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Road Accident Fund is slow to pay

updated: 25-Nov-15

Members of the public who have claims against the Road Accident Fund, whether with De Broglio Attorneys Inc or with other attorneys, need to know that when their case is finalised, receiving payment from the Road Accident Fund will take much longer than they expect.  

It has been widely reported in the media over the last year that the Road Accident Fund has cash flow problems.  In a recent letter sent out via the Road Accident Fund to attorneys and suppliers, the Road Accident Fund has estimated that these problems will last for another three years.  They say that they have a current dash flow deficit of R9 billion and that that will reach R11 billion by February 2016.  The Road Accident Fund has a current policy of paying smaller cases (i.e. those cases settled for R100 000,00 or less) first and paying the bigger cases last.  Michael de Broglio has been outspoken about this commenting that, “I have even written to the CEO of the Road Accident Fund, Dr Eugene Watson, telling him how I believe it is immoral that those who are the most seriously injured and who thus receive bigger payments, are paid last and preference is given to those with small settlements.  Unfortunately, the RAF seemed unmoved by these arguments and complaints and has not reconsidered their policy.”  

It is important that members of the public understand that it is still worthwhile doing a Road Accident Fund claim. They are going to be paid and the Road Accident Fund is not bankrupt, it just means that they will take a lot longer to be paid while the current cash flow crisis of the RAF endures.  The reality is that there are financial problems with the Road Accident Fund, and one has to accept that payments will take longer.  If one is talking about a case that has been settled for R500 000,00 or more, it might well be that that payment takes approximately 6 to 9 months from date of settlement until it is paid.  The Road Accident Fund does refer to shorter timeframes when they discussed this in the media, but in their own communications with suppliers they make it clear that their timeframes do not relate to when the settlement is actually made!  When they talk about how long a payment is going to take, they are referring to how long it will take from once their own staff requests payment on their own internal systems.  In other words, if they take 2 to 3 months to load it up on their own internal system, from once the matter is paid, they don’t count those 2 to 3 months as part of the time that payment has been outstanding – they only count the days, in terms of their analysis of when they pay debts, from once they request it on their own system.  So, the date of settlement or the court date when the case was settled is completely irrelevant to them.

Michael de Broglio says that his staff and firm follow various procedures in an effort to get clients paid as quickly as possible, but with the Road Accident Fund having their own system as to when payments are made and not having any assets that can really be attached and sold, which have not been attached numerous times previously, there is a limit to what one can do.  According to Michael, “The bottom line is that attorneys and their clients are all in the same boat – they all need to be paid, and they all have to be patient and await payment.  The only thing that can reduce the payment time is a cash injection from the government and one wonders how many members of the public would like to see another substantial contribution to the Road Accident Fund?”

Case results depend upon a variety of factors unique to each case. Case results do not guarantee or predict a similar result in any future case.