­­The cash-strapped Road Accident Fund has accused 85 law firms – which it fired – of refusing to hand back 183 842 files with victims’ claims.

The fund, which is technically insolvent and government’s second-largest contingent liability after Eskom, faces claims of more than R273bn.

As a News24 report notes, the RAF is mainly funded by a fuel levy (currently around R2 per litre), which brought in around R43bn in the past year. But R10.6bn of that ended up going to legal costs and attorneys.

In total, R17bn of the RAF’s income is now spent on administrative costs.

As reported previously, the fund decided at the start of the year to change its operating model: it scrapped the legal panel of 84 law firms which are contracted to handle claims on its behalf.

Instead, it will now handle claims in-house, and will channel claims according to ‘simple’ cases, which, according to Collins Letsoalo, acting RAF chief executive, would typically include claims for pedestrians and cyclists, for example, for speedy resolution, and those that are more complex. It wants to resolve claims within 120 days.

The fund has requested that the law firms hand back files of all cases that are not finalised.

However, notes News24, the RAF has only received 6 200 of the files, while 183 842 still remain with the attorneys, says Letsoalo.

The legal firms – which are facing billions in lost income – took the matter to court, but Judge Norman Davis ruled in March that they have to hand back the files.

Still, they are refusing, as they await three appeals against recent rulings, including the judgment by Davis, notes News24.

There has also been a ruling against the RAF’s decision to scrap the panel, with Judge Wendy Hughes ordering the RAF to retain the panel for at least the next six months.

The RAF is quite entitled to change its operating model if it does so lawfully, says Lizette Burger, senior professional affairs manager of the Law Society (LSSA). But, she says, ‘the issue is first and foremost one of how the RAF conducts itself. When exercising public power, the RAF is required to do so in a manner that is lawful and rational. However, and as was found by the Honourable Madam Justice Hughes, it has not done so in any manner which could be labelled rational or lawful. If the RAF insists on the handover of files in an irrational fashion, the public, the courts, and the RAF will suffer through unnecessary postponements, clogging of the court rolls, delays, default judgments being taken against the RAF, costs orders being given against the RAF, and the RAF over-settling matters because they are not adequately represented. This is already happening, as has been detailed in the various court proceedings.’

Burger says it does not make sense to return the files while the appeals process unfolds, only for the RAF to ultimately be directed to return them again.

Full News24 report