Cold, hard crash: lawyers are a pain in the assets, says RAF
With 50,500 attachment orders against it, the accident fund says it's taking an unnecessary hit from lawyers
The Road Accident Fund is putting some of the blame for its perilous financial situation at the door of lawyers “dragging the claims process through court”.
A large number of attachment orders (more than 50,500) from lawyers demanding payments for accident victims has been received by the cash-strapped RAF in the past three financial years. Because of “insufficient cash flow” the RAF finds itself facing challenges where sheriffs of the court inundate them with court orders as they try to attach its property for claims totalling billions.
According to a document from the transport portfolio committee meeting in parliament in June, seen by the Times Select, the orders were lodged against the RAF.
So far, nothing has been attached from the RAF because it has settled many of the payments.
RAF spokesperson Phumelela Dhlomo confirmed this, saying writs worth billions of rand have been received.
“During the 2016/17 financial year, 15,720 writs were issued to the RAF with a value of more than R5bn. Operationally, the attachments and removal of assets paralyses the institution as the RAF does not have sufficient assets or funding to meet all immediate obligations,” he said.
“In 2017/18 alone, over R8bn was paid to lawyers due to them dragging the claims process through court. These court proceedings prolong claim payouts ... claiming directly shortens the process as there is no need to litigate.”
Dhlomo said the RAF has started informing the public of their right to claim directly, which has seen a steady increase in direct-claim numbers.
Dhlomo said that despite these challenges they continue to pay lawyers. “Over 30,000 monthly payments were made and it is worth noting that payments have almost doubled over the last three years,” he said.
Writs from lawyers where sheriffs attached its assets were disrupting operational deliverables to claimants. “RAF has been technically insolvent since 1981 and cannot honour its obligations, and writs are a result of that,” said Dhlomo.
For every R16 that South Africans spend on a litre of fuel, R1,93 goes to the RAF, according to the Automobile Association.
He said the Transport Department has sought to address this through the Road Accident Benefit Scheme (RABS) Bill which is still being debated in parliament.
“The bill will eradicate extended and costly litigation, high administrative costs and prolonged claims finalisation. The clogging of court rolls with RAF cases will also be a thing of the past. Claimants will not need attorneys to claim from RABS,” he said.
The bill would also indemnify those responsible for road crashes from civil liability, but not from criminal liability.
But Democratic Alliance transport spokesperson Manny de Freitas said the new bill will mean drunk drivers will benefit from the system. Because no one claiming from RABS would be required to prove who caused the accident, the guilty party could still receive payment.
“In other words, a drunk driver causing an accident would be rewarded for driving under the influence of alcohol.”
Dhlomo said: “Anyone caught drinking and driving will still face the full might of the law.”
In June this year, De Freitas asked Transport Minister Blade Nzimande for the total number of these attachment orders and the reasons for them.
Nzimande blamed it on underfunding, the late submission of documents by attorneys, and invalid writs.
• The RAF is on a drive across the country to educate vehicle accident victims on how to claim compensation directly from the RAF instead of through third parties such as attorneys.
In recent years a number of personal-injury lawyers have been caught on the wrong side of the law as they robbed their clients of their payouts amounting to millions of rand.
By law, lawyers should claim up to 25% from the claimant’s payouts, but many have been accused of taking the entire payment. If claimants go directly to the RAF they get all their money without paying any legal fees.