How state lawyers have robbed SA blind, to the tune of R80bn – report

A report in Sunday Times reveals that a furious Health Minister Aaron Motsoaledi has uncovered possibly one of the greatest scams of state funds in South African history.

According to the paper, government is investigating collusion between people suing government hospitals for malpractice and state attorneys who either settle cases that have no merit whatsoever or defend the cases so badly that they invariably lose.

Estimates put the cost at more than R80 billion in a large-scale scam that began at least six years ago and is concentrated on hospitals in the Eastern Cape – although the practice occurs nationwide.

The Special Investigating Unit (SIU) is now probing how several state attorneys allegedly receive kickbacks from claimants’ lawyers in return for intentionally bungling cases.

Justice Minister Michael Masutha and Motsoaledi confirmed to the Sunday Times that the scams are so entrenched that the state has lost at least R60 billion since 2013 in fraudulent malpractice claims that could easily have been defended.

The true figure could be more than R100 billion.

The health minister said he’d recently discovered one claim for R70 million for a supposedly botched circumcision, when it turned out the patient had never even been circumcised at all and the hospital had in fact saved him from illness.

Another R25 million claim from a 19-year-old man supposedly suffering from cerebral palsy – allegedly caused by bad treatment when he was born in Limpopo – was also without merit since the “victim” was well enough to apply for a driver’s licence.

Since news of the SIU probe has emerged, unscrupulous malpractice lawyers countrywide have reportedly been hastily withdrawing several malpractice lawsuits. The unit raided the offices of five of them this week after they were identified as having lodged 80% of the claims in the Eastern Cape.

“One notorious law firm in the Eastern Cape being investigated by the SIU has a total of 28 cases against the state, with each claim being R15.8 million – a total of R442.4 million,” reports the Sunday Times.

Motsoaledi said they had discovered that even in Gauteng it was easy to discover malpractice cases that were using a basic template where the names of “victims” had simply been changed.

“Kingpins” in the scam are understood to have been identified by government. An official told the paper that they’d already started asking how some state workers were able to afford luxury vehicles on salaries of no more than R20,000.

Government reportedly intends to recover as much money from implicated officials as possible.

The report also suggests that government previously lacked the “political will” to deal with the problem.