Discovery Health will apply for a contempt of court order against the Road Accident Fund (RAF) and its chief executive, Collins Letsoalo, because the Fund has not complied with a Constitutional Court ruling handed down last month.
On 18 October, the Constitutional Court declined the Road Accident Fund leave to appeal against a judgment declaring unlawful its directive to reject claims for medical expenses where these expenses have already been paid by medical schemes, not members.
Discovery Health, the largest medical scheme administrator in South Africa, obtained the High Court judgment in October last year. Judge Mandla Mbongwe interdicted the RAF from implementing its directive issued in August 2022.
The Fund attempted to appeal the decision all the way up to the Constitutional Court, but the apex court refused its application with costs.
Commenting after the ruling, Letsoalo said the Constitutional Court’s decision had “no implications” for the RAF. “The court order did not deal with any merits. It raised issues of a lack of jurisdiction.”
Moneyweb quoted Letsoalo as saying the RAF is not in contempt of the High Court because, for more than a year, it has amended its August 2022 directive to the effect that it will assess each claim on its merits and reject the payment of prescribed minimum benefits (PMBs) and emergency medical conditions (EMCs). The Fund will pay any other medical costs by claimants who belong to medical schemes.
He claimed the Medical Schemes Act (MSA) and its regulations – specifically section 29(1)(o) and regulations 7 and 8 – oblige medical schemes to pay for PMBs and EMCs.
“Medical schemes and their administrators are not claimants in terms of the RAF Act, and they must continue to pay for PMBs and EMCs without any deductibles or co-payments as obligated by the MSA and MSA Regulations,” Letsoalo was quoted as saying.
Read: Discovery versus RAF: more litigation looms
This week, Dr Ryan Noach, the chief executive of Discovery Health, said: “Regrettably, despite the clear position of the courts declaring the RAF’s directive to halt payments of medical scheme members’ valid claims from the RAF unlawful, the RAF has not resumed payments of these valid claims (to medical scheme members). To the best of our understanding, this is in direct breach of the High Court ruling, which was enforced by the Supreme Court of Appeal and the Constitutional Court.
“Given the RAF’s concerning conduct in this regard, this has left Discovery with no alternative but, unfortunately, to resort to seeking an order declaring the RAF and its CEO in contempt of court. The contempt application will be served on the RAF and its CEO within the next few days.”
Noach said this was not the first contempt of court application against Letsoalo. On 12 October, the High Court in Pretoria found Letsoalo to be in contempt of court because the RAF has not complied with a January 2018 court order directing it to provide accident victim Nelson Mazibuko with an undertaking to cover his future medical expenses.
Judge Elizabeth Kubushi ordered Letsoalo to be jailed for three months, suspended for a year, provided he complied with the 2018 order within 15 days of being served with the ruling. She also ordered Letsoalo to pay costs on the attorney-own client scale.
Discovery was not involved in this matter.
Moonstone received the following response from the RAF after asked for comment on Discovery’s statement.
“The RAF and its CEO, Collins Letsoalo, have not been served with such a contempt application. The Fund will therefore not allow itself to be dragged into attempts by Discovery Health to litigate through the media,” said McIntosh Polela, the Fund’s head of corporate communications.
Van Dyk Steenkamp Attorneys, the corresponding attorneys for Mazibuko, told Moonstone on Tuesday that the sheriff has been unable to effect personal service on Letsoalo, although his residential address has been traced.
“We are obtaining advice from counsel to the way forward if we are unable to affect the service as per the order granted by Judge Kubushi,” the law firm said.
