Dodgy lawyers? Millions in payout to cerebral palsy boy unaccounted for

Sfundo Phiwayinkosi Hlongwane only received half of the nearly R10 million payout he received from the KwaZulu-Natal Department of Health, sparking questions about the conduct of the attorneys that represented him.

Sfundo was born with cerebral palsy in 2013, a condition caused by hypoxic-ischaemic damage due to a delayed and incorrect mode of delivery at a KwaZulu-Natal hospital.

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MLS attorney’s investigated

According to News24, only R4.9 million of the R9.3 million settlements he received from the department for malpractice was sent to a trust established in his name.

The Legal Practice Council (LPC) has now begun an inquiry into MLS Attorneys, the company that mediated the transaction. 

MLS Attorneys allegedly deducted around R4.5 million from the payout, including for interim payments.

Furthermore, they submitted a bill of costs reportedly totalling R2.5 million, which remains unaccounted for.

MLS Attorneys’ Lwazi Mnguni denied the deductions and said the fees charged to the Hlongwane family were privileged because of the attorney-client relationship.

NMK Forensics carried out the investigation. When approached for comment, it refused to send a copy of the report to The Citizen as requested.

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Court papers

Court papers seen by The Citizen revealed that a court granted an interim payment in 2020 of over R1.5 million to the Hlongwane family. The family had applied for this payment in anticipation of a trial delay.

The trial, initially set for June 2020, was postponed due to the Covid-19 pandemic.

“The basis of the plaintiff’s application for an interim payment is that considerable costs have been incurred for Sfundo’s medical and related expenses.

“The delay would necessitate further costs to be incurred. The intended introduction of the public healthcare defence, if granted, would also result in further delays,” the court papers read at the time.

The family had claimed R2.8 million in damages as an interim payment. The department offered R1.5 million.

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Medico-legal mayhem: SIU exposes widespread corruption

The Special Investigating Unit (SIU) in September revealed that the public sector had potentially defrauded individuals of billions through medico-legal claims.

SIU lead Advocate Andy Mothibi said corrupt lawyers, touts and medical professionals conspire to swindle the state and claimants.

Mothibi said the unit’s probe prevented the state from losing more than R3.1 billion as a result of medico-legal corruption. However, he told Parliament then that the extremity of loss to the state could surpass R4 billion.

95 investigations were done, of those, the medico-legal investigation identified 54 cases of actual fraudulent medico-legal claims.

The SIU made 51 referrals to the Legal Practice Council (LPC) and 45 to the Legal Practice Fidelity Fund.

Mothibi presented a case study of an attorney in the Eastern Cape who received R373.8 million for 22 claims, but claimants remained poor due to a lack of trust accounts.

“This has resulted in claimants remaining in appalling and impoverished [condtions] despite receiving compensation from the department through their lawyers for medical negligence claims,” said Mothibi

Additional reporting by Enkosi Selane

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