Road Accident Fund v MKM obo KM and Another; Road Accident Fund v NM obo CM and Another (with Centre for Child Law intervening as Amicus Curiae)

The matters concerned claims for loss of support on behalf of minor children arising from the death of a parent in motor vehicle accidents. In both cases, the children were represented by Sonya Meistre Attorneys under contingency fee agreements concluded in terms of the Contingency Fees Act 66 of 1997. The Road Accident Fund (RAF) made settlement offers in November 2020 which were accepted by the attorneys without obtaining judicial approval as required by section 4 of the Contingency Fees Act. In the first matter, a curator ad litem had been appointed and was expressly prohibited by court order from settling without judicial approval, yet the settlement was concluded without such approval. The RAF paid the settlement amounts into the attorneys’ trust account. When applications were later brought to have draft consent orders made orders of court, the High Court questioned the lawfulness of the settlements and payments in the absence of compliance with section 4, declared the settlements unlawful, and made extensive ancillary orders against the attorneys. The RAF appealed to the Supreme Court of Appeal.

The appeal was upheld in both matters with no order as to costs. The High Court orders were set aside and replaced with orders declaring the contingency fee agreements invalid, directing the attorneys to submit bills of costs for taxation, regulating repayment of any excess fees, and referring aspects of the attorneys’ conduct to the Legal Practice Council. The settlement agreements themselves were not declared unlawful.

This judgment clarifies that the Road Accident Fund has no statutory duty to police or enforce compliance with the Contingency Fees Act when settling claims. It draws an important distinction between the validity of a settlement agreement and non-compliance with contingency fee requirements, confirming that attorney misconduct does not automatically taint settlements concluded with third parties. The case provides authoritative guidance on the scope and effect of section 4 of the Contingency Fees Act and limits the imposition of additional obligations on the RAF not grounded in statute.