Road Accident Fund CEO Collins Letsoalo, board must pay millions for botched cases

Pretoria – In another blow for the CEO of the Road Accident Fund (RAF) and its board of directors, the Mpumalanga High Court sitting in Mbombela yesterday turned down an application against an earlier order that they had to pay from their own pockets the costs associated with two cases.

Mpumalanga High Court Judge President Francis Legodi, who issued a lengthy, carefully-reasoned judgment last month, made several scathing remarks regarding CEO Collins Letsoalo and the board’s running of the RAF, especially after they had fired their panel of attorneys.

This resulted in the personal costs order against them, which could run into millions.

Judge Legodi yesterday refused leave to appeal as he concluded that there was no prospect that another court would come to a different finding than that of the full Bench he had headed.

The judge did, however, amend his earlier order to include the RAF itself in the costs order. In terms of the amended order, the RAF, Letsoalo and the board of directors must foot the legal costs in the two cases that formed the subject of the judgment.

The judge ordered that they were jointly and severally liable for the costs. In terms of the order, if the one footed the bill, the others were absolved.

Letsoalo and the board argued at least 14 points on why they felt the court erred in issuing a personal costs order against them. They wanted the Supreme Court of Appeal to take a second look at the judgment.

In his main judgment, Judge Legodi said the system the RAF implemented after the disposal of its panel of attorneys appeared to be the cause of the problem, for lack of a back-up plan.

The procrastination by the RAF in doing nothing to investigate or settle and pay claims, resulting in settlements being reached when the trials were about to get under way, and costs had already been incurred, were earmarked by the court as a huge problem, which could result in cases in courts around the country being plunged into chaos.

Letsoalo had argued that plans were in place to deal with the removal of the panel of attorneys, but he also blamed a shortage of money and staff.

The judgment was sparked by two cases instituted against the RAF and in which the entity did little, if anything, to resolve them. Only on the day of the trial did the RAF want to settle.

In hitting back, Letsoalo and his board said they had acted in good faith at all times.

Letsoalo and his board had no personal knowledge of the two cases, nor were they appointed at the time the summons were issued, they said.

The court was also wrong in finding a link between the RAF firing the panel of attorneys and the two cases, they said – arguing that these attorneys’ mandates had expired and there was a lack of trust between the parties.

In opposing the application for leave to appeal, advocate Brenton Geach SC argued that neither Letsoalo nor his board demonstrated that the appeal would have a reasonable prospect of success, based on the facts and the law.

Geach referred to Judge Legodi’s judgment, in which he said: “If the fund had a workable plan effective from June 1, 2020 (when the panel of attorneys was fired), there would not have been a need for various divisions (of the courts) to ponder how to arrest the chaos caused by the fund through its mismanagement, occasioned by its CEO and board.”

The judge also commented in his main judgment that the panel was fired without an immediate back-up plan in place. Geach argued that they did not consider the needs of victims of road accidents when they fired their panel, and thus left claimants out in the cold.

While Letsoalo maintained that the panel was fired so that the fund could survive financially, Geach countered that Letsoalo had never submitted any financial records to prove that this move did, in fact, save the taxpayers any money.

Pretoria News

Author: editor

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