Private lawyers are all set to appeal the insolvent RAF’s decision to bring litigation in-house
03 January 2021
BY FRANNY RABKIN
The decision by the Road Accident Fund (RAF) to scrap the use of private attorneys to represent it in court will be before the Supreme Court of Appeal (SCA) this year.
Firms that have been representing the entity say the move is unlawful and has thrown courts into chaos.
The RAF serves as a safety net for the loved ones of thousands of South Africans who die in car accidents each year or those who are injured. But it has been lurching from crisis to crisis for years and is insolvent. It has been identified as SA’s biggest contingent liability after Eskom. Corruption is one of the causes of the ongoing crisis. With a guaranteed R40bn every year coming from a fuel levy, it has — despite the efforts of various role players — been a cash cow for unscrupulous lawyers, doctors, actuaries, touts and RAF employees.
RAF litigation makes up the vast majority of litigation in SA’s high courts — in some, more than 90%. When people talk of the wheels of justice being slow, it is RAF matters that account for much of the gridlock. But for the legal profession RAF work is the bread and butter of a significant number of lawyers; for some it makes up their whole practice. It has been estimated, said one court judgment, that the RAF annually pays about R3.4bn to panel attorneys — attorneys who have tendered to be on the fund’s panel to be briefed to represent it in court.
When the RAF in February 2020 called for its panel attorneys — some 103 firms and individuals — to return its files, the financial implications were huge. That the decision impacted just as the Covid-19 lockdown came, when so much court work dried up, made it a devastating blow.
Not all personal-injury lawyers are corrupt, but it was the endemic corruption aided by the RAF’s inept internal arrangements with its panel lawyers that led it to decide to move its legal representation in-house, according to papers before the Pretoria high court in August. According to a judgment by judge Wendy Hughes, transport minister Fikile Mbalula appointed a new board in December 2019 and asked it to consider bringing its legal representation in-house, saying it could save the fund R2.9bn a year. But, said the judgment, this justification came ex post facto and the court was unconvinced. Hughes examined the decision taken by the RAF and found it unlawful on a number of grounds. The panel attorneys thus won in the high court, but the RAF has taken the matter on appeal.
There was then a further fight about what should happen while the case was working its way through the appeal courts. In this battle, ultimately decided by a full bench in a decision penned by judge Jody Kollapen, the court found it would be wrong to force the RAF to work with lawyers with which it is in a bitter legal feud.
But in the meantime, a separate, scathing judgment by the same court has painted a dire picture of how bad things are with RAF litigation and how the decision to scrap the use of attorneys has opened the fund up to inflated claims by unscrupulous attorneys. In a November judgment, Pretoria high court judge Denise Fisher lashed personal-injury attorneys, particularly those representing plaintiffs, and their “defiant attempts … to avoid judicial scrutiny”, even in cases that “are strongly suggestive of dishonesty and/or gross incompetence on the part of those involved”.
In the two cases she was dealing with the plaintiff attorneys had, in amendments made at the last minute and after the RAF had pleaded to the original claims, inflated the claims more than threefold and in ways that were unjustified by the facts, the judge found. Pliant or unscrupulous doctors also played a role.
She said the cases showed a modus operandi in which the RAF was unrepresented and “overwhelmed by the sheer volume of cases and/or the officials are pliable. They thus place undue reliance on the representations of the plaintiff’s attorney as to the loss.”
Because there were no lawyers for the RAF the fund was vulnerable: “This unprotected position that these public funds find themselves in has obviously not escaped those who wish to exploit the fund. These cases are but two instances of widespread exploitation.”
In the cases she was dealing with, the plaintiff attorneys and the RAF settled, agreed on damages and did not want the court involved. The judge had to insist the cases came before her for a decision.
Fisher described the efforts made by the courts over the years to ensure judicial oversight and stem the tide of corruption in this area. But she said “as fast as the judiciary puts in place measures … the more moves are contrived by unscrupulous plaintiffs’ attorneys and the RAF to circumvent these attempts. This is obviously of greater concern now that the RAF is unrepresented by attorneys as there is now even more scope for malfeasance and manipulation.”
However, one of the arguments forcefully made before judge Kollapen’s full bench was that the “civil trial rolls were in chaos and that many matters are being postponed, default judgments are being granted against the RAF and the approach of the RAF is to settle at any cost.”
The evidence of chaos, disruption and a judicial system in disarray remains scattered, anecdotal and relatively isolated.
Judge Jody Kollapen
However, Kollapen said while there has been some disruption, this would have been inevitable with the transition from an old established model to a new model. Even in those cases cited, “the outcomes have generally not been prejudicial to claimants or the system as a whole”.
“The evidence of chaos, disruption and a judicial system in disarray remains scattered, anecdotal and relatively isolated,” said Kollapen.
It is therefore unclear from the judgments how badly the decision to scrap the panel lawyer system has affected the RAF.
But it was apparently implemented without considering what would happen in pending litigation. According to a source within the courts, this period has exposed other worrying practices: unscrupulous plaintiff lawyers have taken advantage of the RAF’s vulnerability and flooded the courts with myriad trial date requests while there is no real dispute worthy of going to trial. This is not because they have any interest in running trials, but simply to force the RAF into hasty, ill-conceived settlement agreements that continue to drain the fund’s already depleted coffers.
The chaos on court rolls, while its extent may be debatable, is a consequence, says the source, of the RAF’s current non-lawyer representatives, called “claims handlers”, who don’t respond to correspondence and do not participate in judicial case-management processes.
While there is nothing to prevent the RAF from using in-house attorneys, provided the transition is done lawfully, regulators may also want to consider the vulnerabilities identified by Fisher’s judgment.