RAF in bid to cut down on costs
Firms eye court after call to hand back files
ABOUT 42 law firms turned to the Gauteng High Court, Pretoria, for an urgent interdict after the Road Accident Fund (RAF) demanded they hand back all files for claims they were handling on its behalf.
The legal fraternity is of the opinion that this request would be devastating for those people who instituted claims against the RAF, as their cases would be dragged out for even longer.
Apart from this, they said it would also bring the administration of justice into chaos.
The courts deal with scores of RAF cases on a daily basis, the bulk of them which are postponed time and again.
The law firms are asking Judge Norman Davis to interdict the RAF from demanding these case files back. This is pending a later application in which they will ask the court to declare the decision by the RAF that the unfinalised files be handed back, unlawful and invalid.
The lawyers are adamant that if the RAF’s conduct is not stopped, it would leave claimants in the lurch.
RAF acting chief executive Collins Letsoalo sent letters to the law firms on February 18 to hand over all unfinalised cases.
The letter read: “You are required to provide the fund a list of all open matters by close of business on February 20…”
It is said that the RAF no longer wants to make use of the panel of private lawyers it had contracted to handle claims and now wants to use its own lawyers to cut costs.
The RAF admitted its outstanding bill for December stood at R17 billion.
The lawyers demanded that RAF not only withdraw the letter in which it was demanding the files back, but that the decision to cancel their services be reviewed and set aside.
They will, however, bring the review proceedings at a later stage.
Lawyer Pritzman Mabunda of Mabunda Inc, cited as the first applicant, said the RAF concluded a services level agreement with several private attorneys to serve as their panel of attorneys in handling RAF matters.
The RAF cancelled these agreements – a step the lawyers said was unlawful. While the issue would be ventilated in court during the review application, there is an outcry from the legal fraternity regarding the demand to immediately hand over all case files.
Apart from it going to cripple those with pending claims, they said it was also unethical as they, as lawyers, had a responsibility to act in the interest of the public. To make matters worse, they said the RAF had not even appointed a new panel of lawyers to deal with the matters.
The RAF said this application was “reckless and self-serving.”
Letsoalo, in an affidavit, said it was based on ignorance or disregard for the law. He said the main purpose of the application was to ensure that the RAF was unable to obtain the files and immediately settle cases.
According to Letsoalo, this would save on unnecessary legal costs, the dragging out of cases and relieve the court rolls around the country.
He said the law firms were bringing this application with the hope that they could continue “extracting billions of rand” in legal fees from the fund. “Currently the fund owes claimants R17bn in settled claims. It is unable to pay these poor claimants and yet spends R10.6bn on legal fees annually. By getting rid of the current model with an unaffordable panel of attorneys, the fund will at least save 75% in legal fees. This will enable the fund to pay claims promptly,” Letsoalo said.