New Guidelines for Road accident Fund (Part 2)

road accident fund

Part 2

The court found the abolition was justifiable and reasonable because it formed part of the scheme to set up a compensation regime directed at ensuring the Fund is sustainable, inclusive and capable of meeting its constitutional obligations towards victims of automobile accidents.


Limit on Settlement


The applicants contended the limit on damages for reduction of income or of dependants’ support infringed the right to property under section 25 (1) of the constitution. They asserted that the Amendment Act deprives victims of home in the shape of reduced damages for loss of earning ability or support. To be able to succeed they would need to demonstrate since the constitution just protects arbitrary deprivation of property, that the scheme was irrational.

The court found that the scheme wasn’t irrational. It followed that the offending sections didn’t represent an arbitrary deprivation of property.


Regulation 5(1) as well as the Recommended Tariff In regulation 5 (1) the Minister has prescribed the tariff for statements to be paid by the fund for hospital and treatment is that medical other prescribed in the Uniform Patient Fee Schedule (UPFS) tariff. The applicants contended this was irrational, unreasonable and deprived innocent victims of a successful treatment in violation of section 12 of the Constitution.


The evidence before the court was apparent that the ordinance would make it impossible for road accident victims to get treatment in a private health care center. The tariff was discovered to be “completely insufficient and unsuited for paying damages for clinical treatment of road accident victims in the private health care sector”.


The evidence demonstrated that the execution of the UPFS tariff would conserve the fund no more than 6% of its total compensation statement. This is viewed as a comparatively meager economy against other persuasive factors, which suggested the tariff was unsuitable.


The court struck down Regulation 5(1) with retrospective effect. The Fund will consequently be liable for the price of health care needs for injury victims from the beginning of the act in August


2008. What would be the outcomes?


Road Accident FundThe ruling brings an end to the uncertainty caused by the constitutional challenge. The Amendment Act introduced farreaching and significant developments to the settlement scheme for road accident victims.


Persons whose earning capacity is compromised as a consequence of an injury might just regain the amount from the Fund which now stands at R180 000. The difference between what is recovered from the Fund, and what the person formerly earned might not be recovered from the wrongdoer.


The loss of a breadwinner will end in a claim for the amount no matter whether the breadwinner made considerably more than the amount. An instance of the issues which could appear would be where a deceased breadwinner earned R5000000 a year and has obligations commensurate with these gains. The family would need to readjust to reside in the amount.


No claims exist either against the Fund or against the wrongdoer for compensatory damages unless the injury sustained is evaluated as a “serious injury”, in which case a claim lies against the Fund.


Insurance providers will have guarantee that no passenger liability claims will appear against them from the day of the Amendment Act. Any reserves, which might have been held in this respect, might be released except in cases where possible emotional shock claims exist.


Income guard kind policies and personal Accident policies will be essential to most families whose main breadwinner gets significantly more than the amount. Motor insurance policies may need to be amended to include contingency cover in case the Fund is not able to pay any claims that are brought against it, and for emotional shock claims.


Passenger claims aren’t any longer confined on the good side and this means that bus and mini bus passengers will have claims against the Fund to the exact same extent as other road accident victims.



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