End of road for RAF?
Claimants left high and dry
TIAAN Verwey still can’t remember the night a truck swerved in front of him on a quiet Benoni street on the East Rand nearly a decade ago. He blacked out and spent weeks recuperating in hospital.
Today, the 28-year-old man suffers from constant back pain and struggles to work as a carpenter.
However, the hardest thing, says the Kempton Park resident, is not knowing when he will receive his R1.3 million payout from the Road Accident Fund (RAF) after his case was settled in July.
“I struggle to walk, battle to bend and can’t pick up anything heavy. I need to pay upfront to see an orthopaedic surgeon but I haven’t got any money. I can’t wait any more.”
But Verwey’s long wait looks set to last longer. Yesterday, the RAF announced it is unable to make any payouts to its claimants, service providers, stakeholders and caregivers after the Sheriff of the Court attached its bank accounts after several legal firms sued the fund for R11 million.
“Payments have ground to a halt due to the RAF’s bank account being attached by the Sheriff,” said Dr Eugene Watson, the fund’s chief executive.
“This is (because) of a few legal firms whose actions disrupted an establishment cash management plan, which now inconsiderately prioritises them over those who have patiently been awaiting payment.”
But Pieter du Bruin, the chairperson of the Association of the Protection of Road Accident Victims, claims Watson is being “economical with the truth” and charges the fund is failing to comply with its statutory obligations.
“Why are attorneys suing the RAF? The principle cause of financial difficulty is the mismanagement of the RAF. There are thousands of claims that are never dealt with. Those claimants have no other choice but to approach attorneys, who act on behalf of their clients.”
The freeze on claim payouts, he believes, is another “ruse” to push through the controversial RAF Benefit Scheme (Rabs) Bill, which uses a “no fault” system – even the person who caused the accident can claim – and only pays out certain predefined and limited benefits. The government hopes it will replace the RAF and its compensation system.
Gert Nel, a personal injury lawyer, agrees. “It’s any attorney’s right to act on behalf of his client’s interests to recover his money that he’s duly settled in terms of a court order. You (the RAF) must make sure there’s money. You can’t say that you don’t have money because then somebody didn’t do their job.
“It’s a smokescreen by the RAF. They’re trying to influence the government and the public to convince them that the current dispensation is not af fordable. It’s not true.”
But the RAF has had a “history of insolvency”, says Watson. “This reality has persisted despite a 50c increase in the RAF fuel levy two years ago. The fund can only pay what it is able to and the cash management plan put in place two years ago endeavours to maintain regular payments to creditors.”
The RAF receives a monthly income of about R3bn from the fuel levy. But with the 30 000 payments that the fund makes monthly, it’s not enough. Ishmael Mnisi, the spokesperson for Transport Minister Dipuo Peters, has urged claimants “to exercise patience” until the impasse is resolved. Parliament recently approved the new law on a no-fault based system to clamp down on corruption in the RAF.
Stephen Flowers, a personal injury attorney, predicts the freeze on payments could have a “devastating effect” on road accident claimants. “We have clients who have waited up to a year to get their payments. It will bring further hardship.” – Additional reporting by Siyabonga Mkwanazi