The Palestinian Road Accident Casualties Compensation Fund: Legal Framework and Social Role

a legal encounter on The Palestinian Road Accident Casualties Compensation Fund: Legal Framework and Social Role. Held with support from the Konrad Adenauer Stiftung (KAS)  Palestinian Territories, the event brought together interested members of the legal community, academics, and representatives of insurance companies. Students of the Faculty of Law and Public Administration at Birzeit University also attended the legal encounter.

In her opening statement, Ms. Niveen Abu Eid, Director of the Legal Department at the Palestinian Road Accident Casualties Compensation Fund (PRACCF), provided an overview of incorporation of the PRACCF. Established in accordance with the Palestinian Insurance Law No. 20 of 2005, the Fund replaced the Palestinian Road Accident Victims Compensation Fund (PRAVCF), which had been created by Presidential Decision No. 95 of 1995.
Ms. Abu Eid explained that the PRACCF’s vision “focuses on providing social protection in Palestine.” The Fund provides compensation to road casualties, who are not covered by insurance in line with the provisions of the Palestinian Insurance Law. In its current role, the PRACCF is part and parcel of the insurance sector components in Palestine. Basically, the Fund seeks to contribute to developing the insurance sector and raise community awareness by highlighting the need for commitment to laws, particularly the Traffic Law No. 5 of 2000 and Insurance Law No. 20 of 2005. The PRACCF also plays a role in providing reparation in case insurance coverage is not available to compensate for bodily injuries resulting from road accidents.

Ms. Abu Eid also elaborated on the legal framework, which governs functions of the PRACCF. Articles 170-177 of the Insurance Law regulate the PRACCF operations, independent juridical personality, and board formation. The Law also provides for cases where an injured person is entitled to demand compensation from the Fund. Article 173 of the Law lists cases where the PRACCF is liable for compensation. These include cases in which the driver who causes an accident is unknown, the driver is not in possession of an insurance under the provisions of the Law, etc. Article 175 also provides that the PRACCF is entitled to claim the amounts it pays from certain persons, who are listed by the article.

Ms. Abu Eid concluded that the PRACCF “is currently impeded by many challenges, most importantly illegal (i.e. written-off and unlicensed) vehicles. Compensations resulting from these illegal vehicles account for almost 70% of cases handled by the PRACCF. In addition to potential seizure of the Fund’s properties, the PRACCF finds it difficult to claim the amounts it pays.

In his presentation, Mr. Waddah al Khatib, PRACCF Director General, highlighted the social role the Fund plays, particularly when insurance companies are liquidated. The PRACCF also compensates persons who sustain bodily injuries in cases where insurance coverage is not available.
Mr. Khatib explained that “the PRACCF’s financial resources are clearly identified by Article 172 of the Insurance Law.” These comprise a percentage of the fees of the compulsory insurance as set by the Palestinian Capital Market Authority for each document. A regulation of the Council of Ministers designates 15% of vehicle insurance amount to cover bodily injuries.

According to Mr. Khatib, compensation for bodily injuries in Palestine is among the best throughout Arab countries. With absolute liability, compensation for these injuries is indefinite. Despite the fact that the PRACCF revenues are limited, a maximum ceiling is not set for compensations.
Reiterating Ms. Abu Eid’s conclusion, Mr. Khatib emphasised that the most significant challenge to the PRACCF “lies in written-off and stolen vehicles.” He confirmed that legal solutions are needed to cope with this obstacle. In addition to violating the law, cases associated with these vehicles deplete the Fund’s resources.

In the ensuing discussion, the audience raised several questions. Participants inquired whether an accident caused by an illegal vehicle can be considered as a road accident in line with the provisions of the Insurance Law. They also discussed the solutions proposed the address challenges to the PRACCF operations.