The Law Society of South Africa has just issued a press release on the direct payment issue.  Here is the full text:

• In terms of the current system, where fault is the basis of compensation, most if not all claims are dealt with on a contingency basis by attorneys. That means that attorneys only receive payment from the client once the payment is received from the RAF. No legal representative would be prepared to take a claim on risk. Most of the time claims call for a substantial financial investment by the claimant for reports by medical and actuarial specialists, as well as from forensic and accident reconstruction specialist. Attorneys often incur these expenses on behalf of claimants.

• Under the current system, most major medical aids are prepared to fund their member’s costs relative to an accident as against an undertaking from the member’s attorney to refund any costs recovered. On this basis they await the outcome of the member’s claim, rather than pursue a ‘supplier’s’ claim. If payment is not made to the attorney, this system will collapse. Medical aids will either pursue ‘direct’ claims, thus flooding the RAF with thousands of individual claims, or the medical aid will decline to meet the member’s costs, to the obvious detriment of the member.

• In virtually every existing claim in the system, the basis upon which an attorney accepts the instruction is that the attorney is irrevocably nominated as agent for the receipt of the proceeds of the claim. This is the underlying contract between attorney and client. Even if the RAF is ‘empowered’ by regulation to by-pass the attorney, this would not negate a contractual relationship between attorney and client, and payment not in accordance with the contract would not discharge the claim. Any attempt to legislate against this would be an undue interference in the right of the public to contract freely and to appoint a legal representative of choice.