Simon Nare
The Standing Committee on Public Accounts (SCOPA) has heard how the Road Accident Fund (RAF) wilfully broke the law and issued unlawful management directives that would lead to litigation, which the entity often lost, and added to wasteful expenditure.
The president of the Law Society of South Africa (LSSA), Nkosana Francois Mavundlela, led the attack against the RAF on Tuesday, when he and the society’s senior members appeared at SCOPA’s enquiry into procurement and governance affairs at the entity.
The RAF enquiry is now in its second month as the parliamentary committee probes maladministration and possible fraud, which have brought the entity to the brink of collapse.
Mavundlela told the committee that the RAF deliberately neglected to pay settlements, even in contempt of court findings, and offered no financial relief for claimants, leaving them destitute.
“The current administration of the RAF failed to recognise and respect the separation of powers as defined in the Constitution and have attempted to usurp to themselves the role of parliament by issuing management directives in which they seek to change the existing law,” said Mavundlela.
He submitted that such brazen disregard of the law was an example of ill-advised policy decisions, which led to wasteful expenditure in the form of adverse cost orders and interest on unsatisfied judgments.
LSSA committee member Lindy Langer told the committee that simply put, RAF management was trying to change legislation without following the parliamentary process.
Langer said the society confronted the board and indicated to the organisation that they had the powers to draft the management directives and then enforce them. This, she said, was further confirmed by former chief executive officer Collins Letsoalo in their engagements with him.
“In the discussions that we have entered into with RAF, the previous CEO would just stipulate that they had this function which is given to them in terms of the powers of the board. So, we do not agree with that.
“We strongly disagree with that, because any member of a board or any functionary of an organisation should ultimately see to it that the powers and functions fall within the ambit of the powers that are provided in terms of the legislation regulated in terms of the constitution, to the benefit of the victim,” she said.
Langer said as far as the society was concerned, it was clear that any notices, any memorandum, any board decisions that had been taken or provided to Letsoalo in making management directives and statements that were in violation of the RAF regulations should not have been tolerated.
“This also created a tremendous wasted expenditure because every single notice, every single announcement is being litigated in court,” she said, adding that the litigation had been going on for some time.
Mavundlela placed the blame for the current state of the RAF squarely on Letsoalo and the board.
“The board notices and everything else in their generation would have been led by both the board and the CEO. Our understanding is that the entire atmosphere and the board and everyone else surrounding the situation may not have comprehended the way they ought to have comprehended,” he said.
Mavundlela also spoke out against myriad enrolled cases, which he said was a result of the failure by RAF to determine the merits of the cases. This led to claims being taken to court that could have been resolved by the entity itself.
He said that the RAF, according to existing regulations, had the right to simply investigate some of the cases and determine the claim. Failure to do that had compelled claimants to instruct their lawyers to head to court.
Some of the claims have been set down for 2031 or 2032 for the claims to be decided, while others are default judgments.
“The current statistics are disheartening, to say the least, when you are sitting with the default judgments. Default judgments are judgments given in the absence of the other party. It’s unopposed matters. When you are sitting with dates of 2031, 2032, the effect of it is that that member of the public — in our view as the law society — is denied access to justice. They are going to sit out five years for the matter to be determined, unopposed. That’s what it actually means,” he said.
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