0 Road Accident Fund Parliamentary Portfolio Committee on Transport November 5, 2003

1 Future medical expenses… INTENDED BENEFIT: UNHINDERED ACCESS TO RELEVANT MEDICAL TREATMENT RAF to pay claimant or service provider on submission of account in prescribed form Claimant does not have to pay before treatment, if claimant has no resources Pre-authorization to be given if medical service providers doubt claimants’ capacity to pay Issue tender for integrated medical management, including dedicated 24/7 call centre for medical undertakings

2 … Future medical expenses No apportioned Undertakings: create debit facility SOLUTION TO CURRENT PROBLEM OF APPORTIONMENT INADVERTENTLY RESULTING IN NON ACCESSIBILITY OF MEDICAL TREATMENT AND DEVICES Calculate lump sum – RAF liability for future medicals Deduct the agreed apportionment = net amount available Remaining amount as Call Account, managed by the Fund Claimant to prioritise needs Costs incurred (net of any discounts) charged to account Residual balance to be CPI-adjusted annually

3 Other interventions in medical matters REMOVAL OF ADMINISTRATIVE BURDEN ON THE CLAIMANT Step up case profiling of serious, but dormant cases with an undertaking Issue pre-settlement undertakings to grant seriously injured claimants access to medical care, ibid recent spate of heavy vehicle accidents Expand the Patient Outreach Program Build managed care capabilities through the RAF tariff RAF to negotiate improved deals (e.g. discounts) with service providers

4 Medical tariff Tariff to be prescribed by the Minister Link tariff to adequate and appropriate standards of care, e.g. duration and quality Tariff to provide for acute, sub acute through to rehabilitation, therapy, assistive devices, medication, care-giving, adaptation to homes

5 Methodology: future loss of income/support NO REDUCTION IN TOTAL PAYMENT: TOTAL PAYMENT AS PER CURRENT LUMP SUM SYSTEM, WITH RELEVANT UPWARD ADJUSTMENTS = NO FINANCIAL DISADVANTAGE TO CLAIMANT Methodology for quantum determination to be standardized Regulations to prescribe how future loss of income and support calculated – for consistency and fairness Adjust installments annually as prescribed Monthly deposits into claimant’s bank account Fund to assist the “Unbanked” to open bank accounts

6 Future loss of income and support: operations Current capacity to handle installment payments Minor restructuring to handle monthly payments – establish a dedicated installment unit Decentralize administration of future income and support benefit

7 Systems: future loss income & support System allows for managed monthly payments of future loss of income and/or support Utilize Public Private Partnerships(PPP’s) to gain access to established infrastructure Integrated links to Internal Medical Profile becomes critical

8 Delivery channels: Future loss of income and support CLAIMANTS TO RECEIVE WHAT IS DUE TO THEM DIRECTLY Dedicated pay points e.g. Post Office and commercial banks Direct payments into claimants’ bank accounts Service providers (banks) to ensure access to periodic installment

9 General damages: ranges and percentages

10 General Damages Proposed lump sum : greater of R or 40% of general damages at settlement Rationale: 72% of all general damages paid over 3 years are below R Result: Seriously injured claimants and claims above R will receive 40% of total general damages at settlement Regulate payment of balance in installments over a maximum period of 7 years House, car and other adjustments shall already have been paid for under the Fund’s obligations for the claimants’ medical expenses as per prescribed tariff

11 General damages: operations System caters for installment payments Utilize Public Private Partnerships(PPP’s) with a view to “piggyback” on their established infrastructure

12 Collateral Benefits: to deduct All benefits from state sources (government safety nets) Sick and medical scheme benefits Social security benefits Obligation on Payee to declare benefits

13 Claims of ordinarily non resident claimants RAF’s total liability limited to the total claim costs and benefits as applied to an ordinary resident up to a prescribed limit. No claims and/or payments in a foreign currency permitted Campaign to reach tourists and foreign visitors to purchase private cover for foreign currency costs

14 Arbitration or Litigation Include current 120 days investigation and assessment period Include compliance with sec 19(f): statutory affidavit about events of road accident Claimants opt for Arbitration or litigation (Uphold access to court as Constitutional right) Arbitrator to be an external party, mutually agreed upon by the two parties

15 Arbitration Rules… Process and time frames of proceedings will be governed by Arbitration Rules Rules are specifically drawn up to resolve disputes quickly and constructively Rules reflect the intention of the Arbitration Act 42 of 1965 (as amended)

16 Management of the Arbitration workload Litigation Department will expand to incorporate an Arbitration component. Included in present business plan and budget provisions The Arbitration process will be externally managed by an independent service provider To be managed in the area (RAF Regional office) within which the claim is being processed.

17 …Management of the Arbitration Process Litigation and Arbitration cannot run as concurrent processes in the same claim. Should claimant elect to proceed via the Arbitration route, and a Summons has already been issued, the Summons should be withdrawn upon referral of the matter to Arbitration. Arbitration Rules provide that a referral to Arbitration has the effect of suspending the substantive rules relating to prescription of the claim.

18 Implementation of Arbitration amendment Arbitration process as an alternative method of settling disputes will apply to all claims in progress as at the date of commencement of this provision Claimants may choose to go to Court or settle claims via the Arbitration process Date of commencement to be proclaimed by the President