Pretoria - It looks like a bleak Christmas is on the cards for claimants who are waiting to receive compensation from the Road Accident Fund (RAF).
At least eight of the RAF’s Absa accounts were attached about a month ago by about 346 injured motorists demanding payment.
As things now stand, RAF owes about R17billion to claimants whose claims were approved either through settlement or via various court orders.
Collins Letsoalo of the RAF’s legal department confirmed in papers before the Gauteng High Court, Pretoria, that the the road fund's liability at this stage towards injured motorists was more than R17bn.
The RAF only receives on average of about R3.5bn each month.
The RAF last week launched an urgent application to try to stay afloat for now.
It asked the court to urgently lift the attachment of eight of its bank accounts.
In part B of it application, which it intended to bring at a later stage, the RAF asked that it be given at least 180 days to pay pending claims.
But Judge Selby Baqwa struck the urgent application from the roll due to non-urgency, as the bank accounts were already attached in October and the RAF had only now approached the court.
The judge also noted that the attorneys representing the 346 claimants demanding urgent payment, who managed to get the bank accounts attached, were not told about the application.
Letsoalo said in court papers that the RAF wanted to raise loans to pay its dues and was dependent on monthly levies.
“The average claims which are settled and not paid to claimants every month is R4.3bn, which is way more than the R3.5bn which the applicant receives every month.”
He said the money the fund received each month was not enough to pay its debts. He asked for an extension of at least 180 days, instead of the normal 30, in which to pay claimants.
“The applicant will never be able to reach a state where all judgment debts are paid within 30 days from the date on which the court orders are granted against it.” At best it could first start paying matters long overdue, as there was no money to meet all the court orders quickly, he said.
Letsoalo said the fact that eight of its bank accounts were now on ice did not help. “This results in the applicant not being able to transact on its bank accounts and not being able to pay claimants whose payments are long overdue.”
He said although the RAF sometimes delayed making payments, it eventually paid all its debts. He said the only purpose the attachment of the bank accounts would serve was to pay those who applied to be paid first, while the others who had been waiting for payment would have to continue standing in the line.
The total amount sought to be collected in terms of the 346 attachment notices is R173834583.
“There are more than 1000 writs of execution which have been served upon the RAF for payment at its Pretoria office. Each writ is not in respect of just one claimant but in respect of many claimants and for millions of rand... There are other writs of execution also served at the RAF’s regional offices on a daily basis.”
Letsoalo said the RAF was forced to prioritise the payments.
Lawyer Konrad Röntgen said it was becoming increasingly difficult to explain to his clients why they had to wait so long for payment. He said the RAF’s decision not to pay claimants within 30 days, but rather 180 days or later, was an infringement on the public’s right to be compensated.
“If the RAF had properly-trained claims handlers, claims could be settled without people having to go to court.” He also said the RAF did not want to settle matters, but would rather turn to court, which escalated legal costs.
Röntgen said the RAF should be in a much better financial situation now than in the past, as under the new legislation loss of earnings had been capped and general damages could only be claimed in very serious cases.
Another RAF lawyer, Jean-Paul Rudd, said the entity and government had responsibilities towards motorists, which were vested in the Constitution.
“The RAF can only be disestablished or de-funded through a legislative amendment. The RAF’s existence is rooted in the state’s obligation to respect, protect, promote and fulfil the right to freedom and security of the person. This entails an obligation not to cease funding the entity. The RAF was specifically established to pay compensation to accident victims. This is especially so since the RAF Act deprives injured persons from claiming against the common law wrongdoer.
“Legislation that purports to de-fund the RAF or to terminate it, without transferring its debts to another entity, would be susceptible to a constitutional challenge on the basis that it constitutes a failure by the state to fulfil its obligations in terms of the Constitution, to respect, promote and fulfil the right to freedom and security of the person,” he said.