What Are Contingencies in Road Accident Fund Cases?

A contingency in a Road Accident Fund (RAF) case is the fee your attorney deducts from the final award, calculated as a percentage of the proceeds recovered for you — the attorney is only paid if you win, with the fee governed by the Contingency Fees Act 66 of 1997, capped at a statutory maximum, and required to be set out in a written agreement signed by you and certified by the attorney as reasonable before any work begins. The deduction is taken from your settlement or court award, the attorney’s fee portion is paid directly to the firm before the balance is paid out to you, and the Contingency Fees Act caps the percentage the attorney may claim so that claimants retain the bulk of the recovery. Recent case law, including Supreme Court of Appeal guidance on the correct application of the statutory cap to loss-of-income calculations, has tightened how the deduction is calculated, particularly in RAF claims where the award is composed of past and future loss of earnings.

What “Contingency” Means in an RAF Claim

In South African legal usage, a “contingency” in an RAF claim refers to a contingency-fee agreement — the attorney is paid only if the claim succeeds, with the fee being a percentage of the amount recovered. The fee is deducted from the RAF award after settlement or court order; it is not added on top of the award. The contingency-fee arrangement is governed nationally by the Contingency Fees Act 66 of 1997, which sets the rules for how the fee must be agreed, calculated, capped, and disclosed. In RAF matters the term is often used loosely — “the contingency” can refer to the deduction itself, the percentage applied, or the agreement authorising it — but the underlying concept is the same: an attorney-client fee that depends on the outcome.

The Statutory Framework: Contingency Fees Act 66 of 1997

The Contingency Fees Act sets out the formal requirements a contingency-fee agreement must meet to be enforceable. Section 2(1)(b) of the Act permits a legal practitioner to charge a “success fee” higher than normal fees, but section 2(2) applies two ceilings to that fee.

Cap	Limit	Effect
First cap	Success fee cannot exceed normal fees by more than 100%	The success fee may at most double the attorney’s normal (attorney-and-own-client scale) fees.
Second cap	For money claims, total success fee cannot exceed 25% of the capital recovered, excluding costs	The practitioner recovers the lower of the two figures, and the claimant is guaranteed at least 75% of the capital.

The Act also requires the attorney to certify that the fee is fair and reasonable, having regard to the complexity of the matter, the risk involved, the time required, and any other relevant factor — this certification is built into the agreement itself. Contingency-fee arrangements must additionally comply with the rules of the Legal Practice Council, the body that regulates the practising conduct of attorneys under the Legal Practice Act 28 of 2014. Agreements that do not meet the statutory requirements may be unenforceable, with the attorney forced to revert to a conventional fee basis.

How the Contingency Deduction Is Calculated

The deduction is applied to the net capital amount recovered from the RAF — not to the gross claim amount and not to heads of damages that are not subject to the contingency. The fee is usually expressed as a percentage of the recovered amount (capped under the Act), not as a fixed Rand figure.

The deduction is taken before the balance is paid out to the claimant: the RAF pays the settlement amount into the attorney’s trust account, the attorney’s fee is deducted, and the remainder is paid to the claimant. VAT is calculated on the fee portion but sits within the 25% ceiling — courts have held that adding VAT on top of the 25% would effectively charge the client 28.75% and “patently offend against the Act.” Costs awarded to the claimant are excluded from the 25% calculation entirely.

Step	What happens
1. Calculate normal fees	Determine the attorney’s normal fees on the attorney-and-own-client scale (taxed or agreed).
2. Apply the surcharge	Add a success fee of up to 100% of those normal fees.
3. Compare to the 25% cap	Compare the combined “success fee” figure to 25% of the capital recovered.
4. Take the lower figure	The lower of the two is the maximum the attorney may recover, with VAT included inside that figure.
5. Pay out the balance	The remainder (at least 75% of the capital, plus costs) is paid to the claimant.

Contingency Fees in the Specific Context of RAF Claims

RAF claims have particular features that affect how the contingency interacts with the award. The RAF settles or is ordered to pay specific, statutorily-defined heads of damages under the Road Accident Fund Act 56 of 1996 — general damages, past loss of earnings, future loss of earnings, medical expenses, and related heads. Contingency-fee disputes in RAF matters typically arise around how the percentage applies to loss-of-earnings components and whether the agreement permits deduction from amounts the RAF settles for non-pecuniary items such as general damages.

Recent appellate guidance has addressed the correct application of the statutory cap to loss-of-income calculations in RAF claims. A 2025 Gauteng High Court decision, De Bod v Road Accident Fund, confirmed that past and future loss of earnings form part of the capital award and the 25% cap is calculated against that aggregate recovery — the cap is not sliced up between individual heads of damages. The judgment also set aside a contingency-fee agreement whose worked example would have left the claimant with only about 54% of the capital: properly applied, the claimant would have received around 75% (roughly R375 000 of a R500 000 award) plus costs.

What Must Be in the Contingency-Fee Agreement

To be enforceable, a contingency-fee agreement must meet the following requirements:

• It must be in writing and signed by the client before the attorney begins work on the contingency basis.
• It must state the percentage the attorney will charge, the cap (i.e. that the fee will not exceed the statutory maximum), and the basis on which the percentage will be applied.
• It must set out which matters the contingency applies to and which (if any) are excluded.
• The attorney must certify that the fee is fair and reasonable, having regard to the complexity of the matter, the risk involved, the time required, and any other relevant factor.
• The client must be informed in writing that they may seek independent legal advice before signing.

What a Claimant Should Check Before Signing

Before signing any contingency-fee agreement, a claimant should confirm each of the following points:

• The percentage — confirm it is at or below the statutory cap and is stated clearly.
• The scope — does it apply to the full recovery or only specific heads of damages?
• The trigger — is the fee calculated on settlement, on court order, or on both?
• VAT — confirm VAT is included within the 25% cap, not added on top.
• Disbursements — are disbursements (sheriff fees, medical reports, expert fees) recovered separately or out of the contingency?
• Termination — what happens to the contingency if the matter is settled directly with the RAF without the attorney completing the claim?
• Cancellation rights — what happens if the client wants to terminate the agreement partway through?

Current Case Law and Recent Developments

Two judgments handed down in 2025 — Bheme v Road Accident Fund (5089/2023) in the Mpumalanga Magistrate’s Court and Capasana v Road Accident Fund (5876/2022) in the Free State High Court — confirm that the assessment of contingency deductions in RAF matters remains an actively-litigated issue. The Free State Development Law Library’s topic index for “assessment of contingency deductions for past and future” lists a sustained body of judgments on the issue, indicating an established litigation sub-area rather than a one-off dispute.

Most consequentially, the Supreme Court of Appeal’s guidance on the correct application of the statutory cap to loss-of-income calculations in RAF claims — applied in De Bod v Road Accident Fund — has tightened how the deduction is calculated. A current contingency arrangement must be checked against this latest authority: an agreement that calculates the fee on a basis other than the capital recovered (for example, by reference to a fee scale alone, or by adding VAT on top of the 25%) is at risk of being set aside as non-compliant.

Why the Contingency Matters to the Net Payout

The contingency directly reduces the net amount paid to the claimant — a 25% contingency on a R1 million capital award leaves R750 000 to the claimant before any disbursements. Because the RAF does not pay the attorney’s fees on top of the award, the contingency is the mechanism by which the attorney is remunerated in an unsuccessful-claim scenario (no fee is recovered if the claim fails, which is why the percentage is higher than an hourly fee would be).

The contingency also shapes the attorney’s incentives in settlement negotiation — the higher the contingency, the more aligned the attorney’s interest is with maximising the gross recovery, but the statutory cap exists precisely to prevent over-recovery at the claimant’s expense. A claimant who understands how the contingency is calculated can meaningfully compare fee proposals between firms rather than choosing on the basis of headline experience alone.

Why This Matters Across the Country

RAF claims are governed by the Road Accident Fund Act 56 of 1996, which is national legislation administered by the RAF as a single statutory entity, and the contingency-fee mechanism sits on top of that under the Contingency Fees Act 66 of 1997. The size of the claim determines which court hears the matter.

Forum	Claim threshold	Geographic example
Magistrate’s Court	Claims up to R400 000	Local magistrates’ courts across South Africa, including the Mpumalanga seat in Bheme v RAF
Regional Court	Claims between R400 001 and R1 000 000 (with limited civil jurisdiction)	Regional courts across provinces
High Court	Claims above R1 000 000	Gauteng Division (Johannesburg and Pretoria), Western Cape Division, KwaZulu-Natal Division, Eastern Cape Division, Free State Division (as in Capasana v RAF) and other provincial divisions

What matters for the contingency-fee question is not which court hears the claim, but how the deduction is calculated and certified against the statutory framework. Recent case law on contingency deductions in RAF matters has come from across the country — Mpumalanga, the Free State, and the Gauteng Division — confirming that the issue is being tested nationally under the same Act. The Contingency Fees Act applies uniformly across Burger Huyser Attorneys’ footprint, and contingency-fee agreements entered into with the firm’s general litigation practice — led by Director & Head of General Litigation Nadine Roesch-Prinsloo from the Roodepoort branch — are drawn up in compliance with the Act’s written-agreement, certification, and cap requirements before any RAF claim work begins.

Frequently Asked Questions

What does “contingency” mean in a Road Accident Fund case?

It refers to a contingency-fee agreement — the attorney is paid only if the RAF claim succeeds, with the fee being a percentage of the amount recovered from the RAF. The fee is deducted from your award after settlement or court order, not added on top, and is governed by the Contingency Fees Act 66 of 1997.

What is the maximum contingency fee an attorney may charge in an RAF claim?

The Contingency Fees Act 66 of 1997 caps the fee in two ways: the success fee cannot exceed the attorney’s normal fees by more than 100 percent, and for money claims the total fee cannot exceed 25 percent of the capital recovered by the client, excluding costs. The attorney recovers whichever is lower, and VAT is included within the 25 percent rather than added on top.

Does the RAF pay the attorney’s fees on top of my award?

No. The contingency fee is deducted from the amount the RAF pays into your attorney’s trust account; the balance is then paid out to you. The attorney’s fee is taken from the recovered amount, not added to it.

What must a contingency-fee agreement contain to be valid?

It must be in writing, signed by you before the work begins, state the percentage and the statutory cap, identify the matters covered, and include the attorney’s certification that the fee is fair and reasonable. You must also be told in writing that you may seek independent legal advice before signing.

What happens if I lose my RAF claim?

Under a contingency-fee agreement, the attorney does not recover a fee if the claim is unsuccessful — that is the trade-off for the higher percentage charged on successful claims. Disbursements such as expert reports, sheriff fees and medical records may still be recoverable from you depending on the terms of the agreement.

Can I challenge a contingency deduction after I have already received my payout?

Yes — recent case law shows claimants do challenge contingency deductions in RAF matters, particularly around how the percentage is applied to loss-of-earnings components. The window for challenge and the basis (agreement terms, statutory cap, reasonableness) depend on the facts of the specific case and the agreement you signed.

If you have been asked to sign a contingency-fee agreement for an RAF claim, or want a second opinion on whether the deduction already taken from your award is correctly calculated, Burger Huyser Attorneys’ general litigation practice can review the agreement and the settlement calculation with you. Contact the Randburg head office on 011 888 0246 or the Roodepoort branch on 011 668 0030. The firm carries a 4.8/5 average across 250+ Google reviews (Trustindex verified “Top Rated Law Firm in South Africa”) and fields RAF work under Director & Head of General Litigation Nadine Roesch-Prinsloo, who specialises in MVA claims and insurance repudiations.