ROAD ACCIDENT FUND (RAF) LEGISLATION | ​​Legal Framework

Legal Mandate 

During the reporting period, the Road Accident Fund Act, 1996 (Act No. 56 of 1996) (the “RAF Act”) was amended by the Road Accident Fund Amendment Act, 2005 (Act No. 19 of 2005) (hereinafter referred to as the “RAF Amendment Act”).

​​​​​​​​​In terms of both the RAF Act and the RAF Amendment Act, the RAF provides cover to all users of South African roads for loss or damage caused by the negligent driving of motor vehicles within the borders of the Republic.

The client base of the RAF therefore comprises not only the South African public, but all foreigners within the borders of the country.

The RAF provides two types of cover, namely:

1. Personal cover to accid​ent victims or their families​​

2. ​and indemnity cover to wrongdoers.
   
   

Liability of the RAF 

Fault-based system

Compensation only for bodily injury

The RAF is liable only to pay compensation for loss or damage suffered as a result of bodily injury or death. The effect of this is that the RAF does not pay for any loss or damage to property (such as damage to mo​tor vehicles, goods conveyed in a vehicle, etc.).

Accidents within South African borders

Losses and damages compensated

The compensation paid by the RAF is determined by the RAF Act and the RAF Amendment Act, and is based on the common law of delict. Damages paid by the RAF are categorised as special damages and general damages. Special damages are paid for pecuniary losses that have been, or will be suffered - and include: 

• Past and future hospital, medical and related expenses;

• Past and future loss of earnings;

• Past and future loss of support; and

• Funeral expenses.

General damages (non-pecuniary loss) are paid as compensation for loss of amenities of life, pain and suffering, disability and disfigurement to persons who have suffered bodily injury in a motor vehicle accident.

The extent of liability of the RAF differs in terms of the provisions of the RAF Act and the RAF Amendment Act. 

Apportionment of damages

As the RAF Act and the Amendment Act provide for a fault-based system of compensation, the amount of damages recoverable by a claimant is reduced by the extent to which the claimant's fault contributed to his or her damages. This is done through the application of section 1 and 2 of the Apportionment of Damages Act, 1956 (Act No. 34 of 1956).

The effect is that if a claimant was partly to blame, then the RAF will not be liable for the percentage of damage representing the claimant's own negligence.

Liability for legal expense

In terms of the RAF Act, claimants who are paid compensation by the RAF are entitled to have their legal fees (on a party and party basis) paid for by the RAF. However, this provision of the RAF Act that creates an automatic liability on the RAF to pay the party and party costs to claimants who are paid compensation, has been deleted in the RAF Amendment Act. The effect is that in claims to which the RAF Amendment Act is applicable, the normal rules relating to the award of legal costs in litigated matters will apply. Further, the RAF may consider making a costs contribution towards legal costs in non-litigated matters, but there no longer exists a legal obligation on the RAF to do so. 

Exclusions of liability

1. Exclusion of liability in terms of the RAF Act
   The liability of the RAF for loss or damage is excluded in specific instances provided for in terms of section 19 of the RAF Act. In respect of claims governed by the RAF Act, namely claims arising from accidents that occurred before 1 August 2008, liability is excluded in circumstances where:​

a) The person who suffered the loss or damage (called the "third party") at common law cannot hold the wrongdoer (usually the driver) liable for the damages;

b) A paying motorcycle passenger is injured or killed by the exclusive negligence of the driver of the motorcycle;

c) A person is a member of the same household as the driver of the motor vehicle in which such person was conveyed, and the collision resulted solely from the negligence or unlawful act of such driver;

d) A person was a passenger in a motor vehicle and was responsible for the maintenance of the driver of such motor vehicle and the collision resulted solely from the negligence or unlawful act of such driver;

e) A third party does not institute a third party claim against the RAF personally or through an admitted and practicing attorney or other authorised official;

f) A third party enters into an agreement with any person other than an admitted and practicing attorney or other authorised official in terms of which such a person receives a portion of the compensation recovered, or any amount for services rendered in respect of a third party claim;
g) A third party unreasonably refuses or fails to submit to a medical examination by a medical practitioner appointed by the RAF on request of the RAF and at its cost; andh) A third party  refuses or fails to:

(i)    Submit to the RAF (at the latter's cost) copies of all relevant medical reports in their possession;
(ii)   Allow inspection of their medical records held by a medical practitioner or a hospital;
(iii)  Submit an affidavit setting out full particulars of the accident together with a claim form;
(iv)  Supply within a reasonable time from obtaining possession thereof, copies of all relevant statements        and documents in respect of the collision.

2. ​Exclusion of liability in terms of the RAF Amendment Act

   Section 19 of the RAF Amendment Act continues to provide that liability is excluded in the instances referred to in sub-paragraphs (a), (e), (f), (g) and (h) above. However, the RAF Amendment Act does not provide for the liability of the RAF to be excluded in circumstances referred to in sub-paragraphs (b), (c) and (d) above. The effect of this is that the RAF will be liable on the same principles applicable to other claimants if a person is injured or killed on or after 1 August 2008 and at the time of the accident such person was:

   a) A paying motorcycle passenger is injured or killed by the exclusive negligence of the driver of the motorcycle;
   b) A member of the same household as the driver of the motor vehicle in which such person was conveyed and the collision resulted solely from the negligence or unlawful act of such driver;
   c) A passenger in a motor vehicle who is responsible for the maintenance of the driver of such motor vehicle and the collision resulted solely from the negligence or unlawful act of such driver.

   The exclusions listed in sub-paragraphs (a) and (e) to (h) above, are still provided for in the RAF Amendment Act, and consequently in such circumstances, the RAF will not be liable for any losses or damages, regardless as to whether the collision in question occurred prior or subsequent to 1 August 2008.

   The RAF Amendment Act brought into being one further instance where its liability is excluded, namely where the loss or damage results from secondary emotional shock. The effect of this is that where an accident occurs after 31 July 2008 and a person suffers shock as result of witnessing or hearing of such accident, and the person suffers losses consequent to the shock, the RAF will not be liable for these losses. However, a person who suffers loss as a result of secondary emotional shock will have the right to claim such loss from the wrongdoer in terms of the common law.

   Limitation of liability

   Limitation of liability in terms of the RAF Act
   In terms of section 18 of the RAF Act, the liability of the RAF is limited in certain instances.

   Passenger limitations

   In respect of certain specified categories of passengers or the dependents of those passengers in the case of the death of the passenger, the liability of the RAF is limited in respect of both the amount recoverable and the damages sought to be indemnified, depending on the category into which the particular passenger falls.

   The limitation only becomes operative where the injury or death is caused by the sole negligence of the driver of the vehicle in which the passenger was conveyed.  

   In respect of passengers conveyed in vehicles under the following prescribed circumstances:

   • ​​​​Passengers for reward;

   • Passengers conveyed in the course of the lawful business of the owner of that motor vehicle;

   • Passengers conveyed in the course of their employment where they are not covered by the Compensation for Occupational Injuries and Diseases Act, 1993 (Act No. 130 of 1993) ("COIDA"); and

   • Lift club passengers,

   The liability of the RAF is limited to an amount  in respect of both general and special damages.

   The liability of the RAF in respect of claims of all other passengers (social passengers, such as friends) is limited to an amount in respect of special damages only. These passengers are not entitled to general damages.

   Funeral expenses

   Section 18 of the RAF Act also limits the liability of the RAF for funeral expenses, with the RAF only being liable to pay the necessary actual costs related to cremation or internment.

   Reduction of liability 

   • In terms of section 18 of the RAF Act, the RAF may deduct from its liability amounts that claimants are entitled to under certain other specified legislation. In this regard, the RAF is entitled to reduce its liability in the following circumstances:
      
     Passengers who are employees injured or killed in the course of their employment and who are covered by COIDA. In terms of the RAF Act, the monetary amount for which the RAF is liable is limited to the amount which the claimant could have claimed but for section 18 of the Act or a specified amount, whichever is the lesser, minus any compensation to which the claimant is entitled under COIDA.

   • Members of the South African National Defence Force ("SANDF") who have claims against the Minister of Defence in terms of the Defence Act, 2002 (Act No.42 of 2002) ("the Defence Act"). This refers to members of the SANDF who are, at the time of the accident, rendering a military service or undergoing military training in terms of the Defence Act or any other Act governing the SANDF. The claimant's common law damages suffered as a result of the accident fall to be reduced by the RAF in the sum that such a claimant is entitled to under the Defence Act.

3. Limitation of Liability in terms of the RAF Amendment Act

Limitation on passenger claims removed

The inequitable and discriminatory provisions in the RAF Act that provided for the RAF's liability to be limited to an amount where a person is injured or killed while a passenger in the vehicle that was solely to blame for the accident, has been removed in terms of the RAF Amendment Act. The effect of this is that the RAF will be liable on the same principles applicable to all other claimants if a person is injured or killed on or after 1 August 2008, and at the time of the accident such person was a passenger in the vehicle that was solely to blame for the accident.

Funeral expenses

The limitation of the RAF's liability to pay only the necessary actual costs of cremation or internment remains in the RAF Amendment Act.

Reduction of liability

The RAF Amendment Act has retained the provision that the RAF may deduct payments received by third parties in terms of COIDA and the Defence Act.

Additional limitations in the RAF Amendment Act

The removal of the limitation on passenger claims served to increase the liability of the RAF. So as to ensure the sustainability of the system, it was necessary for new limitations on the RAF's liability to be introduced in the RAF Amendment Act. In respect of accidents occurring on or after 1 August 2008, the liability of the RAF is limited as follows:

• Hospital, medical and related expenses are now paid on the basis of two tariffs. The first relates to emergency medical treatment and the applicable tariff is based on the National Health Reference Price List. The second relates to non-emergency medical treatment and the tariff applicable for such treatment is the Uniform Patient Fee Structure for fees payable by full-paying patients prescribed by the National Health Act, 2003 (Act No. 61 of 2003), as revised from time to time. 

• Loss of income and support is now capped at a maximum amount per annum, irrespective of the actual loss. This cap is adjusted quarterly to counter the effect of inflation.

• Payment of general damages is now limited only to instances where a serious injury has been sustained. In terms of the Regulations to the RAF Amendment Act, an injury will be assessed as "serious" if the injury results in 30% or more impairment of the Whole Person as provided for in the American Medical Association Guides ("AMA Guides"). The Regulations further provide that if an injury does not result in 30% or more Impairment of the Whole Person, such an injury may only be assessed as serious if that injury: 

(i) Resulted in a serious long term impairment or the loss of a body function;

(ii) Constitutes permanent serious disfigurement;

(iii) Resulted in severe long-term mental or severe long-term behavioral disturbance or disorder; or

(iv) Resulted in the loss of a foetus.   

Apart from being required to ensure the sustainability of the system, the introduction of new generally applicable limitations on the RAF's liability has gone some way in addressing the systemic problems in the RAF Act, in that:

• The inequity of the poor subsidising the rich has been partially addressed through the cap on loss of income and support and the medical tariffs;

• The payment of general damages in instances only where a serious injury has been sustained will limit wastages in the system and curtail abuse; and

• By limiting liability for loss income and support, the system is more reasonable and sustainable, as the risk of enormous claims by foreigners has been removed.    

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