1 ROAD ACCIDENT FUND: AN OVERVIEW DEPARTMENT OF TRANSPORT

2 CONTENTS OF PRESENTATION Challenges addressed Road accidents in South Africa Claims against the RAF Trends in RAF compensation payments Transaction costs Fuel levy and RAF income Object of the Bill Key amendments Questions raised on 1 June 2005 Finalisation

3 SYSTEM OF ROAD ACCIDENT COMPENSATION: A CONCEPTUAL FRAMEWORK Road accident victims Number of vehicles Kilometres travelled Fuel salesFuel levy RAF IncomeCompensation expenditure Cost expenditure Road accidents RAFLegal profession Other role players Regulatory environment Service providers

4 ROAD ACCIDENTS IN SOUTH AFRICA

5 GROWTH IN VEHICLE POPULATION IN SOUTH AFRICA: Average annual growth: 4%

6 GROWTH IN ROAD ACCIDENTS IN SOUTH AFRICA Average annual growth: 2.6%

7 GROWTH IN ACCIDENTS IN SOUTH AFRICA: Average annual growth: 0.8% Average annual growth: 3.2% Average annual growth: 2.6%

8 PEOPLE INJURED IN ACCIDENTS IN SOUTH AFRICA: Average annual growth: 3.2%

9 CLAIMS AGAINST THE RAF

10 ACCIDENTS AND ACCIDENT CLAIMS LODGED WITH RAF Average annual growth: 2.6% Average annual growth: 7.3%

11 INJURED PERSONS AND INDIVIDUAL CLAIMS LODGED WITH THE RAF: Supplier claims included in RAF claims

12 CASUALTIES PER CASUALTY ACCIDENT AND RAF CLAIMS LODGED PER ACCIDENT

13 INJURIES OF VICTIMS COMPENSATED BY THE RAF:

14 HOSPITALISATION OF VICTIMS COMPENSATED BY THE RAF:

15 TRENDS IN RAF COMPENSATION PAYMENTS

16 TOTAL COMPENSATION PAID: R 0 R 500,000,000 R 1,000,000,000 R 1,500,000,000 R 2,000,000,000 R 2,500,000,000 R 3,000,000,000 R 3,500,000, Total compensation R 000 R 1,375,589R 1,386,026R 2,025,876R 2,411,795R 3,034,512

17 COMPENSATION PER HEADS OF DAMAGES:

18 PERCENTAGE OF AMOUNT CLAIMED PAID

19 REAL ECONOMIC LOSS AND NON-ECONOMIC LOSS PAID BY THE RAF:

20 DISTRIBUTION OF COMPENSATION BY THE RAF UNDER THE HEADS OF DAMAGES

21 DRIVERS OF COMPENSATION: GENERAL DAMAGES General Damages: Claims finalised in Average amount (nominal) R 11,744R 12,656R 12,164R 12,532R 14,216 Average Amount (2004 values) R 15,110R 15,453R 14,051R 13,259R 14,216 Number of claims that received General Damages Claims that Received GD as % of claims finalised

22 DRIVERS OF COMPENSATION:FUTURE LOSS OF EARNINGS Future loss of Earnings: Claims finalised in Average amount (nominal) R 74,017R 87,200R 97,865R 136,256R 183,625 Average Amount (2004 values) R 95,231R 106,471R 113,049R 144,167R 183,625 Number of claims that received Future Loss of Earnings Claims that received Future Loss of Earnings as % of claims finalised 43322

23 COSTS

24 TRENDS IN LEGAL COSTS PAID BY THE RAF:

25 LEGAL COSTS COMPARED TO COMPENSATION PAID

26 FUEL LEVY AND RAF INCOME

27 INCOME FROM FUEL LEVY:

28 INCOME AND EXPENDITURE

29 RAF AMENDMENT BILL

30 Object of Bill To limit the liability of the Fund To provide a system of compensation which is more equitable, fair and transparent whilst allowing for good governance.

31 Key Amendments Governance Removal of limitations on passengers Introduction of limitation on loss of income and support claims (R160k) Limit the Fund’s liability for general damages only for seriously injured citizens or permanent residents Introduce medical tariffs Allow for no-fault emergency medical treatment Remove liability for emotional shock claims from secondary victims

32 Questions raised at previous meeting Questions from previous briefing: Rule of Law: Constitutionality of specific limitations Tariff for legal work: Taxed party-to-party Legal practice: Law Society SA Assessment: Accreditation such that rural clinics could provide assessment services Funeral costs: removed Support claims relating to accidents on farms: despite rebate any accident anywhere in SA is covered Backlog: Not addressed in Bill directly provision for outsourcing may increase efficiency

33 Finalisation of Bill Constitutional Opinion, Adv Wim Trengove: Replacement of common law rights with statutory rights without allowing access to the common law will succeed in a constitutional challenge as long as the specific limitation are found to be constitutional. Second opinion due for next committee meeting on 6 th September. Comments of the Board of the RAF being considered for inclusion. THANK YOU Marissa du Toit Department of Transport