Road Accident Fund alleges attorneys paid client only R10 400 from R241 000.
The Legal Practice Council (LPC) is assessing a complaint that law firm Spruyt Inc Attorneys allegedly paid a Road Accident Fund (RAF) claimant only R10 400 despite successfully claiming R241 000 from the fund.
“The Legal Practice Council received the complaint referred to from the Road Accident Fund last week.
“The complaint, like all other complaints, is investigated as outlined by sections 36 to 44 of the Legal Practice Act (LPA).
“The Legal Practice Act provides a strict process that we have to follow, which requires that upon receipt of a formal complaint, our team of legal officers (who are admitted legal practitioners) will request all the necessary information and evidence from the complainant to establish merit.
Thereafter, if the is a prima facie case of misconduct, the legal practitioner is given an opportunity to respond to the alleged misconduct. On completion of the investigation, the matter is placed before an Investigating Committee to consider all the facts and decide on whether there is merit to the complaint, or that the matter should be dismissed,” said LPC spokesperson Kabelo Letebele.
This comes after the RAF added that it had been alerted that some attorneys had been “systematically underpaying claimants”, providing compensation amounts that are significantly lower than what the RAF was paying out.
“This malpractice is being conducted under the guise of administrative costs and purported discounts.
A claimant who has opted to remain anonymous, approached the RAF seeking clarification after experiencing this troubling treatment. The RAF paid the claimant’s legal representative Spruyt Inc Attorneys R241 000, but they paid the claimant a measly R10 400. The discrepancy was justified by the attorney as necessary due to high administrative costs, a malpractice that is misleading and in clear contravention of the Contingency Fees Act 66 of 1997, which limits the total fee to a maximum of 25% of the compensation,” the RAF said.
In a statement of account, from the attorneys to the client involved in the third party claim in question, the loss of earning amounts is R241 831, as noted by the RAF regarding its payout.
The client fees were listed as R115 000 inclusive of VAT, however, another amount is written as the attorney's own client fee as per agreement, which then totals R125 831, plus expenses at R116 420, 98. This leaves the claimant with R10 410, 02.
In response to the incident, the RAF said it was committed to ensuring fair and transparent compensation practices.
“Claimants who have been subjected to such unethical practices are urged to contact the fund immediately.
It is imperative that these issues are addressed, and that the integrity of the claims process is upheld. We will continue to work with the claimants to ensure the transformation of this RAF system to the benefit of the claimant,” said the fund.
Spruyt Attorneys said they would provide a response to the allegations in due course.
East London-based Masixole Bangiso from Masixole Bangiso Attorneys appeared in the East London Magistrate’s Court and was recently released on bail over alleged theft of RAF money from a client.
He is alleged to have stolen RAF claimants’ money in his trust fund which ultimately led to his arrest in relation to a claim of around R550 000.
Cape Times