Two law firms get lion’s share of RAF’s R103m legal services spend

The Road Accident Fund (RAF) paid 84% of the total R103.1 million it spent on corporate legal services in its 2024 financial year to Malatji & Co Attorneys Inc and Maponya Ledwaba Attorneys – just two of the 43 legal firms on its panel.

Malatji & Co was paid R55.87 million by the RAF in 2024 and Maponya Ledwaba R30.75 million. The RAF revealed this in a presentation to Parliament’s Standing Committee on Public Accounts (Scopa) last week.

These two law firms were also paid the bulk of the amount the fund spent on legal services in the RAF’s 2023 financial year, with Malatji & Co paid R15.25 million and Mopanya Ledwaba R14.86 million of the RAF’s total corporate legal services bill of R34.26 million that year.

Zibi said Malatji & Co in particular received “an incredibly disproportionate portion of the work allocated by the RAF”.

This information was initially not made available to Scopa and was only provided after committee chair Songezo Zibi complained that it had twice requested information about the top 10 law firms that received briefs from the RAF and accused the fund of deliberately withholding this information from the committee for improper reasons.

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Law firm selection

Acting RAF CEO Phathutshedzo Lukhwareni said a panel of 43 law firms was appointed by the RAF in December 2023 but only 19 were briefed and paid during the 2023 and 2024 financial years “at the time of preparing the report [presentation]”.

Lukhwareni said the RAF has a panel of law firms and the selection takes place depending on the complexity of the matter.

Scopa member David Skosana of the ANC asked what criteria is used to allocate briefs among the 43 law firms, why only 19 firms had been briefed and paid, and what measures are in place to ensure cost effectiveness and equitable distribution of work among the firms on the panel.

Scopa member Mark Burke of the DA said Maponya Ledwaba Attorneys was extracting R30 million a year from the RAF but “has got one director, three senior associates and an associate as a secretary and an admin clerk”.

“Does that seem right? Does it seem reasonable that a firm with that staff cohort could be extracting that value and delivering value?” asked Burke.

Lukhwareni said some of those disbursements were for counsel fees and the cost is determined by the complexity of the matters they have handled and, if the matter is prolonged for a number of years and goes all the way to the Supreme Court of Appeal (SCA) for instance, the cost will obviously be significant.

He said repeat briefings are determined by the successes the law firm have registered in the previous cases but declined to comment on the size of Maponya Ledwaba Attorneys because he is not privy to this information.

“To the extent that they [the two law firms] are in the panel and are competent to be in the panel, I don’t see any unreasonability in that,” he said.

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The ‘complex’ cases

Mampe Kumalo, who was referred to by Lukhwareni as the RAF’s head of legal but is the fund’s chief governance officer, said the complex cases these firms had or were handling include the Discovery Health, South African Revenue Service (Sars) and Auditor-General matters.

The Discovery Health matters relate to various applications it launched against the RAF linked to the failure of the fund to pay the past medical expenses of claimants.

The Sars matter involved an application to stop and prevent the tax collection authority from deducting R5.1 billion – or any part of this amount from the RAF levies it collects – to pay Eskom in terms of a settlement agreement between Sars and the power utility.

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Repeat business despite repeated failure

Zibi requested Kumalo to provide Scopa with a detailed breakdown by the close of business on Thursday of the fees paid to the two firms, including attorney fees, party-party costs, the cost of counsel and punitive costs orders against the RAF.

“The reason I want this is that you have persistently been clobbered on the AG matter by a law firm you continue to pay and see absolutely no reason to seek another law firm,” he said.

Deputy Minister of Transport Mkhuleko Hlengwa said they must not be ignorant to the fundamental risk which prevails at the RAF because of the lawyers.

“The abuse of the system and the leakages of the money not reaching claimants in part is a result of the construct of the RAF.

“Why are we spending so much money on legal fees?,” he asked.

“We should be spending it on claimants because the whole system is fundamentally structured in a way which is problematic, hence the bill that we will be bringing … to parliament.”

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Malatji responds 

Approached for comment about how the firm was able to receive such high fees from the RAF and if it has had any engagements with the Special Investigating Unit (SIU), Tebogo Malatji – MD of Malatji & Co Attorneys – told Moneyweb the firm has no way of knowing how the RAF decides to appoint attorneys on matters and what criteria it uses to do so.

“We are thus unable to tender the explanation you seek and suggest that you direct the question to the RAF. As the two directors primarily responsible for the servicing [of] the RAF, I have 31 years practice experience and Ms Sunelle Eloff, 24 years,” he said.

“We have personal injury law experience from the time that we started practice, have acted for the RAF for the most part of our practice lifespan and are therefore experts in the field.

“We are also one of the leading public law specialist firms in the country.

“We can only but speculate that the reasons the RAF instructed us in each instance that they did must have something to do with our years of experience, expertise and suitability for the matter at hand,” said Malatji.

“We have acted for the RAF in several of their most complex matters assisted by senior and junior counsel from the Bar and that accounts for the high value of payments to our firm displayed.

“Moreover, the figures displayed at Scopa as being payments to our firm consist primarily of counsel/advocates and other disbursements and to a lesser extent fees to our firm,” he added

“Until we are confronted with the actual number of instructions issued by RAF to its panel attorneys, we do not accept your assumption that it is our firm that allegedly received a disproportionate number of instructions.”

Malatji added that the SIU has not engaged the firm on this issue.

Maponya Ledwaba Attorneys has not responded to a Moneyweb request for comment on these same issues.

This article was republished from Moneyweb. Read the original here.