The North Gauteng High Court In the matter between Road Accident Fund v Legal Practice Council and Others recently commented as follows:

“There can be no doubt that the RAF has been beset with financial problems for several years and is   presently in a precarious financial position.”

The comments were made in a judgement which deliberated on the RAFs’ petition to the court to were it sought an indulgence on staying hundreds of warrants of execution and attachments against it brought by unpaid claimants. This was an extra ordinary relief sought by the RAF in order to stabilize its precarious financial position in order to prevent an ensuing constitutional crisis.

This article then seeks to discuss RAFs’ position and the order in Road Accident Fund v Legal Practice Council and Others (58145/2020) [2021] ZAGPPHC 173 (9 April 2021).

Article:

The Road Accident Fund is experiencing severe financial difficulties that have been exacerbated by the current economic hardships faced by South Africa as a country. This then will mean, road accident victims who claim successfully will not necessarily get their payments or such monies will be delayed, resulting in lamentable hardships for the victims who desperately need the money for medical access or otherwise.

 The RAF is an organ of state which serves a constitutional purpose. The RAF stands in the shoes of the common law wrongdoer and provides insurance of payment to all successful motor accident victims that claim successfully. This position is beneficial given that, many people who cause motor vehicle accidents are men of straw (literally and deductively) who would not be able to pay for damages of road accident victims.

The RAF is financed by fuel levies, for every litre of petrol bought, a fraction is given to the RAF. However, since Covid-19 hit, and the introduction of the national lock down, many people had no use of vehicles, thus substantially reducing the fuel levies sourced for the purpose of paying out claims. This further intensified the RAF’s financial position. As a consequence, a number of claimants were now attaching the assets of the RAF. Hence the court case.

FACTS OF THE CASE

As a result of its dire financial position, the RAF is currently failing to pay claims made by the victims and in other instances, was extremely delaying such payments. The successful claimants then attempted to attach the assets of the RAF in order to force it to pay. However, that will in way bring the RAFs’ entire productions to a standstill, the RAF then approached the court in order to suspend the attachment and execution strategy employed by select claimants. Many claimants opposed, whilst others supported and demonstrated understanding of the RAFs’ financial position.

ISSUES TO BE DECIDED BY THE COURT

The court had to decide that, given the financial constraints within which the RAF operates and the constitutional legitimacy of its functioning, whether the extra indulgence to suspend and stay execution steps against RAF is justified at the cost of inconveniencing successful claimants who have not been paid over a prolonged period of time.

THE LAW AS APPLIED BY COURT 

The court recognized that the RAF serves a legitimate constitutional purpose as empowered by the Road Accident Fund Act (as amended) and the constitution. It noted that payment of compensation is not only a statutory duty, but mechanism whereby the state must comply with its constitutional duty in terms of section 12(1)(c) read with section 7(2) of the Constitution to protect road users.

The court also noted that if necessary temporary stay of execution is not granted the RAFs’ financial crisis will not be alleviated and that will result with the RAFs’ implosion and result with a constitutional crisis where the RAF will no longer be able to fulfil its constitutional obligation by paying compensation and it will trigger the invocation of section 21(2)(a) where claimants will now be forced to recover damages directly from wrongdoers. The court appreciated that if this was to be allowed, many road accident victims would be left in a very dire situation of being uncompensated.

CONCLUSION

The court suspended for a definite time.

This means all RAF claimants should reasonably expect and accommodate a delay in payment of their claims. Payment of claims will be done using the first in time principle subject to lawyers who represent such claimants notifying the Fund of their claim and entitlement of it being paid. 

Reference List:

• Constitution of South Africa, 1996.

   

• Road Accident Fund Act 56 of 1996.

   

• Road Accident Fund v Legal Practice Council and Others (58145/2020) [2021] ZAGPPHC 173.