Road Accident Fund in the news: Suspension of payouts
Despite its regular source of funding, through the RAF Fuel levy, the Road Accident Fund is in principle in a constant state of insolvency. The RAF exists to assist those that have suffered loss due to the negligent driving of a motor vehicle by providing compensation to claimants.
For more information on the basics of an RAF claim see our article
Long overdue claims
The RAF received more than 100,000 new claims in the 2019/2020 financial year. Approximately 46,000 claims remain unsettled after five years, with outstanding payments nearing R50 billion. By March 2020, the RAF’s deficit had ballooned to R322 billion.
In July 2020 Acting Chief Executive Officer of the RAF, Collins Letsoalo, told media that the average time it takes after an accident until a settlement is reached (a determination of how much money you will be paid out) is five years.
Further detail of the Fund’s concerning financial position was revealed in response to a court order granted by the High Court earlier this year, which suspended – until the end of April – all writs of execution and attachments against the RAF’s essential assets. The court also ordered the RAF to clear its backlog of unpaid claims – older than 180 days – before 30 April 2021.
The court ruled that in order to give the RAF a reprieve to get back up to date with payments, recent claims not older than 180 days have been suspended from 1 May 2021 until 12 September 2021, to allow the RAF time to improve its operational standing.
Attorneys’ costs are being blamed
The RAF has cited legal fees as the most immediate cause of their financial predicament. High Court Judge Pieter Meyer said the RAF’s processes were “antiquated and plagued with corruption” and that its deep financial disaster posed a “constitutional crisis”. Given the RAF’s current slow turnaround time, it is clear that claimants have had to enlist the help of attorneys to submit and finalise their claims. In practice, part of the problem is that the RAF does not dispose of simple matters in a timely way in the early stages of a claim, thereby limiting legal fees which they also pay to their own legal teams and not only claimants’ attorneys. It has become clear that without the assistance of attorneys, claimants are pushed to the back of the queue when it comes to payments as they have no one speaking up for them.
How do I receive my compensation?
Payments are made on a lump sum basis. This is has contributed to the RAF falling behind on payments, as it has to pay large amounts of money at a time.
As a result of the overwhelming amount of overdue claims that the RAF has had to pay, it has tried to stagger payments by implementing a priority system of paying older claims first. Claimants whose cases had been finalised had been placed on a list where it is attempted to pay claims after 180 days (6 months). Once this does not happen attorneys assist clients by taking action and obtaining a warrant of execution against the RAF.
A warrant of execution is delivered to the RAF by the Sheriff, where after the Sheriff can seize property or funds to pay the debt. Over the last few years, there has been a big debate about the detrimental effects these warrants of execution have on the ability of the RAF to do their work. The court has issued a court order prevent attachments against the RAF’s essential assets until the end of April 2021. However it is expected that the RAF will have no choice but to approach the court for an extension of this order, so that they may be able to remain functional.
The benefit of appointing an attorney
All of the above result in the delay of payments to claimants. More so in the case of unrepresented injured parties who do not have the knowledge of the RAF’s procedures and how to enforce their legal rights. It is understandable that the RAF may have to stagger payments in order to pay off older claims first, however claimants should ensure that their claims are submitted for pay-out. If the settlement and pay-out has not been submitted, the payment can easily be overlooked without representation.
If you have questions about your Road Accident Fund claim, feel free to contact Pau du Plessis Attorneys on 012 809 1588 or send an email to paul@pauldup.co.za.
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