CLAIMS ARISING OUT OF THE UNDER-SETTLEMENT OF RAF MATTERS ARE ON THE INCREASE. RAF PRACTITIONERS NEED TO BE EXTRA CAUTIOUS IN DEALING WITH THESE MATTERS. PLEASE READ THE ARTICLE ON THIS TOPIC, WITH SOME GUIDELINES FOR THE PREVENTION OF SUCH UNDER-SETTLEMENT OF RAF CLAIMS
Claims for the under-settlement of RAF matters were few and far between until the early 2000’s. The Attorneys Insurance Indemnity Fund (AIIF) only started recording these matters as a separate claim type in the 2005/6 year.
The profession and the public have become increasing litigious since then and the numbers and values of these claims have continued to increase year on year.
Under-settlement claims have the highest average value per claim of all claim types that are reported to the AIIF.
To illustrate some of the circumstances that can lead to such claims, we have selected a cross section of actual claims with varying circumstances, such as:
- The minor’s claim was under-settled for an amount of R71 438-00. As so often happens, the minor’s mother had instructed the practitioner in her representative capacity and had pressurised him into settling the matter before all the necessary medico-legal reports could be obtained.
It had not been completely clear from the seven medico-legal reports that had already been obtained by the practitioner, that the head injury sustained by the minor was a serious one. The Glasgow coma of 14/15 and the neurologist’s report seemed to suggest that the head injury was a minor one. However, there were some statements in several of the reports that should have set off alarm bells.
Subsequent reports confirmed that the head injury was in fact a serious one and that the minor’s damages exceeded the RAF settlement amount.
- Again, the minor’s mother insisted that the practitioner settle with the RAF without obtaining the necessary medico-legal reports. The practitioner was aware that the minor’s Glasgow Coma of 11/15 and other symptoms suggested a serious injury, but bowed to pressure and failed to obtain all the requisite reports.
- A practitioner settled the claimant’s claim against the RAF for R75 000 in respect of general damages, with no undertaking for future medical expenses. The claimant argued that the practitioner had failed to properly assess the injuries and damages or to discuss the settlement with him (the claimant) and that he had ultimately under-settled the claim.
The practitioner had obtained an early medico-legal report from an orthopaedic surgeon, who had requested that he be allowed to re-examine the client a year later, on the basis that the latter’s condition had not stabilised and there would probably be serious sequelae. The injuries were, inter alia, fractures to the right femoral head and superior pubic ramus.
The practitioner settled the matter without obtaining a further report. Subsequent reports obtained by the claimant’s new attorneys supported a claim of under-settlement.
- The statutory medical report did not refer to a head injury. The practitioner failed to take notice of the references to a serious head injury in the hospital records and accordingly failed to instruct the necessary experts.
- The practitioner relied on the assertion in the statutory medical report that no future medical treatment was foreseen and accepted an offer that did not include an undertaking to pay future medical expenses. He failed to assess whether or not the claimant would need future medical treatment. The claimant had fractured the neck of her left femur which had led to a bipolar hip replacement. This should have alerted the practitioner to the possibility of a revision procedure considering the claimant’s age.
The injuries had also led to a leg length discrepancy, which might also have led to her incurring future medical expenses. The injuries and sequelae documented in the hospital’s medical records should have persuaded the practitioner at the very least to obtain a report from an orthopaedic surgeon.
- The practitioner failed to consult with the claimant regarding her injuries and sequelae. Using a Power of Attorney, he under-settled the claim with the RAF without discussing the offer with client.
- The practitioner allowed his client to accept the RAF’s low offer, knowing that this was an under-settlement. This was done because the client insisted that he desperately needed the money at that time. The client signed an indemnity acknowledging the practitioner’s advice not to accept the offer. (In such a case, it appears that no negligence can be attributed to the practitioner, as long as it can be shown that the offer was fully discussed and the consequences of the under-settlement were fully explained in clear and understandable language, using a competent interpreter, if necessary.).
- The practitioner allowed the client to settle his matter without obtaining any medico-legal reports, because neither the client nor his small practice could afford to pay for such reports.
In a situation like this, there are several courses of action that could be followed in order to protect the client, inter alia:
- The client can be referred to a firm that is able to carry the costs of the reports, pending the settlement of the claim; or
- The RAF can be approached to assist with the payment of such costs; or
- The expert can be approached with a request for payment to be held over pending finalisation of the claim.
- The practitioner instituted an action in the Magistrates’ Court for loss of support. Thereafter, he obtained an actuarial report that showed that the figure for the claimant’s damages was greater than the R100 000 for which the court had jurisdiction. It was by then too late to withdraw and institute action in the appropriate court, as the five-year period within which action had to be instituted had prescribed.
- Attorney Guisi Harper suggests that in cases where the matter has not prescribed, consideration should be given to withdrawing the Magistrate’s Court action and issuing afresh out of the High Court – bearing in mind the additional costs that would be involved.
Until the SCA case of Oosthuizen v RAF, handed down in 2011, it was common practice to transfer matters with the consent of the defendant. (Oosthuizen v Road Accident Fund (258/10)  ZASCA 118 (06 July 2011)). See also Kgoale and Another v Road Accident Fund and Others (A769/2015)  ZAGPPHC 493 (24 June 2016).
(Perhaps in future members should consider taking a case with different facts to the Oosthuizen case to set a precedent that there are instances that in the interests of justice would justify the Plaintiff’s attorney requesting and obtaining the Defendant’s consent to transfer the matter, as the practice was in the past.)
- The practitioner instituted action against the RAF on behalf of his client (whose first language was Zulu). An offer of settlement was made and accepted prior to trial. There is no file or telephone note or letter to client confirming that the offer was ever explained or discussed with client.
In a situation like this one, it is extremely difficult to prove that the practitioner had:
- Canvassed the offer in depth, explaining all the pros and cons;
- Used the services of an interpreter (presuming this was necessary).
- The RAF contended that the claimant was struck by the insured vehicle while crossing the road and failing to keep a proper lookout. The claimant’s version was that she was struck while she was waiting at the side of the road. The practitioner accepted the RAF’s apportionment of 60/40 against the claimant and her damages were accordingly reduced by 60%. It subsequently emerged that the RAF had no witnesses who could rebut the claimant’s version and she alleged that her claim had been under-settled.
The claimant signed a special power of attorney and the practitioner submitted the claim timeously. The practitioner attempted to contact the claimant to discuss an offer of settlement made by the RAF, but could not locate him. He realised that the claimant’s contact details must have changed and therefore negotiated with the RAF and accepted the offer on behalf of the client. In this regard see the duties of a practitioner to locate his client set out in the judgment of Colman J in Mazibuko v Singer 1979 (3) SA 258 (W) (at page 264).
Briefly, the main lessons to be learned from the matters discussed above is that the RAF practitioner needs;
- to put himself in a position where he can properly and independently quantify the claim (by taking comprehensive instructions from client on all issues relevant to merits and quantum and obtaining and carefully scrutinising medical records, medico-legal and accident reports/case dockets – and if necessary reports from accident reconstruction experts or assessors) and
- to preferably not use a power of attorney to accept an offer and
- to make sure that he obtains alternative contact details (of relatives, friends and employers of the claimant) and to emphasise to client the importance of notifying any change of his contact details and
- to make sure that he does in fact give the client the appropriate advice and information regarding settlement and
- to make sure that there is sufficient written proof that such advice was given and
- to give an unsatisfied client the option of obtaining a second opinion and
- to be extra cautious where a minor is involved and if necessary insist that a curator ad litem be appointed to act in the minor’s interest.
Attorney Jacqui Sohn points out that, on a practical level, this proposal may not be an option as the parents are the clients and would certainly not agree to such an appointment if they were the ones insisting on accepting an offer.
The only real option is for the practitioner to withdraw and to document his/her reasons for doing so in a letter to clients (i.e. that it is not in the best interests of the minor to accept the offer.)
In addition to the above suggestions, please note the following recommendations:
- Taking on RAF matters unless you/your staff have the necessary expertise in such matters. (The same applies to medical malpractice claims);
- Allowing an unqualified person to assist in such matters without constant and strict supervision;
- Taking on RAF (or any other) matters that are already close to prescription;
- Taking on matters referred to you by another firm of attorneys/person, in situations where you are unable to properly consult with the claimant yourself.