Lawyers pocket R7bn from RAF

2009-11-30 05:14

THE Pretoria Bar Council (PBC) has ordered a probe of the Road

Accident Fund (RAF) accounts of 13 ­advocates following the recent disclosure

that lawyers and advocates pocketed the bulk of the R11,1 billion RAF payout to

road accident victims last year.

“This is scandalous,” RAF chief executive officer Jacob Modise

said. “Some of them are walking around with millions.”

Explaining the perilous state of the RAF’s financial affairs to

Parliament a week ago, Modise pointed out that the legal fraternity earned

almost R7 billion in legal and contingency fees with regard to RAF claims in the

2008/09 financial year.

By comparison, only R4,3 billion was paid out to accident

victims.

Not only did these advocates make a financial killing in the RAF

claims market, their cases were clogging up court rolls countrywide.

More than 60% of the court roll at any given time is occupied by

RAF cases, Modise said.

Spokespersons for the Law Society of South Africa (LSSA) and the

PBR agreed with him. The majority of cases on South Africa’s court rolls are RAF

cases, they said.

The huge treasure chest at the end of the RAF rainbow is shared by

a small, select group of South ­Africans.

The country’s law societies have 19 000 lawyers on their books

while 2 103 advocates are members of bar councils. Many of them do not handle

RAF cases. The rest share the treasure chest.

The legal fraternity regards the RAF as a slush fund, added Modise.

“They are making as much money out of the fund as they can. They

are robbing South Africa.”

Two of the advocates probed by the Pretoria Bar Council this week

narrowly escaped being taken to court to force them to open their books to

scrutiny.

But they were persuaded not to resist the probe. “All of them had

handed in their books by four o’clock on Thursday,” said advocate Hennie de Vos,

chairperson of the investigation committee. He refused to name the advocates.

Referring to the PBC probe as “just a drop in the bucket”, Modise

pointed out that the abuse was “widespread”.

“All bar councils should do it,” he said. “The rot needs to be

removed from the system. Some action needs to be taken by the honest elements in

the profession.”

Modise revealed:

  • The legal fraternity last year not

    only pocketed R2,5 billion in legal fees, it also pocketed a sizeable portion of

    the R8,6 billion in compensation payouts to road accident victims.

Most attorneys who lodged claims with the RAF avoided charging

contingency fees in terms of the Contingency Fee Act (CFA), which allows

contingency fees of a maximum of 25% of their clients’ payouts.

Attorneys make contingency deals with clients in terms of common

law contingency legislation, which allows them to take as much as 50% of

payouts, a percentage that earned them up to half of the R8,6?billion RAF

payouts awarded to claimants last year.

  •  Members of the legal fraternity book

    court time for three to six cases a day, a practice which not only contravenes

    their own ethical dictates, but also allows them to settle most cases “literally

    on the steps of the court”, collecting multiple fees for a single day in

    court.

  • Road accident victims are forced to

    wait three or four years for settlement because their legal representatives

    slowed down cases in order to earn maximum fees.

“We are not milking the RAF. We are rendering a service and we

charge fees for it,” said Thoba Poyo-Dlwati, co-chairperson of the LSSA.

She pointed out that legal fees included “all costs relative to

proving the claim” including accident reconstruction experts, engineers,

­actuaries, forensic accountants, surgeons, psychologists, occupational

therapists, physiotherapists and advocates.

The RAF’s R2,5 billion legal fee payout included what the RAF spent

on its own “legal” costs.

If the RAF were to deal with claims promptly and efficiently and

made reasonable attempts pro-actively to settle cases, she said, “legal costs

would be drastically reduced.”

Forty-five percent of cases were settled on their trial date, said

Poyo-Dlwati.


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