Cape Town - The Road Accident Fund (RAF) is increasingly seeing more matters settled out of court, with R24 billion saved in legal costs over the past four years, said CEO Collins Letsoalo.
RAF briefed the media on its 2023/24 performance report, yesterday.
The fund provides compensation for all road users in South Africa in the event of an injury sustained as a result of a motor vehicle accident.
Collins said the RAF reduced its short-term debt or RNYP (requested but not yet paid) to about R8.271bn, which had previously peaked at R19bn.
“What is this short-term debt? It is the money we owe to claimants that we can’t pay ...” Collins said.
“We give you the projection of R51.4bn, so if we did nothing, we were going to be at R51.4bn in terms of projections in this financial year.
“What does R51.4bn mean? It means RAF would have simply received its revenue and that whole revenue would be less than the RNYP, which is the short-term debt.
“Now that would’ve been a disaster so we have averted that disaster.”
He said the most contentious issue was that of legal costs.
“We sit with legal costs of R3.899 billion. You can see that when we started in 2019/2020, that was sitting at R9.4bn. So we paid lawyers R9.43bn and that has been reduced to R3.89bn this financial year.”
In its 2023 summary performance, 79 377 claims were registered with 63 015 claims finalised.
The average settlement value per claim increased by 9.54% to R287 000 per claim.
In a statement released on Saturday, RAF said it had reported Spruyt Incorporated to the Legal Practice Council for gross misconduct and cruelty to claimants.
This after it was made aware of some attorneys “systematically” underpaying claimants, providing compensation amounts that were significantly lower than what RAF had paid out.
In one such instance, Spruyt Inc Attorneys representing an RAF claimant was paid out R241 000, however, the claimant received a mere R10 400, with the attorney claiming this was due to high administrative costs.
RAF said the malpractice was misleading and in contravention of the Contingency Fees Act 66 of 1997, which limits the total fee to a maximum of 25% of the compensation.
Cape Argus