What is happening at the Road Accident Fund – the new strategy?

The Road Accident Fund (RAF) was created to fulfil its constitutionally mandated function of financially assisting road users who have…
By Louis Botha
11 May 2022

The Road Accident Fund (RAF) was created to fulfil its constitutionally mandated function of financially assisting road users who have been adversely impacted in accidents on South African public roads. In other words, the RAF exists so that victims of road accidents (Claimants) are protected and covered to ensure that those individuals are compensated for injuries sustained or the loss of a loved one. The RAF stands in the shoes of the wrongdoer, which has the effect that Claimants are precluded from suing the wrongdoer to recover their damages.

Is the Road Accident Fund insolvent? – Insolvency is the wrong measure of the RAF’s ability to pay Claimants. Insolvency looks at your assets versus your liabilities. The RAF was never created to hold assets and it thus makes sense for its liabilities (future claims) to outweigh its assets. The RAF is funded through fuel levies and as those levies are continuously received by the RAF it has a constant stream of capital inflow. This means that the RAF can pay Claimants and they continue to do so.

What is the Road Accident Funds new operating model? – Recently, the RAF’s acting CEO, Collins Letsoalo, introduced a new strategic plan that moves away from litigation to claims management. According to Letsoalo, this new strategy has been adopted because the current operating model has left the RAF unsustainable. He maintains that the RAF’s priority will now shift to early investigation and settlement of claims within 120 days from lodgement of claims. The RAF has since been moving to a more sustainable operating model. Firstly, the RAF has stopped paying exorbitant fees to private Attorney firms to defend it and are now handling claims inhouse. Secondly, the RAF is focused on settlement directly with Claimant Attorneys instead of litigating at extra costs. The RAF has thus started utilizing less expensive resources at their disposal and this has provided increased capital for settlement of claims.

With boots on the ground, what is really happening in the day-to-day claims at RW Attorneys? – At RW Attorneys we tackle the problem from all sides. We attempt to settle claims directly with the RAF, whilst simultaneously following the tried and tested litigation route in the courts. We continue to find success via both avenues. The reality is that the RAF does not have the capacity to settle claims within 120 days, as mandated, and we do not see this happening any time soon. The RAF is, however, attempting to settle claims out of Court, which leads to claims being settled earlier and with less litigation costs.

Why should you use an experienced Attorney to assist you in your claim? – At RW Attorneys we rely on 132 years of legal experience to quantify and settle your claim in the most efficient and meticulous way possible. Our services are offered on a “no win, no fee” basis. We have a highly qualified team of medical Specialists that will examine you and quantify your damages. When your matter is settled it can take up to 180 days for payment to be made by the RAF. We have an established relationship with the RAF, which leads to timely payments of our client’s claims. This ensures that you are fully compensated for your injuries or loss of a loved one. We make it a priority to ensure that your claim is not under settled to save time and money. We take pride in delivering quality work and putting the needs of our client’s first.