Court action puts RAF at risk of collapse

THERE is a real risk that the Road Accident Fund could collapse and its R40billion deficit transferred to the public if sections of the RAF Amendment Act were to be declared invalid, the Pretoria high court heard yesterday.

THERE is a real risk that the Road Accident Fund could collapse and its R40billion deficit transferred to the public if sections of the RAF Amendment Act were to be declared invalid, the Pretoria high court heard yesterday.

Any immediate declaration of invalidity of portions of the act would have disastrous effects, Steven Budlender, appearing for the RAF, argued.

Budlender joined lawyers for the transport minister in urging the court to dismiss outright the application by the SA 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 R25000 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 R40billion deficit to the South African public, 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.

The application continues. - Sapa

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