WHAT IS A SETTLEMENT AGREEMENT?

An offer is a proposed agreement between two or more parties and may only become a binding contract once the terms and conditions contained in it are accepted by the person to whom the offer is made.

For purposes of the Motor Vehicle Accident Fund Act, offers communicated to the claimants are intended to settle the claim made on the Fund by a person who has suffered loss as a result of a motor vehicle accident. Such loss comes about either as a result of a person being injured or being a dependent of a person killed.

The basis for compensation is to place the person involved in the motor vehicle accident, as far as possible, in the position he/she was prior to the accident.

Compensation is made out to people who personally sustain loss or bodily harm and secondary victims (people who sustain loss due to the injury or death of another). Typically the Fund will offer to pay for the medical expenses that have been incurred to treat injuries. It will also offer to contribute towards the cost of the funeral of a person killed. It will offer to pay monies to maintain the dependants of a person who is killed. It will replace income lost on account of an injured person no longer being able to work on account of the injury.

Where the loss is going to occur in the future as is the case where a child needs to be supported or an injured person cannot work anymore the Fund provides what is known as "an undertaking". This is simply an offer that the Fund will provide the monies involved monthly or in installments. So as regards income, the Fund offers to continue paying the injured person's salary as if the accident had not occurred. The same applies to medical expenses. The Fund "undertakes" to pay for the medical treatment as and when the injured person receives the treatment.



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