RAF History
The RAF is the product of a long history spanning more than sixty years, which commenced with the introduction of compulsory motor vehicle insurance in 1942. The Motor Vehicle Assurance Act 29 of 1942 was the first statute in South Africa, which provided for compulsory insurance to ensure that victims could recover damages, which were caused unlawfully by motor vehicles. The main thrust of the initial legislation was to afford protection to persons not in or on a particular vehicle, i.e. pedestrians. During the sixties it became apparent that certain insurance companies had insufficient income to cover claims. Several companies were liquidated and this lead to the establishment in 1965 of the Motor Vehicle Accident Fund to act as reinsurer of companies which undertook compulsory MVA insurance.
From 1942 to 1986 the legal basis and the funding of the MVA system essentially remained unchanged. With the introduction of the Motor Vehicle Accidents Act 84 of 1986 the method of funding the payment of claims was radically changed. The compulsory insurance system with its statutory annual premiums was abandoned in favour of a levy on fuel sold. The 1986 Act also introduced the agency system in terms of which certain insurance companies acted as agents for the Fund to handle and settle claims. This agency system and funding method through fuel levies were retained in the Multilateral Motor Vehicle Accidents Fund Act 93 of 1989. The purpose of this latter Act was to introduce a uniform system of compensation for road accident victims in the so-called SA TBVC states. The legal basis for compensation payable for bodily injuries sustained and personal losses suffered following road accidents, remained unchanged. The agency system was undesirable and ineffective and was phased out from 1993 to 1997 and now all claims are attended to by the RAF.
The RAF: Road Accident Fund Act 56 of 1996 came into operation on 1 May 1997. This act established the present RAF: Road Accident Fund whose object it is to pay compensation in accordance with applicable statutes for personal loss or damage wrongfully caused by the driving of motor vehicles.
The Road Accident Fund Act was subsequently amended by the Road Accident Fund Amendment Act 19 of 2005. The amended Road Accident Fund Act applies to all claims arising on or after 1 August 2008. Claims arising prior to this date are still subject to the pre-amended Road Accident Fund Act. The amendments removed certain discriminatory provisions and introduced caps of the RAF’s liability in certain areas to ensure the sustainability of the RAF.
The Road Accident Fund Commission was appointed on 1 June 1999 to inquire into and to make recommendations regarding a reasonable, equitable, affordable and sustainable system, for the payment by the Road Accident Fund of compensation or benefits, or a combination of compensation and benefits. In its 2002 report to Government the Commission recommended that a new authority, called the Road Accident Benefits Scheme (RABS), should be created to implement a “no-fault” system of third party compensation that provides benefits in the form of periodic payments governed by an approved tariff, subject to thresholds and monetary ceilings and paid directly to service providers.
The Department of Transport is currently in the process of developing a no-fault policy that is expected to culminate in legislation that will introduce fundamental changes to the current system of third party compensation”
The Legal Base
The present MVA system indemnifies the driver or owner of a motor vehicle against liability incurred as the result of loss of damage wrongfully caused to another person in road accidents. The RAF only indemnifies the driver or owner to compensate for losses suffered due to bodily injuries sustained or the death of a person, and not also for liabilities which the driver or owner may incur for damage to property (e.g. damages to motor vehicles, personal affects, buildings, luggage or goods conveyed in a vehicle). Common law principles of delict are incorporated in the legislation. Thus during the assessment of claims the respective degrees of fault of the victim and the wrongdoer have to be determined. The victim's claim is reduced by such own degree of fault or blame for the accident.