Applicants requesting an urgent interdict say the new RAF directives are unlawful and make the process unnecessarily difficult for claimants.
A group of frustrated claimants are taking on Transport Minister Fikile Mbalula and the Road Accident Fund (RAF) over a new directive changing the rules under which victims file accident claims.
Top law firm Adams & Adams is representing a group of accident victims whose claims have been rejected as a result of a new management directive which stipulates additional requirements for a claim to be processed. The directive is part of a new strategy adopted by the RAF to reduce costs and increase the pace at which claims are processed.
In order to address challenges which have constrained the RAF both operationally and financially, Mbalula and the RAF adopted a strategy to settle accident claims within 120 days, reducing the average age of old claims and cutting administrative costs.
Speaking on the new directive on Monday, Mbalula said the RAF had operated with a financially unsustainable model for a number of decades. In recent years the long-term liabilities of the fund have become the government’s largest contingent liability.
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“What was also a priority is the actuarial liability of R322 billion the new team was asked to investigate and reduce. With this being the contingent liability of the state, it made the RAF the biggest liability after Eskom,” Mbalula said.
According to an earlier statement by the RAF, one of the challenges leading to billions in legal costs and time wasted is the lodgment of claims by plaintiff attorneys with insufficient information to enable the fund to investigate and settle claims within the required 120 days.
This enables the attorneys to issue summonses against the fund after the prescribed 120 days have lapsed, thereby charging legal costs. These costs have added up to R6 billion annually.
Applicants requesting an urgent interdict, however, say applying the directive as it now stands is unlawful and makes the process unnecessarily difficult for claimants.
Accident victims whose claims have been rejected have filed an application asking the courts to interdict and restrain the RAF from refusing to accept the delivery of claims for compensation based on non-compliance with the management directive.
In papers filed by Adams & Adams partner Jean-Paul Rudd, he argues that the importance and detrimental impact of the “unlawful” management directive on persons wishing to claim compensation from the fund is immense.
The directive which has been effective from April this year is ostensibly designed to enable the RAF to effectively and efficiently administer claims. In addition to the documentation required for a claim to be valid in terms of the law, the fund now requires additional documents that form part of the claim’s supporting documents. These include additional hospital and police documents.
Rudd argues the additional information requirements stipulated by the directive only compound an already difficult process of obtaining certain documents from public institutions.
The directive effectively makes the RAF the final word on the validity of a claim, he adds.
“The practical effect of the management directive is to shut the door for claimants with technicalities, requirements not demanded by the legislation, the Minister nor by the courts. The way in which the RAF enforces the management directive means the fund is proverbially the judge, jury and executioner regarding substantive compliance.”
The urgent application was filed in the Gauteng High Court in May. The interim interdict is sought pending the institution and finalisation of an application for the review and setting aside of the management directive.
The review will be instituted in terms of the Promotion of Administrative Justice Act 3 of 2000 and/or the principle of legality.
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The Personal Injury Plaintiff Lawyers Association (Pipla) chairperson Justin Erasmus says the RAF should have instituted the new regulation as an amendment to the RAF Act in order to subject it to a more fair process.
“It should be that the regulation is done in an amendment and it should be published for comment. They should allow various role players in the industry to comment about this so that we come to some kind of collective solution that everybody is happy with.”
Rudd argues in his founding affidavit that the logistical restrictions imposed by the Covid-19 pandemic have made it more difficult to get certain information from public institutions. Obtaining the required documentation to submit a claim that substantially complied with the requirements of section 24 of the RAF Act takes time and great persistence by attorneys, he adds.
“We and our clients are reliant on state institutions, hospitals and the police to supply information and supporting
documentation,” he says.