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RAF cash flow crisis

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.  

Posted by Michael de Broglio on Tuesday 24-Nov-15

RAF cash flow crisis


Michelle   said...
on Wednesday 02-Nov-16 12:51 PM
I would also like to know how long does it take for your money to be released by the sherif? And why do RAF sent the money sent to the sherif?

nokwanda  said...
on Tuesday 25-Oct-16 01:21 AM
How long does the sheriff take to release money if it was already paid by road accident funds

peter  said...
on Tuesday 30-Aug-16 12:32 PM
what if RAF give you the curator because your still under the age. then the curator gives you amount of 2 000 every month, then your ask him to give you 50 000 then he ignore you every day when you try to call what must you do cause RAF he's out on you.

Koos  said...
on Monday 16-May-16 01:10 PM
I hope that someone can give me an idea of what to expect.

My accident claim has been settled November 2015 , my attorneys has confirmed on an email that they have received payment from the RAF Yet they cannot provide me with a Taxed statement therefor I am still waiting for payment from them.

Tamaryn  said...
on Thursday 26-Nov-15 07:43 AM
Considering the sums of money which flow into and out of the Fund daily one would expect that the Fund would, at the very least, manage their cash flow adequately. Clearly there is a need for a complete overhaul relating to the financial management of the Fund. Their current financial situation goes against the very grain and purpose of a "Fund". All claims, no matter the quantum, should be paid out timeously by the Fund. A lot of constructive action is needed from the Fund's side..starting from the very basics, the purpose of the Fund, and all the way up.

Nicky  said...
on Thursday 26-Nov-15 05:58 AM
The frustrating thing is that the RAF think that they're doing everybody a favour by actually making payments and what's even worse is that they're consider issuing of warrants "a selfish approach by some firms". A firm is by entitled to issue a warrant and I'm sure that this is only done in the best interest of clients and not to show some form of selfishness!

Charlotte Harding  said...
on Wednesday 25-Nov-15 12:44 PM
It is sometimes difficult to sit on the other end of the telephone when a client phones in to inquire about their money, to listen to their financial difficulties they have to put up with until the money is paid. It feels mostly that my hands are tied behind my back, as we can only do so much as a company. I really do feel for our clients sitting in this predicament as they have probably waited a long time for their matter to settle, and then having to wait longer for the money to come through.

Kaylee  said...
on Wednesday 25-Nov-15 12:00 PM
The problem is, the smaller payments may make the calls go away, but the bigger amounts are usually for the people that need it the most as they are the most injured. I agree that the CEO should consider the approach here. I also think that attorneys are more inclined to issue writ's for larger settlements than the smaller ones and if they want people to stop phoning perhaps they should consider paying the bigger settlements first.
I deal with client's concerns on a daily basis regarding updates on their payments, people are incredibly frustrated with the delay in payments but the real issue is the cash flow crisis of the fund. I feel bad for people that urgently require the money as this is the reason why people proceed with a claim against the RAF.
The fund wants RABS to be implemented and maybe they see this as a solution to their cash flow problem. I however read an article in the De Rebus magazine this month which gave a few real scenario's and the fact of the matter, is the fund is not going to be saving much money and they will open themselves up to a whole lot of claims for under settling of claims.
Clients this time of year want their money because its December but unfortunately issuing a Writ can only take you so far. The fund will say their computers are attached and they cannot process payments, which is in fact the reality of it all.
Its a tough and real problem

Prishani   said...
on Wednesday 25-Nov-15 09:57 AM
I do believe that clients should be made fully aware of how long the process actually takes regarding payment, I think the RAF needs to put some procedures in place in order to deal with making payments in a more efficient and effective way. It is really disheartening that they are paying smaller matters first when in most cases the larger amounts are obviously for those who are seriously injured, and are desperate to receive their money.

Johann  said...
on Wednesday 25-Nov-15 07:09 AM
Some interesting observations and I also found it very informative to watch your video that you put up on Youtube recently (entitled 'Road Accident Fund payment problems') explaining the challenges faced and how De Broglio Attorneys intend to go about this.

Zanell  said...
on Wednesday 25-Nov-15 06:47 AM
The sad part is seeing clients who have been struggling financially for 5 years due to delay in there matters which is mostly caused by RAF then they need to wait another 9 months yet again because of the RAF. We all contribute to the Fund why should they always make it feel like they are doing us a favour.

Melissa  said...
on Wednesday 25-Nov-15 06:27 AM
It is really difficult to get payments from the RAF as they are very slow payers. I think that the RAF has to take into consideration the pain and suffering of the clients into account and be more co-operative with the RAF firms to make payment. They get levies from petrol, diesel fuel everyday, if it weren't for the people the RAF wouldn't exist.

Sandra  said...
on Wednesday 25-Nov-15 06:23 AM
Payments are difficult to get in, maybe because its end of the year time period that has an effect on the Payments.... I think a better system is needed in order for things to run better and faster and much more sufficiently. Clients are phoning in everyday, desperate for the money and eventually that does leave one feeling heart broken when they are suffering and you cant supply them with what they need

Alexis  said...
on Wednesday 25-Nov-15 05:17 AM
It is not easy to get these payments in. You have to call, get details, call the relevant people, email etc just to get it requested. Once requested, it can still take up to 120 day s for payment and on then you still see ones requested in March that have still not been paid.

I understand that there is a problem, but then a system needs to be worked out. One in which, yes it will take longer but all get paid within a suitable period of time and in order, not some here and some there as it is now.

Half these clients are in dire need of this money, and it is horrible to see them having to wait so long, which means they are suffering for much longer.

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