Collins Letsoalo has proposed that the RAF do away with lump sum benefit payments and replace them with annuity payments. Picture: African News Agency (ANA)
Collins Letsoalo has proposed that the RAF do away with lump sum benefit payments and replace them with annuity payments. Picture: African News Agency (ANA)

Road Accident Fund woes worsen as the innocent suffer

By Zelda Venter Time of article published Feb 4, 2021

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Pretoria - The personal Injury Plaintiff Lawyers Association said it was perplexing that the Road Accident Fund (RAF) was placing blame for its poor financial situation squarely on the shoulders of its former panel of attorneys and the plaintiffs.

Its chairperson advocate Justin Erasmus said when one analysed the figures carefully in the latest RAF Annual report, close to R2 billion was being spent on employees and administration (R1.75bn for employee salaries and R848 million for administration costs).

He said a further R4.5bn was paid on defending matters that could respectively be settled out of court and R6.3bn on plaintiff attorneys, which everyone agreed could be much lower if cases were managed promptly by in-house staff.

The body, which represents more than 350 attorneys, questioned that if the RAF was so concerned about legal costs, why was it not able to settle issues timeously going to court?

“Litigation costs are often a direct result of the RAF not administering claims promptly and professionally. There also has to be a workable alternate solution provided if victims’ rights are to be protected and we do not have any direction from the RAF on what that may look like,” said Erasmus.

Erasmus said, as an example, he represented a man in his early 20s this week, who was a 19-year-old farm manager, with a promising career, when he was injured in a car accident which left him a quadriplegic with a serious brain injury.

Erasmus said two years ago the RAF accepted to settle the liability for the damages he sustained but it had, to date, done nothing to quantify the claim. This, despite having been provided with a full set of medical reports.

The man was totally unemployable and is being cared for by multiple family caregivers until a solution can be found.

“His situation is obvious and cannot be disputed. His medical bills have run up to over R4m alone, due to the seriousness of the injury, and we now have to go to court as his general damages and loss of income remains unresolved,” added Erasmus.

Erasmus said this was just one example of a matter that could easily have been finalised years ago, without the considerable litigation costs that had now been incurred.

“The RAF claims are complex and expensive to prepare, and its record with persons who claim directly is poor. Awards are typically much lower than those obtained in court, and the time taken to finalise such claims is worrying,” he said.

According to Erasmus, there were also cases where the RAF had taken so long to finalise claims submitted directly to it, that some of them were prescribed. This resulted in the victims losing their rights to an award.

“Claims that are lodged by unrepresented victims would be at the complete mercy of the RAF,” said Erasmus.

Erasmus said the association appealed, on countless occasions, to the RAF to sit down with its legal teams to find ways of streamlining the process and discuss how to save costs, but these requests were ignored.

“The RAF’s lack of transparency and a desire to collaborate constructively to find a solution remain ongoing issues, and it is very frustrating,” Said Erasmus.

Erasmus said he was also concerned about chief executive of the RAF Collins Letsoalo’s proposal that the RAF do away with lump sum benefit payments and replace this with annuity payments.

“This is particularly concerning for seriously injured victims, who will lose the ability to use the capital amount received to improve their lives. Currently, many claimants use the awards to re-skill themselves or to pay off their homes, or make other interventions that are appropriate to their circumstances.

“Annuity payments would eliminate this ability and would turn claimants into pensioners who may, at best, receive an annual contribution to their grocery bill. Annuity payments also raise the question of how the RAF believes they will be able to efficiently administer such monthly payments when, at present, they have administrative backlogs stretching back six years.

“While the arguments and finger pointing continue and the RAF appeals for yet another two years to get it’s house in order, the real losers continue to be innocent RAF victims,'' Erasmus concluded.

Pretoria News

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