Fund ordered to pay RAF claimant after law firm theft
The Legal Practitioners Fidelity Fund has been ordered by the Gauteng High Court (Pretoria) to pay a 54-year-old widow living in an informal human settlement in Orange Farm, Johannesburg, her Road Accident Fund (RAF) payout that was stolen by her attorneys.
The fidelity guarantee fund, established in terms of the Legal Practice Act, exists to protect the public against losses arising from the theft of trust funds.
Lindiwe Nkosi claimed compensation from the fund in terms of the Legal Practice Act, because the compensation she received from the RAF for injuries sustained in a motor vehicle accident on 29 July 2015 was stolen by Chueu Inc Attorneys.
Moneyweb reports that the court was informed that the firm was hopelessly insolvent, and the Legal Practice Council (LPC) confirmed in an email dated 13 February 2024 that it is under curatorship and owes the LPC R29m.
The fund’s Jerome Losper said in an answering affidavit to Nkosi’s claim that it has received 116 claims relating to Chueu Attorneys, to the total value of R82 721 575.48.
Acting Judge HGA Snyman said it appears from the SCA judgment in the Chueu Attorneys matter, the firm had handled 6 000 files with an estimated gross value of R6.2bn before it folded.
Nkosi applied for an order that the fund be compelled to approve her claim or provide reasons for its repudiation.
Moneyweb notes that the fund opposed Nkosi’s application, with Losper stating that she had not furnished any documentation or evidence of steps taken to recoup the money misappropriated by Chueu Attorneys.
Acting Judge Snyman said Chueu Attorneys had instituted action against the RAF in terms of the RAF Act, and the matter was settled on 30 April 2019.
Under the agreed court order, the RAF was ordered to pay the settlement amount to Chueu Attorneys.
The Sheriff Centurion East paid R617 115.91 to Chueu Attorneys for Nkosi’s claim (which) never paid the award over to her.
Snyman said this amount less 25% (R462 837) is what he will use for the purposes of this judgment.
The 25% is the maximum fee that may be charged by attorneys in terms of the Contingency Fees Act.
The fund was also ordered to pay Nkosi the costs of the application.
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.
