The Road Accident Fund has a massive funding shortfall and now a group of lawyers want its CEO to go. Picture: ANA files
The Road Accident Fund has a massive funding shortfall and now a group of lawyers want its CEO to go. Picture: ANA files

Law firms bring case against Road Accident Fund CEO

By Zelda Venter Time of article published Sep 10, 2020

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IN the latest legal battle between attorneys and the Road Accident Fund (RAF), six law firms have launched urgent proceedings to have the appointment of RAF chief executive Collins Letsoalo overturned.

The former PRASA CEO was appointed chief executive of the RAF in August after having served in an acting role, and as chief financial officer at Transport.

The law firms said in papers filed at the Gauteng High Court, Pretoria, that his appointment posed a threat to the proper functioning of the RAF which in turn posed a risk to the public who are seeking compensation after road accidents.

The legal woes of the fund are escalating, with another major law firm having also filed papers earlier this month in which it wants the fund wound up, as it says it cannot pay its debts.

The application in which Maponya Attorneys is asking the court to declare the RAF bankrupt is expected to be heard on October 13 together with the bid to have Letsoalo’s appointment overturned.

It is not clear whether the RAF has filed its opposing papers yet in these two applications. The Pretoria News sent questions to the RAF this week regarding the allegations made against Letsoalo and the entity, but at the time of publication, no response had been received.

Kabelo Malao, an attorney at K Malao Inc, said in the latest application that the resolution of claims was in jeopardy with the appointment of Letsoalo.

Some of the reasons forwarded for this argument include Letsoalo’s track record with the RAF. Malao said this includes suspending senior officials and making new appointments who report directly to him.

It is said that he has also forbidden claims handlers from communicating with panel attorneys despite matters being on trial.

Malao said Letsoalo made decisions on matters on which he has no powers, including dispensing with panel attorneys. This issue has been the subject of contention and various court applications.

However, at the time, Letsoalo said millions were spent on legal fees to defend cases, where the fund could have simply settled cases and used the money to pay the claimants.

Malao said since dispensing of the panel attorneys, the legal representation of the RAF in pending trials “has been a perplexing mess”, and he blamed Letsoalo for the backlog.

“He has shown no leadership and has been responsible for the largest litigation crisis in all divisions of the high court,” Malao claimed.

He laid at Letsoalo’s door delayed payments to accident victims whose claims have been finalised and claimed further that he instructed banks not to co-operate with sheriffs who wanted to attach RAF assets for the non-payment.

“He has turned his back on the lawful system of procuring legal services from panel attorneys duly appointed after a public procurement process.”

In this latest application for winding-up of the RAF, Maponya Attorneys said it had not paid fees billed for the services it had rendered.

According to the firm, the RAF owed it more than R20.5 million, but the fund is unable to pay.

Transport Minister Fikile Mbalula has said the RAF faces challenges with a liability of R324billion and claims of R17.2billion that were finalised but not paid, in some cases for years.

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