Road Accident Fund assets may not be attached, for now
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Pretoria - Moveable assets belonging to the Road Accident Fund (RAF) may not be attached by claimants who have not been paid, until at least next month.
A full bench of the Gauteng High Court, Pretoria postponed a hearing in which the RAF was asking for a financial reprieve of 180 days to pay claims to March 15. The matter will be heard over two days.
The postponement followed a request in this regard by the RAF, which also asked the court to extend the earlier agreement that law firms demanding payments did not execute executions they had already obtained.
The RAF, in turn, undertook to pay claims in order of date that the court order was granted, or the settlement regarding payment was reached. The oldest claims would thus be paid first.
The moratorium on payments is only temporary, and until the court, next month tries to find a solution to the multitude of issues between the RAF and various law firms. The moratorium impacts about 189 000 claimants waiting to be paid.
RAF CEO Collins Letsoalo said if the court did not extend the moratorium on execution against the assets, it would have a disastrous effect on the entity.
“We are in a parlous financial state. The implosion of the RAF is imminent,” Letsoalo said.
He pointed out that the main aim of the application next month was to try and find a solution which would prevent the RAF from collapsing and stop a few claimants who “are not willing to wait” to be paid as their attorneys issue writs of execution to attach moveable assets and bank accounts.
Letsoalo said the RAF had, meanwhile, made considerable inroads in implementing an equitable system of payment. It, however, accepted that its system was not perfect and many instances of mismanagement are discovered on a daily basis.
“The applicant (RAF) is doing what it can to correct and investigate mismanagement or corruption,” Letsoalo said.
According to him, reconciled payments of R7.2bn have been processed between October and December 4.
Letsoalo said R670m was, however, discovered to be duplicate payments which needed to be paid back to the RAF.
He added that it was RAF policy not to pay any fees to attorneys who had been struck from the roll, but about R260m was requested in this regard.
New management was appointed in 2019, according to Letsoalo, and despite the difficult Covid-19 conditions, they were doing all they could to turn around the RAF.
Last month, it emerged that the RAF had paid a claimant R1.5m in compensation, 11 days after it had reached an agreement with the law firm representing the accident victim. This came a few days after the RAF undertook in court to pay the oldest claim first.
Letsoalo said the incident was being investigated by his office.
More law firms and other bodies such as the Johannesburg Attorneys Association and the Association for the Protection of Road Accident Victims meanwhile indicated that they would be joining the application in trying to find permanent solutions to the RAF’s problems in making payments to claimants.
The legal fraternity felt that the government – especially the ministers of transport and finance – urgently had to come aboard to avoid the fund’s total collapse.
The RAF receives about R43bn a year in fuel levy, which Letsoalo said was not enough to keep the fund afloat.
He maintained that as part of the RAF turn-around strategy, cases should be settled.
Last year, he gave a host of law firms who served on the RAF panel of defence attorneys the boot as he said more than R10bn a year alone went into paying legal fees, while that money could go towards paying claims.