MEMORANDUM ON THE OBJECTS OF THE ROAD ACCIDENT FUND AMENDMENT BILL, 2005 OBJECTS OF BILL
1. The Road Accident Fund Amendment Bill, 2005 ("the Bill"), seeks to amend the Road Accident Fund Act, 1996 (Act No. 56 of 1996) ("the Act"), in various respects. The Bill is a redraft of the Road Accident Fund Amendment Bill, 2003 [B64 - 03], currently before Parliament. These amendments are aimed at improving the governance of the Fund, providing for a more equitable, fair and transparent compensation system and whilst limiting the liability of the Fund.
2. The Bill seeks to authorise the Minister of Transport to appoint the Chairperson and Vice-Chairperson of the Board of the Fund. It also seeks to abolish the executive committee of the Board. In terms of the proposed amendments, the Minister will appoint the Chief Executive Officer of the Fund, after recommendations from the Board.
3. It is proposed in the Bill to put a monetary limit on claims for loss of income or support. A method for determining tariffs for payment of medical expenses is provided for. Those tariffs will be based on the tariffs for health services provided by public health establishments or negotiated for emergency medical treatment.
4. The Bill also seeks to repeal the provision in terms of which the Fund is liable for the legal costs of claimants. This will result in a saving to the Fund.
5. The Bill seeks to limit the liability of the Fund to compensate for general damages only for those seriously injured and provides guidelines for the assessment of injuries. This amendment will result in substantial saving needed to compensate all passengers.
6. Amendments are also proposed to allow for direct payment to medical service providers for treatment provided.
7. The Bill furthermore seeks to repeal limitations on liability in section 18(1), section 18(2) and 19(b} of the Act in terms of which the liability of the Fund for certain claims (e.g. claims in respect of persons who were conveyed for reward) are limited or excluded. It is believed to be discriminatory to have a specific limitation on such claims and that such claims should be treated the same as any other claim.
8. In terms of a further provision in the Bill, it is proposed that the Fund's liability be excluded where a person sustained emotional shock when he or she witnessed or observed or was informed of an accident. This provision will prevent a growth in the liability of the Fund
10. The provision in the Bill seeks to abolish the right to common law claims save for those circumstances which the Fund is unable to pay compensation or where the action for compensation arises in respect of damages arising from emotional shock sustained as a result of witnessing or being informed of the bodily injury or death of another person as a result of motor vehicle accident.
11. If the penultimate clause of the Bill is approved, the envisaged Road Accident Fund Amendment Act, 2005, will not apply to claims in respect of which the cause of action arose prior to the commencement of that Act. It would be unfair, and arguably unconstitutional, to accord retrospectivity to the Act. Thus, the Act wilt only apply to claims that arose after the commencement of the Act.
12 The Department took the oral and written comments and inputs given during the consultation process in the Portfolio Committee hearings in 2003, regarding B64-03, into account. It also took into account the oral and written comments and inputs given during the consultation process in the Portfolio Committee hearings in 2005, regarding the redrafted Bill, into account. The Department presented the draft Bill to the Board of the Road Accident Fund in 2004 and its comments were incorporated. National Treasury was consulted on both the Bill and the financial implications of the Bill. Cabinet was informed of the revision to the Bill as welt as the impact of the Bill on road users and the financial implication of the Bill.
FINANCIAL IMPLICATIONS FOR STATE
13. The Bill will improve the financial sustainability the Fund.
14. The State Law Advisers and the Department of Transport are of the view that this Bill must be dealt with in the same manner as in the case of B64 - 03, i.e. in accordance with the procedure established by section 75 of the Constitution, since it contains no provision to which the procedure set out in section 74 or 76 of the Constitution applies.
15. The State Law Advisers are of the opinion that it is not necessary to refer this Bill to the National House of Traditional Leaders in terms of section 18(1)(a) of the Traditional Leadership and Governance Framework Act, 2003 (Act No. 4 2003), since it does not contain provisions pertaining to customary law or customs of traditional communities.