The Pretoria high court has ordered the Road Accident Fund (RAF) to scrap a board notice setting out onerous new requirements for lodging claims, declaring it unlawful, unconstitutional and at odds with the organisation’s obligations to compensate victims of traffic accidents.
While the ruling represents a victory for the applicants, it is only the first of two legal battles over the RAF’s push to increase the mandatory documentation required when road traffic accident victims lodge claims. A second board notice with similar requirements is still in play.
In the past accident victims weren’t expected to submit extensive supporting documentation when they lodged claims with the RAF. However, since 2021 it has demanded extensive paperwork, including reports from third parties such as police accident reports, financial statements, and medico-legal reports.
The RAF is a statutory body established to compensate victims of road traffic accidents. It is funded by a fuel levy on sales of petrol and diesel, currently set at R2.18/l. Victims of negligent drivers can claim for medical expenses and loss of earnings.
In March 2021 the RAF issued a directive setting out new mandatory documents that were to be submitted with claims, followed by a board notice published in the government gazette in June that year. A group of nine accident victims and suppliers of medical devices successfully applied for an urgent interdict against the notice, and then sought to have it reviewed and set aside.
The applicants’ attorney JP Rudd, partner at Adams & Adams, said the RAF was an insurance fund that was obliged to investigate claims. “It can’t sit back and say claimants must supply everything,” he said.
Powers exceeded
In a ruling handed down on November 6, a full bench ruled that the RAF had not only exceeded its powers in issuing and applying the board notice, but had also created barriers that impeded accident victims’ ability to lodge claims.
“The (RAF) did not facilitate efficient administration of claims but rather reduced the number of claims by creating administrative hurdles to stop claims from being submitted. It resulted in victims of motor vehicle collisions being excluded from claiming compensation,” the Pretoria high court judges wrote.
Parliament had given the minister of transport the power to make regulations to the RAF Act, but did not grant the minister powers to sub-delegate those powers to the RAF, said the judges. They found the RAF had failed to follow any form of public consultation, as it did not seek input from the legal fraternity or the public.
The court ordered the RAF to review all the claims it rejected between March 8 2021 and June 15 2021 that it had deemed invalid due to lack of documentation, inform the affected people, and give them six months to resubmit their claims. It awarded a punitive cost order against the RAF and ordered it to publish the terms of the order on its website and in national newspapers.
Appeal likely
RAF CEO Collins Letsaolo said he had instructed the fund’s lawyers to seek leave to appeal against the ruling. He challenged the judges’ finding that the RAF had failed to follow a proper public consultation process before publishing its board notice. ]
“It is a shock to us, which is why we are appealing,” he said.
The RAF had decided to increase the documentation required of claimants because 93% of the claims in its backlog did not have the requisite paperwork, he added.
Another legal fight is under way over a second board notice the RAF published in the Government Gazette in May 2022, after withdrawing the first notice in the wake of the 2021 high court interdict.
The second board notice was published after public consultation and institutes the same requirements for supporting documentation as the previous one.
The Legal Practitioners Indemnity Fund has filed a review application to have this board notice declared unlawful, unconstitutional and set aside. The matter is due to be heard early next year.
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