RAF seeks leave to appeal against judgment on invalidity of claim forms

The Road Accident Fund (RAF) has lodged an application for leave to appeal in the Supreme Court of Appeal (SCA) in a matter that it says relates to the “sustainability and survival” of the organisation, which pays out compensation for injuries suffered during road accidents. 

The application has been brought against a judgment handed down in the Pretoria high court in November, which ruled that regulations relating to the documentation required by the RAF for the submission of a claim were unconstitutional, unlawful and invalid as they constituted unfair administrative action envisaged under the Promotion of Administrative Justice Act (PAJA). The act requires public participation in the exercise of administrative action, which did not occur in the gazetting of the regulations. 

The requirement for more documents and a new form in support of claims resulted in the rejection of claims by nine claimants who did not submit these additional documents. They brought the court application to have the regulations declared unlawful. 

The claimants argued that the new model adversely affected their rights to lodge claims for compensation and imposed unreasonable and unlawful restrictions on their right to do so. 

Critics said the new requirements — which include third-party reports such as police accident reports, financial statements and medico-legal reports — were expensive and difficult or impossible to obtain within the deadlines set by the RAF.

The Pretoria high court ruled that the RAF’s rejection of the claims lodged between March 8 2021 and June 15 2021 was null and void and gave the claimants the right to resubmit their claims. 

RAF CEO Collins Letsoalo argues in his affidavit in support of his application to the SCA for leave to appeal — which was rejected by the Pretoria high court — that the regulations requiring more documentation are intended to prevent a practice whereby claimants’ legal attorneys provide only the bare minimum of information with their claim, which means that the RAF is unable investigate and settle it within 120 days. Legal action lasting a number of years and incurring huge legal costs then follows with settlement reached on the eve of the trial. 

“More than 90% of the matters are settled on the eve of the hearing, literally at the doorstep of the courts. This is after the RAF has demanded relevant information to enable it to settle the matter. The legal practitioners do not object to the provision of this information at that stage simply because they are already guaranteed a hefty legal bill,” Letsoalo said. 

Letsoalo alleged that this practice is intended by attorneys to garner legal fees, which are crippling the RAF. He referred to research showing that despite a decline in the number of claims between 2005 and 2018, there was an “unprecedented” surge in legal costs. In 2005, the RAF faced 185,773 claims, incurring legal expenses of R941m. By 2018 — with a reduced number of claims of 92,101 — legal costs skyrocketed to R8.8bn and reached R10.6bn in 2019. 

He said this put the RAF in a precarious financial position. “If there is no urgent intervention, the RAF may very well collapse, to the detriment of the members of the public.” 

He told the SCA that the RAF’s requirement of more information upfront when a claim is lodged is the same information that the claimants readily furnish on the eve of the hearing or at the court doorsteps. The aim is to obviate the need for litigation. 

“The RAF intends settling at least 98% of the claims without the need for litigation. This has faced resistance from the legal practitioners who fear losing out on their hefty legal bill.” Letsoala claimed that the application to the Pretoria high court was part of this resistance. 

Letsoalo rejected the high court’s finding that the form and decisions requiring more information, which was attached to a gazetted regulation, was itself a regulation and therefore subject to PAJA. They also did not, he said, fall within the definition of administrative action.

He asserted that the RAF Act allows the fund to issue forms and it did not exceed its powers as the court ruled.

ensorl@businesslive.co.za