Pretoria - The Road Accident Fund (RAF) has incurred the fury of lawyers, who are accusing it of trying to rescind a host of legitimate court orders.
According to the lawyers, those who are close to RAF chief executive Collins Letsoalo are being paid first.
The RAF turned to the Gauteng High Court, Pretoria, nearly two weeks ago, in which it asked that the auditor-general’s report into its affairs not be presented to Parliament during this sitting. It in fact asked that the contentious report entirely remained under wraps pending an urgent review of the findings.
The audit concluded that the RAF’s liabilities exceeded R361 billion, while it maintained that its liabilities are no more than R30bn. Auditor-General Tsakani Maluleke in December issued the RAF with a disclaimer audit opinion for the 20/21 financial year.
It was argued that the RAF changed its accounting policy early last year because it was erroneously classified as a commercial insurer. According to the RAF, they are in fact a social insurer as they provide public insurance against risks such as loss of income due to car accidents.
The auditor-general, in turn, maintained that it was a commercial insurer and told the court that if the RAF was allowed to use its “wrong” accounting policy to try to secure loans, the public would severely suffer. It emerged that the RAF wanted to secure loans from outside entities to try to get itself out of its dire financial position.
Meanwhile, several lawyers are also complaining that while they had received legitimate court orders in their favour, the RAF has now indicated months down the line that they are planning on overturning those orders.
But one lawyer said the RAF never bothered at the time to defend some of the matters. In one case the court ordered the RAF to pay a claimant after the judge went to great lengths to ensure that the fund knew the matter was on the roll.
The RAF nevertheless never showed up in court. Now, nearly a year down the line, the RAF gave notice that it was planning to ask the court to overturn the order.
The Pretoria News was told that in many of these cases writs had been issued against the RAF to recover the money as these orders were still in place. RAF spokesperson William Maphutha said there were a number of default judgments, which were obtained by attorneys during lockdown under dubious circumstances.
“Some orders are for highly inflated amounts and in some instances; liability of the RAF is in dispute.”
He said in such cases, the RAF, as provided for in the court rules for any litigant, opted in exercising its legal rights to approach the same courts for rescission of these orders. “This approach has yielded positive results for the RAF that has a legislative obligation to ensure that the fuel levy is administered properly and deserving claimants are compensated.”
Maphutha said the rescission approach was not applied to all matters where there were court orders. “Each matter is considered in terms of its own merits. We cannot comment on matters specific, which might be currently pending before court.”
An attorney who wants to remain anonymous said that in his opinion the growing rescissions were the result of the RAF earlier firing its panel of lawyers. “It is due to internal negligence which in many instances is due to non-availability of a panel,” the source said.
It is said that again claimants who have been waiting for years for their cases to be concluded are the ones suffering as they are at the mercy of the RAF which had promised to settle claims within 180 days.
Letsoalo, in an earlier affidavit before court, said he prioritised old claims first. Yet, in another anonymous letter sent to the legal fraternity, it is claimed he is favouring some attorneys, especially “those close to him”.
While some have to wait for years, an example was given in the letter where it was said that in one case, the claim was lodged in August last year. The fund made a settlement offer in January and the money was paid over a few days later.
This while it took months to obtain medical reports.
Maphutha said there was no substance to the allegation of favouritism. “No single member of the executive or the board can influence or override the payment system in place. Mr Letsoalo is employed as the CEO of the RAF; he has no capacity to interfere in any payment processes in the RAF. “
Maphutha said such allegations should be reported to law enforcement agencies for proper investigation.
Pretoria News