From 1947 until 1996 the owners of motor vehicles were required to buy road accident insurance that indemnified them against claims for damages filed by innocent third parties. The insurers were private insurers that determined the premiums and managed the claims.

The system worked. In 1996 the RAF was established as a single state owned insurer and instead of vehicle owners paying for their own insurance, a levy was imposed on fuel sales to fund the RAF. The fund widened its scope to compensate anyone injured, whether negligent or not.

The idea was that by compensating everyone, there would be no more wasteful and costly litigation to determine who was at fault, the only question to be answered was how much compensation should be paid. This seemed like a good idea to save money by reducing legal costs.

It never worked out that way. The fund appointed about 140 connected law firms to deal with claims on its behalf, they were paid for their work opposing claims and not on the basis of results. The longer and more costly the process the more money they earned. Legal costs exploded

Of course the longer the RAF lawyers could drag a claim out, the costlier and more expensive it got for the claimants and their lawyers, so the legal costs increased exponentially. Higher costs didn’t bother the RAF because if they needed more money, they bumped up the fuel levy.

We now find ourselves in a place where the fund has a deficit of some R330 BILLION. The panel of RAF lawyers has been fired and claims will now be dealt with internally, although the capacity to do so has yet to be built at further enormous cost.

The other innovation to curtail costs has been to slash the compensation amounts payable to road accident victims. This brings us full circle to the point where those concerned about the risk of death or injury to themselves or their family members need to buy private insurance.