Road Accident Fund hid millions from lawyers

The lengths to which the Road Accident Fund (RAF) was prepared to go in order to avoid settling claims with lawyers representing victims of car accidents were revealed in Parliament on Friday, when the Special Investigating Unit (SIU) briefed the Standing Committee on Public Accounts as part of the committee’s ongoing investigation into the fund’s governance failures, financial mismanagement, legal costs and allegations of corruption, notes Legalbrief Africa. SIU head Andy Mothibi said that the fund’s Treasury had started conducting internal investigations into bills from practitioners and firms over cost disputes, effectively blocking payments to them and prejudicing claimants. He said that some bills had accumulated interest, with lawyers applying to courts for a writ of execution to attach RAF assets, including furniture, to force payment. However, in some instances, the RAF would change its bank accounts to shield funds from being attached. A News24 report notes that the SIU previously found that the blocked payments were worth an estimated R452m, with changing of accounts leaving large amounts of RAF money unaccounted for. The SIU said that the move amounted to ‘financial misrepresentation and could be viewed as attempts to circumvent financial accountability and transparency,’ and have broader implications for public trust. 

The findings form part of several preliminary findings by the SIU investigation into the fund, which it launched in 2021, including procurement irregularities, duplicate payments to lawyers, and fraudulent claims. News24 says it previously reported that the erroneous payments worth R350m were paid to 101 law firms in 2021. The RAF dismissed investigations after firms repaid the duplicate, while 87 firms paid back the funds before the fund’s investigation started. According to Mothibi, acknowledgements of debt worth an estimated R70m have been signed with lawyers so far, while R42m in cash has been recovered for the duplicate payments. ‘The SIU investigation revealed that lawyers paid R246m to the RAF. The unit is investigating whether such instances amounted to misappropriation of trust funds,’ he added.