Road Accident Fund being brought to its knees by unscrupulous individuals, says CEO
Johannesburg - The cash-strapped Road Accident Fund (RAF) is being brought to its knees by unscrupulous individuals who want to enrich themselves at the expense of claimants, that is according to RAF CEO Collins Letsoalo.
This comes after another gruelling court battle against creditors who had attached movable properties belonging to the organisation.
RAF has been in and out of court in the past few months on various matters which include a panel of lawyers challenging its new business model of wanting to settle claims within 120 days without litigation.
In the midst of that, creditors have been circling the organisation and dragging it to court and seizing its assets to effect payments on monies owed.
The Pretoria High Court on September 10 ruled in favour of the organisation and instructed a sheriff to return assets that had been seized.
Judge Elmarie van der Schyff issued a rule nisi, calling on interested and affected parties to show cause by no later than October 28 as to why her order should not be made final and instructed the sheriff to return the RAF’s property. The sheriff was further interdicted from removing any other possessions from the RAF.
Judge van der Schyff in her reasons for granting the order indicated that all road accident victims have an interest in the optimal functioning of the RAF. The judge indicated the RAF’s financial position was a matter of public record and those road accident victims who secured court orders in their favour, receive their compensation long after the awards are made.
“This is not a new development and can actually be described as the status quo. Generally, the prejudice they suffer are countered by adding moral interest to the claim amounts after a court order was obtained.
“The removal of movable property from the RAF’s offices will seriously impede on the Fund’s ability to perform the function the fund was created for.
“Allowing the removal and subsequent sale of property will benefit a limited number of claimants to the detriment of thousands of successful and prospective claimants,” Van der Schyff said.
Following the judgment, Letsoalo said the attachment of their assets was a calculated move to hamper the organisation from functioning. He further accused the sheriff of having ulterior motives as some of the seized assets did not belong to the RAF.
“The sheriff moved to attach our movable assets from our Menlyn office which is the biggest in the country. This ranged from desks to chairs to printers and computers. Most of them, at least the critical ones, don’t belong to us.
“They are leased to RAF and they were not supposed to be attached in the first place but the sheriff took an unprecedented move which is very malicious. This has led to a situation where we can’t operate in the biggest region in the country,” Letsoalo said.
The Menlyn office covers Limpopo, North West, Mpumalanga and the northern part of Gauteng. Letsoalo said the move left claim handlers unable to access emails and files from their computers and therefore were not able to deal with matters, including those that were due for trial.
He maintained that the sheriff was informed that the assets did not belong to the organisation but that did not stop the process.
“She was even shown an affidavit coming from the service provider and she went on to attach under the guise that its none of her business. We find that curious as RAF. One could be fooled that the sheriff is doing her work or people are just attaching assets but the reality is that the sheriff is making money out of this whole exercise.
“In executing writs, she charges more than R2 000 on one. Meaning if she has a thousand writs she has R2 million. She claims to have about 750 writs with her. The sheriff does not seem to be acting in good faith,” he said.
The RAF has been operating at a loss for almost three decades. In a bid to turn the tide, the operating model of doing away with the panel of attorneys was proposed with a turnaround time of 120 days to settle claims.
That proposal has however been met with resistance and the organisation along with Letsoalo were dragged to court by the panel of lawyers.
The panel of 85 law firms is said to be refusing to hand back at least 180 000 files back to the fund.
They took the organisation to court to fight the move. In the latest battle, the lawyers have launched another court case, this time, calling for the removal of Letsoalo from his position. He was made permanent last month after having acted in the position for almost a year.
In their court papers, the six law firms said his appointment posed a threat to the proper functioning of the RAF which in turn posed a risk to the public who are seeking compensation after road accidents. The law firms complain of Letsoalo’s track record within the RAF. They have accused him of suspending senior officials and making new appointments who report directly to him.
Letsoalo questioned the timing and motive of the court application.
“Why were they not complaining when I was acting and waited until I was appointed permanently?
“The real issue here is the issue of the panel of lawyers who want to maintain paying themselves 25% of our revenue. We spend R10.6bn per year in legal fees to lawyers. About 95% of these matters never make it to court but are settled after five years in what we at the RAF term pseudo litigation,” he said.