The Road Accident Fund (RAF) and Discovery Health have been locked in a dispute over medical expense claims resulting from road accidents for the past two years. What began with a seemingly straightforward directive from the RAF has escalated into a complex, multi-layered legal confrontation.
Here is a timeline of the events that led up to the decision by the High Court this week.
The initial directive and its impact
On 12 August 2022, the RAF’s chief claims officer issued a directive instructing its employees to reject claims for past medical expenses already settled by claimants’ medical schemes. The RAF justified this directive by reasoning that such claimants had not suffered any financial loss and, therefore, the RAF had no obligation to reimburse them.
The decision directly impacted medical schemes, such as those managed by Discovery Health, by barring claims for these disputed medical expenses.
Upon becoming aware of the directive, Discovery Health launched urgent legal proceedings, arguing that the directive was unlawful.
Discovery’s position is that the RAF’s not paying claims is discrimination against all medical scheme members who are also road users and who pay the same fuel levies towards the RAF as all other road users.
The matter was heard by Judge Mandla Mbongwe, who, on 27 October 2022, set aside the directive and interdicted the RAF from relying on it to reject claims for the disputed medical expenses.
The RAF responded by filing an application for leave to appeal, while Discovery Health pursued immediate enforcement of Judge Mbongwe’s order through a section 18 application under the Superior Courts Act.
Judge Mbongwe declined to entertain the application, stating it was unnecessary after refusing the RAF’s leave to appeal.
Developments in the higher courts
The RAF continued its attempts to overturn Judge Mbongwe’s order.
23 February 2023: The RAF petitioned the Supreme Court of Appeal (SCA) for leave to appeal.
31 March 2023: The SCA dismissed the RAF’s application, finding no reasonable prospects of success.
24 April 2023: The RAF approached the Constitutional Court, seeking leave to appeal.
18 October 2023: The Constitutional Court refused the RAF’s application, stating that the matter did not engage its jurisdiction.
Meanwhile, Discovery Health had filed another section 18 application seeking the enforcement of Judge Mbongwe’s order while the RAF’s appeals were pending.
On 26 June 2023, Judge Nomsa Khumalo dismissed Discovery Health’s section 18 application. She later denied Discovery Health leave to appeal her decision.
RAF issues two new directives
Second directive (13 April 2023)
The directive required RAF employees to determine whether a claim fell under the Prescribed Minimum Benefits (PMBs) or the Emergency Medical Conditions (EMCs) as defined in the Medical Schemes Act (MSA). Only claims outside these categories would be considered for compensation. The RAF’s rationale included:
Medical schemes are statutorily obligated to pay for PMBs and EMCs under the MSA and its regulations.
- The RAF is not an insurer, and its operational model as regulated by entities such as the South African Reserve Bank and the Financial Sector Conduct Authority reflects this distinction.
- The MSA does not grant medical schemes a right to reimbursement from the RAF, nor can medical scheme rules compel members to recover such costs from the RAF.
Third directive (2 November 2023)
This directive relied on section 19(d)(i) of the Road Accident Fund Act, which limits the RAF’s obligation to compensate in cases where claimants have agreements to pay third parties a portion of their compensation. The relevant section states:
“The Fund or an agent shall not be obliged to compensate any person in terms of section 17 for any loss or damage … where the third party has entered into an agreement … to pay such person after settlement of the claim … a portion of the compensation in respect of the claim.”
Discovery Health’s allegations of non-compliance
Discovery Health viewed the issuance of the two new directives as a deliberate attempt to circumvent Judge Mbongwe’s order. It demanded that the RAF cease implementing these directives, but the RAF refused, maintaining it was entitled to issue and enforce them.
Faced with this impasse, Discovery Health initiated an application to compel the RAF to comply with Judge Mbongwe’s order and challenge the legality of the new directives.
The full bench of the High Court in Pretoria heard the application on 20 and 21 June 2024.
On 17 December, The High Court dismissed, with costs, Discovery Health’s application to declare the RAF to be in breach of Judge Mbongwe’s order. Judge Dunstan Mlambo and Judge Noluntu Bam ruled in favour, while Judge Ingrid Opperman issued a dissenting judgment.
