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FINANCIAL RESCUE: 

Within days of his teenage son suffering a long-term brain injury in a hit-and-run, Martin Goss (not his real name) recognised the financial implications of the tragedy  and claimed against the  Road Accident Fund.   Five grueling years later,  he had the satisfaction of securing a substantial settlement for a young man facing an uncertain future.

“Adam was 17 and crossing the road outside a friend’s home in a Port Elizabeth suburb when he was hit by an SUV that failed to stop.

“In the turmoil immediately afterward, I got an unsolicited call from a firm of attorneys offering to represent him in a claim against the RAF (Road Accident Fund). I guess they got their information from the hospital.

“Through my job in financial management, I had an awareness of the fund, but I knew precious little about it. A couple of weeks later, I met an attorney and signed a letter of appointment.

“Then I discovered the firm would be acting for the RAF, as well as for Adam. When you claim, you build a case and so does the RAF - you are looking for the maximum award for the injured party, and the RAF is trying to pay out the minimum in the interests of the fund.

“The claimant’s attorney earns a percentage of the final award, which provides the incentive to achieve the highest settlement possible. It’s an adversarial process, so the same attorney representing both parties seemed to me like a conflict of interest. I withdrew from the agreement, although they didn’t like it, and appointed a different law firm.

“One of the first things we had to agree on was their remuneration. They indicated they would typically take about 25% of the final award, but I found out independently that you can negotiate. Once that was established, we agreed they would take a lower percentage if the award exceeded a certain amount.

“They have a duty to do the best for their client in any event, so there is no reason why they should earn much more just because the award might be substantial. We settled on about 15%.

“The process of claiming was slow. Adam was in the hospital for about six months and in a coma for three. When he came home, things were very difficult for about a year. His physical injuries were relatively minor, but his brain injury meant he had to learn to walk and talk again, helped by all kinds of therapies.

“Fortunately, I had a good medical aid, but the bills were huge and there were just so many of them - it was overwhelming. I was lucky to have a supportive employer, who gave me space to deal with all this. My wife had to give up her job.

The assessment roundabout

“The first thing we had to do was establish the extent of Adam’s impairment. The RAF pays direct medical costs, but, beyond that, depending on the severity of the injuries, they may make general damages awards too, including for future loss of earnings. Adam has short-term memory problems, so he is unlikely ever to be able to hold down a normal job.

“The test for loss-of-earnings awards is the extent of what they call ‘whole person impairment’: the impact of the injuries in the broadest sense - on emotional stability, as well as functionality. To qualify for an award, a claimant has to be judged at least 30% ‘whole-person impaired’.

“Adam had to be assessed by two panels of specialists: theirs and ours. All the assessments came to me and I got to read them that was really hard. Sometimes they said stuff we’d thought but didn’t really want to know for sure. But it did help us to understand that we were dealing with a life-changing, lifelong situation.

What might have been

“It was obvious very quickly Adam was going to meet the threshold for a loss-of-earnings award, so the next step was to quantify the loss. That meant examining what Adam’s life might have been like if he hadn’t had this accident. So the RAF started looking into all sorts of stuff: his background, his family, what kind of scholar he was in Grade 11, what he had achieved so far and what opportunities he might have had.

“Fortunately, he had a clear career path mapped out: he wanted to work in sound engineering, and his goal was to work overseas, so we were able to establish that Adam would have had good employment prospects. I say ‘fortunately’ because so many young people don’t have the same opportunities, and then how do the actuaries calculate the future loss of earnings?

The award

“Four years after the accident, the RAF made us an offer of a 70% settlement. In other words, they were saying Adam was 30% responsible for the accident. Of course, that went down like a lead balloon.

“To fight it, we had gone to the police and find out more about what had happened that night. They never found the vehicle that hit Adam, but the crime scene evidence proved beyond doubt Adam was 100% an innocent victim and the driver of was 100% negligent. That meant Adam would get 100% of the quantum of the award instead of 70%. That was a big moment; we certainly had a glass of wine that night.

“At the end, when the actuaries had done their work, the award was in the region of R8 million. It sounds a lot, but remember it covered the legal fees of around R2m and all the medical expenses, including those paid by medical aid, which was millions of rand.

“The balance of less than R5m suddenly did not seem much when it represented the income of a lifetime. But the loss of earnings is calculated on an actuarial model that has a ceiling on income, which I believe was around R300 000 a year at the time, 2015. And inflation is not part of the calculation, because the money can be invested and grow in excess of inflation.

“Actually, the award was not quite the end. The RAF is always broke, so the money was owed to us, but months went by with no sign of payment. Then I decided to take matters into my own hands. I approached the RAF directly with evidence that the media were interested in the story. I don’t know for sure whether that did the trick, but soon afterward they did payout.

“I didn’t feel too bad about using that tactic. By then it was more than five years since the accident and we simply could not afford to carry the costs for another year or two. And we needed to get the money invested for Adam.

“Four years later, it is in a trust run by professional trustees, one of whom looks after the investment decisions. The trust pays Adam an allowance every month, roughly equivalent to the amount he’d be left with as a 26-year-old in an entry-level job with taxes and bills to pay. Unfortunately, the performance of the stock market has been disappointing over the last five years, but then Adam is young and he has time.”

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