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This article is taken from the May 2001 Phatlalatsa newsletter

 

Research into lump sum payments for the RAF Commission

Senior partner Ross Jennings has just completed a fascinating project for the RAF Commission.

The Road Accident Fund Commission was established by the State President to inquire into and to make recommendations regarding a "reasonable, equitable, affordable and sustainable system" for the payment of compensation or benefits to the victims of road accidents in South Africa.

As a part of their comprehensive investigative process, the Road Accident Fund (RAF) Commission approached Strategy & Tactics to undertake research into the expenditure of lump sum payments made by the Fund to the victims of road accidents in South Africa.

Ground-breaking research

World-wide, research into this issue is minimal. One of the reasons for this is the sensitive nature of the information that is sought; and the fact that claimants are not obliged to, or may not be able to, account for the expenditure of their lump sum payment.

The Road Accident Fund provided access to information from their database, and ten claimants residing in Gauteng (for ease of access) were selected from the database to pilot the questionnaire. It was initially hoped that information on claimants from 1995 onwards could be obtained. However, the database only started capturing information from the end of 1997. As a result, a decision was taken to concentrate only on claims from 1997 (a total of 112 claims). Due to the difficulty of tracing claimants, it proved necessary to extend the focus of the study and information on all claims above R250 000 paid in 1998 were added to the sample frame.

Survival or assistance?

The Road Accident Fund, a parastatal, presently determines the compensation to be paid to a road accident victim. The compensation is allocated across a number of categories according to the damage the victim has suffered.

These categories include medical expenses, loss of earnings and general damages for pain and suffering. Most frequently, the compensation is paid out by way of one lump sum to the claimant. This payment is usually made through an attorney.

Without pre-empting the release of the Commission’s report later this year, the main finding was that claimants were largely ignorant of what the lump sum payments had been targeted at. As a result, the lump sum payment was seen as a means to survive, as a way of getting over the impact of the accident or a way of securing the future for themselves or their children. Given the socio-economic status of many claimants, this financial resource appears to have gone some way to ameliorating a desperate situation.

While the uses that the lump sum payments were put to may have been financially prudent, it did question the resources used by the RAF and the various legal representatives to dedicate particular portions of the payment to particular categories.

"My enigste seun is 9 jaar oud en kruip in huis rond. Geen geld kan hiervoor vergoed."

"They’ve taken too long to settle the claim and I am still unaware about many things regarding the claim."

"I think the lawyers and the legal games are the problem with the Fund."

"It helped me a lot to provide for the future with my husband no longer with us."

The final RAF Commission report will be released later this year.

 

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