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RAF’s work hindered by legal cases as bill rises to R10.6bn

Acting CEO Collins Letsoalo briefed the media on the fund's new operating model on Monday.

FILE: Collins Letsoalo. Picture: @PRASA_Group/Twitter

JOHANNESBURG - The Road Accident Fund (RAF) said it had neglected its primary mandate to settle and investigate claims and had instead been resorting to legal battles that had cost the fund billions of rand.

Acting CEO Collins Letsoalo briefed the media on the fund's new operating model on Monday.

The fund is government's second largest contingent liability after Eskom, with about R17 billion owed to claimants.

Letsoalo has also predicted a R15 billion loss in revenue for this financial year.

The RAF is reviewing its operating model which has left it R17 billion in the red with liquidity issues.

Letsoalo has been going to court for about 90% of the cases.

“Over the years we have seen legal expenses grow from about R940 million in 2008 to about R10.6 billion in the current year.”

He said the new operating model would focus on finalising claims within 120 days and not years as is currently the case.

Letsoalo said they aimed to reduce their legal costs by 70% in the next three years.

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