Road fund could collapse, says witness
3 March 2010, 23:06
There is a real risk that the Road Accident Fund (RAF) could collapse and its R40-billion deficit transferred to the public if sections of the RAF Amendment Act were to be declared invalid, the Pretoria High Court heard on Wednesday.
Any immediate declaration of invalidity of portions of the Act would have disastrous effects, argued Steven Budlender, appearing for the RAF.
Budlender joined lawyers for the transport minister in urging the court to dismiss outright the application by the South African Law Society, Association for Personal Injury Lawyers and others, to declare certain sections of the Act and regulations unconstitutional and unlawful.
He however said if the court granted any order of invalidity, it should be suspended for two years to ensure that government entities remained functional and to give Parliament time to correct any defects.
The applicants maintained that certain changes in the Act were irrational, unconstitutional and unlawfully prejudiced road users, especially vulnerable victims such as the indigent and children.
The new legislation does away with the R25 000 limitation on passenger claims, but puts a cap on how much can be claimed for loss of earnings or support, limits claims for pain and suffering to very serious injuries and limits tariffs for medical care.
It also abolishes an injured driver's right to claim compensation from the guilty party for costs not covered by the RAF.
The RAF said in court papers there was a real risk the entire fund would collapse and be unable to pay any compensation if sections of the Act were immediately declared invalid. This would have the effect of transferring the RAF's accumulated R40-billion deficit to the South African public, the RAF said.
"The possibility of being left with no claim against the RAF at all is infinitely more damaging than being left with a limited claim in terms of the Amendment Act," The RAF said.
Budlender said the applicants seemed to be suggesting the government should have made arrangements from a budgetary point of view by, for example, further raising the fuel levy or minimising the purchase of defence equipment.
He argued the limitation of claims against the RAF was perfectly rational if one took into account the limited resources available to the RAF system, and the government's duty to ensure the state's limited resources were spent on ensuring everyone had access to some accident cover.
The application continues. - Sapa
Any immediate declaration of invalidity of portions of the Act would have disastrous effects, argued Steven Budlender, appearing for the RAF.
Budlender joined lawyers for the transport minister in urging the court to dismiss outright the application by the South African Law Society, Association for Personal Injury Lawyers and others, to declare certain sections of the Act and regulations unconstitutional and unlawful.
He however said if the court granted any order of invalidity, it should be suspended for two years to ensure that government entities remained functional and to give Parliament time to correct any defects.
The applicants maintained that certain changes in the Act were irrational, unconstitutional and unlawfully prejudiced road users, especially vulnerable victims such as the indigent and children.
The new legislation does away with the R25 000 limitation on passenger claims, but puts a cap on how much can be claimed for loss of earnings or support, limits claims for pain and suffering to very serious injuries and limits tariffs for medical care.
It also abolishes an injured driver's right to claim compensation from the guilty party for costs not covered by the RAF.
The RAF said in court papers there was a real risk the entire fund would collapse and be unable to pay any compensation if sections of the Act were immediately declared invalid. This would have the effect of transferring the RAF's accumulated R40-billion deficit to the South African public, the RAF said.
"The possibility of being left with no claim against the RAF at all is infinitely more damaging than being left with a limited claim in terms of the Amendment Act," The RAF said.
Budlender said the applicants seemed to be suggesting the government should have made arrangements from a budgetary point of view by, for example, further raising the fuel levy or minimising the purchase of defence equipment.
He argued the limitation of claims against the RAF was perfectly rational if one took into account the limited resources available to the RAF system, and the government's duty to ensure the state's limited resources were spent on ensuring everyone had access to some accident cover.
The application continues. - Sapa
Pretoria
