Applications against the Road Accident Fund and its apparent inability to honour its obligations towards road accident victims are piling up. Picture: David Ritchie/African News Agency (ANA)
Applications against the Road Accident Fund and its apparent inability to honour its obligations towards road accident victims are piling up. Picture: David Ritchie/African News Agency (ANA)

Road Accident Fund mired in dire financial position

By Zelda Venter Time of article published Oct 29, 2020

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Pretoria - While Transport Month is wrapping up, applications against the Road Accident Fund (RAF) and its apparent inability to honour its obligations towards road accident victims are piling up.

Several matters are not only dominating the Gauteng High Court Pretoria’s roll, but the issue of non-payments can also turn to the Constitutional Court.

These applications include a bid to liquidate the fund, brought by a Joburg law firm, which said the RAF owed it multi millions in legal fees, as well as an application by a firm for the removal of the fund’s chief executive Collins Letsoalo, following allegations that he is not competent.

In addition to this, there are numerous applications to enforce a proper payment system “free of corruption”.

Several law firms have meanwhile turned to court to attach the moveable assets of the fund and thus recover payments.

In retaliation, the RAF has launched its own application to stop the sheriff from removing its assets in terms of warrants of execution.

In this application Letsoalo is asking the court to grant it an extension of 180 days to pay its debts.

Letsoalo said while he realised it was an extraordinary order to ask, he explained in court papers that it was in the public interest for the RAF to continue with its work.

A law firm is now threatening to turn to the Constitutional Court if the RAF does not urgently come up with a plan.

It said claimants had to wait years to be paid after their claims were approved.

While the applications are flying around about the fund’s inability to honour its commitments, the court rolls are daily clogged with applications by ordinary citizens claiming compensation following road accidents.

A law firm earlier this month obtained a judgment in terms of which the fund has to pay R8.5million to its client.

Another law firm addressed two letters to the RAF in which it said it would approach the apex court as its judgments regarding payments to clients were simply not being honoured.

It said the Centurion sheriff alone had confirmed that there were outstanding writs of execution exceeding R1m at its office.

The firm requested an outline from the fund as to what it was going to do to honour its accumulating debts.

In court proceedings before Judge Wendy Hughes earlier this year, the RAF admitted that it owed more than R17m to claimants.

To make matters worse for the fund, the RAF Act allows for interest to run on debts.

The law firm said in the letter the impasse could not continue, as these debts had been outstanding for more than a year, with no indication from the fund as to how and when it would pay.

They also complained that the system lacked transparency and said if the fund did not come up with a plan, they would turn to the Constitutional Court.

Van der Merwe Attorneys are meanwhile turning to the high court this week, to demand a framework of payments from the RAF for the payments of outstanding claims.

The firm said such a framework would ensure certainty for legal practitioners and ensure claimants were treated equally and fairly when they were paid.

In addition, the firm said, a payment plan would result in attorneys no longer having to issue writs of execution against the RAF to force payments.

Letsoalo, in earlier court papers, said the RAF was not spared the economic strain caused on the country by the pandemic.

He said it was in a dire financial position and its liabilities continued to grow.

He said if the situation was not managed by a 180-day reprieve, there was a real risk of the fund collapsing financially. This will cause the fund to be unable to pay anyone.

Pretoria News

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