Recently Bell Dewar advised the Road Accident Fund in respect of
a plethora of challenges brought by the organised legal
The Law Society of Africa and others ("the
applicants") applied to the North Gauteng High Court to have
certain provisions of the Road Accident Fund Act 19 of 2005
("the RAF Act"), Regulations and a Government Notice
On 31 March 2010, Fabricius AJ dismissed the application in its
The applicants then applied for leave to appeal to the
Constitutional Court. In the Constitutional Court, the applicants
limited their attack to the following provisions:
section 21 of the RAF Act which abolishes a road accident
victim's common law right to claim compensation from a
wrongdoer for losses which are not compensable under the RAF
section 17(4)(c) of the RAF Act which caps the amount of
compensation that the Road Accident Fund ("the Fund") is
obliged to pay the victim for loss of income or a dependant's
loss of support where the victim dies as a result of a motor
vehicle accident; and
Regulation 5(1) which prescribes a tariff for health services
which are to be provided to accident victims by public health
The abolition of the common law claim
Prior to the amendment of the RAF Act, victims of motor vehicle
accidents were required to claim compensation from the Fund instead
of the wrongdoer. Where the fund was unable to compensate the
victim for all damages suffered, the victim could sue the wrongdoer
to recover those losses.
A rudimentary example of the pre-amendment scheme is as
Total damages suffered by the victim: R200 000.00
Compensation paid by the Fund: R150 000.00
As is evident from this example, the Fund did not compensate the
road accident victim in full. The road accident victim could under
the pre-amended RAF Act sue the wrongdoer for any residual amounts
not covered by the Fund. In this case, that amount would be R50
Section 21 (in its amended form) provides that a victim of a
motor vehicle accident will have no claim against the wrongdoer. In
other words the road accident victim would not be able to claim R50
000.00 from the wrongdoer.
The Constitutional Court held that the abolition of the common
law claim is rationally related to the legitimate government
purpose to make the Fund financially viable and its compensation
The capping of claims for loss of income and support
Pecuniary damages have been limited by section 17(4)(c) of the
RAF Act. Compensation for loss of income and support is calculated
(irrespective of actual loss) on the basis of a maximum annual
income which is currently set at R182 047.00 per annum.
This amount will be adjusted by the Fund on a quarterly basis to
counter the effect of inflation.
The Constitutional Court held that the capping of claims for
loss of income and support advances a legitimate governmental
purpose to make the Fund financially viable and sustainable and to
render the scheme "transparent, predictable and
The implication of this provision is that if any road accident
victim's income exceeds R182 047.00 per annum, he or she will
not be able to claim that amount from the Fund. This provision will
therefore have an adverse affect on high income earners who will no
longer be able to claim for their actual loss of earnings.
The impact of this provision can be reduced in the following
Income Protection policies can protect actual income lost above
R182 047.00 per annum (limits are set by insurers); and
Life Cover to cater for loss of income upon the death of the
road accident victim, the proceeds (a lump sum payment) is for
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Generally, Garnishee proceedings is done in two different stages. The first stage is for the garnishee order nisi, while the second stage is for the garnishee order absolute.
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