Durban - The National Department of Health is facing legal claims of more than R105 billion for medical negligence involving law firms whose clients are dissatisfied with the amount of money due to them from the court settlement amounts.
Health portfolio committee chairperson Dr Sibongiseni Dhlomo said litigations had left the department with a liability of about R26bn, while Minister Zweli Mkhize told the committee that the department had settled R500 million of the claims last year.
The auditor-general’s 2019-2020 report revealed in March this year that the government was facing litigation claims totalling R147.12bn. Most of the claims, R105bn, were related to medical negligence.
It was reported that the Eastern Cape Health Department led the pack, with R36.75bn, followed by Gauteng (R23.8bn) and KwaZulu-Natal (R23.4bn).
Other lawyers are also targeting the Road Accident Fund (RAF) which, according to the auditor-general, has been sued for a total of R59.62bn. The Legal Practice Council (LPC) has a list of 213 law firms who were either suspended or struck from the roll of attorneys between 2018 and March this year.
More than 100 lawyers claimed twice for one case from the RAF, totalling R340.1m. The RAF has recouped some of the money, although 42 of the firms are yet to return it. The LPC was investigating the RAF matter and was yet to determine what action to take against the alleged offenders.
“Since the establishment of the Legal Practice in November 2018, we have received just over 21 000 complaints from the members of the public against legal practitioners,” said LPC spokesperson Sthembiso Mnisi.
Independent Media’s investigations unit has learnt that a Durban law firm, Friedman & Associates, had secured more than R1 billion in claims against the KwaZulu-Natal Health Department. But its clients, some of whom have received a settlement of more than R10m each, are living in poverty as they have limited access to their money.
Most of Friedman’s clients are mothers of children who were born with permanent physical and mental disabilities, including cerebral palsy, caused by medical negligence at birth.
Plexus Wealth, which is administering Friedman’s client trust funds, has also been accused of keeping beneficiaries in the dark.
Legally, the firms are not supposed to charge more than 25% of their clients’ settlement and the defendants contribute towards the payment to lawyers, but the clients have complained that far less of the settlement is transferred to their trusts. They also say the money keeps depreciating, despite the fact that the financial institutions appointed to administer the funds should be investing the money, so that it lasts the beneficiary’s entire life.
Aggrieved clients have received little help when they lodged complaints against Friedman & Associates. Friedman was reported to the LPC in November last year and January this year, but after the death of its sole proprietor, Michael Harris Friedman, in January this year, the council abandoned the investigation.
Mnisi said that after the council had ceased the investigation, the complainants, most of them illiterate, were advised “on the process of lodging claims against the legal practitioner (Friedman) with the Fidelity Fund”.
Mnisi said the investigation was called off after Friedman’s death because “in our complaints process, the legal practitioner concerned is provided an opportunity to respond to the complaints as part of our investigation in dealing with matters.
“In this case, one of the matters was reported after the practitioner had already passed on.”
After Friedman’s death, Friedman & Associates ceased to operate. Some of its clients and staff were taken by AC De Sousa Attorneys whose owner, Antonio De Sousa, defended Friedman.
He said the funds were placed in trusts, whose trustees include the beneficiary's family member and two other people with the necessary expertise as trustees, and were closely monitored by the court.
“The judge will have the draft trust deed before him or her and is able to see who the nominated trustees will be before the order is made. The trust is ultimately overseen by the Master of the High Court,” he said.
De Sousa described Friedman as an ethical lawyer who was in practice for more than 30 years. “He dealt with thousands of clients and I am quite sure there is a longer list of happy clients than unhappy clients.”
Plexus chief executive officer James Barnett confirmed that the trust funds were invested with a long-term timeframe for beneficiaries’ life expectancy.