The outcome of the ANCs long-awaited KwaZulu-Natal conference was a win for the Thuma Mina crowd. (Delwyn Verasamy/M&G)
The Road Accident Fund’s (RAF’s) legal department is all too well acquainted with the interior of the country’s courts, including the Constitutional Court.
The responsibility for trying to prevent further harm to the organisation through the courts has fallen upon Charlene Louw, the RAF’s general manager: legal, compliance and regulation. The bulk of the institution’s yearly legal bill of R4.7-billion is directed toward defending challenges brought by attorneys acting for claimants who believe they have been short-changed. This has become an unfortunate practice, often motivated by the greed of lawyers who retain a percentage of claims awarded to their clients.
“There has been a lot of criticism of how we handle direct claims, most of which is unfounded, and we still want to encourage claimants to come to the RAF directly,” Louw says. “We have too many matters in court where there is no basis for adjudication of the matter by the court and would have otherwise more expediently been settled directly with the RAF. We are clogging the court system and more concerning for RAF is that the compensation paid to claimants is deducted by the lawyers representing them, which is not the case if they came to the RAF directly.” These legal challenges are expected to fall away once the proposed Road Accident Benefit Scheme (Rabs) is enacted as it proposes a simplified benefit structure, with payments made directly to the beneficiary as opposed to the current complex dispensation where merits and quantum are more often than not determined by the courts through a process of protracted and costly litigation.” These legal challenges are expected to fall away once the proposed Road Accident Benefit Scheme (Rabs) is enacted as the mechanism to determine the value of benefits changes. With the enactment of the Rabs legislation, in future, all claims will be handled directly between claimants and Rabs.
The RAF and its enabling legislation is often challenged in the courts, and one such challenge is the recent Constitutional Court challenge where the Court ruled that claimants who are the dependents of an accident victim are eligible to receive benefits from both the RAF and the SA Social Security Agency (Sassa).
“This is a debate that has been a long time coming. We have held the view that foster and child care grants ought to be deducted from the compensation paid by the RAF. Our reasons for this are because in our view, the compensation paid by both RAF and Sassa are from the same purse so to speak, and amount to double compensation to the claimant. “What the judgement does for the RAF is that it brings finality to that debate. We intend not to challenge it.”
Apart from grappling with these weighty legal issues, the legal, compliance and regulation department is also responsible for ensuring legislative compliance, particularly around governance and combatting fraud and corruption. Louw says this is achieved by testing compliance with processes, procedures and legislation — a process that identifies anomalies that could be due to fraud, and is critical in the processing of claims.
“RAF’s reputation has not always been great, and while the reasons are many, some of the contributing factors were the lack of a compliance fuction, an immature risk management function, and a fraud and investigations department that was not capacitated enough to do preventative work.” One of the ways that her office is trying to combat non-compliance and fraud is by conducting internal awareness campaigns with the investigations and ethics units.
Similarly, and in a bid to encourage claimants to deal directly with the RAF, the institution has implemented public awareness programmes that are proving to be quite successful, says Louw. “In fact, the RAF on the Road campaign received the 2014 National Batho Pele Excellence Awards for the best Project of the Year.”
Louw says direct claims are to the benefit of the claimants, because claims can be settled much quicker than if they are subjected to the challenges that are inherent in the lawyer-driven option.
The organisation would certainly benefit from her team’s expertise being directed toward compliance and fraud prevention activities rather than fighting excessive claims in court.