Since Sunday, my facebook newsfeed has been awash with links to this article: “A SHOCKING DISCOVERY FOR DISCOVERY MEDICAL AID MEMBERS“.

It can be found at the website of Ronald Broboff & Partners Inc. – the “leaders in medical negligence claims and road accident fund claims since 1974”. The law firm has recently had an awkward string of court losses – and presumably, they’re taking it to the people. Quite publicly.

The Vendetta

The basic gist of the complaint/letter/declaration/conspiracy theory:

1. Discovery Health are evil bastards.
2. They have a team of attorneys headed by Jeffrey Katz, who are even eviller bastards.
3. Jeffrey Katz forces the victims of car accidents, and their next of kin, to sign unlawful undertaking documents in the hospital.
4. A quote: Discovery’s unlawful undertaking document forces the member to agree to claim against the RAF [Road Accident Fund], at the members own risk and cost, so that Discovery be reimbursed in full, without any deduction of the usual substantial legal and medico legal costs often running into hundreds of thousands of rands.
5. According to the complaint, the document threatens to cut off medical care if people don’t sign.
6. And now, Ronald Broboff & Partners Inc. feel that there is a vendetta against Ronald Broboff & Partners Inc. because:
   1. Discovery is getting less money from the Road Accident Fund.
   2. Discovery faces the prospect of a mass exodus of members when they discover that RBP is fighting the good fight on their behalf.
7. The vendetta is laid out in some detail, with the juicy title: “DISCOVERY’S VENDETTA – THE EVIL PLAN”.
8. The evil plan apparently involved Discovery finding some people to lay a complaint against Ronald Broboff & Partners Inc. “to serve as pawns”. From what I can tell, these people seem to have won their lawsuit against RBP – further proof of Discovery’s dastardliness.
9. There are some affidavits to read (totally worth reading): here.

It’s a lot to read – I’ve probably missed some finer details. But I got bored by all the references to the Law Society.

The Unlawful Undertaking Document

Because I’m a sceptic by nature, I went and read the original document that the “poor” complainants were forced to sign. You can find it on Bobroff’s website (Annexure 6), but I thought that I’d save you all the trouble and screen capture it:

If you read nothing else, read section 2. Did anyone else notice that this “unlawful undertaking document” that’s being rubbished about actually mentions Broboff Attorneys by name?

Here’s my reading of the document:

Dear Claimant

You’ve been in a Road Accident. This means that you’re entitled to claim your medical expenses from the Road Accident Fund.

In the interim, we will be paying for your medical expenses.

It seems that you’ve decided to go and claim from the Road Accident Fund, and you’ve appointed Mr Broboff as your attorney. If you want to engage him – then that’s your business, and you should pay for it.

However, if you are successful in your claim, then you’re obliged to refund us for our medical expenditure before you pay anyone else.

Even before you pay Mr Broboff.

This condition was in our Terms and Conditions. But because we know that you don’t generally read terms and conditions, we’re advising you of that clause right here and now.

All the best with your claim

Discovery Health

The Aftermath

Discovery have responded, as have Moneyweb. You can read those responses here – and the word “defamation” is being thrown about quite strongly.

My favourite part from the Moneyweb article:

It is clear that RBP tries to use the document to divert the industry’s attention from the precarious position the firm finds itself in.

RBP has recently been on the receiving end of numerous adverse judgments in several courts, including the Supreme Court of Appeal (SCA) and the Constitutional Court. The rulings found that RBP’s common law contingency fee agreements are unlawful and that the firm grossly overcharged several vehicle accident victims it represented at the Road Accident Fund (RAF). Several judgments also suggest that Ronald and Darren Bobroff may be guilty of improper conduct. This could result in their names being struck from the roll of attorneys.

Despite this, RBP continues to try and justify its contingency fee agreements on the basis of a determination by The Law Society of the Northern Provinces (LSNP).

The LSNP also recently labelled Darren Bobroff “a disgrace to this society” during a disciplinary hearing for his defamatory postings on social media.

The key points from Discovery’s response:

• The Scheme always pays for the treatment of any member or dependant injured in a motor vehicle accident in accordance with the member’s specific plan type, no questions asked.
• If a member or dependant subsequently becomes entitled to any benefit from the RAF, the member or dependant may submit a claim to the RAF for compensation and reimbursement of related medical expenses. The Scheme does not force members to claim from the RAF.
• If a member or dependant receives compensation from the RAF for medical expenses, the member must then refund those amounts previously paid by the Scheme for the member’s medical expenses. This is to avoid the member being unjustly enriched at the expense of the Scheme by receiving double compensation for the same health event.
• If the member does not receive any compensation from the Road Accident Fund, the Scheme will remain liable for the costs of the treatment subject to the chosen plan type of the member, and will never require that the member repay these funds to the Scheme.

What’s Really Going On?

If I was to make some observations, I would say this:

• Ronald Broboff & Partners Inc. makes some of its money by persuading road accident victims to claim from the Road Accident Fund and then taking a portion of the proceeds.
• Provided that the medical aid of the victim agrees to pay the medical expenses, the road accident victim gets to keep all the proceeds from their RAF claim (less the legal costs).
• But if the medical aid scheme says “That’s not fair – you can’t double claim like that” – then what is the incentive for road accident victims to claim from the Road Accident Fund?
• And more importantly, how will RBP collect their fees if Discovery Health gets first bite at the claim?

Also: what would happen if all the medical aid schemes followed suit?

As a final disclaimer – I do agree that preventing a road accident victim from paying their legal fees out of their RAF claim is a little bit unfair. But there doesn’t really seem to be a good solution here, because “let the victim claim twice” surely can’t be the right answer…

Perhaps a standard legal fee of, say, R50,000 could be permissible in the Ts and Cs?

Just a thought.

Rolling Alpha posts opinions on finance, economics, and the corporate life in general. Follow me on Twitter @RollingAlpha, and on Facebook at www.facebook.com/rollingalpha.