How long does the RAF take to pay after settlement?

A claimant who has waited four years for a Road Accident Fund matter to settle hears the figure, tells the family, and starts planning. Then nothing happens for six months.

This is the most predictable disappointment in personal injury work, and it is entirely avoidable as a disappointment, because the timetable is written into the order itself.

The 180 days

Court orders and settlement agreements against the Fund ordinarily provide that:

• the capital amount is payable within 180 days of the date of the order
• taxed or agreed costs are payable within 180 days of agreement or taxation
• the claimant may not issue a writ of execution in respect of those amounts before that period has expired

One hundred and eighty days is roughly six months. It runs from the order, not from the collision, and not from the day the matter was argued.

So the sequence a claimant actually experiences is: years of investigation and medico-legal assessment, then a settlement, then another six months.

The reason for the arrangement is the Fund's financial position, which has been the subject of extensive litigation in its own right. Whatever view one takes of that, the practical position for a claimant is fixed: the money is coming, and it is not coming this month.

Interest is running

This is the part that softens it, and claimants are rarely told.

Orders against the Fund ordinarily provide that it is liable for interest at the prescribed rate, calculated from 14 days after the date of the order until the date of final payment.

Two consequences.

Delay is compensated. Not fully, and not in a way that helps you pay rent next month, but the amount owing grows while you wait.

Check the interest on payment. When the money arrives, the interest component should be there. An amount paid on day 200 that carries no interest is short, and it is worth raising rather than assuming the figure is correct.

What gets paid, and what does not

A settlement usually has several components and they behave differently. Our guide on what a RAF claim is worth sets out the heads, and the RAF claim range indicator gives the shape of one.

General damages are paid in money, if the injury was accepted as serious. Our guide on the RAF 4 serious injury assessment explains that gate.

Past medical expenses are paid in money.

Loss of earnings and earning capacity is paid in money, and is usually the largest component in a serious claim.

Future medical expenses are not paid in money. This is the single biggest surprise in the whole process. Instead of a lump sum, the Fund issues an undertaking to pay for future accident-related medical treatment as and when it is incurred, in accordance with the statutory tariff.

You therefore receive a certificate rather than cash. It is valuable and it lasts, but you cannot spend it, and you have to use it correctly: treatment is claimed against the undertaking afterwards, and providers need to know it exists. Claimants who expected money for future surgery and received a piece of paper feel misled, and they were usually told, once, in a letter they read while thinking about something else.

The money goes to your attorney first

Payment is made by electronic transfer into your attorney's trust account, not into your own.

The attorney then accounts to you: the capital received, the interest, fees, disbursements such as the medico-legal reports and counsel's fees, and the balance paid over.

What you are entitled to is a written statement of account showing each of those, and you should ask for it rather than waiting for it. Where the fee is contingent, our guide on how no win no fee works sets out the statutory limits on what may be charged, which are the thing to check the statement against.

Disbursements in a serious claim are substantial and legitimate. Several specialist reports, an industrial psychologist and an actuary can run to a great deal of money, and it is spent whether or not you see the invoices. Ask for them.

Using the undertaking

Because it is the component people understand least, it is worth setting out how it works once you have it.

It covers accident-related treatment. Not everything that happens to you afterwards. The link to the injuries in the claim is what makes a cost claimable, and a condition unrelated to the collision is not covered.

It is paid in accordance with the statutory tariff. That is not the same as whatever a private provider chooses to charge. Where a provider bills above the tariff, there can be a shortfall, and you need to know that before the procedure rather than after it.

It generally works by reimbursement or direct arrangement, not by handing you money in advance. That is why claimants with no other cover still face a cash-flow problem for a procedure the undertaking will ultimately pay for.

Providers need to know it exists. Give the treating specialist and the hospital a copy, with the claim and link numbers, and do it before admission. A hospital that discovers the arrangement after discharge will pursue you.

Keep it permanently. It has no expiry that helps you plan around. A knee replacement or revision surgery fifteen years from now is exactly the sort of thing it is for, and the certificate needs to be findable by somebody other than you.

Get advice before accepting a settlement with a wide undertaking and a small capital figure. Where the Fund offers an undertaking in place of a calculated future medical cost, the trade is real: you are exchanging a quantified amount for a promise limited by a tariff. That may well be the right deal, and it should be a decision rather than an assumption.

If the claimant is a child or lacks capacity

A different set of rules applies, and it surprises families.

Money awarded to a minor is not paid to a parent to use. Depending on the order, it is placed in a trust created for the child's benefit, or paid into the Guardian's Fund administered by the Master of the High Court, with the capital preserved and released in accordance with the order or on majority.

The same approach applies where a claimant lacks the capacity to manage their own affairs because of a brain injury, and a curator may be appointed.

That is protective and it is also slow, and it adds a further layer after the 180 days. Parents who expected to receive their child's award and find it in a trust with a professional trustee, who charges fees, are often upset. The time to raise how the money will be held and what it will cost to administer is while the settlement is being negotiated, not once the order has been made.

When the 180 days pass and nothing arrives

This happens, and there is a process rather than a crisis.

Confirm the date the period expired. Count from the order, and check whether the order provided differently.

Have your attorney follow up in writing, quoting the link and claim numbers and attaching the order. Most delays resolve here, because the file has gone to the wrong place rather than because payment has been refused.

Then a writ. Once the 180 days have expired the restriction falls away and execution becomes possible. Attachment against the Fund has itself been litigated, so it is not a purely mechanical step, but it is a real remedy and the possibility of it moves files.

Keep the interest running in mind. The amount owing is increasing, which is not a reason to be patient but is a reason not to panic.

Ask your own attorney the direct question. A distinction worth being blunt about: sometimes the Fund has not paid, and sometimes the Fund paid and the attorney has not accounted. If you have been waiting a long time past the period, ask specifically whether the funds have been received into trust. You are entitled to a straight answer, and if you do not get one, the Legal Practice Council is the place to raise it.

What to do while you wait

Do not borrow against it at a high rate. There is an industry built on advancing money against pending and settled RAF claims, and the cost of that money is high. Six months of interest on an advance can consume a meaningful part of an award. If you are in genuine difficulty, discuss it with your attorney first.

Do not make commitments on the strength of a date. The 180 days is an outer limit that is frequently used in full.

Get the undertaking certificate and keep it safe. Give a copy to the treating specialists who will be billing against it.

Keep claiming your medical treatment properly, against the undertaking, from the day you have it.

Worked example

This example is illustrative. A claim settles on 3 March. The order provides for capital of R1 850 000 made up of past medical expenses, loss of earnings and general damages, plus an undertaking for future medical expenses, plus costs to be taxed.

The claimant expects the money in a few weeks.

What the order actually says is that the capital is payable within 180 days of 3 March, so by about the end of August, with interest at the prescribed rate from 17 March until payment. No writ may issue before the end of August.

Costs run on their own track. They are taxed in June, and the Fund then has 180 days from taxation, which takes the costs payment into December. That is normal and it does not delay the capital.

Payment of the capital arrives in August, into the attorney's trust account, with interest calculated from 17 March. The attorney accounts: capital, interest, contingency fee within the statutory limit, disbursements for the orthopaedic surgeon, the industrial psychologist and the actuary, and the balance to the claimant.

The one thing the claimant does not receive is money for the knee replacement he will need in twelve years. That is covered by the undertaking, and when the time comes the surgeon bills against it. He puts the certificate in the same file as his title deed, which is the correct instinct, because he will need it decades from now.