Amendment of the Road Accident Fund Act PRESENTATION TO PARLIAMENTARY Department of Transport PRESENTATION TO PARLIAMENTARY PORTFOLIO COMMITTEE 8 th September 2004 General: The presentation seek to show the interaction between the institutional processes and the amendment, highlights concerns where these two areas are intertwined; proposed a decision on the systemic issues and puts forward the current amendments on the table. Please note that the stakeholders are expecting a new amendment act next week.

Key Processes Department of Transport Equity Amendment Process RAF Fairness Transparency Governance Competency Governance Efficiency Fraud and corruption Consultation Future of the RAF Policy changes Restructuring

Current Bill before Parliament Department of Transport Objective RAF Amendment Bill 2003 RAF Amendment Bill (2004) Parliament resolved to continue with all Bills tabled pre-elections Objective of Bill to limit liability of RAF Objective remains unchanged Proposed corrections and improvements based on submission and representation made in Oct – Nov 2003 Ethos of proposed changes is to provide for universal application of Act to all road users General: The presentation seek to show the interaction between the institutional processes and the amendment, highlights concerns where these two areas are intertwined; proposed a decision on the systemic issues and puts forward the current amendments on the table. Please note that the stakeholders are expecting a new amendment act next week.

Current Bill before Parliament Department of Transport Details RAF Amendment Bill 2003: Portfolio Committee Recommendations RAF Amendment Bill (2004) Corrections to acceptable clauses Liability in term of medical tariffs Limit liability wrt non-residents Exclude liability wrt emotional shock of secondary victims Liability linked to medical tariffs, transformative objections and payment schedules Make Act universal in its application Remains unchanged General: The presentation seek to show the interaction between the institutional processes and the amendment, highlights concerns where these two areas are intertwined; proposed a decision on the systemic issues and puts forward the current amendments on the table. Please note that the stakeholders are expecting a new amendment act next week.

Current Bill before Parliament Department of Transport RAF Amendment Bill 2003 RAF Amendment Bill (2004) Corrections to acceptable clauses continue Mediation and arbitration Deductibility of Collateral Damages Mediation and arbitration processes are first interventions? Proposed cap may necessitate reliance on private insurance? General: The presentation seek to show the interaction between the institutional processes and the amendment, highlights concerns where these two areas are intertwined; proposed a decision on the systemic issues and puts forward the current amendments on the table. Please note that the stakeholders are expecting a new amendment act next week.

Current Bill before Parliament Department of Transport Amendment Bill 2003 Amendment Bill 2004 Improvements to “un- acceptable” clauses Compulsory provision of medical undertakings Provision of compensation for income and general damages in the form of installments Transitional arrangements Regulated method of payment to ensure reasonableness (Fund to determine payment method subject to guidelines in Act). Limitation on liability will focus on capping liability and not postponement of liability. Removed General: The presentation seek to show the interaction between the institutional processes and the amendment, highlights concerns where these two areas are intertwined; proposed a decision on the systemic issues and puts forward the current amendments on the table. Please note that the stakeholders are expecting a new amendment act next week.

Current Bill before Parliament Department of Transport Amendment Bill 2003 Amendment Bill 2004 Improvements Amendment Bill Regulated level of funeral compensation RAF legal fees excluded from Contingency Fees Act, 1997? General: The presentation seek to show the interaction between the institutional processes and the amendment, highlights concerns where these two areas are intertwined; proposed a decision on the systemic issues and puts forward the current amendments on the table. Please note that the stakeholders are expecting a new amendment act next week.

Key Principles underpinning the Amendment Bill Department of Transport Equity Fairness Amendment Bill Transparency Governance

Application of Principles Department of Transport Application of Principles Make the Act universal in application Increase limit for all passengers Equity Ensure compensation for victims /their families Emotional Shock General Damages/ Pain and suffering Contingency Payment System Fairness Transparent system of compensation Capping General Damages and Income/Support Provide Medical Tariffs Specified Funeral Cover Transparency Structure Appointment of Chairperson and CEO Abolish Executive Committee Governance

Key Principles Equity Department of Transport Makes the Act universal in application Align Act with Section 9 (1) of Constitution which protects the rights to equal protection and benefits Increase limit for passengers - Public Transport - Lift clubs General: The presentation seek to show the interaction between the institutional processes and the amendment, highlights concerns where these two areas are intertwined; proposed a decision on the systemic issues and puts forward the current amendments on the table. Please note that the stakeholders are expecting a new amendment act next week.

Key Principles Fairness Department of Transport Ensure reasonable compensation for victims and their families Emotional Shock: Compensation for emotional shock should be directed to road accident victims and their families and not to secondary victims General Damage: Place medical threshold on access to general damages to ensure those who are seriously injured are compensated to adjust their lifestyle General: The presentation seek to show the interaction between the institutional processes and the amendment, highlights concerns where these two areas are intertwined; proposed a decision on the systemic issues and puts forward the current amendments on the table. Please note that the stakeholders are expecting a new amendment act next week.

Key Principles Department of Transport Fairness Continued Ensure reasonable compensation for victims and their families Contingency Payment System: Remove link between contingency payment system and victim’s compensation so that victims benefit more than other parties General: The presentation seek to show the interaction between the institutional processes and the amendment, highlights concerns where these two areas are intertwined; proposed a decision on the systemic issues and puts forward the current amendments on the table. Please note that the stakeholders are expecting a new amendment act next week.

Key Principles Transpa-rency Department of Transport Provide for a transparent system of compensation allowing for greater efficiency Capping General Damages and Income/Support: Transparent system based on maximum compensation limited only by proportion of fault Method of payment will be regulated to allow for decision regarding payment method – whether installments, lump-sum or undertakings – to be reasonable whilst financially sound General: The presentation seek to show the interaction between the institutional processes and the amendment, highlights concerns where these two areas are intertwined; proposed a decision on the systemic issues and puts forward the current amendments on the table. Please note that the stakeholders are expecting a new amendment act next week.

Key Principles Department of Transport Transpa-rency Continued Provide for a transparent system of compensation allowing for greater efficiency Provide Medical Tariffs: Allow for certainty, introduce transformative measures and provide acceptable payment schedules Specified Funeral Cover: Provide certainty on level of compensation and expedite process General: The presentation seek to show the interaction between the institutional processes and the amendment, highlights concerns where these two areas are intertwined; proposed a decision on the systemic issues and puts forward the current amendments on the table. Please note that the stakeholders are expecting a new amendment act next week.

Key Principles Gover-nance Department of Transport Ensure RAF governance is in line with Public Finance Management Act and Protocol on Corporate Governance Abolish Executive Committee General: The presentation seek to show the interaction between the institutional processes and the amendment, highlights concerns where these two areas are intertwined; proposed a decision on the systemic issues and puts forward the current amendments on the table. Please note that the stakeholders are expecting a new amendment act next week.

Department of Transport Way forward Key principles and proposals presented here address the concern of the various stakeholders whilst taking forward the objectives that Government had set itself through this Bill. Passage of these amendments, whilst not solving all problems faced by the RAF, is a necessary step in turning the RAF around. We thank you for your continued participation and assistance in this process Nonkululeko Msomi – Deputy Director-General Department of Transport General: The presentation seek to show the interaction between the institutional processes and the amendment, highlights concerns where these two areas are intertwined; proposed a decision on the systemic issues and puts forward the current amendments on the table. Please note that the stakeholders are expecting a new amendment act next week.