I was very happy to see the Road Accident Fund being given a 50% increase in the budget.  That will certainly help them with their cash flow crisis that they have now, but in the long-term, if the Road Accident Benefit Scheme comes into effect, the members of the public will be paying for nothing – R1,50/litre for very few benefits will be an outrageous rip-off.  An advocate friend of mine always puts it more bluntly and says it is simply fraud.  

The reason for the current cash flow crisis is no doubt the fact that the 55,000 cases a year that were being settled by the Road Accident Fund was doubled up last year to about 110,000 and despite that only a R5,6 billion shortfall was incurred.  One does not understand why the Road Accident Fund does not settle cases in the order that they came in, the oldest being settled first and instead has settlement drives where they try to settle people’s cases immediately, even though they don’t have the funds to pay them.  It is particularly unfair for those who have their cases in the court process and have waited 3 or 4 years for a trial date to have other people’s cases suddenly being jumped to the front and settled before theirs.  The money though is not going to solve the problems immediately, and especially not if the Road Accident Fund continues on their current settlement drives.  Firstly, according to the CFO of the Road Accident Fund, any increase that they get only effectively hits their bank account in July, so although the public would be paying more for petrol long before then, they are not going to have the money until July.  That probably means that attorneys will be paid about 50% more from the end of July.  If the Road Accident Fund’s figures that they will by then have a R10 billion shortfall are correct, what that will mean is that with the extra amount of R800 million a month, the shortfall will remain until at least December of this year, but if they continue to settle claims at the same rate, the extra money will only cover the monthly shortfall that we’ve had for the last few months of R800 million a month, and not actually reduce the backlog.  

In other words, if the Road Accident Fund continues to settle as many cases as they are right now, in December one will still have the R10 billion shortfall that is currently being projected for July, but you will at least have a more stabilised system where instead of the delay for payment growing each and every month it will remain constant and most firms of attorneys will be able to break even, even if their profitability is certainly adversely affected.  

The other thing that I certainly don’t agree with is the Road Accident Fund’s policy of paying those that are the least badly affected first, and those who are most seriously injured last.  That is the effect of their policy at the moment to pay cases for under R100 000,00 on approximately 60 days and cases for R1 million or more on 180 days.  It is perverse and it actually encourages the lodgement of smaller cases because those who do smaller cases are hardly affected by the cash flow crisis in the Road Accident Fund’s effort to reduce the number of people who are complaining and simply make sure those, who had the worst injuries and are getting the most compensation, are the ones, who are obviously far fewer in number, but bigger in amounts, who have to wait the longest.  It probably makes sense from an accounting and administrative perspective but morally the concept of paying those who are the most injured last is completely bankrupt.