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Santam takes tow firm to court

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A well-known insurance firm has accused a Newcastle tow truck company of “unscrupulous business practices and borderline blackmail tactics” to secure undue payments.


The case highlights the problems being experienced with many towing companies that the Weekend Witness has reported about recently.


In papers before the Pietermaritzburg high court this week, Santam alleged that Atlas Towing’s refusal to release a vehicle was unreasonable and “tantamount to extortion”. Santam said it tried to reason with Atlas and when that failed it got its attorney involved, but that also proved useless. The only option afterwards was to turn to the court to seek an urgent order that the Toyota Hilux vehicle be returned to it.


Judge Rashid Vahed granted the order. If Atlas fails to abide by it, the judge has authorised the sheriff to take possession of the vehicle.


Johan Murray of Santam said in court papers that the vehicle could not be driven following an accident on March 31, on the Majuba Pass, Volksrust. An Atlas employee arrived at the scene and the driver told him that the vehicle was insured by Santam. The employee was adamant that his company was authorised to tow vehicles for Santam’s clients.


Based on this misrepresentation, the driver gave the employee permission to tow the vehicle, but was not given any documentation or towing slip.


“At no stage whatsoever was any towing fees or storage cost discussed with the driver at the scene of the accident,” said Murray.


Also, the employee towed the vehicle without contacting Santam for approval.


Murray said that the driver reported the incident to Santam and was paid out R175 210. The vehicle then became Santam’s.


He said that Santam then discovered that Atlas was not an authorised service provider to perform towing services for it. Following numerous queries, Santam managed to confirm the vehicle was kept at Atlas’s premises.


Atlas agreed to release the vehicle for R13 397, which Murray said was unreasonable, unjustified and not market related.


“According to the industry norms an amount of R6 314 [which Santam has paid] constitutes a fair and reasonable amount in respect of towing and release fees,” he said.


Murray said Santam now bears the risk if the vehicle is lost, stolen or damaged. It frequently happens that salvaged vehicles are stripped and sold piece by piece.


The yard was not inspected to ensure it is safe. He said the vehicle could be damaged, vandalised, stripped or even stolen while in Atlas’s possession.



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