Written by Brian Preller
The Road Accident Fund (RAF) plays a fundamental role in ensuring social stability. The organ of state, established in terms of the Road Accident Fund Act (the Act),[1] ensures negligent drivers of motor vehicles, thus ensuring that the victims of road accidents are duly compensated rather than leaving victims destitute and in possession of unenforceable paper judgments. By design, the RAF should act no different than any other private insurer. A claim is lodged, an investigation takes place, and payments are processed to victims by way of settlement.[2] However, as is noted by overburdened court rolls across the various divisions, in terms of which around 90% of litigious matters before some courts are against the RAF.[3]
LITIGATION AT CROSS-ROADS
Victims of road accidents approach firms of attorneys to handle their claims, and whilst the handling of a claim typically begins with a statutorily prescribed lodgment, it quickly escalates into litigation when a settlement offer is not forthcoming from the RAF. Attorneys, under a legal duty to represent their clients’ best interests, continue steadfast in litigation, all whilst the RAF, under the direction of new internal management, has terminated their attorney’s mandates in the hope of settling claims and reducing legal costs.[4] According to some reports, the RAF’s liabilities total over R360 billion, second only to Eskom, and only by a fine margin.[5]
The result of the present state of affairs and claims cycle is that more often than not, a settlement offer from the RAF is frequently received a few days before trial if not on the day of trial, resulting in a rushed acceptance and removal of the matter from the roll. This is likely a result of the RAF’s failure to adapt sufficiently to large-scale restructuring, resulting in settlement prioritization leaning towards trial matters. This despite the promise of the RAF to settle newly lodged matters within 120 days.[6]
One would be forgiven for believing that the receipt of a settlement offer is the end of the matter, after all, the RAF will process the settlement and funds will be received in due course. However, and as noted specifically in the practice directives of the Gauteng High Court:[7]
‘Every settlement/consent draft order presented shall be interrogated by a judge who is requested to make the settlement/consent order to determine whether or not the circumstances upon which order is premised are justified in relation to the law, the facts, and the expert reports upon which they are based.”[8]
The justification for this approach is simple and is described at great length by
Fisher J in the matter of Taylor v Road Accident Fund.[9] A lack of judicial oversight provides opportunities for malfeasance and corruption. Thousands of fraudulent claims are submitted to the Road Accident Fund every year,[10] many with the assistance of doctors and attorneys who, without scrutiny, may be seen as truthful and reliable by mere social standing. This corruption is further facilitated internally, through the negligence of claim handlers who do not properly scrutinize claims.
THE SETTLEMENT COURT PROCESS
When a settlement agreement is finalized between the RAF and the Claimant in a matter where a summons was issued, the Plaintiff must approach the specially constituted settlement court to make the settlement agreement an order of court.[11] This is a lengthy process that requires the Plaintiff’s attorney to approach the court for a settlement trial date.
A notice of acceptance is served on the RAF, and, in instances where a contingency fee agreement has been entered into, both the attorney and Plaintiff should depose to affidavits in terms of sections 4(1) & (2) of the Contingency Fees Act respectively.[12]
In terms of the Revised Practice Directive 1 of 2021 (the 2021 Directive),[13] the seminal document required is a settlement submission document, in terms of which both the Plaintiff and Defendant’s representatives are to make submissions on the facts and evidence, appropriately cross-referenced, that demonstrate that the settlement amount is an accurate reflection of the damages in the matter. This should be signed by both parties and be presented to the registrar with a draft consent order and Form 9, attached to page 47 of the 2021 Directive.[14]
Alongside a date application form and practice note, the Plaintiff will be able to apply for a settlement hearing date on CaseLines by inviting the appropriate Registrar’s office. Thereafter, a hearing date should be provided by the relevant Registrar.
CONCLUSION
Settlement court is a necessary check and balance that ultimately results in the protection of public funds. The RAF receives an annual income of more than R40 billion from fuel levies,[15] and whilst this may seem like a bottomless pit of money to those managing claims on either side, the fund is operating at a deficit. The settlement trial court requires parties to justify their settlement values and ancillary terms to ensure accountability, transparency, and the rule of law. While RAF litigation is often seen as trifling in the legal space, it is nevertheless, of monumental importance in realizing the rights of persons, particularly the right to security of the person entrenched in Section 12 of the Constitution.
[1] Act 56 of 1996.
[2] Supra note 1 at s4(1)(b).
[3] M T v Road Accident Fund; H M v Road Accident Fund 2021 (2) SA 618 (GJ).
[4] Business Insider ‘Road Accident Fund says lawyers are refusing to hand over 183,000 cases’ availible at https://www.businessinsider.co.za/claims-road-accident-fund-2020-7 accessed on 18 May 2022.
[5] Times Live ‘Court dismisses Road Accident Fund’s bid to block release of audit report’ availible at https://www.timeslive.co.za/news/south-africa/2022-02-25-court-dismisses-road-accident-funds-bid-to-block-release-of-audit-report/ accessed on 18 May 2022.
[6] Road Accident Fund ‘Management Directive 1/2021- Compulsory Supporting documents required for RAF Claims Administration’ dated 8 March 2021 at page 2.
[7] Judge President’s Practice Revised Directive 1 of 2021.
[8] Ibid at para 5.3.
[9] Taylor v Road Accident Fund and a related matter [2020] JOL 48990 (GJ) at paras 5-23.
[10] Ibid at para 16.
[11] Applicable process in Gauteng.
[12] Act 66 of 1997.
[13] Supra note 7.
[14] Ibid at paras 55.1 – 55.2.
[15] Road Accident Fund ‘Annual Report 2019/2020’ at page 4.
