RAF hails ruling, but Outa does not
● The embattled Road Accident Fund (RAF) sang its own praises this week after a court ruling stopped claimants from attaching its money and property.
But the Organisation Undoing Tax Abuse (Outa) found the judgment from a full bench of the Pretoria high court last week “worrying”. Outa says that those unable to work because of disability will suffer the consequences of the RAF’s inefficiency.
The judgment paints a bleak picture of an entity on the brink of financial implosion, with an accumulated deficit of R322bn and liabilities exceeding assets by a similar amount.
The court order means that for the next 180 days, all writs of execution against the RAF and settlements it has already reached with claimants are suspended.
On Thursday, RAF board chair Thembelihle Msibi and CEO Collins Letsoalo hailed the judgment as one of management’s strides towards fixing the entity. Letsoalo said the fund sought the court order because it faced an untenable situation.
“What we had was a situation where our bank accounts were being attached, our chairs were being taken, our computers were being taken. We couldn’t function,” he said.
“This new management and the board is doing very well. We have taken a lot of decisive action about consequence management,” Letsoalo said.
“There are a lot of people that cases have been opened against with the police and there are also lot of other people that have been suspended or dismissed at the RAF for all these things. We are actually on course to do what the cabinet and the minister expects us to do.”
Transport minister Fikile Mbalula also welcomed the judgment.
“This is an important step in placing the RAF on a sustainable path to ensure that it is able to provide the much-needed relief to those who need such relief as a consequence of the position they find themselves in due to road accidents,” he said.
“It also gives impetus to our interventions, which started with the appointment of the board in 2019, followed by the appointment of the CEO in 2020, who will then drive the implementation of a new operating model for the RAF.”
But Outa CEO Wayne Duvenage said there was little comfort for victims of road accidents.
“The real shame is that those people who are suffering from an inability to work and earn a living to sustain themselves, due to accident injuries, are now suffering the consequences of this ruling and the demise of the RAF,” he said.
“We have largely government and the management of this institution to blame, along with the unscrupulous conduct of a number of law firms which feed off this pot of money by taking advantage of a weak RAF, whose systems, administration and leadership have not kept pace with the demands on it.”
Duvenage said the RAF should have acted 15 years ago. “This is when it had the capacity to challenge the veracity of the growing number of claims being presented, through the development of competent teams, along with systems and processes to deal with the workload and to fend off the many inflated and fictitious claims against it,” he said.
“No wonder their litigation costs have increased tenfold, because they simply have allowed this to happen,” he said.
To keep pace with growing demands on the fund, said Duvenage, the RAF component of the fuel levy had been increased significantly.
“The state has erred by simply throwing money at the problem and passing this cost on to the motorist, instead of dealing with the systemic issues and addressing the real problems arising from a lack of capacity, expertise, leadership and systems at the RAF,” he said.
Legal Practice Council spokesperson Sthembiso Mnisi said: “The council has abided by the order of the court to publish the judgment to all practising attorneys.”