Lawyers’ damning memorandum on the Road Accident Fund

Lawyers from 10 organisations have compiled a stinging joint memorandum about what they term a “crisis” at the Road Accident Fund (RAF).

The signatories include the Law Society of South Africa, the Black Lawyers Association, the National Association of Democratic Lawyers and the South African Medico-Legal Association.

They say they are speaking on behalf of the victims of road accidents and as officers of the court and custodians of the Constitution.

This comes after Deputy Minister of Transport Lisa Mangcu and the RAF each blamed lawyers for many of the RAF’s woes, including the large backlog in processing claims and long delays in paying victims and lawyers.

In the memorandum, the lawyers say the “narrative” blaming lawyers for the RAF’s problems is intended to distract attention from the ineptitude and negligence of the RAF, a taxpayer-funded statutory body responsible for covering the costs incurred by victims of road accidents.

They say the situation is so bad that accident victims are “literally prevented from lodging claims against the RAF”.

They want Minister of Transport Sindisiwe Chikunga to appoint a new RAF board. They say RAF CEO Collins Letsoalo does not have the requisite legal background for the job.

The memorandum is addressed to Chikunga, Mangcu, Letsoalo, Justice Minister Ronald Lamola, the RAF board, parliament’s portfolio committee for transport, the Standing Committee on Public Accounts (Scopa), Auditor-General Tsakani Maluleke, and the Legal Practice Council.

Critique

The lawyers say the RAF has failed to deal with victims’ claims promptly because it is largely dysfunctional, incapable of basic administration and engaged in unnecessary litigation while failing to heed several court orders.

The memorandum blames Letsoalo for much of the crisis, saying the CEO, by his own admission, has only a basic understanding of the law.

It points to several recent high court findings against the RAF in which judges slammed the fund’s board and CEO.

Read:
High Court orders RAF CEO to pay legal costs ‘out of his own pocket’
RAF appeals ruling that its non-payment of medical aid-covered claims is unlawful

The lawyers say the RAF’s decision to do away with the panels of attorneys that previously investigated claims and managed litigation and settlements has proven disastrous.

The RAF now uses state attorneys for representation, but the authors of the memorandum say this “outsourcing to the Department of Justice” has led to unnecessary delays and wasteful expenditure on litigation in cases where a settlement could have been reached.

The memorandum also criticises the RAF for:

• Refusing to cover expenses if these have already been paid by a victim’s medical aid, pointing out that this means victims lose out on medical benefits from their schemes;
• New requirements for lodging claims that have led to many claims being ignored, despite an Eastern Cape High Court ruling that the RAF should suspend the new process;
• Reversing established practice by refusing to cover foreign nationals who can’t prove they are in South Africa legally;
• “Habitually failing to timeously make payment”, leading to sheriffs of the court enforcing orders of execution against the fund; and
• Staff remaining on paid suspension despite rulings by the Commission for Conciliation, Mediation and Arbitration.

The memorandum asserts that basic office administration does not happen at the RAF and paints an alarming picture of an unresponsive organisation where emails go unanswered, claims are unacknowledged, documents are mismanaged and the helpline does not function.

Demands

The authors of the memorandum are asking for an urgent meeting with those responsible for the RAF.

They want Chikunga to appoint a new board and a suitably qualified CEO. They suggest that the attorney panel system be reconstituted or sufficient state attorneys appointed to handle RAF matters in court and that a dedicated RAF court be set up in Pretoria.

They also want the RAF to improve its system of dealing with claims and institute business basics – phone calls answered, messages returned and communications acknowledged – and to respect court orders and pay claims and bills on time.

The RAF, which is largely funded with money obtained from the fuel levy, has for years battled to meet its financial obligations. Its recent attempts to make its books look better by adopting a different accounting system attracted the ire of the auditor-general and Scopa.

Read:
RAF making great strides in its turnaround strategy, claims chair [March 2022]
SA cuts Road Accident Fund liability by R305bn [June 2021]

In addition to facing substantial claims, the RAF has lost money to unscrupulous lawyers who allegedly double-dipped on payments. This is being investigated by the Special Investigating Unit, which has also received reports about alleged maladministration and wasteful expenditure at the RAF.

A recent oversight visit by members of Scopa to the RAF head office in Pretoria found chaotic working conditions, including boxes of documents lying around on the floor and employees forced to function without office furniture and equipment as these had been seized by sheriffs.

Read:
Judge condemns attorneys and Road Accident Fund for not protecting child claimants
Road Accident Fund faces imminent implosion
Court calls for Road Accident Fund to be liquidated

The RAF board’s term of office has ended, but it has remained in place as a new one is yet to be appointed.

The RAF had not replied to GroundUp’s questions on the memorandum at the time of publication.

© 2023 GroundUp. This article was first published here.