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The Road Accident Fund (RAF) faced tough questions in parliament over its leadership instability, mounting legal costs, default judgments and the financial impact of the RAF 1 form judgment.
After presentations made to the portfolio of transport, the fund revealed that it paid out R8.9bn for 80,665 claims.
But it was further revealed that the fund also paid R2.2bn in legal fees, which raised concerns among MPs with the DA’s Chris Hungsinger questioning how the fund could maintain institutional memory after having four chief executives in seven months.
“What continuity and institutional memory and decision-making has survived this level of churn?” he asked, while seeking clarity on when government would finalise a permanent CEO and board.
Deputy transport minister Mkhuleko Hlengwa said the process was now moving towards the cabinet.
“We are finalising a memo for transmission to the cabinet, where one is for the CEO and one for the board. This cost-benefit analysis forms part of the bill which we’ll be bringing to the cabinet,” he said, adding that the material part of the bill was complete and the ministry was awaiting completion of the analysis.
The proposed reforms include changes to the fuel levy, the possible introduction of third-party insurance and consideration of the impact of electric vehicles on RAF revenue.
Hlengwa said the fund was “an institution in transit from a very difficult past of a series of wrong decisions and non-compliance”.
“We are doing our level best to regularise the environment, to stabilise it, so it can operate normally and respond to its immediate challenges as they present themselves.”
Rise Msanzi’s Makashule Gana questioned whether claimants represented by certain firms had a greater chance of having their claims finalised.
“If one was to look at this, it would tell me that you’ve got a greater chance of getting your claim finalised and paid out if you are represented by [certain] attorneys,” he said.
The RAF presentation showed the most-used 10 attorneys for the quarter, with De Broglio Attorneys Inc topping the list at R225.94m worth of claims, followed by Ger Nel Inc at R167.81m and Frans Schutte Mathews Phosa Inc at R164.98m.
Podbielski Mhlambi Inc received R146.21m, Komane Attorneys R133.91m, Van Niekerk Attorneys R122.84m and JS Terblanche Inc R115.80m.
Adendorff Incorporated received R96.44mn, Adams & Adams (Pta) R88.37m, while Mphela & Associates Attorneys Inc received R83.39m.
Hlengwa said the RAF needed to follow the money through to the claimant.
“Sometimes the claimants are not aware that RAF has made an offer.”
Acting RAF CEO Radikwena Phora said the fund would provide parliament with more information on the payments.
He also stressed that each firm represented multiple claims and that claimants, rather than the RAF, chose which attorneys represented them.
He said the RAF had launched a dedicated backlog eradication project to deal with historic claims separately from new claims.
“We are deliberately separating backlog from normal handling of claims, with a view that over time we get to a point where our attention is purely on new claims,” Phora said.
Hungsinger questioned the RAF’s financial position after its change in accounting policy.
Phora said the financial statements had been restated to reflect the change and said the impact was about R490bn.
“We have moved the organisation from an adverse opinion to an unqualified opinion, which is a big step from where it came from,” Phora said.
On the request-not-yet-paid register, Phora acknowledged that the RAF remained financially constrained, to an extent exceeding R20bn.
“As much as we would want to pay all of what is on the RNYP, in a single month we get as little as a billion,” he said.
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