1 road accident fund: an overview department of transport
TRANSCRIPT
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 incomeObject of the BillKey amendmentsQuestions raised on 1 June 2005Finalisation
3
SYSTEM OF ROAD ACCIDENT COMPENSATION: A CONCEPTUAL
FRAMEWORK
Road accident victims
Number of vehiclesKilometres travelled
Fuel sales Fuel 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: 1990 - 2003
0
1
2
3
4
5
6
JFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAM
% Annual Growth : Vehicle PopulationJanuary 2001 to May 2005
Average annual growth: 4%
6
GROWTH IN ROAD ACCIDENTS IN SOUTH AFRICA
0
20000
40000
60000
80000
100000
120000
140000
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
*
2003
*
Total Accidents with casualties
Average annual growth: 2.6%
7
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
1980 1983 1986 1989 1992 1995 1998 2001
Fatal Major Minor Linear (Minor)
GROWTH IN ACCIDENTS IN SOUTH AFRICA: 1990 - 2003
Average annual growth: 0.8%
Average annual growth: 3.2%
Average annual growth: 2.6%
8
PEOPLE INJURED IN ACCIDENTS IN SOUTH AFRICA: 1990 - 2003
0
50000
100000
150000
200000
250000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Fatal Serious injury Slight injury
Average annual growth: 3.2%
9
CLAIMS AGAINST THE RAF
10
ACCIDENTS AND ACCIDENT CLAIMS LODGED WITH RAF
0
20000
40000
60000
80000
100000
120000
140000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
New RAF claims on accident level Total Accidents with casualties
Linear (New RAF claims on accident level) Linear (Total Accidents with casualties)
Average annual growth: 2.6%
Average annual growth: 7.3%
11
INJURED PERSONS AND INDIVIDUAL CLAIMS LODGED WITH THE RAF:1993 - 2003
0
50000
100000
150000
200000
250000
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
*
2002
*
2003
*
Total casualties RAF new claims
Supplier claims included in RAF claims
12
CASUALTIES PER CASUALTY ACCIDENT AND RAF CLAIMS LODGED PER ACCIDENT
0
0.5
1
1.5
2
2.5
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
NDOT Casualties per accident with casualties RAF Claims lodged per accident
13
INJURIES OF VICTIMS COMPENSATED BY THE RAF: 1999-2001
Light39%
Moderate32%
Serious20%
Fatal9%
14
HOSPITALISATION OF VICTIMS COMPENSATED BY THE RAF: 1999-2001
Not admitted60%
Admitted40%
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TRENDS IN RAF COMPENSATION PAYMENTS
16
TOTAL COMPENSATION PAID: 2000 - 2004
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 3,500,000,000
2000 2001 2002 2003 2004
2000 2001 2002 2003 2004
Total compensation
R 000 R 000 R 000 R 000 R 000
R 1,375,589 R 1,386,026 R 2,025,876 R 2,411,795 R 3,034,512
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COMPENSATION PER HEADS OF DAMAGES: 2000 - 2004
R 0
R 200,000,000
R 400,000,000
R 600,000,000
R 800,000,000
R 1,000,000,000
R 1,200,000,000
R 1,400,000,000
R 1,600,000,000
2000 2001 2002 2003 2004
Past Medical Expenses Future Medical Expenses Past loss of Earnings Future loss of Earnings
Future loss of Support Past loss of Support General Damages Funeral Costs
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PERCENTAGE OF AMOUNT CLAIMED PAID
0
10
20
30
40
50
60
1999 2000 2001
Medical Expenses Medical Expenses: FutureLoss of earnings/support Loss of earnings/support: FutureFuneral expenses General Damages
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REAL ECONOMIC LOSS AND NON-ECONOMIC LOSS PAID BY THE RAF: 2000 - 2004
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
2000 2001 2002 2003 2004Real Financial Loss Unrealised LossLinear (Real Financial Loss) Linear (Unrealised Loss)
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0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000 2001 2002 2003 2004Past Medical Expenses Past loss of Earnings Past loss of SupportFuneral costs Future Medical Expenses Future loss of EarningsFuture loss of Support General Damages
DISTRIBUTION OF COMPENSATION BY THE RAF UNDER THE HEADS OF DAMAGES
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DRIVERS OF COMPENSATION: GENERAL DAMAGES
General Damages:
Claims finalised in
2000 2001 2002 2003 2004
Average amount
(nominal)R 11,744 R 12,656 R 12,164
R 12,5
32R 14,216
AverageAmount(2004 values)
R 15,110 R 15,453 R 14,051R
13,259
R 14,216
Number ofclaimsthat receivedGeneralDamages
56385 55698 68460 71250 91386
Claims thatReceived GD
as% of claimsfinalised
67 68 67 65 59
22
DRIVERS OF COMPENSATION:FUTURE LOSS OF EARNINGS
Future loss of Earnings: Claims finalised in 2000 2001 2002 2003 2004
Average amount (nominal) R 74,017 R 87,200 R 97,865 R 136,256 R 183,625
Average Amount (2004 values) R 95,231 R 106,471 R 113,049 R 144,167 R 183,625
Number of claims that received Future Loss of Earnings
3330 2715 2835 2449 3281
Claims that received Future Loss of Earnings as % of claims finalised
4 3 3 2 2
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COSTS
24
TRENDS IN LEGAL COSTS PAID BY THE RAF: 2000 - 2004
R 0
R 100,000,000
R 200,000,000
R 300,000,000
R 400,000,000
R 500,000,000
R 600,000,000
R 700,000,000
R 800,000,000
R 900,000,000
R 1,000,000,000
2000 2001 2002 2003 2004
RAF legal costs Claimant legal costs Total legal costs
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LEGAL COSTS COMPARED TO COMPENSATION PAID
0
500
1000
1500
2000
2500
3000
2000 2001 2002 2003 2004
Real Financial Loss Unrealised Loss Total legal costs
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FUEL LEVY AND RAF INCOME
27
INCOME FROM FUEL LEVY: 2000 - 2004
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
2000 2001 2002 2003 2004
Income from fuel levy
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INCOME AND EXPENDITURE
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
4500000
2000 2001 2002 2003 2004
Income from fuel levy Expenditure:Compensation and Costs
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RAF AMENDMENT BILL
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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.
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Key Amendments
GovernanceRemoval of limitations on passengersIntroduction 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 tariffsAllow for no-fault emergency medical treatmentRemove liability for emotional shock claims
from secondary victims
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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
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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 6th September.
Comments of the Board of the RAF being considered for inclusion.
THANK YOUMarissa du Toit
Department of Transport