DEPARTMENT OF TRANSPORT

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DEPARTMENT OF TRANSPORT
Road Accident Fund Interim and future processes
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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

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RAF Amendment Bill 2003
RAF AMENDMENT BILL - 2003
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.
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RAF Amendment Bill 2003
RAF AMENDMENT BILL - 2003
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
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RAF Amendment Bill 2003
RAF AMENDMENT BILL - 2003
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.
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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.

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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

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SOCIAL IMPLICATIONS
Inter-Departmental Committee on RAFC Report

• 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.

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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

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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.

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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.

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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
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(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)
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The matter was considered by Cabinet on 20
August 2003 and the recommendations of the
Cabinet Committee on Governance and
Administration were approved.
Inter- Departmental Committee on RAFC Report
CABINET DECISION (contd)
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Inter- Departmental Committee on RAFC Report
THE PROPOSED WAY FORWARD - 2004

• 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.

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