RAF loses Constitutional Court case on grants amid fraud allegations

May 1st, 2015
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By Mapula Thebe – editor

On 20 April The Constitutional Court, ruled against the Road Accident Fund (RAF) in a matter pertaining to foster care grants. In Coughlan NO v Road Accident Fund (CC) (unreported case no CCT 160/14, 20-4-2015) the court ruled in a unanimous judgment that the foster care grants a grandmother received to support three children after their mother was killed in a road accident do not absolve the RAF for loss of support. The ruling upheld an appeal by a curator on behalf of the children who have now reached the age of majority.

The matter was an application for leave to appeal against a judgment and order of the Supreme Court of Appeal (SCA) in terms of which a decision of the Western Cape Division of the High Court against the RAF was set aside. The case looked at whether foster care grants, paid to the foster parents after the death of the mother of the three children in 2002, are deductible from compensation payable by the RAF for loss of support to those children. The curator contended that foster grants are not deductible, while the RAF contended that they are as this would amount to double compensation.

The High Court held that the grants were res inter alios acta and that the children were entitled to the full amount of damages suffered as loss of support, while the SCA held a different view. The SCA held that it was satisfied that if it was not for the death of the children’s mother, the foster parents would not have claimed the foster child grants and that the foster child grants were deductible.

Meanwhile, on 21 April the opposition party – Democratic Alliance (DA) – released a press statement that says that it is in possession of evidence in the form of letters from complaint attorneys to claimants that allege that the RAF sues itself in an attempt to maintain a certain cash flow, which then delays claims made by road accident victims.

The DA is set to lay criminal charges against the RAF CEO, Eugene Watson, on behalf of road accident victims who are awaiting pay-outs.

The RAF released a statement saying that it would not comment on the allegations until it has seen the charge sheet and any accompanying documents relating to the allegations.

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Notice:

In the article, ‘Revised checklist for leave to appeal to the SCA’ (2015 (April) DR 20), ‘the letter’ in para 3 under the heading ‘No other annexures other than those mentioned in r 6’ relates to a letter of the Free State Law Society of 8 March 2006, which has been fully quoted in Erasmus: Supreme Court Practice (Juta: Cape Town) commentary on r 6.

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This article was first published in De Rebus in 2015 (May) DR 3.