Picture: Moneyweb
The Road Accident Fund (RAF) has warned of “unscrupulous attorneys” who are giving groceries and transport money to claimants in a scheme aimed at swindling them of their RAF claims.
An illegal scheme is going on with unethical law firms that aim to benefit from RAF payouts rather than claimants.
RAF said it has received complaints about attorneys who paid the claimants amounts that are significantly lower than what was paid to them by the fund.
The fund said the scheme includes borrowing money to cover living expenses such as buying groceries and paying for transport while the claim is being finalised, with them claiming this money back with “exorbitant interest” from the claimant’s compensation.
“South Africa has exceptionally high levels of inequality,” the fund said on Wednesday.
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“Desperate road crash survivors and their families are often lured into these illegal schemes, then often coerced by attorneys into signing agreements that prevent them from questioning their RAF pay-out amounts.”
According to RAF, in Mpumalanga, there are law firms that are allegedly forcing the claimants they are representing to apply for their compensation to be paid in instalments.
It added that claimants from across South Africa have told stories of not hearing from their attorneys, being forced to sign documents that are not explained, not being told about the undertaking that they may use for medical needs while waiting for compensation, and not having access to their funds for five years after the compensation has been paid.
The fund said it recently reported Spruyt Incorporated Attorneys to the Legal Practice Council (LPC) and the Gauteng LPC and assisted several claimants in laying charges against the law firm.
In the matter, RAF paid the claimant’s legal representative, Spruyt Inc Attorneys, R241 000, but they paid the claimant a measly R10 400.
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“The discrepancy was justified by the attorney as necessary due to high administrative costs — a malpractice that is misleading and in clear contravention of the Contingency Fees Act 66 of 1997, which limits the total fee to a maximum of 25% of the compensation,” the fund said.
RAF Chief Executive Officer Collins Letsoalo has urged claimants who are victims of these “unethical practices” to contact the fund immediately.
“The Fund’s contact centre capacity was increased last year to deliver more transparent and fair services to the claimants. It is imperative that these issues are addressed and that the integrity of the claims process be upheld,” Letsoalo said.
The fund also emphasised that claimants have the right to information about party-to-party costs.
Party-and-party costs are legal costs that a court may order RAF (the defendant) to pay to the claimant (the plaintiff) in a claim where summons was served.
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“Party-and-party costs are those costs which were necessarily incurred while prosecuting or defending the claim. They do not include attorney-and-client costs related to attendances between a claimant and the attorney,” the fund said.
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