The Road Accident Fund (RAF) officially cancelled its tender to appoint new law firms on Friday and is determined to sack all 103 law firms it currently has on its panel.

In a letter to bidders, it says ‘the RAF’s dire financial situation has necessitated a review of its operating model, which resulted in a conclusion that there is no need to have the panel of attorneys’.

This notification comes shortly after 86 firms on the existing panel of attorneys were directed to hand over all files to the RAF.

Rapport notes that 42 of the affected firms launched an urgent application in the Gauteng High Court (Pretoria), to be heard on 17 March, to interdict the RAF from proceeding with the move. The RAF reportedly told the newspaper it is now paying more than R10bn a year in legal fees and can no longer afford to ‘enrich’ lawyers.

RAF spent R941m in 2005 on litigation to complete 185 773 cases and now finalises fewer than 100 000 a year. ‘This is despite the fact that 99% of matters are settled before coming before a judge,’ a spokesperson is quoted as saying.

Attorney Pritzman Mabunda, acting on behalf of 42 law firms, says the matter is urgent to avoid chaos in the courts. In his founding affidavit, he says the livelihoods of at least 500 attorneys and some 2 000 of their employees have been placed in jeopardy.

According to the firms, the directive to hand over the files is unconstitutional, irrational, and will cause huge delays in the finalisation of these matters. Mabunda says most of the claimants are poor and vulnerable. Furthermore, the inevitable delays with trials will cause a floodgate of cost orders against the RAF as it will be held liable for wasted costs.

‘What the applicants also came to know was that the decision to issue a handover notice on 18 February and 20 February 2020 was not taken by the board… It seems that the decision to demand the handover of files from the panel attorneys, as well as the decision to cancel the announcement of the tender and the tender itself, was taken by the acting CEO, Mr Letsoalo, or his delegates,’ Mabuza states.

Part A of the application is for an interdict and Part B of the application is to review the decision to cancel the tender and issue the hand-over notices.

How the RAF plans to improve the situation without external attorneys is spelled out in a letter to the country’s judges and sent on 28 February.

The letter by Collins Letsoalo is contained in papers supporting the urgent application. ‘We intend for (sic) reduce the claims average age to 180 days from the current 1 350 days. This will be done mainly by avoiding litigation and only litigating where bona fide settlement has failed, where there is a litigious dispute and mediation has also been unsuccessful,’ Letsoalo wrote to the judges. He said some 25% of RAF’s costs currently goes on legal fees and it struggles to pay R17bn owed to the public in terms of court orders.

‘We have sought to capacitate our internal team to be able to investigate and settle claims within the 120 days as set out in the RAF Act.’

According to his letter, the RAF has plans in place to deal with 390 740 court files to be returned by its attorneys in due course.

‘From our data analysis, we have also noted that some of these files are partially settled, with most having past medical expenses postponed sine die without any sound rationale. We have assembled a team of medical experts to work through these files to ensure finalisation of these matters.’

Letsoalo concludes by expressing gratitude for the judges’ ‘understanding and co-operation in this transitional period’ and inviting them to engage with the RAF ‘in the event you notice any glitches within the administration of justice relating to the RAF’.

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Founding affidavit