CHRIS HUNSINGER: Urgent need to fix the broken Road Accident Fund

In her July budget speech, transport minister Barbara Creecy promised that “a key priority for the next financial year will be the stabilisation and improved governance of the department and its entities”. In the same speech she revealed that each year our country sees more than 10,000 fatal motor vehicle accidents, which the Road Traffic Management Corporation estimates amount to almost 3% of our annual GDP.

Over the years we have seen a worrying disconnect between the department of transport and one of its key entities, the Road Accident Fund (RAF). Veiled by well-oiled public relations machinery, the RAF’s board and CEO have been operating unchecked and without proper oversight for far too long, jeopardising the claims of hundreds of thousands of road crash victims, including poor and unemployed claimants who have no other recourse.

Perhaps the gravest cause for concern is that the majority of governance failures within the RAF are squarely attributable to RAF leadership. The RAF appears to have stopped the payment of claims for the past four months or so. There seems to have been a lower value of claims paid out by the RAF thus far in 2024 compared with the same period in previous years. We have reached a point where the entire RAF system is on the verge of collapse unless we take immediate and robust steps to keep that from happening.

For years the RAF has treated its empowering legislation as more of a buffet than a mandate, picking and choosing which sections of the RAF Act it applies and which it does not. Its implementation of the new “RAF1 form” in July 2022 and the subsequent launch of a “pre-assessment application” enabled it to capture all new RAF1 claims.

During the 2022/23 financial year the RAF on average received and pre-assessed 3,132 claims per month, of which 97% were later found to be noncompliant. This means only 3% of claims received by the RAF were eligible to be assessed and finalised by the fund within the set 120 days. Earlier this year the high court in Johannesburg struck down the “RAF1 form” as unlawful. 

The RAF’s recent launch of a call centre aimed at “facilitating” direct claims, at a huge cost to taxpayers — notwithstanding that the RAF stopped assisting direct claimants years ago after realising that it was not equipped to do so — is yet another example of bad management and worse planning. Tens of thousands of such claims have already expired, yet the RAF continues to “lure” claimants by engaging them directly (spending hundreds of thousands of rand on TV commercials).

The RAF is simply not complying with its statutory obligation to investigate claims and pay fair and equitable compensation. Instead, it has resorted to leaving the finalisation of these claims to the courts. There are hundreds of applications for default judgment lodged against the RAF every month. Last year saw 126 default judgments granted against the RAF in January-November (to the value of more than R438m), 1,116 in 2022 (more than R2.9bn), and 483 in 2021 (R1.4bn), sapping precious funds from an entity already in dire straits. 

Litigation creates enormous additional costs for the RAF. Its CEO blames legal representatives, yet the RAF has yet to formulate either a proper strategy or an internal action plan to deal with claims older than 120 days and awaiting trial dates. It is well known that there is a standing approach taken by RAF management of not attending to any matter older than 120 days unless there is a set court date. Put differently, any claim, regardless of whether it can be settled immediately, will as a result have to wait for years to obtain a trial date, only after which the RAF will take action to deal with the matter.

The implication of this is that directly submitted claims will never receive any attention and be allowed to lapse. The claimants’ attorneys (insofar as they can afford one) have no choice but to apply for court dates to compel the RAF to attend to their client’s claim, further clogging the court roll. This is why claims now take almost 60 months to settle. This is also one of the primary causes of our overburdened court rolls.

As a result of the RAF’s dereliction of a basic duty to attempt to settle outstanding claims where they are reasonable and well founded, the RAF’s legal bill is not under control. According to its annual report for the past financial year, total expenditure on claimant medical costs has been on a downward trend at a rate of about 13% per year (as opposed to the past average growth of 33%). What the report fails to mention is that this reduction is mostly a result of the RAF adopting a policy of not compensating claimants for medical expenses in cases where they have already been compensated by their medical aid. 

Finally, the RAF has on more than one occasion requested the courts to allow it a total of 180 days to pay claimants when a case eventually gets settled. Even these self-imposed timelines are often ignored, denying road crash victims any reasonable opportunity to gain meaningful financial, mental or physical rehabilitation. These are the everyday challenges of road crash victims in the iron grip of the RAF. Claimants at large are in serious need of an intervention in the RAF to safeguard their rights and protect their interests. 

The CEO often boasts about the entity’s “great performance”, but the facts tell a different story. In 2008 the fund was able to process 120 claims per employee. By 2018 this number had dropped to 33 per employee. In the last financial year the number is a dismal 14. Put bluntly, the RAF is working less and spending more. The entity’s operational costs increase each year, from R1.75bn in 2022 to R1.82bn last year. Less than 5% of claims received each year are processed within 120 days, and the backlog increases at an annual rate of 40,000-50,000 cases.

Given the tough realities for all road users, the almost 1-million road crashes annually, the more than 12,000 related deaths on our roads and the fact that the majority of RAF claimants are from rural areas and mostly poor, the RAF must execute its legislative duties fully and diligently. A greater tragedy is the availability of practical and easily implementable solutions that have been “on the table” for a few years now, yet none of these recommendations has been brought into effect.

Some of these solutions include ensuring a capable and effective RAF leadership that is willing to execute the RAF Act fully and lawfully, building additional required legal capacity in the fund, focusing on internal competence building of all staff, and strengthening claims handler capacity and competence. Settlement agreements must be reached timeously and claims flowing from them must be paid efficiently. The RAF must urgently reduce unnecessary legal fees and investigate practical ways to reduce the burden on our courts. 

More strategic and long-term solutions include the development of a national integrated road safety strategy, a proper revision of the RAF Act, including all stakeholders in the process, and a rewritten, comprehensive set of regulations aligned with the act. Change at the RAF is urgently needed. But this should happen in a well-planned, fully researched and structured manner involving all key stakeholders, and must, above all, be practical and sustainable.

• Dr Hunsinger, a DA MP, is party spokesperson on transport.