The Supreme Court of Appeal (SCA) has held the CEO of the Road Accident Fund (RAF) Collins Letsoalo personally liable for settlements delays, marking a crucial shift in public service accountability.
It reached the pivotal decision on 5 March 2025, issuing a ruling that has serious implications for the governance of the RAF and how claims are managed within the agency. At the heart of this case was the inquiry prompted by the settlements of claims from Dumisani Elvis Hlatshwayo and Mzwandile Modcay Masilela, which were concluded only a day before their respective court hearings in March 2022.
On 28 March 2018, the RAF acknowledged receipt of a third-party claim of Hlatshwayo. On 10 September 2019, Hlatshwayo instituted an action against the RAF. The trial was set down for hearing on 7 March 2022. However, the RAF made an offer to Hlatshwayo’s attorneys, which offer was accepted on the day of the trial. This settlement of the claim on the day of the trial prompted the High Court to hold an inquiry into the issue of costs, which subsequently became the subject of the appeal.
Masilela instituted a direct claim against the RAF which was registered on 12 January 2018. Since the RAF did not object to the validity of the claim, it was deemed to be valid. On 27 March 2018, the RAF requested Masilela to submit his hospital/clinical records. Masilela did not furnish the requested documentation but opted to issue a summons instead. The RAF instructed a firm of attorneys to defend the matter. The pleadings were duly exchanged but the hospital/clinical records were only furnished in August 2019.
His attorneys then delivered the rule 37 conference and 37A judicial case management meeting notices to the RAF’s previous panel of attorneys. The RAF’s attorneys failed to respond or appear at the case management hearing. Although Masilela claimed for loss of earnings, his rule 37 minute, compiled by his attorneys, indicated that the expert reports of the occupational therapist, industrial psychologist and actuary were still outstanding.
The RAF contends that when Masilela set the matter down for the case management meeting, it was not ripe for hearing as there were expert reports outstanding. Nevertheless, this case was certified trial ready on 25 January 2022 and enrolled for hearing on 14 March 2022.
The RAF tendered an offer in respect of the merits, future medical expenses and general damages on 9 March 2022. Masilela accepted the offer on the same day. Due to the outstanding issue of loss of earnings, the claim was thus partially settled. The partial settlement, like the settlement in the Hlatshwayo claim, was also concluded a day before the hearing.
The High Court refused to make the settlement agreements orders of the court. The late settlement of the claims prompted the Judge President to constitute a full court to inquire into the reasons for the delay and late settlement of the claims. In pursuance of its decision to conduct the inquiry, the full court issued various directives, which were primarily aimed at the officials of the RAF.
On 24 January 2023, the full court directed Letsoalo and the Board to pay out of their own pockets the costs connected to and occasioned by the late settlement in each matter. Letsoalo was further directed to bring this judgment to the attention of the Minister of Transport and the Board by not later than 26 January 2023 and confirm to the Registrar of this court by not later than 27 January 2023 that this has been done. The RAF, Letsoalo and the Board then took the matter to the SCA.
Their woes worsened when the presiding judges of the SCA concluded that he, alongside the RAF Board, exhibited excessive delays in processing claims, which culminated in the court-ordered inquiry about why settlements were finalised so close to the trial dates. This level of negligence or misconduct prompted the court to impose personal liability for the costs incurred due to the late settlements.
The SCA ruling culminated from the full court’s assessment of whether the actions of the CEO and the Board amounted to bad faith, a critical test under section 15(3) of the RAF Act. In the judgment, the SCA argued that the myriad procedural missteps and governance issues at the RAF necessitated accountability to ensure fairness for claimants, ensuring that the expectations of the fund are effectively met.
A scathing analysis from the court indicated that there was a direct connection between the leadership’s decisions and the systemic failures leading to the late settlements. The inquiry revealed alarming factors, including a departmental structure that restricted effective case management due to an absence of proper oversight and improper communication channels within the agency’s legal representatives.
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