Road Accident Fund (RAF) CEO Collins Letsoalo and the fund’s board have been ordered in a High Court judgment to collectively and severally “pay out of their own pockets” the costs related to the late settlement of two claims lodged with the fund.
Mpumalanga Judge President Frans Legodi, with Deputy Judge President Sheila Mphahlele and Judge Brian Mashile concurring, had been extremely essential of Letsoalo and the RAF board within the judgment handed down on Tuesday to an inquiry into the late settlement of two claims lodged towards the fund by Dumisani Elvis Hlatshwayo and Mzwandile Modcay Masilela.
Listen/Read: Protecting belongings arising from a Road Accident Fund or medical-negligence declare
Legodi criticised the late settlement of RAF claims, or the settlement of claims on the dates of trial, when monumental costs of litigation had been already incurred and never preventable.
The judgment additionally revealed the chaos on the RAF, significantly because the fund instructed its panel of attorneys to return their information as half of a shift to an in-sourcing mannequin on the fund.
Legodi mentioned the price order towards Letsoalo and the RAF Board shall embody the costs to date related to or related to these inquiry proceedings and the costs of two counsel, the place relevant, that resulted from or had been related to the late settlements.
He additionally ordered Letsoalo to convey this judgment to the eye of Minister of Transport Fikile Mbalula and the RAF board by no later than 26 January 2023 and make sure to the registrar of the Mpumalanga High Court that this has been achieved by no later than 27 January 2023.
Masilela’s attorneys lodged his declare with the RAF on 11 January 2018.
The case was licensed trial prepared on 25 January 2022 with out the RAF collaborating in pre-trial and/or case administration conferences, regardless of discover for these conferences being served on the fund.
It was enrolled for trial on 14 March 2022 and the RAF claims handler, after initially asking for additional info, then obtained a mandate for the deserves, future medical bills and common damages of the declare.
This resulted in a young being made on 9 March 2022, with this supply accepted on the identical day.
Hlatshwayo’s declare was lodged with the RAF on 26 March 2018. The matter was on trial on 7 March 2022 when it was settled in its entirety.
Claim handlers’ challenges
The system carried out by the RAF after the disposal of the panel of attorneys from June 2020 created challenges for declare handlers, who acknowledged that on some days they may have greater than 20 trials to attend to on a single day.
Legodi mentioned most declare handlers had been mentioned to have greater than 100 issues that they need to attend to of their respective portfolios.
He mentioned that for the RAF to permit issues succesful of being settled to attain the stage of trial after which solely to be settled on the dates of trial or later, defeats the Act’s object to examine, settle and pay compensation.
Legodi mentioned this has an enormous unfavourable impression on the use of the monies of the fund and quoted from an affidavit by which Letsoalo mentioned there have been 185 773 claims in 2005, which resulted in R941 million in legal costs.
Read: RAF making nice strides in its turnaround technique, claims chair
There had been solely 92 101 claims in 2018 however the legal costs rocketed to R88 billion.
“In 2019 the legal costs elevated to R10.6 billion. This ballooning of legal costs can solely be attributed to not imposing and or complying with the legislation as supplied for… [in] the Act.
“The buck stops with the CEO, his management and the board. Spending so much money on legal costs can only be described as a failure to manage and utilise the money of the fund for the purposes of the Act,” he mentioned.
Counterproductive legal technique
Legodi mentioned Letsoalo, the fund’s administration and board had been absolutely conscious that earlier than the return of the numerous information from the panel attorneys on pending issues within the courts, an answer had to be discovered first and way more time was wanted to discover workable and efficient resolution.
“The real question therefore is what did the RAF do to ensure that our courts are not brought to a stand-still at a great prejudice not only to the administration of justice affecting the claimants or litigants but also to the RAF itself?” he mentioned.
Legodi mentioned it’s clear in Letsoalo’s affidavit the issues confronted by the RAF had been largely due to its counterproductive legal technique in phrases of which solely 2% of the claims had been settled inside 120 days and 98% by means of litigation.
The RAF then determined to undertake a distinct mannequin, and to scale back legal costs.
The intention was to settle 98% of claims inside 120 days and solely litigate on 2% – and to instantly settle the bulk of instances that had been already on the roll from June 2020 onwards.
“This [Letsoalo] concession is telling and if this dream was realistic, achievable and had come true, we would not have been in these proceedings and dealing with an inquiry to determine who must be held liable in the form of costs order arising from late settlement of the two cases,” he mentioned.
Read: SA cuts Road Accident Fund legal responsibility by R305bn [June 2021]
Legodi mentioned an try to attempt to blame the panel attorneys for not having returned the information in time has no advantage and isn’t based mostly on any factual foundation as a result of, as of 1 June 2020, there was nothing in place to take in the numerous information from the panel attorneys for the issues pending within the courts.
The RAF, represented by the CEO and the board “are to be blamed” for this method in coping with trial issues, he mentioned.
Legodi added that ordering the declare handlers to refer each matter pending in court docket to the State Attorney’s Office for pre-trial and judicial case administration conferences whereas understanding {that a} system has not been put in place within the State Attorney Office for such issues to be effectively and successfully handled “is not acting in good faith to deserve a protection in terms of section 15(3) of the Act”.
He rejected argument that there aren’t any info to present the late settlements are related to the conduct of the CEO and the board.
The Masilela case was settled too shut to the date of trial and the Hlatshwayo matter was settled in its entirety on the date of trial.
“The claim officers who had deposed to the affidavits in these matters all pointed to a bus that had no direction. But, all overwhelmed by a chaotic situation created by the management steered by the CEO and the fund’s board,” he mentioned.
Legodi described the failure of the RAF, CEO and board to observe the Mpumalanga Division’s Practice Directive guidelines within the current two instances as “inexcusable”.
Responding to Letsoalo’s rivalry that he was not a celebration to both of the 2 instances and had not obtained discover of any reduction to be sought towards him personally, Legodi mentioned “the buck stops with the CEO as to what happens to those members of the staff and the conditions of their employment”.
Legodi referred to the “weapon” the courts have within the kind of value orders, that are supposed to keep away from the costs of protracted litigation, when the principles of the court docket usually are not complied with.
He mentioned intervention by means of a judicial case administration course of additionally permits the court docket to have an oversight and to refuse to certify issues trial prepared except happy that the matter is certainly prepared for trial.
“The courts are required to take charge of the pace of litigation and not only [be] dictated by the parties. The pro-activeness of the courts is required,” he mentioned.
