Sociologist and political economist, Max Weber, defines a state as one that maintains a monopoly on the legitimate use of physical force within its borders, with efficient administration, effective policies, and conscionable leaders. When corruption, armed gangs, and terrorism become the dominant feature of the state the very existence of the state becomes dubious, therefore resulting in a failed state. In South Africa, state-owned enterprises are laden with complacent officials and corrupt leaders.
The Road Accident Fund (“the Fund”) was declared a delinquent litigant by the Mpumalanga High Court in a scathing judgment by the Honourable Judge President Legodi. The Fund was established in terms of section 2 of the Road Accident Fund Act 56 of 1996 (“the Act”). The object of the Fund is the payment of compensation per the Act for loss or damage wrongfully caused by the driving of motor vehicles.
The powers and functions of the Fund include the stipulation of the terms and conditions upon which claims for the compensation for loss or damage, the investigation and settling of claims arising, caused by the driving of a motor vehicle. The clogged court roll for default judgment or compelling the Fund to either appoint experts or attend pre-trial conferences proves the Fund has and continues to fail to uphold its obligations, powers, and function.
The Fund, much like other state own enterprises such as the Passenger Rail Agency of South Africa (PRASA) and ESKOM are operating on its last legs. In Hlatshwayo and Another v Road Accident Fund (3242/2019) [2023] ZAMPMBHC, the court was tasked to consider whether it was appropriate to make a special order as to costs against litigants or their attorneys for the refusal of attending pre-trial conferences; or the failure to consider settlement. Legodi JP criticized the late settlement of the Fund’s claims or the settlement of claims on the dates of trial where enormous costs of litigation were already incurred and not preventable.
The judgment was highly critical of the Fund’s CEO Collins Letsoalo and the board. The Court lodged an inquiry into the late settlement of two claims that were lodged. The Court ordered Letsoalo and the board to jointly and severally “pay out of their own pockets” the costs associated with the late settlement of two claims lodged with the Fund. The judgment also revealed the exuberant chaos within, since it instructed its panel of attorneys to return their files as part of a shift to an in-sourcing model. The Court called attention to the Fund’s callous and indifferent attitude towards matters, especially their complacency with matters that were capable of being settled, to reach the trial stage and then only to electing to settle on the dates of trial or later. This tactic defeats the Fund’s legal obligation to adequately investigate, settle and pay compensation.
The chaos which characterizes state-owned enterprises in South Africa is in dire need of reformation and restoration. These enterprises require effective governance and control in order to serve the public.
"I cannot say whether things will get better if we change; what I can say is they must change if they are to get better." — Georg C. Lichtenberg.
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