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This interview was originally aired on RSG Geldsake (in English). The Afrikaans introduction has been translated in this transcript.
RYK VAN NIEKERK: The struggling Road Accident Fund is in the news again, and again unfortunately, for the wrong reasons. The organisations representing attorneys in the country have sent an absolutely stinging memorandum about the ongoing crisis at the fund. This follows after the Deputy Minister of Transport, Lisa Mangcu, and the fund itself having blamed attorneys for the fund’s problems. The allegations include a huge backlog in the processing of claims, and very long delays in paying accident victims and attorneys. The legal fraternity says that allegations that attorneys are causing the problems are complete rubbish and simply an attempt to divert attention from the fund’s problems. The legal fraternity also asks the minister of transport to appoint a new board.
This affects all of us because the Road Accident Fund is funded by a levy of R2.18 on every litre of petrol sold in South Africa.
I will be chatting with Professor Hennie Klopper from the University of Pretoria, who is also involved at HB Klopper Attorneys, also in Pretoria. Then I’ll also speak to Collins Letsolao, the chief executive of the Road Accident Fund. We’ll be getting both sides of the story.
[The segment running from 1:32 to 8:47 has not been transcribed.]
RYK VAN NIEKERK: Collins Letsoalo is on the line. He is the CEO of the Road Accident Fund.
Collins, thank you so much for joining me. I don’t know how much you understood of what Professor Hennie Klopper, [emeritus professor at Pretoria University and HB Klopper Attorneys], has [just] had to say, but in essence he says there are significant problems within the Road Accident Fund, and there is no proactive or a positive change in the way the fund is actually managing and processing claims. It seems to be a mess. All the cases go to court and then there’s a long, long delay.
COLLINS LETSOALO: Good evening. I’ve not heard a lot, but if that’s what the Prof is saying, with all due respect, he’s wrong at every level. I don’t think that we can agree that the Road Accident Fund continues to be [inaudible] our model was actually around what the Prof had discovered in 2019.
But the Road Accident Fund was paying about R10.6 billion to legal costs of matters that 99.6% of them were [inaudible] at the best of the cost a year. Now we came and our view was that we do not want to waste the taxpayers’ money by paying R10.6 billion and settling 99.6% of those matters. I think we did a lot of other things that made a lot of people upset.
I don’t think that people expected what we did in really taking out [inaudible], because what you are seeing is a comeback from the legal profession, which has siphoned a lot of money out of this fund for years and made it unworkable.
Read: Lawyers’ damning memorandum on the Road Accident Fund
For instance, I tell you that a quarter of all the fuel levies that we used to collect, R10.6 billion, we used to go to lawyers. As we speak today, we have cut that significantly, and I am saying over the last three years at least R20 billion of what we should have paid has now gone to the claimant. And that’s what we aimed to do from the beginning.
But I want to say this. There is one of the recent De Rebus– I think the professor has also written about the new model, and he looked at issues. One of the citations there is Ketsekele vs the Road Accident Fund of 8 May by Retired Judge Bertelsmann. That tells you a horror story about the RAF back then in 2015. And these particular lawyers that have written this, they must tell you what they have done. We’ll show you what we have done. They must on their side tell you what they have done to try and resolve that because the matter was actually reported to them.
RYK VAN NIEKERK: But the memorandum that was issued by the 10 representative organisations, as well as the prof today, said that cases drag out for years and that the fund does not make proactive offers to settle matters. This leads to the exorbitant legal bills, and that stems directly from the administration function within the RAF.
Let me ask you this. How long does the average case take to be processed and paid out by the fund?
COLLINS LETSOALO: Currently we are focusing on a 120-day settlement, which is what we have brought into the space, and it takes 180 days after the court order for people to be paid. Now we have a backlog. Of course that backlog was created by the following. In terms of Section 24, people must submit claims. Section 24.4(a) says that you must submit a claim with all particulars. What lawyers simply did is to submit empty claims. And in terms of Section 24(5), if don’t object within 60 days to those claims as a claim, then it becomes valid in all respects in law. And that is what they have been abusing for years.
Read:
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We brought up this minimum requirement that they’re now challenging in court, and only 3% of what they submit actually goes through; 97% is actually being objected to, and that is what is making them freaked because ordinarily, what they would do is they would drag these matters for years. And that’s why we are saying, give us the information, give us the minimum requirements, [and] in 120 days we’ll give you the offer. That’s exactly what they don’t want.
Remember, if they do that it’ll simply mean they’ll not reach to the 25% of the [inaudible] contingency fee. It will be it save your legal costs or 25%, whichever to lower. So they are muzzling it out to push it for four years because they want to earn all these fees.
RYK VAN NIEKERK: So you say they are lying?
COLLINS LETSOALO: Absolutely. They fib all the time. This fibbing seems to be a problem. I said this morning that I suspect that they’re suffering from the Mandela effect, where these are just on tribulation…..
People are making assertions about things that are not there. Let them bring the facts.
And, as we are saying now we’re finalising our audit; we’ll bring the legal calls that we will show that we have got them down. We have performed more than 90%. And they tell you about the crisis. The crisis – only the R20 billion they’ve lost in the last three years.
RYK VAN NIEKERK: But Mr Letsoalo, there are other aspects which are also concerning. The standing committee of public accounts, or Scopa, visited the Road Accident Fund offices recently. They were prevented from accessing the offices. When they eventually got in, they found people working on makeshift desks. They had to use their own computers and own chairs. There were boxes of files – even in the parking lot. And afterwards, Scopa said, ‘This is a dysfunctional institution’. How do you react to that criticism?
COLLINS LETSOALO: They must tell you where they’re getting that from. I’m telling you that we have got an annual performance plan, which we are measured against since I arrived. When we arrived, it was sitting at 58, I think it was 56%, and we increased it to 78, to 84. This year it’s higher than 90%. So we don’t know what they’re talking about, so we can’t say. When Scopa came, they knew we were not going to be there. They never asked us any questions. If they’d asked we’d have answered. It’s a very simple thing of accountability. Now they knew I was outside the country. We told them we won’t be there.
Read:
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They said we are going to go to the head office. They end up in Menlyn and then they see stuff in boxes, and they say there’s a problem. Why would an organisation that in terms of Section 34 must receive paper not have boxes worth of papers in sight? I mean, if they came and they said we found papers everywhere – they did find papers everywhere. They were in boxes, indexed…..
RYK VAN NIEKERK: But the pictures show that people are using those boxes, putting a plank on top of it to use it as a desk. There aren’t even desks.
COLLINS LETSOALO: Ehh, we have to see that, because there’s no such a thing. They say those things. There’s no such a thing.
RYK VAN NIEKERK: But there are pictures of those boxes. There are pictures of those desks going around in the media.
COLLINS LETSOALO: Let them come. Those pictures – they were never there. People showed boxes on the floor, and they said people sit on these boxes. And the question people ask is: ‘Where are those people that are sitting on those boxes, because we’re seeing only boxes without anyone sitting on them.’ So there’s no truth to that.
Read:
RAF making great strides in its turnaround strategy, claims chair [March 2022]
SA cuts Road Accident Fund liability by R305bn [June 2021]
‘And remember, the issue of the taking of this is created by the same legal fraternity. They have not started now. They’ve been taking rough furniture for years. They used to take cars here. So it’s nothing new. We came, we went to the court to seek for relief in terms of 45(a). And that has happened. That just pushed them. They used to attach our bank accounts. They’ve never done such in the last three years. And that is what is frustrating.
RYK VAN NIEKERK: Collins, we’ll have to leave it there. That was Collins Letsoalo, who is the chief executive of the Road Accident Fund.
Johan [Gouws], what do you make of this story? We have heard two sides which differ hugely.
JOHAN GOUWS: He says, she says. The truth probably lies somewhere between.
RYK VAN NIEKERK: It’s probably in a box somewhere.
JOHAN GOUWS: Ryk, should we take a look at what is happening in other government departments, it would take some effort to persuade us that they do not have big problems as well.
