Road Accident Fund can’t pay wages, accounts attached

The Road Accident Fund (RAF) has been unable to pay expenses like salaries because its bank accounts have been attached.

In the meantime, the fund owes R17 billion to people across South Africa who have suffered losses due to road accidents, but are still waiting to receive their compensation.

In an urgent application in the Pretoria High Court this week, the RAF asked for two things – that the Sheriff of Pretoria East return control of its eight Absa bank accounts to it, and that the court make a permanent special arrangement for the RAF that would give it the leeway to pay claims within 180 days instead of 30.

However, Judge Selby Baqwa scrapped the urgent application from the roll, with costs.

The RAF did not answer questions posed by City Press’ sister publication Rapport about how it will manage without its bank accounts and what it is going to do next.

Collins Letsoalo, the RAF’s acting CEO, painted a grim picture in the fund’s court papers.

He said the Sheriff “often” freezes money in the RAF’s bank account. In this case, it was at least 346 motorists to whom the RAF owed R173 million in terms of court orders.

Letsoalo said it was not that the RAF didn’t want to pay, but that it simply could not do so.

The RAF gets R3.5 billion from fuel levies every month, but has to pay out on average R4.3 billion in claims. This is before it has even paid salaries or other expenses.

Read: RAF ‘shambles’: Public Protector is investigating maladministration

Rapport has previously reported that the RAF was forced to lease chairs and tables because the Sheriff regularly attached the organisation’s furniture.

In his affidavit, Letsoalo said the RAF would never be in a position to pay all its judgment debts within 30 days of the date on which judgments were granted.

Those who have been waiting the longest are paid first.

Letsoalo said that most attorneys who represented claimants understood the fund’s financial position, but that there were still attorneys who advised their clients to obtain writs of execution to attach the RAF’s bank accounts. He said this happened often.

Because this is happening so often, the fund cannot use its accounts to pay those who have been waiting for their money for an extended period of time.

He said the fund “eventually” paid all debts owed by it – this was why it made no sense to attach the accounts, as it only hindered the fund’s ability to function.

At present, there are more than 1 100 writs of execution that have been served on the RAF’s offices in Pretoria. More of these are served on its regional offices every day.

Letsoalo said that the only way to make up the shortage would be to increase the fuel price levy.

The matter was scrapped from the roll because it had not been brought to the attention of the attorneys who represent the 346 claimants – they happened to find out about the case through the course of the day.

An attorney from Pretoria East who did not want to be identified said that his clients, on average, wait for five months for their claims to be paid.

“But, thereafter, I have to apply separately for the interest that is owed on the amount, which also takes time. Sometimes the fund doesn’t even pay out all the interest,” the attorney said.

“In the meantime, the RAF has a very luxurious office in Centurion and its annual report is printed on expensive glossy paper – all of it a waste of money.”

He also claimed that the RAF did not give proper instructions to its own attorneys for the claims against the fund.

“The fund does not give its attorneys the proper documentation. Often, the claimant makes these documents available to them just to save time.

“The RAF’s attorneys are also not allowed to settle a matter without instructions from the RAF, even if it is obvious that the claimant was in no way negligent in respect of the accident. This can cause a case to drag on for a year or two.”

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