Claims backlog to cost Road Accident Fund R49.9bn

Road Accident Fund Source: Google Images

The Road Accident Fund (RAF) is saddled with about 45 000 claims that await settlement for a period that ranged between five and 10 years as at last October.

The cash-strapped RAF will now need a whopping R49.9 billion to settle all the outstanding claims.

This is according to Transport Minister Fikile Mbalula when he was responding in writing to parliamentary questions from EFF MP Noluthando Nolutshungu.

Nolutshungu asked Mbalula the total number of road accident claims that were lodged against RAF that have been awaiting settlement between five and 10 years.

She also asked on what date the outstanding claims finally would be settled and what total amount it would take to settle all the claims.

In his written response, Mbalula said the total number of road accident claims that have been lodged against the RAF and awaiting settlement for more than 10 years stood were 6 933 as at October 9.

He also said there were 39 214 other claims that were also waiting for settlement for five years during the same period.

“The date for which the outstanding claims will finally be settled is unknown at this time due to the multitude of variables,” Mbalula said.

He, however, said the factors included delays attributable to claimants’ attorneys, failure to locate the claimants, non-availability of medical experts to assess claimants, compile reports and/or testify in court as well as the long time to obtain a trial date, among others.

The minister said the aggregated total amount claimed in respect of the claims was R49 985 029 061.

“The total amount it would take to settle all of the afore-mentioned claims was unknown at this time due to the multitude of variables,” Mbalula said.

His comments come hot on the heels of the reports that the cash-strapped RAF was forging ahead with its decision not to use the panel of attorneys whose service level agreements it decided to stop earlier this year.

The fund took this decision because it faced financial difficulties and deemed that it would save by using private attorneys on certain circumstances.

In November, Independent Media reported that Mbalula said the fund was embarking on a recruitment drive based on the assessment of the capacity of its in-house attorneys.

In his written response, Mbalula said RAF currently has a total number of 62 attorneys to be seconded to the Office of the State Attorney to deal exclusively with RAF matters.

“The further recruitment of additional attorneys will be informed by an analysis still to be done on the ability of the current attorneys to deal efficiently with the current number of litigated matters, where triable disputes exist,” he said.

“The RAF aims to further recruit on an ongoing basis such additional attorneys informed by the number of litigated matters which requires representation in court.”

This happened as there was litigation between RAF and the lawyers who challenged the decision to scrap the panel of attorneys in a bid to save millions in legal costs.

Mbalula had said the RAF owed claimants billions of rand in settled claims.

“It is however unable to pay these claimants and yet spends R10.6bn on legal costs annually.

“By getting rid of the current operating model, with an unaffordable panel of attorneys, and by adopting the new operating model the RAF could save substantial amounts in legal fees,” he said at the time.

He said through the new model RAF would capacitate its operations for claim handlers to investigate and settle claims and by pursuing voluntary mediation and use of state attorneys where litigation could not be avoided.