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<< August 2005  | September 2005 |  October 2005 >>
RAF issue goes from bad to worse
Some extracts from a piece I have just written for the Gauteng Law Council:

It is always incredibly difficult to give an update on the latest Road Accident Fund news, simply because it changes from one day to the next. Having said that, this update was attended to in early September, and we do hope it is as up to date as possible - noting again that the latest information is available on our website at www.gautenglaw.co.za.

Starting perhaps with the less urgent news, we are still looking for a hit and run case suitable for appeal to the Constitutional Court after the Law Society has budgeted quite some money to take on a suitable case with regard to the 14 day affidavit issue. If you have a suitable case in this regard, please would you address a letter to Maude Ferreira, either via Docex 50 Pretoria, or per telefax on (012) 328-5170 or maude@lsnp.org.za and she will certainly get you in touch with the relevant parties. Essentially, the Law Society would cover the entire costs of the appeal and in the circumstances, they are looking for a suitable case.

Attorneys continue to struggle, on a daily basis, with getting settlement offers from the Road Accident Fund, alternatively having matters that have been settled paid and what we certainly do know is that more and more of these matters are being referred to the Courts, either as defended matters or in the form, where the matters have already been settled, of applications to compel payment. There can be no doubt that one of the effects of the constant anti-attorney press releases that were issued by the Road Accident Fund over the last few years and the coverage that then followed (which generally simply tended to repeat the press releases, but just quoting different paragraphs of same) has led, if nothing else, to a far greater public awareness of the Road Accident Fund than ever before. That in turn has led to greater and greater numbers of claims being lodged against the Road Accident Fund and whereas 10 years ago many members of the public had never heard of the Road Accident Fund, they certainly all have now and the increasing number of claims bears evidence to a strategy that backfired.

The parliamentary process has been rather difficult to follow. New draft Bills typically appear 1 or 2 days before public hearings and if there is one thing that is certain, there is no way that anybody can allege that there has been proper consultation with either attorneys or the public, in whatever the latest form of the Bill is, given that they change so quickly and so often. Hearings are postponed at the last minute, and then set down again at short notice, and it does seem that there is certainly an intention to move forward, at a more rapid rate, than was previously the case from the legislature.

Unfortunately, even though the issue affects all of us, as members of the public, very few attorneys have taken the time to consider the implications  when they should, particularly when they represent large companies. The bottom line is, if the common right to sue the wrongdoer for the balance of the claim that the Road Accident Fund will not pay out in terms of the new legislation is done away with, and challenged successfully in the Constitutional Court, as we believe will be the case, we will all be at risk to large claims should we be at fault and companies in particular would be responsible for the actions of their drivers. This was again illustrated in a recent Court case where a taxi owner was ordered to pay the balance of a claim, in a limited damages case, due to the fact that only one vehicle was involved, and that one single claim alone exceeded R600 000. You can only imagine the consequences if there are a number of people involved in an accident who are seriously injured. Of course, thats the one side of the story, and the other side what is going to happen to you if you are injured in an accident, can never work, or work properly again and your compensation is limited to R160 000 per year and your right to recover from the wrongdoer, if the wrongdoer even has the finances, is removed from you? Payments are likely to be in instalments and that will further prejudice you and/or your family if you should be injured in an accident.

An actuary, specializing in these matters, Gerard Jacobson, has estimated that to cover yourself for the additional income that you will lose, you will need to take out an insurance policy that he estimates, if enough people take it up, will cost you R1 000 per family per month. The problem with this type of top up insurance is that, needed as it is by a minority of the population, is that it is likely to be extremely costly because there will not be a high take up of the insurance, due to affordability, and of course, the risk taken on by the insurance company, particularly with high earners, is indeed most substantial when one only covers high income earners because by definition only they can afford to cover themselves with such insurance.

There are however other consequences that very few people give any thought to, such as the fact that at the moment, medical aids generally recover the majority portion of expenses they pay out in severe cases and these are typically guaranteed by undertakings by attorneys and then refunded to them. When they dont recover these monies, and realize the implications of a change in the system, and whether it takes 2 years or longer for them to feel the impact, you can rest assured that medical aid rates will jump possibly 20% - 30% per annum. The draft Bill provides for medical expenses incurred to be paid at a special tariff which will be laid down at a later stage. You can rest assured, if this tariff was going to be anywhere near private rates or even the lower medical aid rates, that there would not be a need for a special tariff and undoubtedly the medical aids are going to recover substantially less than they do now, with an all round cost implication for members.

Another consideration, particularly ahead of the 2010 World Cup, is going to be the excitement that foreigners, and there will be vast numbers in this country, will have when they discover that they are not going to be covered by the new Act and in a country where 10 000 people die a year on our roads, and 100 000 are injured (it puts 9/11 and the recent New Orleans disaster in a new light), that it is not going to add to the appeal of visiting South Africa. Our roads are amongst the most dangerous in the world, and if that is the price of a rapidly growing economy, then one of the counter balances has been a world class system of compensation for those who do suffer misfortune or worse on our roads.
One wonders what the 2011 Rugby World Cup organizers would think when it comes to making a decision as to who should host that event, or indeed the Olympic Council, if it comes to their attention that should they an Olympic Games in South Africa not only will their athletes and officials be at risk, but the tens of thousands of spectators who follow the event, some of whom will inevitably be injured, are going to have to take up additional, and extremely costly insurance, if they are to be protected while they travel around South Africa. Again, attorneys representing tourist agencies, travel agencies and these various organizations seem to have simply lost sight of the various implications and have not put forward objections or even comments.

The Automobile Association, of which many of us are members, has not even commented on the Bill and we are led to believe that they are not even aware of the latest developments. Again, how many of you are members of that organization and how do you feel about the fact that let alone not objecting to the legislation, they havent even commented! What could be more important to their members?

Unfortunately the Bill changes so often that they no longer even say that it is, for example, the 6th draft of the Bill or the 7th draft of the Bill, rather on each Bill they seem to publish a statement such as Bill as on 31 August 2005.

To however give you an idea as to some of the shocking provisions in the Bill as of 31 August 2005, Section 26 of the Act will be amended so as to allow the Minister to make regulations to prescribe any matter which may be "...expedient to prescribe in order to achieve or promote the object of this Act". Many would say - say no more, but sadly there is much more!

Section 21 of the Bill removes the common law right to claim for anything that the Road Accident Fund does not pay out, and Section 17 provides that the Road Accident Fund will only be liable to compensate for "a serious injury". What is a serious injury you ask? A serious injury is defined as being, in the draft of 31 August 2005, assessed "... on a prescribed method adopted after consultation with medical service providers". These medical practitioners will have to be accredited with the Road Accident Fund "... in the prescribed manner".

Sources close to the Law Society advise that almost every injury that you sustain in an accident, short of those that essentially ruin the rest of your life, will be excluded and you can rest assured that you will be receiving no compensation if "all" you suffer, as a result of an accident, is a few broken arms and legs and a couple of months only of hospitalization and no work.

This really is a very serious issue and we would appeal to you to contact the organizations involved, such as SAAPIL or the Johannesburg Attorneys Association, who have a free Road Accident Fund newsletter for all members at (011) 337-7269. We will also feature updates on our website. Speak to those you know, contact your clients and Parliamentarians, and keep yourself informed on the issue. All members are also urged to monitor their personal insurance cover policies in the near future.

Posted by Michael de Broglio on Tuesday 06-Sep-05   |  Permalink   |  0 Comments  Comments
Insurance industry excited about RAF changes
In one of today's Cape newspapers there is an article that the short term insurance industry welcomes the new RAF Bill. They try and keep it subtle, but end with whats important to them - the public will have to buy top-up policies - which as luck would have it, their members who supported the bill, will be able to provide.
Its all just about money, not what is good for SA or anybody else.
Posted by Michael de Broglio on Wednesday 14-Sep-05   |  Permalink   |  0 Comments  Comments
Bad service

Attorneys are often criticised for our service levels, and in recent times have been trying to compare our services to those of many other industries. It is amazing that, the example, you get restaurants with fantastic food, great service and words seems to spread so slowly, that there aren't that busy. On the other hand, you get institutions, places that made their name a long time ago that currently have more business than they can handle, and are expanding the premises to cater for more clients, but service levels have long since dropped past atrocious. A perfect example of that is a copy shopping in Dunkeld by the name of Fournos - which, at apart from having a name for chicken, has also seen its number of branches expand all over Johannesburg - including at the airport.

I've had some bad service there recently so I decided today to go at a not so busy time, after the mid-morning rash, and arrived at one o'clock when the store closes at two. I ordered my copy and roast chicken with salad, and when my coffee arrived the waiter advised me that they'd run out of ready chicken and what they had was raw, and still had to be cooked for quite some time. To be frank, a recent experience of waiting more than 10 minutes to be served, while the waiter picked at his skin in front of me, made me take a decision to leave a little faster than would normally be the case if I was not going to try something else, but not before an attempt to discuss it with a manager. I never found one, but my wife did, and he told her, the time being 1:10pm "I have already sold 200 chickens and at 2 p.m., so what you expect?". The attitude of the staff, chiefly the waiters of whom there are not enough in the first place, was pretty similar, so I guess I know where they got it from. The place is doing its best business right now, but as word of mouth spreads, you can rest assured that if steps are not taken, the future of the store is not as bright as its current attendance would show. I discussed the matter with a friend, and he told me he no longer goes there because of the poor service, and then I heard the same story from my mother. That's how buzz about bad service spreads, and is something we all have to be careful of, from the new receptionist who misses all of her calls to the staff member dealing with clients on the phone. Your business may be booming now, but if you give the kind of service that Fournos in Dunkeld is giving now, the boom days will soon be behind you. The picture, which we snapped today, shows the empty racks, and shelves at Fournos. The manager, predictably one would guess given the barren nature, asked us not to take any more.  Maybe he was just irritable, another male client was busy complaining too.

Posted by Michael de Broglio on Sunday 18-Sep-05   |  Permalink   |  0 Comments  Comments

Tomorrow its I think my 9th AGM, in terms of attendance, at the JAA.  It seems a long time ago that I was Chairperson, and its great to attend without having to give a speech.  I have of course the Gauteng AGM in 10 days time, and an annual report still to prepare there - which will remind me of the work involved!

Tomorrow my role is limited to introducing Ronald Bobroff.  I was asked to do the same thing last year, and our Chairperson, Hoossen Sader, then delivered a 3 minute warm up on Ronald's role in the profession etc.  I sat back, knowing there was nothing left to say, assuming he had forgotten it was my task, and looked forward to hear from Ronald on what he had to say.  As Hoossen wound up Ronald's introduction to the anticipated, "And now its time to welcome Ronald to the stage....", or at least thats what I expected him to say, as he had said all I could say on a short evening, he in fact announced, "and now Michael de Broglio will give us a brief introduction to Ronald..."

Hopefully, this time he leaves something for me to say!  Of course Ronald and I will see more than our share of each other this week - a 1.5 hour media meeting Monday, the JAA AGM tomorrow and the whole of Friday at the Law Society Council meeting mean we can't say, "haven't seen him for a while."!

Posted by Michael de Broglio on Tuesday 27-Sep-05   |  Permalink   |  0 Comments  Comments

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