It was very interesting to read a recent article in the Wall Street Journal all about plaintiff lawyers in America advertising for the latest in personal injury cases. Apparently, more than $160 million was spent on some 800,000 mass litigation adverts during 2023.

The most common adverts during the last decade have been for asbestos or mesothelioma claims. There have also been a lot of claims for the military members who were stationed at a camp that had contaminated water that led to miscarriages, Parkinson’s disease as well as cancer. Those are the Camp Lejeune Water Contamination cases. In addition to that, there have been adverts for claims relating to the use of talcum powder, Xarelto, Glyphosate and hernia meshes.

The article also detailed the fact that a lot of other companies have invested in the litigation. Some private equity firms or hedge funds provide loans to law firms for third party litigation funding.

In the USA, legal firms take between 30% and 40% of the final settlement or verdict. In California, for example, it is common to take 30% if a matter is settled without going to court and the fee is 40% if the matter does go to court. That is obviously far more lucrative than the 25% including VAT cap in South Africa.

There has been quite a bit of coverage in recent months of the continued financial issues facing the Road Accident Fund.  The deficit however seems to have stabilised, when last we heard, at approximately R14 billion and consumers seem to accept and understand that payment is no longer made as and when a case is settled or shortly thereafter. 

There is a bit of a misconception though that payment is made on 180 days.  That is in terms of a court order which prevents attorneys from issuing writs before the 180 days are up.  In our actual experience many payments take longer than 180 days to be paid and part of the struggle for attorneys is to get those matters loaded up, by the RAF staff, in the first place.  It requires a lot of calls, e-mails and correspondence back and forth with the Road Accident Fund staff before a matter is actually loaded up and sometimes that alone, although that should not be the case, takes months to achieve.  At the end of the day though there is not much that plaintiff attorneys can do – while their clients might be unhappy about how long a payment takes, they have no control over which matters the Road Accident Fund pays, when they pay and how long they take to pay. 

The Road Accident Fund has really reached a low point in terms of its finances.  There have certainly been problems over the years, even payments that had to be made in instalments a number of years ago, but things have really touched new lows in recent times. 

Going into the Covid-19 situation the Road Accident Fund had a deficit of R17 billion relative to courts orders and amounts they have agreed to pay out.  Covid-19 has obviously made the situation far worse and the Road Accident Fund, at the current time, is only paying a fraction of what they owe to attorneys’ firms for all their clients.  It is a situation that requires calm.  If attorneys all start issuing writs, then the Road Accident Fund who only received approximately R1,9 billion in the last month of the R17 billion that is owed to clients and service providers, then obviously there will not be enough money to pay everybody.  It is a situation where I have, in my legal newsletter which you can find at www.legalnewsletter.co.za, urged attorneys to try and remain calm and not jump the queue so that the payment situation can be resolved.   

Some attorneys, when they come across a situation that indicates that a colleague they are dealing with has clearly done something irregular with their trust account, try to avoid the issue.  Sometimes it is used as a negotiating point with the other party and in other cases it is simply forgotten about as part of the settlement of a matter.  This comes to attorneys’ attention when trust account cheques for example bounce or an attorney is not able to refund somebody who has incorrectly made payment into their account.  We’ve had matters previously where the Road Accident Fund, instead of paying us, have paid the wrong firm of attorneys and in some cases those attorneys one or two years later still have not repaid the Road Accident Fund.   

Attorneys in this position need to acquaint themselves with the rules for the attorneys’ profession which came into operation on 1 March 2016 replacing the various rules of the various Law Societies.  Rule 35.35 requires that any member who comes across irregular conduct or dishonesty on the part of another member in relation to the handling of trust money is required to report that to the Society.  In other words, if you come across such an instance, you have an obligation to report it to the Law Society and will obviously be guilty of contravening rule 35.35 if it ever comes out at a later stage that you were aware of an irregularity with regard to trust moneys of another attorney, but did not advise the Law Society of same. 

I cringe every time I see an article like the one you can read here:  http://mpumalanganews.co.za/293285/road-accident-fund-takes-service-to-the-people/.

It is so terribly sad that the Road Accident Fund has managed to make so many people believe, as Donald Trump has with the poor in America that he and they are fighting for their interests.  I don’t think Trump has the interests of anybody other than himself and the wealthy at heart and the Republican Party has traditionally never been the party for lower middle-class people, who are the ones who have now given him power. Likewise, the Road Accident Fund goes out of its way to emphasise again and again that by approaching them directly, members of the public can save on attorneys’ fees.  

Off course what they don’t say is that saving on attorneys’ fees hardly means anything if the Road Accident Fund offers you a small fraction of what your case is worth.  This is something we all need to combat and to combat strongly with the Road Accident Fund settling an ever-increasing percentage of the cases in South Africa directly. Certainly the ones I have come across have been under-settled and sometimes quite dramatically.  I also don’t really understand what the Road Accident Fund is trying to prove by referring to attorneys as “intermediaries”.  That is the term they use in this article. People must go to the Road Accident Fund directly to avoid the fees of “intermediaries”.  Only attorneys are allowed in South Africa to charge fees for doing RAF work, so presumably the reference is to us, but why is there a need to call us “intermediaries”?  It seems to suggest that the Road Accident Fund will do their job just perfectly well without the involvement of attorneys. That is simply not the case and it is something that the Law Societies need to start challenging.  An intermediary, according to the dictionary, is somebody who acts as a link between two parties in order to bring about an agreement or reconciliation – almost a mediator. It is disturbing that the Road Accident Fund is trying to describe attorneys in such a way.

I would suggest that each one of you address this with your own Law Society and demand that they take up what appears to be a new tactic of the Road Accident Fund in suggesting that the role of attorneys is simply to act as mediators in such cases.  Language as you know is very important and it is a little bit worrying that such specific language is being used in this instance to describe attorneys. One wonders what the purpose behind that is.

I would argue that in launching this campaign without disclosing to the public the many claims that they have under settled amounts to a flagrant fraud on the public. They should also be disclosing the qualifications of the persons who will be deciding on the unassisted claimant’s fate. “Meet Peter. He has been working here for six months and doesn’t really know what he is doing yet but he’ll try his best”

I get a lot of queries from clients, including clients with other attorneys as to the problems being experienced in RAF matters.  The biggest problem right now is the issue of the Road Accident Fund taking so long to make payments.  Some people struggle to believe that their attorneys are telling them the truth when they tell them that some cases can take as long as 8 or 9 months to be paid, and that is just the capital payment in a matter and not the party and party cost refund.  It is an issue that has been reported by the media, but perhaps not as widely as it could have been and it certainly helps clients if they are able to Google on search terms such as “RAF cash flow crisis” or “Road Accident Fund payment problems” and see articles about this themselves.  

The bottom line is that at the current time the Road Accident Fund has a deficit of approximately R9 billion and they estimate that it will grow to R11 billion by the end of February 2016.  It does not mean somebody must not do a claim, or that they will never be paid – it just means that when their case is finalised they have to be patient and understand that there is a limit to what their attorney can do.  It is easy for people to say that one should send in the Sheriff, but when one sends in the Sheriff the Road Accident Fund claims that their assets have already been attached by another attorney, and that their assets largely constitute computers which they need to make payments.  It certainly will not help anybody if an application is brought and ends up resulting in payments being suspended, and so it really requires patience by everybody involved in this work.  Personally I would like to see the CEO of the Road Accident Fund, Dr Eugene Watson, reconsidering his approach of paying the least injured and smallest cases first.  They focus on paying cases settled for R100 000,00 first and then delaying the bigger payments.  I am not sure what the purpose of that is, but I could speculate that that would get rid of probably 50% of the calls that they get complaining and by getting rid of all the smaller calls it might make it easier for them to deal with those complaints that they still get, but it is not fair to those who need the money the most and are the most severely injured in an accident and I really do think that they need to reconsider this approach.  

This is going to be another negative article of mine about studying law, but I want to emphasise before I begin it, that there are exceptions to everything.  Somebody with a good brain and who is hard working and with excellent client liaison skills will always do well in any field, no matter how many challenges they face.  

One cannot however ignore that unfortunately law degrees have become far too popular, especially after they were made much easier to obtain when you no longer had to get an under-graduate, or first degree first, before studying a law degree. The advantage of having that first degree is that you have a chance to get an education, to study various other subjects and not just learn about a very narrow field of law.  Too many younger attorneys being admitted to the profession have a very little idea as to what is going on in the world and I think to be a good attorney, you do need to have an idea of what is going on in business, politics and the world you live in and be able to adapt to it.  Those who do not read newspapers or at least the news online, are very unlikely, in my opinion, to succeed, and I can say without exception that the successful attorneys as well as advocates that I know are equally conversant on the law as they are on what sport event took place on that day, what the latest in South African politics is, the world economy or other such issues.  There may be exceptions to that, but I have not come across them yet.  

The challenges that the legal profession face is a continuing stream of new entrants into the legal field, while so much work is being taken away from attorneys and other areas are under constant threat such as personal injury law.  Even when they are not under threat, they face the spectre of legal fees being reduced at the very same time that overheads are rising.  I don’t think it is too far away from the day when you go shopping at a Pick ‘n Pay Hypermarket for example, that there will be two or three attorneys sitting in the entrance who disburse a quick 15 minutes of advice to loyal shoppers, who have a membership card, on maintenance or various other issues.   I am bombarded with CV’s for people who wish to become either candidate attorneys or who have just been admitted as attorneys and would like a job with our firm.  Without exception they would obviously have a four year University degree and yet in training they seem to be earning an average salary of about R4 500,00 to R6 000,00 a month and as a beginner attorney, they are earning approximately R10 000,00 a month and a bit more if they are lucky enough to have started off at a busy and successful practice.  I am obviously not talking about the salaries at the big five or six major corporate law firms who take the cream of the talent from the law schools every year – only those with the very highest marks.  

I am talking about salaries being paid at average law firms all across the bigger cities like Johannesburg and Pretoria, which happen to pay far higher salaries than one would earn in Cape Town, Durban or smaller centres.  I think that that is all you need to know about the state of the legal profession – is it worth it to study for four years, then do one or two years of articles, write admission exams and once you have been through all of that, which could easily be 6 to 6 ½ years, to earn R10 000,00 a month?  The AMCU miners are after all demanding R12 500,00 a month and every law firm owner will tell you that he or she has a number of secretaries employed by him or her that earn more than attorneys.  All what these figures point to is a complete over-supply of people to a profession and we are producing far too many attorneys instead of engineers and possibly top policemen and policewomen/investigators who can reduce our crime and cut down our corruption.

A law degree is certainly very useful in business and more and more often it leads to attorneys, after a year or two in practice, joining corporate firms for a small increase over what they are earning in a law firm with the guarantee of benefits, etc.  That is a personal choice but I never studied law and obtained three University degrees just so that I could become a legal officer, consultant or compliance assistance in a corporate entity.  That is not what law is about to me and unfortunately there too, apart from those really brilliant individuals who have stepped into companies at senior positions, most of those going into that particular field, while initially getting a higher increase, will never be able to achieve what they could have, being a practicing attorney in a law firm .  That may to appear to contradict what I have just written – but it does not.  I began this article by saying that is that anybody who has ability and is hard working will get ahead despite the terrible challenges facing the profession.  But law schools and parents should really start trying to steer their children in a different direction at the moment and not putting them all into the same field!

I think that most attorneys know about the dangers of the Road Accident Fund doing claims themselves. Not a week goes by when we do not receive some or other complaint about somebody who was represented by the Road Accident Fund and whose claim was either under-settled or was told that they had not issued a summons in time.  Another common complaint is that as a result of the advertising by the Road Accident Fund complainants approach the Road Accident Fund only to be told they don’t have a claim unless they are above 30% on the AMA Guidelines.  In some of those instances the people do not have claims but in many in fact they do.  

An article on IOL News recently caught my interest and you can read the article here:    http://www.iol.co.za/news/crime-courts/man-finally-gets-r1-5m-from-road-fund-1.1638299#.UvPCjPmSx8E
The matter involves a man who approached the Road Accident Fund directly and had his case settled for R38 000,00.  He eventually heard of other settlements from other people and approached a firm of attorneys which led to them suing the Road Accident Fund.  The Road Accident Fund tried to defend the matter on the basis that a summons had not been issued in the case – which of course is ludicrous, because when they are representing the client against themselves the onus is obviously on them to issue a summons on behalf of the client against themselves to stop prescription.  If that sounds ridiculous, then it is, because the whole thought of the Road Accident Fund doing cases other than, let’s say the smallest cases for refunds of past medical expenses and undertakings, is ludicrous.  In any event, he is quoted in the article saying that he genuinely believed that the Road Accident Fund would have his best interests at heart, as this was part of his mandate and ultimately the attorneys who took over the case, and this is not a case my firm was involved with in any way, succeeded in getting him R1,5 million.

It has been reported recently that, with effect from January 2014, barristers in the UK will be able to conduct litigation and share business premises with non-barristers. They will be able to take briefs from the client directly, without having to go through a solicitor first and the Bar Standards Board said, by their chairlady, that, “Superfluous rules have been stripped away and others modernised.” No doubt this will have some implications for legal practice in South Africa and one might see the referral rule dropping away for advocates in South Africa without an attorney being required. Whether most of the advocates would be prepared to practice like this is however quite debatable and it is unlikely that they would be interested in the nitty-gritty and often tiresome aspects of the day to day handling of somebody’s matter.

Contingency fees are always in the news, and there has been steady a steady stream of judgments, some contradicting others, that to a large extent appear to be sounding the death knoll of common law contingency unless the Constitutional Court agrees with the Law Society. The Contingency Fees Act agreement is workable, but only if some of the recent judgments in that regard are not upheld later, because again they also differ and some of them are really based on erroneous assumptions, such as the recent judgment which referred to party and party costs in a typical High Court matter being only R15 000,00. Right now this is a terribly confusing field, which makes a speech that I have been asked to give at the Law Society’s AGM on Saturday, 10 November 2012, even more difficult to do, but I am going to give it my best shot and advise the 500 plus members that are expected to attend as to the latest developments.

I saw that the DA, in the name of Greg Krumbock, issued a press release about the Road Accident Fund’s deficit which did not get much coverage, but seems to have gone out on 11 October 2012. The DA wants to improve the speed of payments to injured persons by allowing them to submit all their claims electronically at hospitals, which seems to ignore the entire process of obtaining medico legal reports and investigating how the injuries affect somebody’s life differently and in different circumstances.

They want to introduce a “different management model for this Fund” which pretty much sounds like most of Mitt Romney’s plans for America – anything that Obama has done is incorrect, but he is not going to be mentioning what the plan is and likewise the DA is not advising what their actual plan is. The one thing that they have picked up on is that they say, “Output per staff member has gone down and the claims processing has slowed.” This is something that attorneys have been saying for years, and much of the Road Accident Fund’s work is now “outsourced” by them to their own attorneys. Certainly, if they started using tenders and offers, particularly with suppliers’ claims, from the minute they are lodged with the RAF, they could reduce their costs considerably, but if the DA or anybody else wants to assist the Road Accident Fund I would imagine that the best way to do so is to tackle the problem of the suppliers’ claims, and to ensure that costs don’t get out of hand by making offers in matters sooner than they are now. In that regard I would bring in a specialised legal team, involving perhaps attorneys or even advocates on a contractual basis who have experience in this field of law and let them advise the Road Accident Fund on generous and quick tenders in matters so that legal costs do not have to be incurred, as they are now. The vast majority of the Road Accident Fund’s expenses could be reduced if only the Road Accident Fund got back to its job of actually settling cases quickly.

I see the Road Accident Fund is at it again, having meetings with people and explaining to them how they can do their claim directly. The theme of the reports in the media on the meetings is always about attorneys who either take all the money, take years to settle the claim or cheat the people in some or other way. I have no doubt that there are such attorneys, and unfortunately they seem to be more prevalent in outlying areas, perhaps because more urbanised clients simply don’t put up with the nonsense that you read about in some of these allegations, but the Law Society does deal vigorously and very aggressively with attorneys who don’t follow the rules.

On the other hand, I come across complaints all the time and comments on my blog at www.debroglio.co.za from people who have tried to do claims themselves with the Road Accident Fund and the general theme of those complaints is that: People who do have claims in terms of the new Act are told that their injury is too minor and that they don’t have a claim; people are not sent to all the experts that they should be to quantify their case properly; people’s cases are not settled by the Road Accident Fund in time or at all and lastly, when they are settled, they are settled for a fraction of what the case is actually worth. In other words, in my experience, somebody is far better off going to attorneys and be able to report their attorney to the Law Society if something goes wrong than going to the Road Accident Fund directly and not being able to report the Road Accident Fund to anybody at all! I believe that you will get better service and a better result by using an attorney but obviously if you have concerns about the attorney make sure, from their website and from doing proper research, that they are an established firm with a history of expertise in this field – and there really are many firms that fit that category.