E-toll lawyers get rich quick before collection contract ends

The e-tolls collection contract has just two months left and lawyers are increasing the number of summonses issued, which ups their fees but not the collections.

Answers to questions put to the Minister of Transport in Parliament on e-tolls reveal that only 3 724 (24%) of the 15 505 summonses issued from April 2015 to August 2018 have actually been served on the defendants. Of the summonses served, 1 320 are being defended. OUTA's lawyers are defending 1 028 of those cases through OUTA’s e-tolls defence umbrella (78% of all cases being defended).

The Minister’s reply indicates that R10.231 million was collected through this legal process from January 2016 to August 2018, while ETC spent R4.6 million on legal fees to collect this. Now compare this to the total outstanding e-toll debt of about R11 billion.

The statistics provided by the Minister show last-minute attempts to increase the number of summonses. In the last two months – July and August 2018 – a total of 4 055 summonses were drafted, which was 67% of the summonses since January 2018 and 26% of all summonses since April 2015. However, most of these summonses are not actually served on the defendants.  In July and August, only 345 summonses were actually served on defaulters.

“If one unpacks these figures, one can only assume the real beneficiaries of the exorbitant effort of summonsing 15 505 e-toll defaulters are the collection agency's lawyers, Durban-based Morris Fuller Williams Attorneys,” says Rudie Heyneke, OUTA’s Transport Portfolio Manager.

The collection of e-tolls is run by Electronic Toll Collections (ETC), which is contracted by SANRAL. ETC’s five-year collection contract started on 3 December 2013 is due to expire by December 2018.

“ETC’s contract has about two months to run, whereafter there will be no collection agency,” says Heyneke.

“Lawyers get richer whilst SANRAL gets poorer and more motorists defy a scheme which has become one of Government’s biggest policy failure,” he says.

OUTA’s CEO Wayne Duvenage agrees.

“We can only put this down to a last-minute frenzy by ETC’s legal teams who are trying to process thousands of summonses as the end of their contract draws nearer,” says Duvenage.

The Minister’s said the service of summonses failed because addresses were insufficient, debtors were unknown at the given addresses, debtors had left the addresses or the premises were locked. These reasons point to an ineffective eNaTIS vehicle registration system and illustrate why effective legal action against defaulters is likely to fail.

The longer that ETC and SANRAL delay in delivering summonses, the less they will collect.

“All debts incurred before 28 September 2015 have now prescribed if a summons was not served on a defaulter within the three-year limit. Those debts cannot be collected on,” says Heyneke.

The Minister's replies are here and here, published on 25 September 2018. 

For more on OUTA's e-tolls test case against SANRAL, see here.

See OUTA's July 2018 report on e-tolls: The e-tolls: A story of failure.