Nawaal Deane
The Law Society of South Africa has slammed a controversial move by the state-owned Road Accident Fund (RAF) to pay compensation direclty to claimants and not through their attorneys.
In a memorandum to the fund, the society says the move will curtail access to justice and is likely to deny compensation to thousands of poor and illiterate claimants.
The move was introduced in a draft Road Accident Fund Amendment Bill 2002, sent out in December last year, sparking off widespread shock among legal practitioners. The Bill was subsequently put on hold but the plan to pay claimants directly is still under way.
The Mail & Guardian reported last month that Humphrey Kgomongwe, the CEO of the fund, said he is committed to implementing a new system at the end of March and has liaised with law societies with regard to the process.
He said that the initiative is intended to curb corruption and the defrauding of the fund, to ensure that claimants are fully compensated and to eliminate the perception that the fund acts in the interest of attorneys rather than claimants.
Currently attorneys will take on a case without requiring a deposit and the client signs over power of attorney to the lawyer. Any medical expenses or continual funding of the client is the responsibility of the attorney until the settlement has been reached. “The proposed arrangement would do away with this access, necessitating attorneys to insist on payment of deposits,” says the society. According to the memorandum the consequence of this new system is that poor people will be discriminated against because attorneys will no longer be able to act as their bankers or loan them money. In some cases, attorneys “keep them and their families alive pending settlement”.
The move by the fund has caused uncertainty among personal injury attorneys who are reluctant to take on new cases, fearing that if this new system is implemented they will incur expenses that may not be paid or bills that will take a long time to be settled.
Personal injury attorneys say that this system will marginalise attorneys and eventually ensure that no attorney will take on third-party cases. But the fund says this won’t happen. “It is not understood why all attorneys would seek to abandon claimants especially as, under the proposed operational mode, they would still be directly paid costs due from the fund for their representation of claimants,” says Themba Mhambi, manager of corporate communications at the fund. The attorneys’ fees will be paid by the fund after the case has been settled.
The fund says that people who cannot afford attorneys or who do not want to use attorneys can approach the fund without approaching an attorney. “If they qualify for compensation we will assist them fully,” he says. According to the fund, access to justice will be achieved through an attorney who will still be paid for work done in representing the client.
The new system will affect medico-legal experts who deal with third party victims with the understanding that their accounts will be settled at the end of the case. “Doctors will not contract with claimants, as they are not sure of getting their money.” But the fund disagrees, saying that if “the medical expenses were necessarily and reasonably incurred the fund is obliged to reimburse the attorney by law”. The fund says that these issues need to be discussed with stakeholders in the legal, medical and other relevant professions.
The memorandum points out that the system is still open to fraudulent activity. “Those practitioners who do have a tendency to steal can open either a fraudulent account or an account under the control of the practitioner, circumventing the proposed new arrangements of the RAF trust. In the event that the proceeds are stolen the claimant will have no cover since the proceeds were not entrusted to the attorney’s account.”
The society recommends that together with the fund they should find alternative solutions to address fraudulent activities. The society does not deny that there are some dishonest attorneys but says: “The [Road Accident Fund must] be requested to assist law societies to ensure that each and every claimant has personally acknowledged that he has seen the discharge form and is aware of the settlement amount.” The fund says that both the claimants and the attorneys are sent settlement offers and the discharge forms.
The tension between the fund and attorneys seems set to continue, with the fund adamant that the new process will take place.
“There is, however, nothing in the proposed system that would stop attorneys and their clients from entering into their own agreements and the client instructing the fund to make certain payments to the attorney prior to making direct payment to the client. We reiterate, though, that there is no inherent injustice in the fund paying claimants directly; if anything, that would be the most just thing to do. Compensation money belongs to the claimant,” says Mhambi.
In the January/February edition of De Rebus, an attorneys’ journal, the editorial reiterates that the fund should work with legal practitioners and law societies to find a solution. It also commended the fund for withdrawing the draft Bill but said that: “[The Road Accident Fund] should not attempt to bulldoze through changes which will have such an enormous potential impact on the public’s entitlement to road accident compensation.”