The Road Accident Fund (RAF) has issued a stern warning to claimants about unscrupulous attorneys exploiting vulnerable road crash survivors by offering groceries and transport money during the claims process, only to swindle them out of their rightful compensation.
The RAF has received numerous complaints from claimants who have been paid significantly less than what was awarded to them by the Fund. This unethical practice involves law firms lending small amounts of money for living expenses, such as groceries or transport, while the claim is being processed. Once the compensation is paid out, the attorneys deduct the loaned amounts, often with exorbitant interest rates, leaving the claimants with a fraction of their due payment.
This scheme, targeting desperate road crash survivors and their families, exploits South Africa’s high levels of inequality. In many cases, claimants are coerced into signing agreements without fully understanding the terms, leaving them unable to question their pay-out amounts.
In Mpumalanga, law firms have been found forcing claimants to receive their RAF payouts in instalments, a practice designed to maximize the attorneys’ profits at the expense of the claimants. Across the country, survivors report being neglected by their legal representatives, signing unexplained documents, and waiting up to five years to access their funds, even after compensation has been paid.
Recently, the RAF reported Spruyt Incorporated Attorneys to the Legal Practice Council (LPC) and assisted several claimants in laying charges with the South African Police Service (SAPS). In one case, Spruyt Inc Attorneys received R241,000 from the RAF but paid the claimant a mere R10,400, citing high administrative costs. This practice blatantly violates the Contingency Fees Act 66 of 1997, which limits legal fees to 25% of the compensation awarded.
RAF Chief Executive Officer Collins Letsoalo urged claimants to report such unethical practices, stating, “We urge claimants who have been subjected to such unethical practices to contact the Fund immediately. The Fund’s contact centre capacity was increased last year to deliver more transparent and fair services to the claimants. It is imperative that these issues are addressed, and that the integrity of the claims process be upheld.”
The RAF also reminded claimants of their right to information about party-and-party costs, which cover legal expenses incurred in pursuing or defending a claim, but do not include attorney-client costs, which are separate and often inflated by unethical lawyers.
Claimants are encouraged to reach out to the RAF directly to ensure they receive their full compensation and avoid being exploited by dishonest attorneys.
