In the five years up to 31 December 2024, 5% of the claims reported to the Legal Practitioners Indemnity Insurance Fund NPC (LPIIF) were related to the under-settlement of Road Accident Fund (RAF) matters. As demonstrated by the two recent cases summarised below, some of the claims were under-settled on the insistence of the clients who were aware, when accepting the first amounts offered, that their claims against the RAF were being under-settled. In both cases, the clients went against the advice of their respective legal representatives who recommended that the offers made by the RAF not be accepted. The clients concerned also refused to attend medico-legal consultations that would have assisted in making cases for higher compensation and were prepared to accept payment of the inadequate compensation offered by the RAF. The clients concerned later instituted action against their respective erstwhile attorneys alleging that the latter were liable to compensate them for the shortfalls between what they (the clients) perceived as the actual value of the compensation due, and what they received. In some cases, the under-settlement claim may be valid but, in others, it may be an attempt to get a proverbial second bite at the cherry.
In Mokalapa v Ramushu Mashile Twala Inc (GP) (unreported case no 83874/2015, 20-1-2025) (Basson J), the plaintiff, alleging that the defendant (a firm of attorneys) had breached its duty when acting for her in a claim against the RAF, sought compensation from the firm. The plaintiff had been injured in a motor vehicle collision that occurred on 28 June 2005. She instructed the defendant to pursue a claim on her behalf against the RAF. The defendant accepted the instruction and instituted the claim.
There were two questions before the court. The first related to whether the defendant had breached the plaintiff’s mandate to pursue her RAF claim (the merits/liability question). The second was whether her claim, if any, against the defendant had prescribed. The fact that the RAF claim was under-settled was not in dispute (para 4). The claim had been settled on 15 October 2011.
The RAF conceded merits (liability) on 30 April 2010. The case was then postponed for a determination of the quantum. The defendant wrote to the plaintiff on 5 August 2011 informing her of the need to undergo assessments by an occupational therapist and industrial therapist, respectively. The defendant followed up the letter by having a conversation with the plaintiff to explain the implications and inform her how this affected the assessment of the quantum of her claim. The plaintiff informed the defendant that she was ‘fine’, did not need to go for further assessments, did not accede to his request to travel from Limpopo to Pretoria for further assessments ‘as it would take too long’ and she was not experiencing any health or injury-related problems (paras 15, 22 and 32).
The defendant wrote to the plaintiff on 13 October 2011 informing her that the RAF had made a settlement offer of R 218 775.90. The letter did not recommend that she accept or reject the settlement offer and recorded that the attorney awaited her further instructions (para 25). The version pleaded by the plaintiff that the defendant advised, alternatively made or encouraged, her to sign the offer was not accepted by the court. The defendant’s evidence was that the plaintiff was excited about the amount of money she would receive in the settlement and she told the attorney that she ‘did not want to die before eating [her] money’ (para 32).
The plaintiff signed the acceptance of the offer. The amount paid to her under the settlement was depleted within a year. In 2015 (more than three years after the settlement), she issued summons against the defendant.
The court did not accept her evidence and dismissed her action against the defendant. The special plea of prescription was also upheld because the plaintiff had known in 2011 that the claim against the RAF was under-settled.
The matter of Du Toit Smuts and Mathews Phosa Attorneys and Others v Sibanyoni (GP) (unreported case no A504/17, 18-10-2019) (Mabuse J (Teffo J and Engelbrecht AJ concurring)) was an appeal before a Full Bench against a judgment by the court a quo holding a firm of attorneys liable for the alleged under-settlement of the respondent’s RAF claim. The firm appealed against that judgment.
The respondent had been injured in a motor vehicle accident that occurred on 19 February 2008. On 4 March 2008 the appellant accepted a mandate to pursue a claim against the RAF on the respondent’s behalf. On 25 May 2011, the RAF made a without prejudice offer to settle the claim for R103 500. Despite having been authorised by the Power of Attorney to settle the claim, the appellants did not accept the offer. The respondent was called to their offices where the offer was discussed. He was advised that the amount offered was inadequate, and he was persuaded to attend a medico-legal examination so that the settlement amount offered could be increased. The respondent was informed of the amount offered by the RAF and how much he would receive, after the firm deducted its fee, if he accepted the offer. The discussion regarding RAF’s offer and request that the respondent attend the medico-legal examination was held on 31 May 2011. On the same date as that consultation, a staff member in the firm called to make an appointment for the respondent to see an orthopaedic surgeon and the respondent was given the appointment date.
On 2 June 2011 the respondent returned to the appellant’s office where he spoke to an interpreter at the firm’s office, and insisted that the appointment with the orthopaedic surgeon scheduled for 11 July 2011 be cancelled. He informed the interpreter that he was prepared to accept the offer because he desperately needed money and wanted to buy a bakkie. The appellants were accordingly instructed to cancel the appointment with the orthopaedic surgeon and the respondent instructed the firm to accept the RAF’s settlement offer. The firm acted on his instructions. The respondent was not prepared to wait for just over a month to undergo the medico-legal examination that may have assisted in representations to the RAF for an improved offer.
While the appellant was pursuing the respondent’s claim against the RAF, he had, without their knowledge, instructed another firm of attorneys on 16 April 2011 to pursue the same claim against the RAF. He, on the same date, signed a termination of the appellant’s mandate and a power of attorney authorising the new attorneys to act on his behalf. When attending the appellant’s office on 2 June 2011, the respondent did not disclose that he had, about a month and a half before, terminated their mandate and appointed another firm to conduct his claim against the RAF. The new attorneys sent the termination of mandate to the appellant on 29 June 2011. The new firm also represented him in the litigation he pursued against the appellant.
Mabuse J, writing for the full bench, noted that:
‘[24] The mere fact that [the respondent] was prepared to accept the offer means that he had been fully informed how much it was; how much of it would be paid to him and had assessed its sufficiency for his purposes and was satisfied that it was enough for his needs. He was prepared to accept it. He was not prepared to wait longer for the appointment. So on 2 June 2011, he himself signed the Release or accepted the Offer of Settlement made by the [RAF]. The acceptance of his offer resulted from his own conduct. Although he had authorised the [appellants] to settle the matter in any way they deemed fit, he was the one who accepted the offer.
…
[42] … A client can always revoke or cancel or override the instructions he has given to his attorney. He retains always the power to act for his own account even if it means overlooking or overriding his attorney’s legal advice or power. He cannot be faulted for taking control of his matter if he deems it fit to do so. When the client acts outside the scope of his attorney’s advice, to which he is entitled to do, such conduct should not be imputed to his attorney. His attorney should not be blamed for any misfortune that may befall the client because of the client’s conduct. The following expression is apt in these circumstances. The Plaintiff must “lie on the bed one has made.”’
The court concluded that:
‘[46] In conclusion I find that an attorney who advises his client not to accept an inadequate offer of settlement, may not be held responsible if the client, having made an informed decision, accepts such inadequate offer of settlement, much against the advice of the attorney….’
The court ruled in favour of the appellant.
Legal practitioners must consult clients on all settlement proposals (Goldschmidt and Another v Folb and Another 1974 (3) SA 778 (T) at 781H). Explain the once and for all rule. If, despite your advice to the contrary, the client insists on accepting an inadequate settlement offer, record that in writing and get the client to sign in confirmation. Do not rely solely on the Power of Attorney and sign the acceptance on the client’s behalf. Record the reasons given by the client for accepting the amount offered. Explain the risks involved in litigation and that there are no guarantees a court will award a substantially higher amount of quantum. Litigation takes a long time to be finalised (factoring in the possibility of interlocutory applications and/or appeals) and the client may adopt the attitude that ‘a bird in the hand is worth two in the bush’. If the ultimate plaintiff is a minor, a person unable to manage their own affairs or under another legal impediment, consider applying for the appointment of a curator bonis to look after the affected person’s interests. Do not succumb to pressure from family members or those purportedly representing the vulnerable plaintiff pushing for a quick settlement so that they can gain access to funds that are not meant for their own benefit.
If instructed to pursue an under-settlement claim against a firm, obtain full details from the client regarding the date of settlement, the circumstances under which the settlement was reached and when the client became aware of the settlement. Investigate all aspects of the matter thoroughly and check what documents or other corroborating information the client has in support of their allegations.
Thomas Harban BA LLB (Wits) is the General Manager of the Legal Practitioners Indemnity Insurance Fund NPC in Centurion.
This article was first published in De Rebus in 2025 (May) DR 12.
