The Special Investigating Unit (SIU) has recovered more than R317m erroneously paid to lawyers by the Road Accident Fund (RAF), and is also investigating claims that the RAF lost millions more rands to maladministration and corruption.

Business Day report says on Wednesday, the SIU briefed Parliament’s Scopa on what it described as a ‘lengthy and complex investigation’ into problems at the RAF.

The unit’s probe centres on fraudulent claims and payments, procurement and tender irregularities, alleged maladministration and possibly unlawful conduct of employees. The investigation has so far cost R3.3m, while the SIU has managed to recover R317.6m from the return of duplicate payments made by the RAF to legal firms.

The SIU’s Leonard Lekgetho told Scopa that 102 law firms, including sheriffs, were being investigated regarding R340m in duplicate payments from the RAF.

‘The RAF has a payment system which dictates that when a claims offer is accepted, whether by settlement or by way of a court order, such claim will wait 180 days before it is paid,’ Lekgetho said.

‘As a result, an attorney will attach the RAF bank account by way of writs of execution served by the sheriff, causing the RAF bank to effect payment in terms of the writs upon the 180 days lapsing. The same claim will be paid again (because it was claimed on the RAF’s internal system), thus constituting a duplicate payment,’ he added.

Several legal practitioners had signed acknowledgment of debt amounting to R70m and others had refunded duplicate payments directly to the SIU.

‘Disciplinary referrals will be made against those implicated officials who failed to ensure that proper controls are in place to mitigate duplicate payments, or officials who failed to implement the controls. Those officials who left the employment of RAF will be referred to the NPA where there is evidence of criminality in their conduct,’ Lekgetho said.

The SIU also had evidence pointing to ‘trust fund accounts being misappropriated’, Lekgetho said, adding that 12 law firms had been referred to the NPA for prosecution, and five practising lawyers had been reported to the Legal Practice Council.

According to the Business Day report, the SIU raised concern about the RAF’s decision to scrap its panel of lawyers, an issue that was also sharply criticised earlier in 2023 in an open letter penned by the country’s leading legal bodies.

MPs heard that the SIU was investigating why the RAF had cancelled the panel of attorneys that represented the agency in court in claim disputes, and that the SIU was investigating whether this move had led to a recent spike in default judgments against the RAF.

‘The total amount of default judgments issued against the RAF for cost and fees from 2018 until second quarter of 2023 amounts to R4.7bn. A sharp increase in the default judgments is noted between 2021 and 2022,’ Lekgetho said.

He added the SIU had found the RAF contravened section 217(1) of the Constitution and section 51(1)(a)(iii) of the Public Finance Management Act in contracts awarded to two service providers to deal with the backlog in RAF claims by victims of road accidents.

‘This matter will be referred to the SIU civil litigation for assessments and potentially to be taken to the tribunal,’ he said.

Full Business Day report