RAF plans to drop general damages payouts

General damages are paid to people who are 'in pain and suffering' and can include trauma, the RAF said. Assessment of this type of damage is, to a great extent, arbitrary since the loss is not patrimonial and incapable of true economic valuation, according to the RAF. The report adds RAF has a provision of about R100bn for claims it has yet to pay and is seeking additional funding from the Treasury to help it meet its obligations. CEO Eugene Watson said the fund had been undercapitalised and insolvent for about 30 years and operated on a year-by-year basis on receipts from the fuel levy. Watson was speaking about the proposed changes to the Road Accident Benefit Scheme Bill. 'We would no longer pay for general damages,' said Watson. 'In 2005 this was limited to serious pain and suffering, but the proposed legislation's idea is that this falls away.' Watson said the RAF would also set up a standard medical tariff for medical costs. According to the report, proposals under the Road Accident Benefit Scheme Bill will also see claimants receiving payouts on a monthly basis, instead of a lump sum. Full Business Day report (subscription needed) Draft Road Accident Benefit Scheme Bill

The number of people arrested for defrauding the Road Accident Fund (RAF) rose from 290 in the 2012/13 financial year to 478 in the 2013/14 year, Watson said yesterday. A report in The Citizen quotes Watson as saying: 'The fraud is both internal and external. We have a fraud prevention plan in place. The percentage in our annual report is largely external.' He said like medical schemes and investment houses, the RAF faced the constant risk of corporate fraud. 'We have fictitious claims, accidents and occupants. We then have fictitious medical reports, evidence, and we may also have collusion between attorneys, our staff members, doctors, touts and so forth,' said Watson. The RAF recently appointed a new general manager for forensics who had worked for the Special Investigating Unit. He said the number of those arrested for fraud in the 2012/13 financial year may have been so much lower than the current year because the fraudulent claims involved vehicles with fewer occupants. Full report in The Citizen

Watson also noted the RAF paid out over R22bn to crash survivors in the 2013/14 financial year, says a report on the Fin24.com site. 'Our cash expenditure exceeded the revenue we collected so we used our cash reserves to fund the additional needs,' he is quoted as saying. He said the RAF's revenue had increased by 13% to R20.6bn. Full report on the Fin24.com site