DEPARTMENT OF TRANSPORT Road Accident Fund: Interim and future processes

Overview OVERVIEW OF PRESENTATION RAF Amendment Bill 2003 The RAFC report The Inter-Departmental Committee Social Implications Institutional implications Legal implications Major recommendations - RAFC Cabinet Recommendations Way Forward

RAF AMENDMENT BILL The objective of the Bill was to alleviate the financial burden of the RAF by introducing measures that would assist with the cash flow situation of the organisation until such time that a successor to the RAF was in place. RAF Amendment Bill 2003

RAF AMENDMENT BILL The following are the measures that were agreed upon: to provide for the liability of the Fund in respect of hospital and treatment costs according to prescribed medical tariffs; to limit the liability of the Fund in respect of claims of non- residents and non-citizens of the Republic; to exclude the liability of the Fund in respect of claims for emotional shock sustained as a result of witnessing, observing or being informed of the bodily injury or death of another person; RAF Amendment Bill 2003

RAF AMENDMENT BILL During the process conducted in the portfolio committee the following clauses found not suitable: to make payments in monthly installments and not lump-sum payments; to render deductible all collateral benefits resulting in double compensation in the case of a bodily injury or death; and to provide for the mandatory resolution of disputes through compulsory mediation and arbitration. Way forward: Possibility to split Bill to incorporate those amendments that did not raise objections. RAF Amendment Bill 2003

Inter- Departmental Committee on RAFC Report THE RAFC REPORT The Road Accident Fund Commission of Inquiry (RAFC) was established to inquire into and to make recommendations regarding a reasonable, equitable, affordable and sustainable system for the payment of compensation or benefits, or a combination of compensation and benefits, in the event of the injury or death of persons in road accidents. The RAFC report comprises a detailed assessment of the RAF and its activities, and makes a total of 179 recommendations for the reform of the current road accident compensation system.

Inter- Departmental Committee on RAFC Report THE INTER-DEPARTMENTAL COMMITTEE Cabinet instructed the NDoT to convene an Inter- Departmental Committee on the Road Accident Fund Commission (IDC-RAFC) to consider the contents of the RAFC report and formulate a position, for consideration and subsequent submission to Cabinet. The IDC-RAFC was established end of January 2003 and after several meetings submitted a report in early April 2003: “Position on the Road Accident Fund Commission Report”. The work of the committee was inconclusive, recommendation were not comprehensive enough to allow for a specific implementation programme, these concern can be related to severe time constraints

SOCIAL IMPLICATIONS General comment by IDC_RAFC: “The recommendations of the Road Accident Fund Commission involve broader socio-political considerations relating to social development and public health policy and raises questions much broader than compensation for accident victims.” Strong call for further and broader consultation. Inter-Departmental Committee on RAFC Report

LEGAL IMPLICATIONS Changes to legislation will be required: Option 1: An amendment of the existing Road Accident Fund Act Option 2: Formulation of a new Road Accident Benefit Scheme Bill and Act Options not considered: Option 3: Incorporation into Social Security Agency Bill

Inter- Departmental Committee on RAFC Report INSTITUTIONAL IMPLICATIONS There are two options for reforming the road compensation system. Option 1 is recommended by the RAFC report and calls for the phasing out of the current RAF and its replacement by the Road Accident Benefit Scheme. Option 2 is a restructuring of the current RAF in accordance with the recommendations of the RAFC report. Cabinet recommended establishment of an expert group to analyse both institutional and financial implications.

Inter- Departmental Committee on RAFC Report MAJOR RECOMMENDATIONS Shift from “fault” to “no-fault” basis: The IDC-RAFC supported the RAFC proposal for a shift from the “fault” system to a “no fault” system, which would be more equitable Shift from legal to medical basis: The IDC-RAFC supported the proposed shift from a legal to a medical basis for compensation. Compensation fund vs. social security benefit scheme: The IDC-RAFC supported the RAFC proposal that the RAF change from an autonomous dedicated fund for compensating road accident victims and be integrated into a national social security system. However, the IDC-RAFC recommends consultation with a wide range of stakeholders before such a decision is taken.

Inter- Departmental Committee on RAFC Report CABINET DECISION On 12 August 2003 the Cabinet Committee on Governance and Administration considered the IDC report and recommend that Cabinet approves the following: (a) the recommendations of the Inter-Departmental Committee (IDC) in principle; (b) that the IDC, under direction of the Ministers of the relevant departments explore further institutional financial technical and other practical implications;

Inter- Departmental Committee on RAFC Report CABINET DECISION (contd) (c) that the IDC submits further recommendations on implication and the phasing out of the current Road Accident Fund; (d) that, under direction of the relevant Ministers, a group of experts be appointed to advise on all aspects of implementation and implications; (e) that a further report be submitted to the Cabinet in due course; and (f) that the National Treasury be consulted on the current financial crisis experienced by the RAF.

Inter- Departmental Committee on RAFC Report CABINET DECISION (contd) The matter was considered by Cabinet on 20 August 2003 and the recommendations of the Cabinet Committee on Governance and Administration were approved.

THE PROPOSED WAY FORWARD Ensure due diligence in this process of consultation. Reconvening of the IDC to develop a vision for a future benefit scheme for road accident victims and further exploration of financial, institutional, technical and other practical implications of the recommendations made by the Road Accident Fund Commission; To appoint a group of experts to assist the IDC in this regard; Establish a IDC Steering Committee to act as the decision-making structure of the IDC To prepare a report and to make recommendations on the following aspects of a benefit scheme: Purpose and role Administrative system Basis of compensation Equity and sustainability Transitional arrangements To consult with National Treasury on the current financial crisis of the RAF. Inter- Departmental Committee on RAFC Report

Thank you DEPARTMENT OF TRANSPORT Inter- Departmental Committee on RAFC Report