Judge condemns attorneys and Road Accident Fund for not protecting child claimants

Judge Denise Fisher in the Gauteng High Court says she shudders to think what has occurred in thousands of cases
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  • A judge has uncovered maladministration, and possibly also fraud and corruption, in Road Accident Fund (RAF) payments involving child beneficiaries.
  • Attorneys are not protecting the interests of children who are due settlements.
  • The judge has reported an attorney and a court appointed “curator” to the Legal Practice Council.

Judge Denise Fisher in the Gauteng High Court has criticised the Road Accident Fund and some attorneys for acting unlawfully when concluding settlement in matters involving children, with no proper scrutiny of their circumstances or of who actually looks after them, and who will protect their financial interests.

“We are in an era where some attorneys who operate in the RAF environment seem to believe that they can engage with the courts in a game of cat and mouse aimed at avoiding court scrutiny of their settlements.

“Little heed is paid by the RAF to the protection of child claimants when attorneys are involved.

“The unchecked flow of funds creates an incentive for fraud, corruption and maladministration,” the judge said in a recent ruling in which she reported an attorney and a court appointed “curator” to the Legal Practice Council.

Read the ruling.

Fisher said she was recently presiding over the RAF “settlement court”, when two matters came to her attention, both involving children. In both matters, she had been asked to simply rubber-stamp the draft orders, but she discovered after some interrogation that the money had already been paid out by the fund to the attorney, who had already deducted her 25% fee, in terms of the Contingency Fee Act.

The Act, she said, did not now allow for this. All settlements done within its terms, had to be made an order of court and fees had to be taxed.

Being aware of the fact that since mid-2020, the RAF had embarked on a policy to “settle rather than run” its cases as a cost-cutting measure, she decided to dig further.

Both matters were being handled by attorney Sonja Meistre “but she is not alone”, Judge Fisher said.

Others had also sought to avoid judicial scrutiny resulting in a court directive earlier this year that all settlement agreements had to be made an order of court, before taxation of costs could occur.

“It was for this reason that attorneys such as Meistre, who have entered into unlawful settlement agreements with the RAF now have no option to seek orders post facto the performance of the unlawful settlement agreements,” said the judge.

When the two settlement agreements were presented to her, the terms were as if no payments had been made as yet, but Judge Fisher unearthed the truth.

And she was equally perturbed by the lack of detail about the circumstances of the child claimants saying she shudders to think what has occured in thousands of other cases involving children, especially in “non litigious” matters where the claims are not handled by attorneys, but directly with the fund.

One must question what she did for a fee of more than R336 000

In matter A, the mother of two children, then 14 and seven, died in an accident and the claim was lodged by their aunt. The fund paid out R1.3 million to Meistre, who deducted 25% for her fees. While the money remained in trust, she had paid out R10 000 to the aunt, apparently for the children.

But the documents put up with the settlement agreement were defective, Judge Fisher said. One of the children’s birth certificates was irregular and there was no evidence that the aunt was who she said she was.

It later came to light that she was not the caregiver and that the children lived with their grandmother.

The application was “garbled and incomplete” and a report from a belatedly appointed curator was only two sentences of “hearsay information”. No-one had interviewed the grandmother or the children.

This was only done at the judge’s insistence. A third affidavit was filed by the curator which “suggests a terse exchange with the grandmother and the children”.

“When her conduct was placed under scrutiny, Ms Meistre for the first time, obtained photographs of the children’s living conditions which suggest they live in poverty but their grandmother is doing all she can. One must question what she did for a fee of more than R336 000.

“The children have been deprived of their maintenance and their grandmother of assistance for a period of more than two years. This is unconscionable,” the Judge said.

In claim B, the application was lodged by the mother of two children, following the death of their father.

Documents put up were “fraudulent”, including the father’s ID document and his death certificate.

Judge Fisher insisted that the mom and the investigating officer give evidence and satisfied herself that it was indeed their father and he had died in an accident.

It also emerged during the hearing that the children were living in Zimbabwe.

“Again, the claim, R428 503, was paid to Ms Meistre and she deducted her fees, without any taxation of costs, before transferring the balance to the mom.”

“There is nothing to suggest that she [the mom] will not do all necessary to preserve the funds for her children and I was given proof that she had invested the money.

“However, the potential for prejudice and conflict of interest arises in each of the cases.”

The judge said that while an overhaul of the system is underway “these two cases bring into sharp focus the immediate systemic failures”.

“Where children are involved, the duty of an attorney to do more than merely take the hearsay evidence is patent. One would expect them to be interviewed in an authentic way … A child is entitled to the dignity of not merely being a name on a piece of paper.”

Judge Fisher ruled that in children’s claims against the RAF, it is incumbent on the child’s attorney to provide at least the following information to the court: The relationship between the plaintiff and the child; the circumstances leading to the plaintiff caring for the child; the financial circumstances of the plaintiff and his or her ability to safeguard and administer the money; the personal and financial circumstance of the child; the justification for the vehicle agreed to administer the funds; the views and the wishes of the child concerned.

She said the determination of who is the best person to deal with an RAF claim on behalf of the child is a matter of inquiry and not assumption, and that courts, attorneys and the RAF should not be tempted to ignore the realities of the child’s situation.

A court must inquire into the protection of the funds, and consider the use of the Guardians Fund to protect their interests.

She declared both settlement agreements to be invalid and ordered the attorney to produce a taxed bill of costs within 15 days.

© 2021 GroundUp, this article was first published here.

COMMENTS   8

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Wow… you don’t say

This attorney unlawfully received her 25%! commission fraudulently, failed to unlawfully subtract tax and has in conflict with the expected standard of a practicing attorney. So what happens now?

While the actions of the attorney are clearly either incompetent or that of a criminal that must be punished, your comment is done from a position of severe ignorance. It is not a 25% comission. It is a 25% cap as to the fees, to simply take 25% is unlawful unless you have a Attorney-client bill of costs, which contains all the relevant fees and expenses, thet sais you can. Also having something “taxed” in litigation is not the same as paying SARS what it is due. To tax the costs of a matter in litigation means that they check your fees and expenses and make sure that it isn’t inflated. This is a necesity because the party that has to pay the other party usually has to pay costs as well. Do you want to pay part, of someone’s inflated fees? As to what happens next is that the LPC will investigate the Attorney in question. This investigation will entail a trust audit etc etc etc. She seems like way too much of an amateur to survive a run in with the LPC, so I forsee she will be struck from the roll of practising attorneys should the LPC conclude that she is not fit and proper. If you want to see the people that are immune from such oversight, google RAF attorney. The first adds you see are the untouchable ones. They also usually sit on the disciplinarty comitees of the LPC.

Good answer. But what then is the point of a contingency fee agreement?

David Brent, the concept of a contingency fee agreement in South Africa originated from the common law. Before the constitutional amendment to the contingency fees act in 1997, Attorneys like Ronald Bobroff simply took 40 percent of a clients capital awarded to them regardless of the level of work they put into the case. The purpose of the constitutional amendment was to erase this practice and to put in it’s place the following:
1. A system whereby the fees of the attorney is capped at 25% of the capital awarded. The attorney is entitled to no more than this, if the attorney were to keep the party and party costs if a contingency fee agreement is in place, that attorney has breached the act and is guilty of defrauding his or her clients.
2. The system is meant to force the attorneys to prove how much work they did. If they want 25% but only did 10 hours worth of work, they would be stopped by the act.
3. The contingency fees act also provides that the attorney is allowed to charge double their hourly rate, which might sound like a fair sum, but it catches up to the 25% barrier fairly quickly and therefore this usually negates the attorney from receiving the full ammount they would have received.

It is worth noting that the contingency fee has come under strict scrutiny over the past few years due to Ronald Bobroff challenging and failing to overcome said contingency fees act. He was of the opinion that the common law rate of 40% supercedes the constiution and it’s mandated rate of 25%. We all know what happened to him.

It is worth noting that due to this scrutiny many attorneys have opted to use a mandate-and-fee agreement. It works the same as a contingency fee agreement but does not have any of the legal restrictions. The attorneys under a mandate-and-fee charge their NORMAL hourly rate, and it is an agreement between the Attorney and the client on where the cap lies. I’ve seen mandate and fee agreements for 25% and others for 49%(It would have to be a huge fight in court for it to reach that level though). The real clever bit about a mandate-and-fee is that it states the attorney is allowed to keep the party-and-party costs which they previously couldn’t by using contingency fees.

@Pretorian

It seems the really “clever bit” about the new “mandate-and-fee” strategy is that it’s a sly scheme to get around – and DIRECTLY subvert – the very principles of the contingency act?

Pretty sure Bobroff and fellow scumbags would have been delighted to have engineered this little alternative “development” themselves.

Get to eat all the pieces of the cake, and still have it all afterwards!

Seems even WORSE than before.

Nice move, attorneys!

I have even deeper respect for this “profession” now!

/s

Nice to know that there is at least one judge who knows her stuff and takes the time to ensure compliance with the law. In a country shattered by corruption, a shining light.

This blatant “verneurkery” needs a MUCH more vigorous response when discovered.

I have long argued that it is fundamentally wrong that professional bodies should EVER be allowed to investigate or discipline their own.

Doesn’t matter whether it’s attorneys, medics, estate agents, financial advisors etc. Allowing this allows a major ethical conflict of interest.

But the set up is as it is.

So my proposal is that when incidents like these are belatedly discovered by people or bodies other than the local chapter of the professional disciplinary body, then THAT body is ALSO on the hook for SEVERE disciplinary censure!

Clearly, their procedures and promised oversight has been found wanting, and there HAS to be personal consequences for ALL the members of this “local chapter” of the professional body.

In my opinion, the appropriate censure would be that the fees this attorney charged should be automatically forfeited in its ENTIRETY.

And that the local professional body – supposedly, but clearly USELESSLY, protecting the interests of wronged clients, should ALSO be THEMSELVES fined the total equivalent of the unethically claimed fees.

And finally, precisely because of this abject “failure-of-governance” by a committee supposedly appointed to prevent this very nonsense, this committee must be disbanded, and a new committee comprised of entirely new candidates, must be forthwith reappointed.

End of comments.

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