South Africa

We are not broke, says Road Accident Fund despite R17bn bill

We are not broke, says Road Accident Fund despite R17bn bill
Cape Town - The Road Accident Fund (RAF) has, ahead of the festive season, moved to allay fears that it has run out of money and said it would be able to pay claims by February.

RAF acting chief executive Collins Letsoalo acknowledged its outstanding bill of more than R17billion but said claims would be paid 180 days/six months from the date on which they were lodged. 

This week, the RAF was victorious in the North Gauteng High Court in Pretoria after lodging an urgent application against the Sheriff of Centurion East, Absa Bank and 346 claimants that have in the last six weeks sent the sheriff to attach all the monies in its eight Absa bank accounts.

In Part A of the application, the RAF asked the court for breathing space and to suspend its obligation to pay the amount overdue to the 346 claimants.

In Part B, the RAF asked for an order against itself that it pay the above amount by no later than February 29. Letsoalo, said the action by the lawyers was dismissed as “not urgent” and “it’s business as usual” at the fund.

According to Statistics SA, approximately one million road accidents are reported a year. The majority of the accidents that occur are caused by human factors, with on average, over 40 people a day being fatally injured and at least 20 being left permanently disabled. In the Western Cape, 17 000 accidents were recorded annually.

“We acknowledge that we owe claimants R17.2bn and those claims are being processed. People must understand that claims are paid out on a first-come-first-served basis,” he said.

But that assurance has very little meaning for Anna (not her real name), who said she had waited six years for her claim to be paid out. Anna was involved in a car accident in 2010 and is no longer able to work.

“I have to use crutches to walk. I am 40 years old now. I can never work again. I worked at an old-age home,” she said.

Anna said she filed her claim in 2011 and received a R2million payout in 2017. The money received so far covered loss of future earnings but she still had to submit future medical claims to the RAF.

“The attorney who helped me even paid for my medical bills and gave me money to survive while we waited for the money from the RAF. It was a very frustrating process, she said. Anna still has medical expenses which she needs to submit to the RAF as part of her settlement, but said she doubted her claims would be settled within the promised time frame.

Letsoalo, on the other hand, said at the heart of the matter was the issue of attorneys who were assisting claimants and trying to jump the queue by attaching the fund’s bank accounts - this would only result in further payment delays, he said. The RAF collected, on average, about R43bn per year from the fuel levy - about R3.5bn per month. But Letsoalo said, as a result of litigation, R10bn of this was “wasted” on legal fees and court battles.

The RAF said on average it paid out R200000 per claim and its aim was to resolve claims as speedily as possible so that claimants were not affected by further delays. “This is not a desirable situation. When lawyers are involved, claims invariably end up in court and this is where the delay comes in.”

Letsoalo said while the fund did everything in its power to assist claimants, people were welcome to seek legal assistance to help navigate their claims. But a different picture was painted by personal injury lawyer Henry Shields, who laid the blame for the delays, squarely at the feet of the RAF.

“Some attorneys are even using money from their own pockets to assist claimants with their medical bills. These are the poorest of the poor who simply cannot afford to wait that long for claims to be paid out,” he said.

Shields said that he and many other attorneys were considering no longer taking on RAF claims because they were frustrated by the system.

Weekend Argus