Do I have to wait for the LPC to resolve my case before I can reclaim the money I was defrauded of?

The long answer

Unfortunately, even though it will probably take months to finalise the investigation by the LPC, it is very unlikely that you will receive your funds from the attorney until the case is finalised. The investigations into this attorney’s alleged misconduct and fraud are what will be relied on to reveal how much you were defrauded and what you are actually owed. 

Even when there is no disciplinary case pending against an attorney, it generally takes more than the 180 days the RAF says it will take to pay out a claim. 

In 2020, the Minister of Transport, Fikile Mbalula, said that it was “unknown at this time” when the RAF would pay outstanding claims and, in 2021, the RAF said that due to Covid a large backlog of cases had built up, which might delay claims by up to two years. 

BusinessTech reported in an April 2021 article that the RAF found that although it collects R43 billion a year (largely from the fuel tax levy paid at the petrol pump) it only disbursed R26 billion to claimants, while it spent R17 billion on administrative costs, of which R10.6 billion went on legal costs.

“It means that for every rand collected in revenue we spend 40 cents to disperse 60 cents. In most cases 25% of this 60 cents is paid to the lawyers as ‘success fees’ for represented claims ... The claimant, therefore, gets only 45 cents in every rand collected. It became obvious that this situation is unsustainable.”

BusinessTech said that a further breakdown of the fund’s spending shows that although it spent R10.6 billion on legal fees, more than 95% of these matters were settled without any trial being run.

In 2021, the RAF got rid of its panel of attorneys and demanded that they return their clients’ files, in an attempt to develop a new model for dealing with claims. The attorneys tried to interdict their termination, unsuccessfully, and the RAF told the Court that they would try to settle 98% of outstanding claims within 120 days. In a 2021 article, Adams and Adams Attorneys noted that claims were generally only settled on the court day, some three or four years after the claim had been lodged with the RAF. It was not clear that the RAF would be able to settle the claims within the 120-day period. Though it would obviously be better for the client to be paid out sooner rather than having to suffer through the three to four years it took previously, said Adams and Adams, the clients’ claims might not be adequately investigated in the 120 days, as medical and legal consultation could take much longer than a 4-month period. 

Where a claim couldn’t be settled within 120 days, the RAF said that they would hire attorneys as needed or use the State Attorney. 

In February 2022, the RAF tried unsuccessfully to interdict the Auditor-General from disclosing an audit report about the RAF’s financial affairs to parliament or the public. The Auditor-General found that due to the RAF changing its accounting policies, it had understated its liabilities (debts) by R300 billion.

The Organisation Undoing Tax Abuse (OUTA) said that in 2009, the RAF tax levy was up to 5% of the price of petrol and generated about R9 billion a year to pay out accident claims. In 2021, it was 14% of the petrol price which pumped about R45 billion into the RAF. OUTA said the increase in the fuel tax was “to keep pace with the growing demand on these lucrative revenues which are largely wasted due to inefficient administration, corruption and unscrupulous legal claims which the RAF administrators are too weak to challenge.”

So, this is certainly a very grim picture, and I’m afraid I could not discover any alternative to waiting for the LPC to finish their investigation. 

You could ask advice from a paralegal organisation like The Black Sash:

Email: help@blacksash.org.za

Helpline: 072 663 3739 / 063 610 1865

Wishing you the best,
Athalie