Road Accident Fund’s faux outrage beggars belief

Correspondence emanating from an organ of state should be professional, respectful and rational – not petulant and sarcastic.
The pond of ready money is inhabited by legal piranhas and dysfunctional on so many levels that it can never be fixed, says the author. Image: Moneyweb

The Road Accident Fund (RAF) last week published a media release titled ‘The battle for the soul of the RAF – it is never about the claimant, it’s about an attempt to maintain a Lawyers’ Enrichment Scheme!’.

This relates to an ongoing tiff being played out in the courts between the RAF and its panel attorneys.

The RAF media release is ostensibly a rebuttal to a recent news article quoting Gauteng High Court Judge Wendy Hughes. This piece is not a critique of Her Ladyship’s judgment.

The media release is peppered with adjectives and exclamation marks and comes across as nothing more than the tirade of a petulant schoolchild with puerile phrases such as “uncle lawyer” and “the little girl who remains vulnerable”. Correspondence emanating from an organ of state should be professional, respectful and rational – not sarcastic.

Who will guard the guardians?

This journalist has been investigating the RAF, its panel attorneys and the plaintiff attorneys continually since late 1998. Attorneys don’t cause the motor vehicle crashes but have for years been the only ones who can facilitate access to the RAF, making them the sole gatekeepers to this social security fund.

The RAF

Its enabling legislation states that a plaintiff may not commence legal proceedings until 120 days have lapsed. Experienced former RAF claims handlers have told this journalist that it is pre-eminently possible to settle claims internally within the 120-day period. The RAF presently seems to lack the motivation and skills to do this.

A survey of RAF matters reveals that once a plaintiff has issued summons against the RAF it does not even brief its own attorneys properly.

They have to ask the plaintiff’s attorneys for a copy of the RAF claim lodgement documents simply because the RAF briefed its attorney without providing its own dossier. The RAF then has the cheek to complain in recent court documents about the number of photocopies that its attorneys make.

Read: The RAF has been technically insolvent since 1981

The RAF’s panel attorneys

This journalist is frequently shown party and party bills of costs (a fancy name for an itemised litigation invoice) presented by a plaintiff’s attorney for work that has never been done. The RAF has some outstandingly good panel attorneys. Yet some of them fail to assess the bill of costs that has been presented to the RAF. It’s a simple matter. All that is required is that the RAF or its attorney be sent to inspect the plaintiff’s file and make an offer. This, it seems, is too much effort.

This journalist has in the past year seen bills of cost where the RAF or its panel attorneys overlooked R50 000 or more in fraud in each matter.

Report it to the RAF, you say. This journalist recently reported it to the highest echelons of the RAF, yet the fund still faffs around in the face of overwhelming evidence.

Gone are the days when a plaintiff’s bills of costs were vetted by an energetic, qualified in-house RAF team.

An eagle-eyed former in-house RAF cost consultant told this journalist that the team once had doubts about whether the plaintiff’s lawyers went on an in loco inspection two years after an accident and took 15 photographs. An appointment was made to inspect the attorney’s file, and indeed 15 photographs had been taken on the scene.

The attorney had some difficulty explaining why, two years after the accident, the damaged vehicle was still on the scene and the injured bodies still lay on the road. (The attorney had not visited the scene but had copied the photographs from the South African Police Service report and passed them off as his own in order to fraudulently inflate his fee.)

The plaintiff attorneys

Back in 1998 I was naive about RAF claims. I thought these were done pro bono by attorneys. Then my eyes were opened when a whistleblower and a journalist exposed Hoosain Mohamed Attorneys of Cape Town in February 1999. The commoditisation of RAF claims had become a veritable cottage industry.

In April 1999 the law changed and allowed for attorneys to act on a contingency basis. Attorneys were previously prohibited from taking matters on contingency. The client had to pay the agreed fees regardless of the outcome. The purpose of the Contingency Fees Act (CFA) is clear: “Notwithstanding anything to the contrary in any law or the common law, a legal practitioner may, if in [their] opinion there are reasonable prospects that [their] client may be successful in any proceedings, enter into an agreement with such client … ”

The CFA has two scenarios:

  • Firstly, where the attorney charges their normal fee; and
  • Secondly, where the attorney can charge a success fee of up to 100% on top of the ordinary fee.

The ordinary fee is determined by the process of taxation. It is clear that the second scenario contemplates a degree of risk.

I can tell you unequivocally that there is not a single attorney that would ever take a matter on contingency where there is any risk involved – so why would they double up on the ordinary fee? The RAF endorses this doubling up practice.

Mythical agreement

Human nature being what it is, the Law Society of the Northern Provinces (LSNP) – contrary to the advice of two respected senior counsel and the law – concocted a mythical agreement for its members: The Common Law Contingency Fee Agreement. The courts were unimpressed and struck these down time and again as being illegal. Those who used the LSNP-sanctioned illegal agreements were not laid by the heels by the RAF or by the criminal justice system but by the good work of a few small-time law firms.

Read: High Court clarifies contingency fees debate – again

Attorneys who used these illegal agreements were protected and encouraged by a former LSNP president and an LSNP councillor – both of whom are currently the most vociferous RAF panel attorneys, and whose firms have recently sued the RAF.

The latter sits on the Judicial Service Commission, which interviews prospective judges and recommends to the president of the country who should be appointed.

Read: Constitutional court decision forces law firm to allow inspection

The RAF is dysfunctional on so many levels that it can never be fixed. The more so because the large and easily accessible pond of money is inhabited by legal piranhas. Perhaps now is the time for the minister of transport to grasp the nettle firmly and call time on the RAF, and thus clean out the Augean stables.

Read: Road Accident Fund hits the wall

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Such is the case for every government department and SOE. I can not off the cuff think of any department or SOE that is functioning properly and effectively. No, none.

The ANC is stealing all the SOE’s and the govt departments blind.

The road accident fund was broken before the ANC intervened.

I would like to see a calculation that shows all the money paid out over the last 25 years and what percentage over the last 25 years years went to victims as opposed to what percentage was paid to legal and legal fees. The RAF has made some very wealthy people and I am not talking about accident victims.

I have long thought the RAF should be stopped.

15000 road deaths per year (not sure on injuries) and a further 35 000 accidental deaths, including murders.

Why dont the 35 000 accidental deaths or other near death accidents get any form of compensation?

Wow. So is the RAF like steinhoff or more like Sasol?

Another transformation success story.

this sector (personal injury law or ambulance chasing) must surely be the most embarrassing part of the entire legal industry. A few years ago a wealthy european tourist got paid around R400m (imagine the lawyer’s slice of that action).

Travelling by car in Africa carries risk. You travel, you assume that risk.

Which other countries in the world have a system like this? China, Brazil, the US, Germany, Japan?

The R500m RAF payout was to Joachim Schoss from Switzerland, the CEO and managing partner of Beisheim Holding Schweiz. He lost his right arm and right leg and suffered renal failure and lung damage. He was 44 years old. A car driven by Muzuvukile Benton Nana collided head-on with Schoss’s motorcycle. Nana was charged with reckless and negligent driving, failure to remain at the accident scene, and failure to determine injuries. Nana was fined R500. The claim was settled by the RAF’s reinsurers.

Even worse : traveling by motor cycle is a huge risk (I have the metal pins to remind me). When I travel to Europe I must have 30 million insurance. If I told my insurer I was going motorcycling in the Alps – imagine what would the premium increase be!

I think the accidental tourist claimed R2,500,000,000 initially?

RAF benefits should imho be capped and defined in similar fashion to standard personal accident insurance. R5k for a finger, R10k for a thumb, etc etc. Fast, efficient, sorted.

If I recall correctly, the tourist all but bankrupted the RAF (at the time). Think it was closer to billion(s) paid out. Dumb system.

when you have a bunch of ars….s running most government institutions what can you expect!!!
They are bled dry

RAF is not sustainable in SA in one form or other. All people should have third private party insurance . Why are people allowed to drive without third party insurance?
SA is one country with highest road carnage. This one like all other failed SA freebies should be scrapped!

Just say Bobroff, then everybody will understand te RAF.

The system worked well when the insurance companies ran it instead of the RAF.

The RAF is about R200 bn in the red. When it was suggested to Dep Minister of Transport Jeremy Cronin that the insurance companies should run the RAF again, he gave the ideological answer – the State cannot hand institutions back to the private sector.

A hole of R200 bn is not enough to convince the communists of their folly.

Really puzzled at the point of Tony Beamish’s article.

He begins by calling out the RAF for intemperate language (this is a cardinal sin?).

Then the more he continues, the more it becomes apparent that the problems at the RAF are merely symptoms of where the REAL problem is. Which is actually the Legal Profession. Wow! NO SURPRISE at all to anybody that has dealt with this “profession” at any level!

Greedy to the point of rapacious. Unethical to the point of rampant dishonesty…

The Legal Profession (and the personal accountability of its members) needs a Draconian overhaul from TOP to BOTTOM.

Urgently.

The RAF fired all their panel attorneys, and appointed the already overburdened state attorney to deal with the litigations where settlement are not possible.

Many good law firms closed their doors and retrenched personnel. Working previously for Plaintiff’s and defendant’s attorneys, I can state as a fact that the claims handlers are some of the most difficult people to reach. The RAF is a night cart on top of the hill, about to fall over.

I don’t understand why we have the RAF in the first place, rather than mandatory third-party insurance, like they do everywhere else.

The Press release by the RAF, referring to their panel attorneys as “uncle lawyer” and the road accident victims as the “vulnerable little girl”, In a time where gender base violence is a serious problem in our community, is in my view obnoxious and offensive.
I truly hope some of the Panel attorneys will stand up and sue the RAF for the defamatory nuance.

This organization is full of incompetence personified

End of comments.

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