Road Accident Fund payout drama .
Ira is one of 200 000 victims who’ve been awarded damages by the Road Accident Fund but have yet to see a cent
EVERY day she thinks, “Maybe today is the day.” Maybe today she’ll get the money she was promised by the Road Accident Fund (RAF) and she’ll be able to put food on the table without borrowing money. Maybe today she can stop fretting about whether her husband will get an odd job to tide them over for a day or so.
Ira Ndebele hasn’t been able to work since a car accident in 2009 left her with constant back and hip pain, frequent headaches and memory loss. She was sitting in the back of a taxi that was rear-ended by a car, and the impact of the crash twisted her spine and dislocated her hips.
“I can’t do homework with my son because of the headaches,” says Ira, who used to work as a clothing store manager. “I can’t do anything – I can’t even carry the washing basket. I’ve become short-tempered as well.”
Her claim to the Road Accident Fund for her medical expenses and loss of earnings was approved in November 2015 but the 42-year-old mom hasn’t
seen a cent of it. Ira’s attorney, Gert Nel, has covered her transport and medical bills as well as litigation costs in the hope the payout is imminent.
Ira is one of more than 200 000 road accident victims who’ve had claims approved by the RAF but haven’t received their payout yet. Earlier this month a group of law firms grew impatient and had the fund’s bank account attached in an effort to get immediate payment for the claimants they represented.
It worked – the firms’ clients were given priority but this caused further delays for thousands of other people, such as Ira, who’ve been patiently awaiting payment.
How the RAF works
The fund provides financial assistance to people injured in road accidents or the dependants of people killed in road accidents caused by negligent driving. It’s financed by a fuel levy that’s included in the price of petrol and diesel.
Those eligible to claim can get compensation for medical expenses, loss of earnings if they’re unable to work, loss of support and funeral expenses. Future medical expenses and future loss of earnings and support due to the accident can also be claimed.
“There isn’t a priority list at the RAF,” says attorney Paul du Plessis, who’s submitted many RAF claims over the past 15 years. Claims aren’t graded, so applications are simply processed as they come in and the RAF is supposed to respond to claimants within 120 days of submission.
Why there are delays
In his many years of dealing with the fund Du Plessis has never received an offer from the RAF within the 120day timeframe, he says.
Asked by YOU why this happens, the RAF responded in a statement that processing claims “requires a significant expenditure of time and resources”. The RAF has to establish who caused the accident, then apportion blame among those at fault, and finally assess what damages (if any) the claimant sustained. Only then can claims be settled.
In the 2015/2016 financial year188 864 claims were received, the RAF says. Of these, 188 759 were finalised but more claims are finalised each year than the fund has money to pay.
The RAF adds that “claims represented by attorneys are prone to litigation, which adds to the delays in finalising such claims”. Having attorneys involved, the fund says, is “a necessary evil of the current [system]”.
But the attorneys and victims YOU spoke to say that if a claim doesn’t go to trial it’s unlikely a settlement will be reached.
Why there’s a problem with payments
The RAF is suffering a major cash-flow shortage because it pays out more to accident victims than it receives from the fuel levy every month (see box below). “Despite utilising most of the monthly fuel levy income of approximately R3 billion to make more than 30 000 payments each month, as of 10 February 2017 a balance of R8,4 billion remained queued for payment to 5 589 creditors,” the RAF says. This is nothing new, Du Plessis says. “The fund has been pleading poverty for as long as I can remember.” In its statement to YOU, the RAF says it has in fact been insolvent since 1981 because its liabilities are greater than its assets. But the fund insists it’s making headway as its backlog of claims that have been settled but not paid out has been “reduced from 450 000 to little more than 200 000”. Nel, who’s also an ex-RAF employee, believes the fund spends money unnecessarily on litigation, largely due to the fact it doesn’t respond to claims within the 120-day period. “If the RAF made an offer within this period, the attorney could then consult with his client, consider the offer, if it’s a good offer you accept it and no additional costs are incurred [by the RAF] as there’s no need for a summons to be served.”
The new scheme ‘won’t be accessible to the layman. People will have to access it electronically and many in SA have no access to basic IT’
(From previous page) But the RAF tells YOU its legal costs as a percentage of expenditure has been reduced from a high of 29 percent five years ago to 16 percent. Administrative costs account for less than seven percent of expenditure, it says.
The proposed solution
The department of transport wants to replace the RAF with the Road Accident Benefit Scheme (Rabs). Instead of a lumpsum payout, claimants will receive their payouts as structured monthly payments.
The scheme will pay out only predefined and limited benefits. Payouts won’t take a person’s individual circumstances into account, as is the case with the RAF. Instead claimants will qualify for certain remuneration options based on the severity of their injuries.
It’s not a new idea – Rabs has been in the making since 2002. But it’s still only proposed legislation and the bill has been met with fierce opposition. Some legal professionals say the RAF’s bankruptcy claims are a ploy to push through the bill. Those against its implementation include the Association for the Protection of Road Accident Victims (APRAV), the Law Society of South Africa and the Law Society of the Northern Province.
“Rabs won’t be accessible to the layman,” says Ngoako Mohlaloga, an APRAV adviser on governmental relations. “People will have to access it electronically and many people in SA have no access to basic IT.”
Under the new scheme the role of attorneys will be limited as proving who was at fault in the accident will no longer be required. Also, benefits will be predefined and subject to a threshold, and claimants won’t have a lump sum from which to pay their legal fees.
With the RAF, attorneys often pay for their clients’ doctors’ visits and transport, as well as the cost of litigation. When the payout is received, the attorney is legally allowed to take up to 25 percent of it – over and above expenses.
Nel says the concern is that most people wouldn’t even be able to access Rabs. The majority of his clients can hardly afford to travel to his office and under the new scheme they’d have to pay for their own medical reports from specialists and submit their own claims, which could cost at least R540. Kyle Manthri (25) was driving home with friends in the early hours of New Year’s Day 2012 when their car was hit by a drug dealer fleeing the police.
The dealer jumped out of his vehicle and assaulted Kyle, breaking his leg and hitting him so hard in the face his vision was damaged.
He lost his job due to his absence from work. “I couldn’t pay my rent and had to take loans and [I still] borrow money just to make ends meet.”
He now works as a sales consultant for Discovery, but can barely read due to his injury.
Kyle’s claim to the RAF was approved in September 2016 but he’s yet to receive his payout from the fund. Christo Oosthuizen (49) lost his left foot in a motorcycle accident in 2012. His claim was finally approved in September last year but he also hasn’t received a payment from the RAF.
“The expenses add up on a daily basis,” says Christo, who works in the pharmaceutical industry.
The accident has also changed his life in other ways. “I was a competitive bodybuilder – I can’t do that any more. I can’t teach my son to ride a bike because I can’t run alongside him.”
He says it’s impossible to get anywhere with the RAF without an attorney. “I don’t have a law degree so what do I know about it? You need that person in your corner to fight for you.
“If it weren’t for my attorney I wouldn’t have known to go to a specialist doctor to find out the extent of my injuries.”
SUCCESS – AT A PRICE
John Samuels* (46) was involved in a motorbike accident in 2013, which resulted in permanent damage to his right leg.
He quit his job as a warehouse manager after suffering verbal abuse at work due to his disability and now works as a filing clerk earning significantly less than before.
De Broglio Attorneys put John’s claim at R2,8 million and said the lowest he’d get would be R1,3 million.
He was eventually offered R644 000, which he accepted. De Broglio took 25 percent, plus the litigation costs of around R106 000. John was left with R387 889.
John submitted his claim in January 2014 and the trial was in November 2015. He was paid out in June 2016. *Not his real name.