RAF in Danger of Collapsing

The Road Accident Fund (RAF) is facing a potential collapse and has recently suffered significant criticism from the high court regarding its handling of claims from road accident victims.

Judge Soraya Hassim emphasized that the RAF’s existence depends on a moratorium on the execution of writs and warrants related to capital and interest.

Read: RAF’s Cape Town branch is on the verge of ‘collapsing’

Hassim noted that the respondents’ agreement to an RAF request for an extended suspension of warrants and writs signifies an acknowledgment that while such a suspension may be undesirable, it is essential to prevent the fund’s collapse.

Judge Hassim expressed strong disapproval of the RAF’s actions in her judgment issued in the Pretoria High Court on Friday.

“Unfortunately, for at least the past 3-4 years, the fund has neglected the rights and needs of claimants injured in motor vehicle accidents due to another’s negligent driving,” she stated.

“Regrettably, the fund has failed to fulfill its statutory duty to compensate injured claimants.”

Hassim indicated that the RAF ignores court rules designed to ensure an organized and swift resolution of disputes and frequently disregards court orders.

As a result, she stated that the RAF has inadvertently hindered the efficient functioning of the courts, failing in its constitutional obligation to assist in maintaining the courts’ dignity, accessibility, and effectiveness.

“Unwantedly, countless hours of judicial time and resources are squandered because the fund does not adequately defend cases.”

“In many instances, the fund fails to provide expert reports and is not present during trials.”

“The court’s task becomes heavier when the fund is in default, as it still has to ensure that a plaintiff is either not over-compensated or under-compensated,” she added.

Hassim emphasized that meaningful engagement from the RAF would ease the burden on the courts.

RAF’s approach ‘has congested court schedules’

She pointed out that the RAF’s approach to litigation “has congested court schedules to the detriment of other litigants,” and the fund’s actions, “whether intentionally or not,” are inconsistent with constitutional principles.

Hassim remarked that the relief granted to the RAF by the full court was intended as a temporary suspension of execution, but the fund seems to have turned that into a prolonged deferral of its obligation to compensate claimants.

Read: RAF nearing a breaking point in its legal struggles against claimants

“In my opinion, such a deferral must be sanctioned by the legislature, as the obligation to compensate and the conditions for doing so have been established by legislative authority.”

“If the fund desires to delay or postpone its obligation to pay compensation to qualified claimants, it must seek approval from the legislature,” she added.

Hassim remarked that the RAF has utilized court processes to manage its operations.

“In this manner, the fund attempts to enforce rules that benefit it, in a manner that suits its interests alone,” she stated.

Writs and warrants

The RAF’s plea for a stay of execution pertained to writs and warrants based on compensatory orders under the RAF Act that were not older than 180 days from the court’s order, following a full court order on 24 April 2021 that granted a temporary stay for 21 weeks until 12 September 2021.

Since then, the RAF has managed to secure further extensions of this moratorium, with capital awards being suspended intermittently since at least 9 December 2020, while execution on interest payments has been on hold since 8 August 2023.

Read:
RAF head office assets at risk of auction [Oct 2023]
RAF’s urgent appeal to stop auction of its assets dismissed [Nov 2023]

Judge Hassim stated that the RAF’s recent application aims to extend not just the protection already afforded by preceding orders but also includes requests for a moratorium on executing writs and warrants for legal expenses.

There were 215 respondents to the RAF’s application, including the Legal Practice Council, the Board of Sheriffs, various sheriffs nationwide, the Pretoria Association of Attorneys, the Johannesburg Attorneys Association, the Black Lawyers Association, and several law firms.

RAF’s finances remain unstable despite moratorium

Judge Hassim noted that despite the moratorium’s advantages, the fund’s operations and financial status do not seem to have stabilized.

She mentioned that the RAF’s new management appears to have struggled to implement the necessary “far-reaching plans to restructure its payment system,” which would allow it to fulfill its statutory obligations promptly.

“The requests for further extensions indicate the fund’s inability to meet its statutory duties despite the moratorium, thereby affecting the state’s capacity to uphold its constitutional commitments to protect road users from violations of their right to safety and security,” she stated.

Some disputes resolved, others pending

Judge Hassim mentioned that on the initial day of the sitting, the parties expressed a desire to explore options for resolving or minimizing disputes.

By the third day, she was informed that many disputes had been settled, but some issues remained unresolved, and she had five draft orders presented to her.

Read:
RAF CEO avoids ‘coercive imprisonment’ for unpaid judgment debts [Jul 2024]
High Court denies RAF bid to evade interest payments on court orders [Sept 2024]

Hassim noted that due to the agreed suspension of writs and warrants for both capital and interest claims, she did not need to decide whether a case had been made for their suspension.

The unresolved issues included when the 180-day suspension for writs and warrants corresponding to capital claims should commence, as well as when execution should be suspended for interest claims that are no older than 90 days from when the capital claim was satisfied.

What the judge ruled

Hassim limited the moratorium extension to an additional six months from the date of her ruling.

The ruling outlined instances where writs of execution and warrants against the RAF, based on pre-existing orders or settled claims, are suspended regarding legal costs for plaintiffs in third-party compensation claims, along with the timeframes for those suspensions.

She mandated the RAF to cover the taxed costs of the Pretoria Association of Attorneys (PAA) and Johannesburg Attorneys Association (JAA) for opposing the fund’s application, while the other respondents must bear their own costs.

Listen/read: Road Accident Fund seeks to exclude higher-income claimants

She indicated that the contributions of these respondents were not critical for adjudicating the application and primarily supported the oppositions from JAA and PAA.

“Considering the fund’s dire financial situation, I do not find it just nor beneficial for current and future beneficiaries of the social security scheme established by the RAF Act to burden the fund with additional costs,” she stated.

Stay updated with Moneyweb’s comprehensive finance and business news via WhatsApp here.