The shocking truth about attempts made by the Road Accident Fund to deny/dissuade claimants from accessing professional legal assistance

In an article that appeared on Network 24, which was further sensationalised by the media, the RAF tried to create the impression that firstly, they are running out of money to pay claims – and secondly, if clients process their claims through attorneys (intermediaries) they will be subject to inflated costs, delays and deliberate mismanagement to further the ambitions of the attorneys rather than the client.

As a firm that deals with hundreds of Road Accident Fund claims on a daily basis we feel it is our duty to respond to this gross misinformation in order to put the minds of our clients at ease and therefore encourage them to read this article which states the objective facts.

It is our standpoint that this kind of release was purposely devised and distributed to persuade clients to lodge their claims directly with the Fund and not to solicit legal assistance with the process.

Best interests of our clients

We operate our firm on the basis that it is our professional duty to always first act in the best interests of our clients and as such we will continue to fight for them. There is nothing untoward about following the ordinary legal channels in order to serve our clients, as per their instructions, when many of them have been waiting years for an outcome and financial assistance.

Furthermore it needs to be noted that attorneys don’t have a mandate to make arrangements with the RAF, they can only act on the instruction of their clients.

The RAF however wants the public to think they are insolvent so that they can implement the Road Accident Benefit Scheme. The fact is that they are NOT insolvent. These so-called “cashflow” problems are now used as an excuse. Meanwhile the bank account has been getting attached for over a year –i.e. not “breaking news” as they allege. As soon as the RAF pays, these attachments are uplifted and they get new money on a monthly basis.

The Fund further pleads poverty yet the CEO of the Fund earns R 6,4 million per year (more than our President) and has just received an annual bonus of over R 1.8 million.

Dispelling the lies

Lie 1: The Fund is technically insolvent with liabilities of around R150 billion and needs to restructure payouts to resolve this situation.

• In truth, more than 80% of that deficit is a paper and actuarial deficit in terms of medical provisions that may be necessary for possible future needs of patients, whilst less than 5% of this is ever used. So 95% of that paper deficit is not real.
• The truth about the lack of funds is more closely related to the fact that they are not assessing current claims timeously and therefore these claims eventually land up in a court procedure – which is in itself hugely costly to the RAF. They are supposed to make an offer to the claimant within a specified period of time. Currently this is simply not happening. Because the claimant is then forced to go to an attorney, and the attorney is then forced to seek a settlement through the courts, their costs skyrocket.
• The RAF presents 79% of the cases on the court role. Through actively attempting not to pay the claims (the average time is currently running at 55 months to settle a claim) they run up enormous costs for themselves. The RAF is the sole contributor to their massive legal bill by not executing their service effectively.

Lie 2: An attorney is not necessary – approaching the Fund directly will save you time and money.

• If the current situation is anything to go by, you will never be compensated – or if you are, you may have to wait years and are unlikely to receive anything close your expectations.
• Attorneys act on instruction and need to follow legal procedures which includes issuing warrants to recover a client’s money. Only if the client agrees to wait 180 days (or even longer) can an attorney enter into such an agreement with the RAF.
• Secondly, there are governing rules in terms of fees. Attorneys can charge double their normal fee as a success fee, although the double portion may not exceed 25% of the capital.

Why do you need an attorney?

• The services that a personal injury attorney offers are vital to your claim succeeding. An attorney who specialises in this area of the law has the specific expertise to ensure that you are awarded the correct compensation for your loss.
• When claimants approach the Road Accident Fund directly, they are not informed or aware about the correct and fair amount they can claim. Clients also believe that the RAF will look after their own as well as the interests of their claimants at the same time.
• A personal injury lawyer will find your hospital record, your police record, pays for medical reports, and in many cases pays for transport to give you access to the system. Naturally, these are professional services rendered and there will always be a fee for this. But these fees have been blown out of proportion and lawyers have been made scapegoats of the cost.
• It’s important to remember that it is a court of law and a high court judge deciding the size of a benefit to be paid to a victim, not an attorney. After such a judgement, payment is to be made by the RAF within 14 days failing which interest will accrue. Unfortunately the RAF just seems to disregard this and run up exorbitant further debts by way of interest at 10.5%. These late payments certainly do not appear to be a solution to their problem.
• All good lawyers follow ordinary legal channels in order to serve their clients as per their instructions – and many of these clients have been waiting years for an outcome and financial assistance from the RAF. Those attorneys that may have agreed a payment scheme with the RAF have most probably done so without instructions from their clients – and are therefore not fulfilling their duties as a prudent attorney should.

Conclusion

The fact of the matter is that the RAF should have approached the SA Law Society to get proper consultation and co-operation from the profession as a whole. Thus far, their approach has done nothing but attack and divide the legal profession due the ultimate detriment of claimants and it will not be tolerated.

Our clients cannot and will not be held accountable for the fact that the RAF is underfunded by National Treasury, if this is in fact so, and our duty is to protect our clients and put their needs first.

Payments were met regularly prior to the amendments effected in 2008 when there were far more claimants in the system and prior to the massive 50c increase in the levy – this, unfortunately, creates a perception that the current status of the Road Accident Fund as alleged is self-inflicted all with the intention of forcing the Road Accident Benefit Scheme bill on the public.

You can read more about the negative impact this bill will have on you here.