Mr Letsoalo’s media statements

Mr Collins Letsoalo, the chief executive officer (CEO) of the Road Accident Fund (RAF), has recently availed himself of several media interviews which are available on YouTube. He has made statements regarding the RAF and the Road Accident Fund Act 56 of 1996 (RAF Act) that need evaluation and where necessary, correction. These statements are in respect of the –

• objects of the RAF Act;
• RAF is not insurance;
• effect of ss 18 and 19 of the Act;
• operation of s 24(5);
• general damages; and
• minimum requirements.

Objects

Mr Letsoalo makes two statements regarding the objects of the RAF Act. He states that the initial Act was enacted for the benefit of white motor vehicle drivers. Actually, it was enacted to protect road traffic crash victims (RTCVs) – pedestrians in particular.  Section 3 of the RAF Act describes the objects of the Act: ‘The object of the Fund shall be the payment of compensation in accordance with this Act for loss or damage wrongfully caused by the driving of motor vehicles.’ The beneficiary of the Act is certainly not the negligent driver as suggested nor has race ever been a feature of the system. The RTCV is the sole beneficiary of the RAF Act. This is achieved by suspending the common law liability of the negligent driver and transferring such liability to the RAF, which fully steps into the shoes of the wrongdoer driver. The object is to, as widely as possible, protect the RTCV against the eventuality that he would be unable to recover his common law damages caused by or arising from the negligent driving of a motor vehicle from the negligent driver because of the latter’s inability to pay. He takes issue with the fact that RTCVs who have not been negligently injured or killed have no claim which stems from his incorrect view of the object of the Act.

RAF is not insurance

The fundamental provisions of the RAF Act are rooted in preceding legislation which used compulsory insurance as the instrument to fund the protection of the interests of the RTCV and ultimately, society. In 1986, the insurance premium funding was replaced by a fuel levy but the substantive mechanism (barring the removal of insurance related provisions) and the provisions of the preceding Acts were carried over to the Motor Vehicle Accidents Act 84 of 1986. The insurance companies were substituted by the Motor Vehicle Accident Fund (MVA Fund) but were retained as appointed agents of the MVA Fund and (eventually the RAF) to deal with claims on behalf of the MVA Fund. The system was perpetuated by the Multilateral Motor Vehicle Accidents Fund 93 of 1989 and later replaced by the RAF Act. Viewed against this backdrop, the RAF and a fuel levy payable by motorists, took the place of the insurance companies and insurance premiums. The RAF fulfils the function of erstwhile insurers. Its liability is not based on an insurance contract but the common law (as before) and the RAF Act (the Act still refers to a claimant as ‘the third party’ being the third party in the preceding insurance contracts). Viewed from this perspective, the RAF is a sui generis statutory insurer which pays common law-based compensation on behalf of the wrongdoing driver (who was and is still sometimes referred to ‘the insured driver’) for the damage or loss sustained by RTCVs caused by or arising from the unlawful and negligent driving of a motor vehicle. It is in the nature of social insurance in that its existential objective is to shield society from the insidious harm caused by RTCs to members of and society itself but does not strictly qualify as such because it does not accord with the essentials of social insurance such as the Unemployment Insurance Fund and Compensation for Occupational Injuries and Diseases Act 130 of 1993 which statutorily create liability, regulates contributions and define benefits.

Sections 18 and 19

In the interview Mr Letsoalo explains that s 18 unqualifiedly limits the claims of all claimants and that the claims of taxi passengers are limited to R25 000.

Section 18 does not limit the claims of passengers. Section 18(1) which previously contained this limitation was repealed as of 1 August 2008. The provision of s 18(2) and 18(3) is designed to prevent double compensation where a claimant is entitled to compensation from both the Workmen’s Compensation Commissioner (injured/killed in the course of employment) or the Minister of Defence (injured/killed in the course of military service) by limiting RAF compensation to the difference between amounts received from the respective sources. Section 18(4) limits funeral expenses to the necessary actual costs to cremate the deceased or to inter him or her in a grave.

Mr Letsoalo also states that s 19 excludes claims without disclosing when this is applicable. Section 19(a) confirms the common law liability of the RAF of wrongdoing drivers for the damages or loss caused by their wrongful and negligent driving. Section 19(b) was repealed. Section 19(c) excludes a claim if it is instituted on behalf of a claimant who is not an attorney. Section 19(d) excludes a claim if another person other than an attorney renders a service in connection with a claimant’s claim and is paid from the proceeds of such claim and is a catch-all ensure compliance with s 19(c). Mr Letsoalo suggests that this provision was inserted by lawyers for their own benefit. This is inaccurate. The provision was introduced into s 23(c) and (d) of the Compulsory Motor Vehicle Insurance Act 56 of 1972 after the Wessels Report of the Commission of Inquiry into Certain Aspects of Compulsory Motor Vehicle Insurance 1978 proposed the introduction of provisions to protect third party claimants against unscrupulous claims consultants who, unlike attorneys, did not have any tariffs for work done, professional rules of conduct nor indemnity insurance. Section 19(c) and (d) of the Act are the successors of s 23(c) and (d). Section 19(c) for the preceding reason limits the handling of third-party claims to practicing attorneys. Section 19(d) prevents a person who is not an attorney from profiting in any way from the handling of a third-party claim through the sanction of loss of claim to prevent circumvention of s 19(c). Section 19(e)(i) – (iii) enforces the claimant’s obligation to submit to a medical examination at the request of the RAF, furnish copies of his medical records, refuses or fails to allow the RAF to inspect his medical records. Section 19(f)(i) obliges the claimant to lodge an affidavit with his claim or soon thereafter setting out the facts on which his claim is based and s 19(f)(ii) obliges the claimant to furnish the RAF of copies of all documents relating to the crash. Failure to meet these obligations result in the loss of claim.

Section 24(5)

This section provides that if the RAF does not object to the validity of a claim within 60 days, the claim is deemed to be valid in law. The RAF CEO maintains that the RAF becomes substantively and procedurally fully liable after 60 days. He labels the section as grossly unfair to the RAF. Section 24 is entitled ‘Procedure’ and as has been held by a number of High Court judgments to exclusively apply to non-compliance with the formal procedural requirements of s 24 and not to substantive issues a such as for example, the merits or prescription of a claim.

General damages

The statement is made that: ‘we do not know what general damages are’. It is established law that general damages (more accurately stated: non-patrimonial loss) are awarded to act as assuagement of the claimant for the non-patrimonial consequences such as for example, pain and suffering of being injured by the unlawful and negligent driving of a motor vehicle and the interest that is being protected is the claimant’s bodily integrity.

Minimum requirements

The CEO deals with the RAF’s self-help approach to the raising of requirements outside of the RAF Act and regulations as if they are law notwithstanding any amendment of the RAF Act by Parliament and has been declared to be unlawful by judgments. The raising of the requirements is an attempt to transfer the RAF’s obligation to investigate claims, as established by case law, to the RTCV who are in many instances illiterate. The return or refusing to accept claims which do not comply with what is now unlawful requirements has disadvantaged many a claimant despite the fact that there is no provision in the RAF Act which sanctions the return of claims. The only avenue open to the RAF is objection to the validity. Validity is in terms of case law determined on the principle of substantial compliance with the procedural prescripts of the Act. In this regard s 19(e) – (f) are the primary sections which prescribe the compulsory documents and information which are crucial and in respect of which there is an obligation on claimants to submit – failure resulting in loss of claim.

Conclusion

It is a pity that statements made by a CEO of the RAF may raise doubt regarding his knowledge and comprehension of the Act that he is required to administer. It may also possibly and unjustifiably confuse and discourage some lay claimants who may have seen the interview concerned from claiming.

Professor Hennie Klopper BA LLD (UFS) is an
Emeritus Professor at the University of Pretoria and a
legal practitioner at HB Klopper in Pretoria.

Exposition of r 18(1) of Uniform Rules of Court

Rule 18(1) of Uniform Rules of Court states that: ‘A combined summons, and every other pleading except a summons, shall be signed by both an advocate and an attorney or, in the case of an attorney who, under section 4(2) of the Right of Appearance in Courts Act, 1995 (Act no 62 of 1995), has the right of appearance in the High Court, only by such attorney or, if a party sues or defends personally, by that party’.

I often come across combined summons and pleadings signed by attorneys in terms of s 4(2) of the Right of Appearance in Courts Act 62 of 1995. This is probably because the rule still refers to the Right of Appearance in Courts Act. However, the Right of Appearance in Courts Act was repealed by the Legal Practice Act 28 of 2014. Since the Act is repealed, the combined summons and pleadings cannot be signed by an attorney in terms of that Act.

The right is no longer held in terms of the Right of Appearance in Courts Act but is retained in terms of s 114(5) of the Legal Practice Act. The section states that: ‘Every attorney who, on the date referred to in section 120(4), has the right of appearance in the High Court of South Africa, the Supreme Court of Appeal or the Constitutional Court in terms of any law, retains that right after the commencement of this Act’.

Signing of combined summons and pleadings in terms of the Right of Appearance in Courts Act may open the pleading up for an attack in terms of r 30 of Uniform Rules of Court. Rule 30 deals with irregular proceedings and states that ‘(1) A party to a cause in which an irregular step has been taken by any other party may apply to court to set it aside.’ Subrule (2) provides that: ‘An application in terms of subrule (1) shall be on notice to all parties specifying particulars of the irregularity or impropriety alleged, and may be made only if –

(a) the applicant has not himself taken a further step … with knowledge of the irregularity;

(b) the applicant has, within ten days of becoming aware of the step, by written notice afforded his opponent an opportunity of removing the cause of complaint within ten days’.

Even though the irregular step will not nullify the combined summons or pleading, as the case may be, it is a step backward in litigation. And the client may unnecessarily bear the brunt of legal costs due to irregular step.

An exception may also be taken against the combined summons or the pleading, as the case may be, in this regard. Rule 23 deals with exceptions and states that ‘(1) Where any pleading is vague and embarrassing, or lacks averments which are necessary to sustain an action or defence, as the case may be, the opposing party may, within the period allowed for filing any subsequent pleading, deliver an exception thereto and may apply to the registrar to set it down for hearing within 15 days after the delivery of such exception: Provided that –

(a) where a party intends to take an exception that a pleading is vague and embarrassing such party shall, by notice, within 10 days of receipt of the pleading, afford the party delivering the pleading, an opportunity to remove the cause within 15 days of such notice’.

Again, the irregular step may not cause irreparable harm to the combined summons or pleading, as the case may be, but it is a step backward in litigation and will directly affect the client.

When signing a combined summons or a pleading, it should be signed in terms of s 114(5) of Legal Practice Act rather than in terms of s 4(2) of the Right of Appearance in Courts Act. In that way, you may prevent unnecessary objection to the pleading.

Note that an exception delivered in terms of r 23(1)(b) is a pleading and must be signed accordingly in terms of r 18(1).

Nare Simon Molele BProc (UNISA)
is a legal practitioner at SN Molele Inc.

These letters were first published in De Rebus in 2024 (December) DR 5.