Lawyers battle lawyers over RAF payments hold-up
The Road Accident Fund (RAF) has stopped payments because its bank account has been attached by the Sheriff of the Court‚ according to its CEO Dr Eugene Watson. He blamed this on ‘a few legal firms whose actions have disrupted an established cash management plan which now inconsiderately prioritises them over those who have patiently been awaiting payment’ – a claim which set lawyers against lawyers, notes Legalbrief.
The sheriff's action followed a successful court application by nine legal practitioners with 33 separate claims amounting to about R11m. According to a TimesLIVE report, he noted the fund’s monthly income of R3bn from the fuel levy had been used to make 30 000 monthly payments‚ but it’s not nearly enough. 'A balance of R8.2bn worth of payments to 5 200 creditors remains queued for payment over and above all that is paid,' he is quoted as saying.
The attachment‚ removal and sale of RAF assets was thus 'an unfortunately common reality'‚ Watson said. 'This reality has persisted despite a 50c increase in the RAF fuel levy two years ago. The fund can only pay what it is able to and the cash management plan put in place two years ago endeavours to maintain regular payments to creditors.' This latest attachment had badly disrupted the fund’s bid to fulfil its mandate‚ he said. Watson also said the halt in payments, ongoing cash constraints and the 'huge‚ unfounded liability' the Minister of Finance raised in the medium-term Budget speech were 'continued evidence that the RAF dispensation is expensive‚ unaffordable and unsustainable'.
Transport Minister Dipuo Peters had apologised to claimants, service providers, stakeholders and caregivers affected by the delays. ‘Minister Peters finds the attachment of the RAF’s bank account by the Sheriff of the Court unfortunate and regrettable because the action denies the claimants access to their much needed financial relief from government,’ the Transport Department said in a statement. Peters had directed that the RAF keep those affected informed and abreast of the status quo and ensure that normality was restored urgently, says a report on the IoL site.
The response to the announcement has been swift. Pieter du Bruin, the chairperson of the Association of the Protection of Road Accident Victims, claims Watson was being ‘economical with the truth’, and charged the fund was failing to comply with its obligations. The freeze on claim payouts, he believes, is another ‘ruse’ to push through the controversial Road Accident Fund Benefit Scheme (Rabs) Bill, which uses a ‘no fault’ system and only pays out certain pre-defined and limited benefits. According to a Weekend Argus report, personal injury lawyer Gert Nel agreed: ‘It’s any attorney’s right to act on behalf of his client’s interests, to recover his money that he’s duly settled in terms of a court order. You (the RAF) must make sure there’s money. You can’t say that you don’t have money because then somebody didn’t do their job. It’s a smokescreen by the RAF.’ Stephen Flowers, another personal injury attorney, predicted the freeze on payments could have a ‘devastating effect’ on road accident claimants.
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The RAF is seeking legal advice in an attempt to unfreeze its account, says a Daily Dispatch report. ‘We are exploring our options in respect of the sheriff’s actions and the process followed, the bank’s procedures and the particular claimants in question where it is found that most of the listed payments were made in 2016,’ said Watson through his spokesperson. Durban-based RAF attorney Michael Friedman accused the attorney firms which had attached the RAF’s bank account of ‘not playing ball’. ‘What they’ve done is jumped the queue instead of waiting patiently in line with the rest of us,’ he said. ‘If all of us (RAF attorney firms) did what those few Gauteng firms have done, there would be chaos,’ he said. That the law firms in question had succeeded in attaching the fund’s bank account to preserve the funds in order to ensure payment for their clients, was ‘very bad’ for the majority of claimants, Friedman said. ‘I think it’s a very selfish act on the part of those firms.’ The RAF has been battling financial problems for decades and Friedman said it was time for Treasury to step in ‘to give the RAF a lump sum payment’.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
