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Demerits en voyage: AARTO’s ‘iron fist’ jab at road traffic offenders and its insurance implications

Reading Time 4 minute read


According to a study by a UK based firm, South Africa has been named the most dangerous country to drive in the world.[1] The study considered a number of factors such as the number of deaths occurring on South African roads, the maximum speeding limits and the number of people who wear seatbelts.

The Administrative Adjudication of Road Traffic Offences Act (AARTO) and the AARTO Amendment Act, have sought to introduce a controversial demerit system. The main purpose of AARTO is to penalise drivers and fleet operators who are guilty of traffic offences or infringements, by introducing a system that will impose demerit points on them for traffic infringements. These demerit points may lead to the suspension or cancellation of licences, professional driving permits or operator cards.

The provisions under AARTO will be introduced in a phased approach and will be officially implemented on 1 July 2022 (subject to a court challenge).

On 13 January 2022, the High Court declared both AARTO and its Amendment Act unconstitutional and invalid. The Acts were found to unlawfully intrude upon the exclusive executive and legislative competence of the local and provincial governments, in that they both regulate road traffic and create a single national system to do so. Furthermore, the Acts were found to usurp the exclusive executive authority of local government to enforce traffic and parking laws at municipal level, because they create a system whereby traffic laws are enforced through a national system of administrative tribunals, administrative fines and demerit points.

It must be noted that the judgment was centred on a technical issue dealing with the powers of the different spheres of government to pass and enforce these laws, particularly at municipal level. Local government may still consider a demerit system.

Assuming that provincial government proceeds with a demerit system, there are a few important points to note from an insurance perspective.

The effect of the demerit system

The effect of the demerit system is that one could potentially lose ones’ driver’s licence for committing road traffic offences, while simultaneously accumulating a certain number of demerit points.

Schedule three of the AARTO Regulations sets out categories of violations of road traffic law into “infringements” and “offences”, assigns a monetary penalty and an associated demerit point to each charge. As an example, if you fail to comply with an instruction or a signal given by a traffic officer, you will receive one demerit point. Another example includes the failure to licence a vehicle with the appropriate registering authority, which will attract a further demerit point.

If a driver accumulates 12 demerit points, their licence will be suspended for three months. Each licence may only be suspended twice, thereafter, it will be cancelled.

An insurance perspective

Insurers should consider rewording policy wordings to cater for AARTO suspensions and cancellations, by including additional conditions and/or excesses or AARTO exclusions.

Depending on the policy wording, an insured may be required to notify the insurer if the insured driver’s licence is suspended or cancelled. In addition, the insured may also be required to notify the insurer if he or she is charged or convicted of negligent, reckless or improper driving. The claim of a motor insured may also be rejected, if the insured motor vehicle is driven whilst under AARTO suspension.

Further, the demerit system provides an opportunity for insurers to assess the risk of a prospective insured, at the pre-contractual stage. Underwriters will be able to determine if a prospective insured is a high-risk driver by having regard to their demerit status for purposes of determining coverage and the appropriate premium.

Lastly, the insurance policy may be drafted to require a continuous duty to disclose the changing circumstances of the insured over time i.e., incurring and losing demerit points over time.

What is the takeaway?

The demerit system and the subsequent cooperation by insurers should not be seen as punishment to South African drivers. If implemented properly, the result will mean safer roads for all and more responsible drivers.

This article is originally featured in the February 2022 edition of FANews on page 56.

This article was prepared by partner Deanne Wood and candidate attorney Giscard Kotelo.

[1] The research study was undertaken by international driver education company Zutobi.


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