South Africa’s accident lawyers are bracing themselves for more public scrutiny after the Cape High Court authorised a raid on a law firm accused of ripping off indigent clients claiming from the Road Accident Fund.
Court representatives and independent attorneys spent about 24 hours collecting documents from the Athlone premises of H Mohamed & Associates that could prove that the firm systematically stole from impoverished accident victims.
Many of the documents were found behind mirror panels in the office of the firm’s senior partner, Hoosain Mohamed, as well as in his private, marble-lined toilet. Other bundles were found outside the building on the fire escape in black plastic bags ready for removal.
Mohamed has quit the firm in the wake of the court application launched last week by the editor of noseWEEK, Martin Welz, together with several former clients. Legal commentators say lawyers who specialise in accident work – many from established white firms — are alarmed at the expos of Mohamed’s scam and the decision by the Cape High Court to order a raid on his firm’s premises.
The director of the Centre for Applied Legal Studies in Johannesburg, Professor David Unterhalter, said the expos would unnerve certain sections of the legal profession – “particularly the ambulance-chasing part of the profession”. It is widely believed that Mohamed’s scam — which boiled down to keeping victims in the dark about their compensation pay-outs and fraudulently pocketing cheques made out to them — was not an isolated incident, but one of many similarly improper schemes pulled off by accident lawyers.
The Road Accident Fund has in the past few months referred many complaints to the Law Society, which in turn claims the fund is targeting specific law firms and soliciting complaints from their clients. It also emerged this week that one of the attorneys who led the charge against Minister of Transport Mac Maharaj’s plans to reform the accident claim system had links with H Mohamed & Associates.
George Maluleke, a leading light in the Black Lawyers Association (BLA), confirmed he had been talking to H Mohamed & Associates about a possible tie-up of their commercial operations. One of the attorneys working for Mohamed, who is implicated in the scam, used to work for Maluleke. Maluleke played a pivotal role last year in torpedoing a long-running campaign by Maharaj to change the way accident victims claim compensation from the Road Accident Fund.
Maharaj’s proposals would have meant a reduced role and lower fees for lawyers, many of whose practices depend on road accident work. But the new regime he proposed would also have led to smaller pay-outs for accident victims, as the plans included capping claims in a bid to cut the fund’s R8- billion deficit.
Maharaj effectively abandoned the reform programme, one of his pet projects, after vigorous lobbying by the legal profession. During three years of haggling with the legal profession, Maharaj on occasions — some of which were tinged with racial tension — failed to hide his dislike for many members of the profession.
The BLA began actively lobbying relatively late in the day. In addition to wanting to change the claim system, Maharaj was anxious to deal with lawyers who have improperly milked the fund and their clients. His last draft White Paper included a proposal that could have forced attorneys to disclose how they determined a particular portion of their fees in such cases, which until now has not been regulated.
One of the government officials who lent a sympathetic ear to the BLA’s lobbying was advocate Mojanku Gumbi, legal adviser to Deputy President Thabo Mbeki. Asked about Gumbi’s role in the process, Maluleke said the gist of what was presented to her was also said at periodic meetings with Maharaj.
“We had meetings with the minister from time to time. She [Gumbi] came in later. Most of the points were made directly to the minister.” Asked whether there was any tension on the issue between the offices of Mbeki and Maharaj, Maluleke said: “I am not aware of tension. I would want to think that as a team they [the ministers] worked together.”
Maluleke expressed his horror at the Mohamed expos. Maharaj initially proposed a “no-fault” accident compensation scheme, which would have paid out victims regardless of whether they were to blame for the accident. Such a scheme has been running successfully in New Zealand.
Maharaj watered down his proposals several times, incurring criticism – from academe as well as the legal profession — that his plans were not sufficiently thought through. Unterhalter said this was one of those areas of the law in which the poor were particularly vulnerable. “If the profession cannot regulate itself — through its professional bodies — then we are going to need some other regulatory body.”
Maharaj, who has not given up and is now laying the groundwork for a commission of inquiry into the accident claim system, said the industry needed to regulate itself. The Mohamed scandal has highlighted the limitations of the Law Society as a regulatory body.
Some of the victims identified by Welz approached the Cape Law Society and got nowhere with their complaints. When the Law Society receives a complaint, it forwards it to the relevant attorney and frequently leaves it at that.
The Cape Law Society said this week it would launch an “in-depth investigation” into how it had failed to discover any wrongdoing on the part of H Mohamed & Associates in one of the more harrowing cases documented by Welz that involved a nine-year old child. Welz and his co-applicants are preparing a class action against H Mohamed & Associates. They will be back in court next month.