Cape Town – Taxpayers could find themselves as much as R2 billion out of pocket in a new Road Accident Fund (RAF) controversy, which could also hit tens of thousands of claimants.
That’s thanks to steps the RAF has taken since the High Court in Port Elizabeth decided the fund irregularly awarded a tender to more than 30 law firms to litigate on its behalf.
In a scathing judgment in March, Judge Clive Plasket gave the RAF time to complete a new tender process, and have a new panel in place by the end of the year.
The panel is one of several firms of attorneys across the country which the RAF uses to settle or defend cases brought against it.
The matter was back in court this week, however, this time in the Western Cape High Court, when one of the firms on the old list failed to hand over relevant files to the RAF, which subsequently brought an urgent application.
The firm, Z Abdurahman Attorneys in Cape Town, argued that it made financial sense and was in the best interests of taxpayers, for old panelists to finalise cases in their possession – rather than hand them over to new firms, who would have to start from scratch.
In addition, the firm said the tender allowed new panelists to charge way higher tariffs.
By the time a new panel was appointed at the end of the year, they said, the sum of public funds wasted could spiral to as much as R2bn.
The estimate included fees for perusal, photocopying, possible overzealous and generous settlements, and travel costs.
The RAF is funded by levies charged to motorists for every litre of fuel consumed.
In an affidavit, the firm’s Zorina Abdurahman said they had 982 pending matters. All were “high value”.
“There was no need for this application, and the correct and cost-saving approach would have been to discuss the practicalities and time lines of the hand-over process with the respondent.”
That approach would have ensured a smooth transition of matters to the new attorneys, although a “reasonable handover period” should also have been arranged to everyone’s satisfaction.
“In the circumstances, this application is frivolous and leads to the unnecessary expenditure of public funding, which could have been avoided,” Abdurahman said.
She added that the firm was not unwilling to return the files, but needed more time to finalise the matters so they could be handed over “in the correct fashion”.
Thursday’s urgent application was not finalised after it was agreed that the RAF Board should first provide the Transport minister with a breakdown of the potential wasted expenditure.