Archive for the Road Accident Fund Category

Road Accident Fund Financials.

Road Accident Fund

THE fiscal situation of The RAF The body that pays damages to road accident victims deteriorated further in the year to the end of March, with its estimated net deficit plunging to R46,4bn from the prior year’s R29,9bn. The deficit includes the estimated quantity needed to settle outstanding claims.   The RAF annual report tabled in Parliament on Wednesday noted that the amount of new claims lodged dropped to 172, 859 from 222, 634 and that the backlog of outstanding claims rose to 253, 111 from 244, 652.   The fund incurred a loss of R16, 5bn during the year, a dramatic increase from the loss of R1, 5bn because of the considerably higher provision for outstanding claims.   As may be the situation each year, the auditor-general has warned that “significant uncertainty” exists about the RAF‘s capability to function as a going concern.   The fund’s precarious financial position is mainly due to what it calls the present “unjust, inequitable and unsustainable” faultbased model that demands that it establish the fault of an injury. People who cause accidents are excluded from damages.   The government has dedicated itself to proceed to a nofault, compulsory social insurance scheme in future as a way to place the RAF on a sound financial basis.   The annual report credited the sudden growth within the net deficit of the fund — which received R17bn last year from cash raised via the fuel levy — to the growth within the anticipated price of meeting outstanding claims. Also, because it’s been underfunded for several of years, it’s been not able to pay claims at the rate they are received by it.   The report said the recalculation by the RAF of its own estimated outstanding liability on the foundation of its own genuine claims expertise, the resolution of claims at amounts higher than previously estimated, and obligations arising prior to the launch of legislative changes in 2008 all led to the “signficant” growth in the estimations.   RAF CEO Eugene Watson described that the amount of private claims lodged had dropped appreciably after changes to the law that excluded a variety of claims for non-serious injuries.   The annual report also noticed that the RAF’s legal costs totalled R1,2bn and claimants’ legal costs R2,3bn. Cost on claims amounted to R12,5bn, with the typical resolution per claim growing 17% to R54,808 (R46,995). More than R3, 9bn was paid for only R800m for medical costs, 3bn for loss of profits and support, and compensatory damages, more than R4.   Mr Watson criticised the substantial quantities that lawyers received for their work for injury fees.   “Success fees (contingency fees) paid to lawyers were estimated to be in the area of R4,5bn, exacerbating the circumstances of adversity sufferers of accidents suffer,” he said. “In addition, the typical time taken to settle a claim still ranged between 12 to 60 months for non-hospitalised claims, chiefly on account of the requirement to demonstrate fault as well as the subjectivity in

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Service provider for cleaning services at RAF offices

road accident fund

INVITATION TO SERVICE PROVIDERS TO SUPPLY CLEANING SERVICES AT THE RAFS REGIONAL & SATELLITE OFFICES   The Road Accident Fund (RAF) is a statutory body that, in relation to the provisions of the The RAF Act, 1996 (Act 56 of 1996), exist to supply cover to any or all individuals within the borders of South Africa for loss or damage caused by death or physical harm resulting from the negligent driving of motor vehicles within the borders of the nation. The RAF has divisions in Cape Town, Durban, East London, Johannesburg and Pretoria where its Head Office is, in addition, located. The RAF also has satellite offices in Nelspruit, Polokwane, Welkom, Port Elizabeth, Newcastle, Tzaneen, Lichtenburg, Bloemfontein & Kimberley.   The RAF wishes to make a service provider/s to supply cleaning services at all the RAFs regional & satellite offices.   Service providers must comply with all applicable legislative requirements pertaining to the trait of the service being supplied.   Closing date: 14 August 2009 at 11h00. The tender document will be accessible on the RAF site at www.raf.co.za under files and publications on 17 July 2009. Further information regarding details of the bid could be requested via email from karinv@raf.co.za No telephonic queries will probably be accepted.   The RAF is dedicated to affirmative procurement consistent with the Preferential Procurement Policy Framework Act, the South African Constitution, 2000 and the Procurement Policy of the RAF. Preference will probably be given to such corporations and individuals, possessed or managed by individuals from formerly deprived classes of South Africa. In preparation FSG has compiled a RAF CLAIM DEFENCE FORENSIC INVESTIGATION Service Profile which is already presented to the RAF and is accessible either by petition or by downloading it from the SERVICE PROFILE page of our site.   The participation of their companies in corporate social responsibility projects is really a priority, as the RAF is answerable for public capital. Consequently FSG has commenced training its Tracer Field Agents (TFA) who are established in each Magisterial District in South Africa (see our SOCIAL RESPONSIBILITY page for details) in the performance of RAF CLAIM DEFENCE FORENSIC INVESTIGATIONS. Not only will this fill a criteria for appointment to the RAF Panel of Attorneys (the RAF requires its service providers to illustrate a substantive contribution in terms of Corporate Social Responsibility), but additionally, it will lead to major financial savings to the RAF. (For reasons of fiscal sustainability, the investigators now appointed to the RAF Panel of Investigators largely base themselves in larger urban areas. But, a large proportion of South Africans – and hence claimants against the RAF – reside in rural/remote areas. RAF investigators so must incur traveling and out-of-town expenses to attend to directions from the RAF, which prices are borne by the RAF. As we have TFA who’ll be trained as RAF INVESTIGATORS (RAFI) in all Magisterial Districts, FSG can service directions from the RAF without incurring considerable travelling and out-of-town expenses, which we we estimate will reduce what the RAF now

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High Noon For The Road Accident Fund

Road Accident Fund

Defrauders Pocketing RAF claims! Defrauders pocket a quarter of all cash made available to victims of South Africa’s national road carnage through the road accident fund, which this week received another warning that it’s on the point of insolvency.   As the RAF board began a countrywide roadshow to victims and brief stakeholders on short – and longterm strategies to maintain the sinking ship afloat while corruption is undertaken revelations about the level of the fraud came. Dr Saths Cooper, the temporary chairperson of the RAF, called it “likely the largest fraud story in South Africa’s history”.   Jeff Radebe, the transport minister, said last month the fund’s board had until August to begin implementing a phased turnaround strategy, along with a 2-year mandate to clean it up.   Cooper told a Cape Town meeting it was closer to a billion rands, as the fraud was previously estimated at about R500million a year.   As one of the collection of measures spelled out by Radebe to check corruption and fraud while making the fund more efficient a secret new verification process starts next month.   “We should all be concerned that there appears to be an industry of specialists feeding on the resources of the RAF and marginalising the legitimate victims in the procedure, making victims of injury victims again of the predatory system,” he said in his own budget vote address.   Cooper agreed this week that it was crunch time, and said failure to act could lead to the fund’s liquidation, scrapping and replacing by a fresh social benefit scheme as proposed by Judge Kathy Satchwell after her threeyear inquest.   Legal professionals, medical health professionals, members of the insurance industry, specialised healthcare societies, law enforcement entities and claimants are attending the fund’s consultative meetings, which some fear are geared toward preparing the people for dramatically decreased fund benefits.   But Cooper told them: “If you get the fraud out of the RAF there would not be a cash flow issues, therefore we are not under-financed. The quantity of fraud is nearly exactly the same as the shortfall we encounter. Therefore we cannot only raise the quantity of cash for fraud.”   He pleaded for a stockholder compact as envisaged by the minister last month, and as the majority of deceitful cases were lodged through private injury attorneys asked for aid against fraud.   Ten suspects were arrested this week for lodging deceitful claims within the Durban region. Six more suspects were reported to the neighborhood authorities. It’s considered 40 more suspects within the Durban region have been identified for arrest. It was the consequence of a combined effort with the South African Police Service and also the RAF regional Durban forensic department.   Since 2001 the RAF has investigated 1 954 fraud cases involving more than R82million. While 1 076 are being investigated, about 494 were successfully prosecuted.   Speaking in Cape Town in the kickoff meeting with stakeholders, Cooper said: “There are two alternatives: to liquidate

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Road Accident Fund Judgement- Kontos v General Accident Insurance Co SA Ltd1989(part 6)

Road Accident Fund Judgement Part 6 The Court will also take into account the effect which its decision may have upon the course of future awards. I have followed the same approach. Similarly, I have followed the approach regarding the changes in the value of money as set out by the same authors at pp 7 and 8. It is clearly established that the fall in value of money is to be taken into account in considering comparable awards, as well of course in calculating future loss. Our Courts have, however, resisted a recklessly exact approach in allowing for inflation. Thus the Appellate Division has held in markedly broad terms that inflation is to be taken into account, ‘but not with such an adherence to mathematics as may lead to an unreasonable result’. The ‘unreasonable result’ contemplated is not further delineated. One premise would appear to be that it may be considered socially undesirable for courts to allow for inflation with such vigour as to be seen to be in turn contributing to its further spirals. Another is that it may not necessarily be appropriate to allow for inflation in the calculation of non-patrimonial damages by applying an inflexible formula, such as a consumer price index. The net result is that the allowance for the erosion of the value of money is necessarily a rough one and should probably incline to conservatism. The prevailing judicial approach is to indicate that allowance has been made for this factor in arriving at a lump sum award, but without specifying the particular rate. I do not intend discussing or analysing the facts of the Katz and Kriel cases, supra, in detail. The facts in the Katz case, supra, appear to me to be similar to the present one in many respects. There are however also differences. One marked difference is the fact that the injured in the Katz case was experiencing physical pain. Another difference is that the plaintiff’s expected lifespan in the present case is much shorter than was the position in the Katz case. The plaintiff in the present matter also suffers from the total inability to breathe on his own. I regard the award in the Katz case nothing more than a guideline to keep in mind. Although there are also many similarities, but also differences, between the facts of the Kriel case, supra, and the facts of the present matter, I cannot but regard the award in the Kriel case merely as a guideline. I have earlier in this judgment referred to the certificate provided by the defendant in terms of Act 56 of 1972 in respect of inter alia the treatment of the plaintiff or the rendering of services or supplying of goods to him. It was submitted on behalf of the defendant that, in complying with the terms of the certificate, some compensation would have been made for at least the plaintiff’s loss of amenities of life. If that it not borne in mind, so the argument ran, it is quite possible that there can be an overlapping between the award for general damages and payments in terms of the certificate. In

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Road Accident Fund Judgements- Kontos v General Accident Insurance Co SA Ltd1989(part 5)

Road Accident Fund Judgement part 5 In such circumstances, it seems to me that the view that all one need look at is the amount of money which David will be prevented from earning is a fallacious view. It ignores the consideration that he win be relieved of almost all the ordinary expenses of living. I associate myself fully with this approach. I also associate myself with the comments of Corbett and Buchanan, op cit at p 73 on the Roberts case, supra, where the learned authors say: Not to make an allowance in this manner results in overlapping of awards. See also Southern Insurance Association Ltd v Bailey NO1984 (1) SA 98 (A) at 113F, Fletcher v Autocar and Transporter Ltd 1968 (1) All ER 726 at 734A-G and 737D-H. See also Lim poh Choo v Camden & Islington Area Health Authority 1979 (2) All ER 910 at 922A-C. Whether an award in a particular case would result in overlapping or duplication of awards depends entirely on the facts of a particular case. In the present matter I am satisfied that, if the defendant pays the amounts in terms of the certificate for future medical and hospital expenses and I do not provide for a deduction in respect of expenses saved, there will be a duplication of compensation awarded. Both counsel were in agreement that a great number of uncertainties around the question of the saving of expenses. That is indeed so. It is clear, however, that the plaintiff will inter alia be able to order himself food of his own hieing from a restaurant, or from family or friends. Furthermore, although it may be possible only on rare occasions, he will be able to visit a restaurant. Indeed the plaintiff will be able to bring some homely pleasures with its expenses to his hospital bed. In all the circumstances, I am of the opinion that the percentage contingency deduction in respect of both past and future loss of income should be 50 per cent. I now turn to the question of general damages. In this respect, it was submitted on behalf of the plaintiff that the award should be not less than R250 000, whilst it was submitted on behalf of the defendant that the award should be not more than R110 000. I have to some degree set out above the plaintiff’s present condition. To put it mildly, the plaintiff finds himself in tragic conditions. It is difficult to imagine what the plaintiff has lost in life. It is enormous. Above it all, this man, who loved life so dearly, is now practically faced with a death sentence. It is expected that he will live no longer than another 17-18 months and he is fully aware of it. In his remaining lifespan he will practically be a living face and mind on a body with no life in it, save that particular care must be taken of that body to keep the face and mind alive. It is practically impossible to compensate the plaintiff for what he has lost. It is just as difficult therefore to assess the

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Road Accident fund Judgement- Kontos v General Accident Insurance Co SA Ltd1989 (Part 4)

Road Accident Fund Judgement part 4 The parties were ad idem that in view of the facts of this case and in view of the short period over which the past and future loss of income are to be calculated the same percentage deduction should be made in respect of both types of loss of income. I agree with that approach. The certificate in terms of s 21(1C)(a) and (b) of Act 56 of 1972, referred to above, states that it covers inter alia the cost of future accommodation of the plaintiff in a hospital or a nursing home, or treatment of, or the rendering of a service or supplying goods to him. Both parties were ad idem that, in view of the plaintiff’s particular circumstances (ie that he need not and cannot keep a place of abode separate from the hospital; that he need not provide entirely for his own food; that he need not pay certain other expenses in respect of a house or flat, etcetera), a contingency deduction somewhat higher than what would have been deducted under normal circumstances should be deducted in this case. On behalf of the plaintiff it was submitted that a deduction of 33? per cent should be made, whilst on behalf of the defendant a deduction even as high as 60 per cent was suggested. A deduction (or even an increase) for contingencies is made to a figure arrived at by way of an annuity calculation to bring it in line with the general equities of the case. As it was stated in Hulley v Cox1923 AD 234 at 245: The amount of it should be estimated on an equitable basis on a consideration of all the circumstances.The factors and contingencies for which normal adjustments are made are inter alia — (a) the possibility of errors in the estimation of the plaintiff’s life expectation and his retiring age; (b) the likelihood of illness and unemployment which would have occurred in any event or which may in fact occur; (c) inflation or deflation of the value of money in the future; (d) alterations in cost of living allowances; (e) the cost of transport to and from work and pension contributions; (f) accidents or other contingencies which would have affected his earning capacity in anyevent, etc. See Corbett and Buchanan, The Quantum of Damages in Bodily and Fatal Injury Cases (Part I), third edition, p 66 et seq. The present matter is not one in which adjustments should be made only for the “normal” factors and contingencies. If only “normal” factors and contingencies were to be taken into account I would have made but only a small adjustment, particularly in view of the fact that a relatively short period of time is involved. In the words of Corbett and Buchanan, op cit p 72, this is the type of case which calls for an orthodox treatment. The same line of approach was followed in Roberts NO v Northern  Assurance Ltd1964 (4) SA 531 (D) at 537B-H (1964 (1A4) QOD 573 (D) at p 579) where BURNS J said the following: The conclusion to which I have

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Road Accident Fund Judgement- Kontos v General Accident Insurance Co SA Ltd1989 (Part 3)

Road Accident Fund Judgement Part 3 Due to the fact that the plaintiff is an intelligent, alert and optimistic individual, he has learned to accept his present condition. It must however be kept in mind that the plaintiff is fully aware of his present condition and of everything he has lost in life. In what I have said so far, I have tried to highlight certain facts. There are many other facts contained in the various medical reports to which I have not referred. I am however mindful of those facts and did keep it in mind in coming to a conclusion on the aspects I had to decide on. The defendant conceded the merits of the action and accepted that the collision was caused by the sole negligence of the driver of the motor vehicle insured by it. In the minutes of the pre-trial conferences the defendant also undertook to pay the plaintiff’s past medical and hospital expenses. The plaintiff’s past loss of income was agreed in an amount of R48 540. It was further agreed that this amount is subject to a contingency deduction. The percentage of the contingency deduction to be applied was however not agreed upon. In respect of the plaintiff’s future medical and hospital expenses and his future loss of income the defendant furnished an undertaking in terms of section 21(1C)(a) and (b) of Act 56 of 1972. For the purposes of calculating future loss of income, it was agreed that, had the collision not occurred the plaintiff would at 1 March 1989 have been earning, all benefits included, R18 960 per annum. It was also agreed that the plaintiff contributed 7,2 per cent of his basic salary to the employees’ pension fund to which he belonged. Again it was agreed that contingency deductions should be made in respect of future loss of income. The parties also could not agree on the percentage of such contingency deduction to be made. It was common cause between the parties that the award for loss of future income was to be increased in some or other way. During the trial it was agreed that each year as at 1 March, commencing from 1 March 1990 and continuing on each succeeding March thereafter, for as long as the plaintiff survives, the award for loss-off future income will be increased by a formula as contained in exh Y. The parties could not agree on the amount of general damages to be awarded to the plaintiff. The Court was therefore called upon to decide — (a) the percentage of the contingency deduction to be made in respect of past loss of income; (b) the percentage of the contingency deduction to be made in respect of future loss of income, and (c) general damages. Continue to part 4—>  

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Road Accident Fund Judgement- Kontos v General Accident Insurance Co SA Ltd1989 (part 2)

The plaintiff is unable to move any muscle or part of his body except his eyes, facial muscles, tongue and jaw. He requires most substantial nursing care which can be summarised as Follows: 1. He requires continuous respirator support. The mechanical ventilator requires the attention of a trained person on at least an hourly basis with day and night supervision. 2. He requires turning every two to three hours for the prevention of pressure sores. 3. He requires feeding by an attendant who has to cut up his food in small portions and to feed him piecemeal. 4. He requires physiotherapy for the passive removal of lung secretions. 5. He requires continuous bladder drainage by means of a condom and drainage tube. 6. He has total incontinence of bowel function and needs manual evacuation from time to time. 7. He requires constant general nursing care. 8. He has developed a pressure sore over the sacrum which has required particular treatment. The plaintiff has had frequent severe lung infections and needs very special care regarding physiotherapy, bronchial, toilet and medical supervision. It is common cause that neurologically the plaintiff will not recover. It is also common cause that from a respiratory viewpoint a number of adverse factors apply such as residual lung damage from each successive pneumonic episode, the emergence of antibiotic resistant organisms and the development of local pulmonary complications, for example, lung abscess or emphyzema. Any one of these conditions may rapidly terminate the plaintiff’s life. In view of these facts the considered medical opinion is that a reasonable estimate of the plaintiff’s lifespan is 18 months as from February 1989. Although the plaintiff may on rare occasions and in the presence of properly qualified nursing staff leave the hospital, he is destined to remain in the spinal unit of the H F Verwoerd Hospital for the rest of his remaining life. The plaintiff is unable to speak due to the permanent indwelling tracheostomy tube. He converses with his lips, his face and sounds he is able to bring forth. The plaintiff does not experience pain, though he sometimes complains about a headache, an ear-ache or a feeling of comfortableness in his body without being able to indicate the precise location thereof The plaintiff is able to sit in a wheelchair and, with the aid of a portable respirator, be moved within the precincts of the hospital, always of course under the watchful eyes of the nursing staff. At the time of the collision the plaintiff was employed as a trainee fish manager in the Sandton Hyperama earning a gross monthly salary of R1 000,00. Although not pertinently relevant for purposes of this judgement, it can be mentioned that prior to taking up this employment the plaintiff was able to earn a higher salary. It appears as if he took up the new employment in order to move into the managerial field of supermarkets to better his own future as well as to have more time available to enjoy life and to pursue his interests. It is clear that the plaintiff was, before he sustained the injuries, an above average sportsman who partook in many

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Road Accident Fund Judgement- Kontos v General Accident Insurance Co SA Ltd1989 (Part 1)

Summary Injured person: Bachelor aged 28 at time of accident and about 33 at time of trial. Above-average and active sportsman. Synopsis of injuries and after-effects: Spine. Quadruplegia. Resulting from major spinal cord lesion. Partial paralysis of shoulder girdle muscles, total paralysis of all accessory muscles of respiration and total quadruplegia. Coupled to respirator via permanent indwelling tracheostomy tube. Plaintiff unable to move any muscle or part of his body except his eyes, facial muscles, tongue and jaw. Requiring continuous respirator support and constant general nursing care, including two-hourly turning, feeding by attendant, physiotherapy for passive removal of lung secretions, continuous bladder drainage by means of condom and tube, manual evacuation of bowels, treatment of pressure sores, etc. Susceptible to variety ofcomplications, any one of which could rapidly terminate life. Life expectancy after trial estimated at about 18 months. Unable to speak due to indwelling tracheostomy tube. Fully aware of his condition and loss, and had passed through various stages of depression and frustration. Issues for decision: 1. The percentage of the contingency deduction to be made in respect of (agreed) past loss of income 2. The percentage of the contingency deduction to be made in respect of (agreed) future loss of income. 3. General damages. As to 1 and 2 the Court, being mindful of the fact that the Plaintiff would not be required to keep and finance a dwelling (and incidental expenses) separate from the hospital, and that the awards were destined not for the Plaintiffs heirs but to make his suffering more bearable, reduced both past and future loss of income by 50%. As to general damages the Court awarded R120 000. In respect of future loss of income as well as future medical and hospital expenses the Defendant furnished an Undertaking in terms of section 21(1c)(a) and (b) of Act 56 of 1972. Judgement Van der Merwe J: On 25 May 1985 a collision occurred at or near the intersection of claim and Hancock Streets, Joubert Park, Johannesburg, between a motor vehicle insured by the defendant and a motor vehicle driven by the plaintiff. As a result of the collision the plaintiff sustained a serious injury of a permanent nature, namely a fracture dislocation of C4 and C5 which resulted in a major spinal cord injury. After initial treatment in the Johannesburg General Hospital the plaintiff was transferred to the Spinal Unit, H F Verwoerd Hospital, where it was found that the neurological deficit was at a level of C3 with resultant partial paralysis of the shoulder girdle muscles, total paralysis of all accessory muscles of respiration and total quadruplegia. The level of neurological deficit implies bilateral phrenic nerve paralysis with resultant total functional loss of diaphragm, the major muscle of respiration. The diaphragmatic paralysis is permanent and irreversible. To enable the plaintiff to breathe, he is coupled to a respirator via a permanent indwelling tracheostomy tube. This state of affairs will continue for the rest of the plaintiff’s life. There has been no neurological recovery since the collision and there will be no recovery in the future. Continues on Part 2—>

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Serious Injury Assessment: Spine and Brain -

Axelson v Rondalia Assurance Corporation of SA Ltd 1967 (1A4) QOD 794 (N)   Flynote Multiple injuries — Shoulder and burns — Fractured shoulder-blade and burns on back — Skin-graft and disfigurement — 20 per cent disability in left shoulder — Multiple abrasions and contusions — Severe pain — Housewife — Shock, pain and suffering, R1,000(£500)— Disability, disfigurement and loss of amenities, R2,000(£1,000)— Total, R3,000(£1,500). Summary As the result of a motor collision, road accident, whilst driving a motor-car, a housewife had sustained a fractured scapula involving the glenoid fossa, i.e. a fracture of the shoulder-blade involving also the cavity in which the head of the humerus moves and forms the shoulder joint. She had also suffered second degree burns of the lumbar region of the back over an area of about eleven inches long, as well as multiple abrasions of both legs and contusions about the wall of the abdomen, arms and face. A skingraft had to be done over the site of the burn, which left a large scar, visible when she bathed, causing her to give up bathing in public. There were other minor disfigurements. She spent 45 days in hospital, suffered a great deal of very severe pain and much inconvenience and distress, including a measure of shock, for which the trial Judge held that she was entitled to ‘a fairly large sum as compensation’, i.e. R1,000 for shock, pain and suffering, past and future. As regards a serious disability in her left shoulder, a loss of 20 per cent of the full movement of that shoulder, she would have to do special exercises for it for the rest of her life, to prevent further deterioration and minimise future pain. There was a possibility of osteo-arthritis setting in and the general condition of the shoulder was likely to deteriorate and not improve. This disability would make her normal household activities, including at present bathing and changing the children, difficult for her for the rest of her life. At present she no longer enjoyed dancing or social intercourse and found her disability distracting and irritating, though she would learn to live with it. For the disability and consequent loss of amenities of life and for disfigurement she was awarded R2,000. This made a total of R3,000 (£1,500).

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