Home South African Judge says Road Accident Fund should be liquidated or placed under administration

Judge says Road Accident Fund should be liquidated or placed under administration

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An application for its liquidation and for the removal of its chief executive Collins Letsoalo, is also expected to be heard next month.

The Road Accident Fund’s mission is to ‘rehabilitate persons injured, compensate for injuries or death, and indemnify wrongdoers in a timely, caring and sustainable manner’. Picture: David Ritchie/ANA

PRETORIA – A judge said that in his view, the Road Accident Fund (RAF) should be liquidated or placed under judicial administration as a matter of urgency.

“This is the only way in which this haemorrhage of billions in public funds can be stemmed and proper and valid settlement of the plaintiff’s claims be undertaken in the public interest,” Judge Denise Fisher said.

She delivered a scathing judgment this week in the South Gauteng High Court against not only the RAF and its officials, but also one of the biggest law firms in the country, a doctor who had submitted a medical report regarding a claimant, as well as an actuarial report.

All of these painted an inflated picture in two RAF cases which recently came before the judge.

She was in fact so concerned about the issues that she referred the conduct of De Broglio Attorneys to the Legal Practice Council, the doctor’s conduct to the Health Professions Council of SA and the actuary’s conduct to this profession’s watchdog body.

The judge further ordered that a copy of her judgment be brought to the attention of the transport ministry as well as to the National Prosecuting Authority.

Judge Fisher said in these cases before her, there are “strong suggestions of dishonesty or gross incompetence” on the part of all those involved.

She also questioned the route the RAF was following by no longer using the services of a panel of attorneys acting on its behalf, but settling matters in a bid to save money.

In both the cases, the judge concluded that the claimants’ lawyers, De Broglio, settled the matters for amounts which were so excessive, taking into account the facts of the cases – that the settlements were “constitutionally invalid and that it constituted irregular expenditure”.

This, while the RAF is cash-strapped and embroiled in a plethora of litigation – both by claimants who try to attach the fund’s assets to force payments, as well as the fund itself who want a reprieve from payments until it can afford it.

An application for its liquidation and for the removal of its chief executive Collins Letsoalo, is also expected to be heard next month.

The concerns of the judge were raised after two RAF matters were served before her. But before the matters could be heard, the lawyers told her that they were in settlement negotiations with the RAF. They later told her the matters were settled and she no longer had to concern herself with it.

They also did not want her to make the settlements an order of the court. The judge said this was perplexing because it was usually made an order.

She said it was probably to avoid judicial oversight of the amounts awarded. She commented it would not have cost anything if the settlements were presented to her.

At closer look, it emerged the settlements were totally inflated and that incorrect information was forwarded regarding the circumstances of the claimants.

In one case it was, among others, said the victim was so badly injured that she could never work again. She had suffered fractures which had healed and opted to resign from her job. The facts of the other case also did not warrant the settlement amount.

In each case the claimant received far over a million.

Even the RAF official whom the judge called to explain this, admitted these cases were over-settled.

The judge said these two cases were not isolated instances, but examples of an everyday approach where lawyers try to avoid the courts looking at the settlements entered into with the RAF, which were “strongly suggestive of dishonestly and gross negligence on the part of those involved”.

In referring to the RAF’s new policy of settling matters and no longer using attorneys to defend matters on its behalf, the judge said: “While this seems to be a cost cutting measure, it has in my view, rendered the RAF system, which is already on the verge of total collapse, even more exposed to malfeasance and incompetence.”