Road accident fund faces collapse

THE Road Accident Fund faces collapse — and claimants will be left high and dry — unless President Kgalema Motlanthe quickly corrects mistakes made by his predecessor.

A landmark Constitutional Court ruling handed down yesterday states that former president Thabo Mbeki “made a genuine and bona fide mistake” when he changed parts of the Road Accident Fund Amendment Act in 2006.

Mbeki wanted to appoint the RAF board and CEO, but this could be done only by amending the act. But because it was found that Mbeki erred when making the amendments, his appointments of the RAF board and its CEO have been declared invalid.

The beleaguered fund — which recently made headlines when Swiss Joachim Schoss successfully claimed R500-million from it — is a statutory body that compensates people injured, or the dependants of those killed, due to negligent driving on the roads. It is funded by a levy on fuel.

Marius Kruger, a Cape Town attorney, brought an application to the Constitutional Court to “clarify” the act, saying it was flawed.

“The act could not be interpreted — [Mbeki] set out regulations when there weren’t any. It became confusing as to how people should claim. He also appointed a board and CEO when he didn’t have the power to.”

Now the highest court in the land has given the president 30 days in which to rectify the situation.

At the end of its financial year, in March, the RAF paid out R9-billion in claims and had a total of 355000 claimants.

The fund’s CEO, Jacob Modise, said if the president did not comply with the Constitutional Court’s ruling within the given time, the RAF would cease to exist.

“ The court ruled that the appointment of the board will remain valid and all decisions made since 2006. This was done to prevent the chaos that would have unfolded,” he said.