The Road Accident Fund (RAF) should put its new accident-victim payment system on hold, the Cape High Court ruled on Friday.
Delivering judgement on the matter between the RAF and a group of lawyers, Judge Jeanette Traverso said the fund should not go ahead with the new system, which would see compensation monies paid directly into the bank account of victims, as opposed to that of their lawyers, until such time as the new system had been reviewed.
She ordered the RAF to pay the legal costs of the applicants.
Earlier, advocate Jeremy Gauntlett had argued before Traverso that thousands of road-accident victims would be deprived of legal representation if the RAF did not continue paying the claimants’ compensation directly into their attorneys’ accounts.
Gauntlett said the move would make it difficult for attorneys to represent victims.
He was representing a group of lawyers challenging the RAF’s recent decision to pay compensation funds directly into the accounts of claimants.
The new system, which came into effect on August 1, was indicative of the RAF’s ”hypocrisy, cynicism and would deprive claimants of legal representation”, he said.
The previous practice, which saw the fund depositing claimants’ compensation into the account of their attorney, allowed them to recover their legal fees.
While a few lawyers have abused the previous system, the RAF’s new system of compensation is not the answer, he said.
Gauntlett argued that existing contracts between clients and attorneys would be negatively affected and asked the court to impose an interim order against the new system.
However, advocate Nazeer Cassim, representing the RAF, said the lawyers’ application had nothing to do with protecting the interests of claimants, but was meant to ensure that attorneys continue to ”rip off” road-accident victims.
”They want to preserve their lifestyle, a large chunk of the money meant for claimants lands up at the middlemen,” he said. — Sapa