication of these regulations which will be an integral part of the Act, will herald the coming in to Law of the Act. These regulations will establish the criteria determined by a medical panel accredited for and paid by the RAF under which the medical practitioner will determine whether or not you have suffered a serious injury. It is also anticipated that no regard whatsoever will be had for the victim's personal circumstances, e.g. A pianist losing a hand will be compensated in the same way as a lawyer losing a hand irrespective of the fact that the pianist's loss of a hand will not allow him to play the piano ever again whilst the Lawyer can practice his profession although in restricted fashion without a hand. Thus if the medical practitioner does not believe you have suffered a serious injury you are denied the right to claim compensation for general damages.

2. All claims for loss of income as a result of the victim being unable to work as a result of his injuries will be payable by installments and will be capped at R160 000.00 per annum.  The wording in the Act may be ambiguous and is capable of meaning that victims who prior to the accident earned R300 000.00 per annum and who after the accident post-accident can only earn R150 000.00 per annum would only be compensated within the overall cap of R160 000.00. This means that because of the limitation his claim for compensation will be limited at R10 000.00 per annum;

3. All medical care from date of accident and for the rest of the victim's lifetime will only be allowed at state health care facilities or at state healthcare rates thereby totally removing the victim's rights to any form of first world medical care;

4. The total removal of any right to compensation from the RAF by any victim who is not a South African citizen or lawful permanent resident.

5 The Act specifically takes away your right to claim from the person whose negligent or reckless act caused the accident the damages you have suffered or the shortfall between the actual amount of your damages and that which you may now recover from the Road Accident Fund.

•  If the claim you have brought is settled prior to the issue of summons, the legal fees you have incurred in having your claim lodged and settled are not recoverable from the Road Accident Fund.

•  The Act as presently worded provides that it will only relate to accidents which occur after it comes into operation and all claims from accidents which occurred prior to the date on which the Act will become effective, are to be dealt with under the present legislation. Thus if the Act comes into effect on 1 st August 2006, and you are injured in a motor accident on 15 th August 2006, your rights to claim damages are as set out in the Act.

We are certain that visitors to this site reading this treatise will not need to be alerted as to how the provisions in this Act drastically reduces your ability to claim damages Road Accident victims have reasonably suffered either from the Road Accident Fund and from the wrongdoer. Many roll players comprising inter alia of the Automobile Association, the Paraplegics Association, and the Organized Legal Profession, have been fighting relentlessly over many years to avoid this Act coming into Law. Their objections and protestations, have fallen on deaf ears and the Transport Minister has shown an unprecedented eagerness to promulgate this Act and this stance appears to be a way forward to addressing the financial problems at the Road Accident Fund which is in a most unhealthy state as a result of the manner in which the Road Accident Fund has been administered and frauds which have been perpetrated on it.

Members of the organised Legal Profession now believe that the only way in which this Act can be scrapped is for the Constitutional Court to declare the Act unconstitutional and it is believed that this can be done. The rest of this treatise comprises of the way in which we believe the constitutionality of the Act can be challenged.

Kevin Hopkins BA LLB (Rhodes) LLM (Witwatersrand), who is a senior lecturer in law at the University of the Witwatersrand, and who is an advocate in Johannesburg, has written an article in the May edition of DE REBUS the official legal publication of the Attorney's Profession in South Africa entitled “ Capping claims ”. This publication is made available to members of the Attorney's Profession but it can be accessed off the Internet on www.derebus.org.za . Visitor's to this site are urged to read this article if they wish to have a detailed appreciation for the legal issues involved in challenging the constitutionality of the Act written in eloquent legal parlance. We will give a brief overview of Mr Hopkins's submissions intermingled with which are our views.

It is clear that by use of the words “capping of claims” the learned author means all the restrictions contained in the Act which reduces or restricts your rights to claim damages. He explains with references to decided cases in this Country, Malaysia Zimbabwe and Canada how he believes that the attempt to restrict your right to claim damages can be equated with expropriation of property and then relies on the protection afforded by Section 25 of the Constitution. This reads:

25. Property

•  No one may be deprived of property except in terms of law of general application, and no law may permit arbitrary deprivation of property.

  1. Property may be expropriated only in terms of law of general application ­
    1. for a public purpose or in the public interest; and

•  subject to compensation, the amount of which and the time and manner of payment of which have either been agreed to by those affected or decided or approved by a court.

  1. The amount of the compensation and the time and manner of payment must be just and equitable, reflecting an equitable balance between the public interest and the interests of those affected, having regard to all relevant circumstances, including ­
    1. the current use of the property;
    2. the history of the acquisition and use of the property;
    3. the market value of the property;
    4. the extent of direct state investment and subsidy in the acquisition and beneficial capital improvement of the property; and

•  the purpose of the expropriation.

  1. For the purposes of this section ­
    1. the public interest includes the nation's commitment to land reform, and to reforms to bring about equitable access to all South Africa's natural resources; and

•  property is not limited to land.

•  The state must take reasonable legislative and other measures, within its available resources, to foster conditions which enable citizens to gain access to land on an equitable basis.

•  A person or community whose tenure of land is legally insecure as a result of past racially discriminatory laws or practices is entitled, to the extent provided by an Act of Parliament, either to tenure which is legally secure or to comparable redress.

•  A person or community dispossessed of property after 19 June 1913 as a result of past racially discriminatory laws or practices is entitled, to the extent provided by an Act of Parliament, either to restitution of that property or to equitable redress.

•  No provision of this section may impede the state from taking legislative and other measures to achieve land, water and related reform, in order to redress the results of past racial discrimination, provided that any departure from the provisions of this section is in accordance with the provisions of section 36(1).

Parliament must enact the legislation referred to in subsection (6).

The Learned author argues passionately and convincingly that included in the definition of property must be the right to claim compensation from the State. He describes it most eloquently by stating:

“ To offer meaningful protection to people, we interpret ‘property' in constitutional law to include anything that would generally form an asset in one's estate. Given that property is a term broad enough to include both real rights and personal rights provided that such have a monetary value, claims against the State created by legislation ought to be classified as ‘property' and will thus be protected by s 25 of the Constitution.”

He goes on to say:

“ This is of course subject to the qualification that the claim has vested – a contingent claim can never be regarded as property because if one has no claim at the time that the claims were capped then one never lost anything – see Chairman of the Public Service Commission v Zimbabwe Teachers Association 1996 (9) BCLR 1189 ZS

In the context of the capping of claims, I am therefore postulating the following:

A claim for compensation under a legislative scheme will be regarded as ‘property' for the purposes of s 25 if the claim has vested; any legislative attempt on the part of the State to remove that claim or diminish its value will amount to a ‘taking away' (expropriation) of that claimant's ‘property'; and legislation attempting to do this would therefore have to comply with the provisions of s 25(2) of the Constitution in order to be constitutionally valid.”

Having come to the conclusion that property includes a claim against a legislative scheme (which is what your claim against the Road Accident Fund and by extension against the wrongdoer would be) and that an attempt to cap it as the Act seeks to do, it is necessary to apply clause 2592) of the constitution. After a thorough examination of the cases in South Africa Zimbabwe Malaysia and Canada the learned author concludes that:

“So, it is my view that the capping of claims may amount to an expropriation (if it is a vested claim). According to s 25(2) (b) of the Constitution property may be expropriated only ‘subject to compensation, the amount, timing, and manner of payment, of which must be agreed, or decided or approved by a court.' What this means is that there is a constitutional duty in s 25(2) for the State to pay compensation. That takes us immediately into the next question: Can the compensation that the State is constitutionally mandated to pay be capped or limited? The answer to that question is dealt with by reference to s 25(3) of the Constitution.”

The criteria in determining a just and equitable compensation as envisaged in Section 25(2) which must be applied are again reproduced thus:

“2.The amount of the compensation and the time and manner of payment must be just and equitable, reflecting an equitable balance between the public interest and the interests of those affected, having regard to all relevant circumstances, including ­

    1. the current use of the property;
    2. the history of the acquisition and use of the property;
    3. the market value of the property;
    4. the extent of direct state investment and subsidy in the acquisition and beneficial capital improvement of the property; and

e. the purpose of the expropriation”

It seems that the introduction of this Act is therefore inconsistent with Section 25 and other sections of the Constitution. The capping of claims in the arbitrary fashion as envisaged by the Act violates Section 34 of the Constitution which reads:

“34. Access to courts

Everyone has the right to have any dispute that can be resolved by the application of law decided in a fair public hearing before a court or, where appropriate, another independent and impartial tribunal or forum.”

A further entrenched clause in our Constitution is that which guarantees the separation of Powers. This means that the legislative, executive, and judicial functions of our various arms of Government must operate independently of each other. The legislative arm is Parliament and it cannot intrude into the arena of resolving disputes. The judicial arm in resolving disputes cannot legislate from the Bench. The executive arm in administering the Laws enacted by the Legislature cannot interfere either in or with the judicial or legislative process.

Mr Hopkins in his article refers to two Court decisions.

In South African Association of Personal Injury Lawyers v Heath 2001 (1) SA 883 (CC) our Constitutional Court held that:

‘[t]here can be no doubt that our Constitution provides for a separation of powers, and that laws inconsistent with what the Constitution requires in that regard, are invalid'.

In S v Malgas 2001 (2) SA 1222 (SCA) at para 3, Marais J.A. in the Supreme Court of Appeals said:

‘ What is rightly regarded as an unjustifiable intrusion by the legislature upon the legitimate domain of the courts is legislation which is so prescriptive in its terms that it leaves a court effectively with no sentencing discretion whatsoever….'

In this case the Learned Judge of Appeal in his usage of the words quoted above expressed his strong disapproval of Parliament the legislative body introducing legislation which prescribes to the Judiciary how it must pass sentence on those found guilty of the commission of certain crimes in such a fashion that the Court has no discretion whatsoever in applying the relevant facts and circumstances before it to the case it is called on to decide.

In the case of capping of claims the right to sue the wrongdoer is eliminated entirely and in cases against the Road Accident Fund the Courts are effectively deprived of resolving disputes by the provisions of the Act.

In terms of Section 172 of the Constitution the Constitutional Court is vested with the power of setting aside any legislation which it finds offends the provisions of the Constitution. Thus, what is proposed by members of the Organized Legal Profession is to bring the Act before the Constitutional Court for scrutiny at which time the eleven Judges constituting that Court will be requested to declare the Act unconstitutional. Before that Court pronounces on the Act, a period of time will elapse between the date the Act comes into operation and a pronouncement. During that time the Act will be Law and as such will be operational. It is also manifestly clear that the Courts will be requested to deliberate consider define and give guidelines as to what will be deemed to be a serious injury. Until we have sight of the regulations, which as has been set out above are still in the process of being drafted, we are unable to comment on this aspect of the Act other then to say that in our view a Pianist who looses a hand is as seriously injured as is an Attorney who suffers brain damage which renders him unfit to continue the practice of his profession. This is so because the Pianist cannot continue with his skill without the use of a hand to do so.

Of equal concern to us is the limitation imposed on the Fund as to the extent to which it will compensate you for your medical expenses. This will be at the rates charged by Public Hospitals or healthcare institutions. If you wish to be treated at a private hospital for your injuries you will have to fund the difference between the costs of such treatment and the meager contribution recoverable from the Fund. You will have to take out separate insurance which consulting actuaries have already prognosticated will be at unaffordable rates. This will leave us at the mercy of treatment currently metered out at Public Hospitals which to describe in the kindest possible way, is less then satisfactory. Furthermore, the imitation at what you will recover in respect of loss of income you sustain in cases of home providers who earn in excess of R160000.00 per year will not adequately compensate you for the injuries you have sustained.

The factual reality is that the Act will come into operation either simultaneously with or very shortly thereafter the publication of the regulations on 1 st July 2006. Although the organised profession has already prepared its resources for the challenge before the Constitutional Court , it will take time for the Court to hear and make its pronouncement on the Act. As to our feeling as to what the Constitutional Court will decide, whilst we believe that the Act in its present form is iniquitous, and that equity and reason should and ought to prevail, we can do no more then again quote from the eloquent words of Mr Kevin Hopkins in his article referred to above. He comments on the Case of Hewlett v Minister of Finance 1982 (1) SA 502 (ZSC) which he believes was wrongly decided when he states:

“ It is clear that the Zimbabwean court was motivated by political justice and not the true quest for legal justice. I hope that our courts will be more faithful to the law and for this reason the case probably should not hold any real weight.”

In conclusion we can do no more then quote the words of Joffe J in the case of Masterprops 205(Pty) ltd vs Stanbic insurance (Pty) Ltd unreported in the Witwatersrand Local Division under case number 9483/05 when in excusing the expert witness called by the Plaintiff at the end of his testimony, the Learned Judge said to the witness:

“ Watch this space. ”

DATED AT JOHANNESBURG ON THIS 10 TH DAY OF MAY 2006

………………………………………………………….

VICKY BOVE AND LESLIE KOBRIN

 

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