RAF makes noise while silence reigns on draft Road Accident Amendment Bill

Media coverage of the draft Road Accident Amendment Bill has been sparse over the past year, yet the Road Accident Fund (RAF), a key supporter of the Bill, remains in the spotlight.

Updates from the Special Investigating Unit (SIU) regarding its investigation into the RAF, ongoing legal disputes with medical schemes, and criticism from the Auditor-General about the Fund’s financial performance have dominated the headlines of late.

In a recent open letter (dated 3 September) to Transport Minister Barbara Creecy, Dr Chris Hunsinger, the Democratic Alliance’s spokesperson for transport, alleged the RAF has suspended claim payments for nearly four months, resulting in a 71.5% decline in claims finalised in 2024 compared to the previous two years.

Two weeks later, Creecy demanded a turnaround plan from RAF to address the backlog in the Gauteng High Courts, as RAF cases have reportedly delayed personal injury trials until October 2029. The Daily Maverick reported the RAF denied causing the backlog, instead accusing lawyers of seeking to benefit financially from the situation. Communications manager McIntosh Polela dismissed the lawyers’ concerns as disingenuous.

In 2020, RAF chief executive Collins Letsoalo discontinued employing a panel of attorneys to represent the Fund in court, opting instead to use the state attorney, except in complex cases – a decision now under SIU investigation.

Last month, Leonard Lekgetho, the RAF’s chief operations officer, told the Standing Committee on Public Accounts that since this termination, default judgments against the RAF have surged, totalling R4.7 billion from 2018 to the second quarter of 2023.

Read: Investigation into ‘fruitless and wasteful expenditure’ continues as RAF bleeds another R1.6 billion

Given this context, it is clear that tensions exist between the RAF and lawyers, whether they are advocating for or against the fund.

In the draft Road Accident Amendment Bill, the RAF also proposes direct claims “without the involvement of lawyers”. It said this would simplify the claims process and enable claimants to lodge claims without the help of third parties.

Released by the Department of Transport on 8 September 2023, the draft Bill proposes shifting the RAF from a compensation model to a social benefits model.

Legal experts caution that if the Bill passes in its current form, it could seriously limit the ability of drivers, passengers, and pedestrians to seek compensation for injuries sustained in car accidents.

Read: RAF amendments will severely curtail the rights of road accident victims, say experts

Read: RAF amendments ‘will result in higher medical scheme contributions’

The public had until 6 October last year to comment on the proposed legislation.

A poll conducted by Dear South Africa showed that more than 19 000 comments from members of the public were delivered to Parliament – the vast majority of which were not in favour of the amendment Bill.

In May, the RAF leadership told Parliament’s Portfolio Committee on Transport that plans were under way to table amendments to the RAF Act.

Committee chairperson Mina Lesoma said the committee had taken note of the report and would flag the RAF Amendment Bill for the Seventh Parliament to prioritise.

However, it has been a year since public comments closed, and despite the Seventh Parliament being in office for almost four months, there has been no update on the draft Bill’s progress.

Moonstone contacted the Department of Transport for an update but has yet to receive a response.

Is the RAF finally out of legal options?

A significant proposed change in the draft Bill revises section 19, potentially excluding individuals from receiving compensation if their medical scheme or insurance covers their accident-related expenses.

Currently, the RAF is liable for compensating all road accident victims for medical expenses incurred, provided they were not solely responsible for the accident. However, the Act does not exclude benefits received from a medical scheme for past medical expenses.

Typically, medical schemes cover initial expenses for members injured in road accidents, and they are reimbursed by the RAF once claims are settled, a process that can take years.

Since 12 August 2022, the RAF has not processed any claims from medical scheme members because of a directive issued instructing RAF staff to halt the processing of all claims from medical scheme members injured in road traffic accidents.

Letsoalo has said that the RAF 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 and emergency medical conditions. The Fund, he said, would pay any other medical costs by claimants who belong to medical schemes.

Now, more than two years later, Dr Ron Whelan, the chief executive of Discovery Health, says the RAF has yet to resume payments for valid claims to medical scheme members.

“This 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. This affects all medical schemes and not just those medical schemes administered by Discovery Health,” he says.

Discovery Health has been in a protracted legal battle with RAF on this matter since 2022.

So far, all judgments have favoured Discovery Health, deeming the RAF directive prohibiting the reimbursement of medical scheme members for valid claims related to injuries from road traffic accidents unlawful.

The initial High Court ruling on 27 October 2022 declared the RAF directive unlawful, a decision subsequently upheld by both the High Court and the Supreme Court of Appeal. The Constitutional Court reaffirmed this ruling in October 2023.

According to Whelan, after the Constitutional Court ruling, the RAF indicated that it did not intend to resume processing claims from medical schemes.

“This stance by the RAF and its CEO is in direct breach of rulings by the High Court, Supreme Court of Appeal, and Constitutional Court,” he adds.

In November last year, Discovery Health filed for an order to declare the RAF and its chief executive in contempt of court.

And they were not alone in this pursuit. Letsoalo faced two additional contempt of court applications for failing to comply with court rulings regarding the fund’s refusal to assess or pay valid claims from medical scheme members.

In one instance, Letsoalo was sued for disregarding a court order to compensate Hellen Mabule, a victim of an accident in April 2021. He was previously held in contempt of court on October 12 last year in a separate case (Mazibuko v the RAF).

Read: Third contempt application against RAF CEO amid legal battles over unpaid claims

The contempt hearing in the Discovery case took place before a full bench of three judges in the Gauteng High Court on June 20 and 21, but judgment has been reserved.

Read: Discovery Health says Road Accident Fund is in breach of court order

Whelan says although no indication has been provided when judgment in this case will be given, Discovery Health understands that the decision is forthcoming.

“We hope that this will be the final step in the process, which will then ensure that payments to medical schemes for all prior medical expenses will resume as a matter of urgency,” he says.

To date, more than R170 million in claims remain unpaid to members of Discovery Health client medical schemes for medical expenses related to road traffic accidents. Given that the RAF has not processed claims for any medical scheme members, regardless of their scheme membership, the total debt owed to all medical schemes is likely far higher.

Whelan says the funds owed to medical schemes by the RAF will have an impact on medical scheme costs over time and, therefore, member contributions.

“If the payments are not resumed, medical scheme members will effectively be paying twice for this cover: through the fuel levy (for which they receive no benefit) and medical scheme contributions for covering their costs,” he says.

Moonstone reached out to the RAF for comment and is awaiting a response.