The Supreme Court of Appeal (SCA) ruling against the Road Accident Fund (RAF) could leave South African government facing a massive financial burden of about R180-billion, raising concerns about the stability of the national fiscus.
The ruling found that the RAF Form 1 introduced in 2022 to register claims was unlawful and ordered the fund to revert to the 2008 version. As a result, claimants who were previously unable to lodge claims under the invalid form will now be allowed to resubmit them.
Alan Beeseley, ActionSA’s member of parliament, warned that the consequences extend far beyond the RAF and into the country’s public finances.
According to estimates, around 600 000 claims were not accepted because of the unlawful form at an average value of R300 000 per claim. Beesley said this creates a potential liability of at least R180-bilion that has not been accounted for.
Finance minister will be requested to brief parly
He said the party will write to finance minister Enoch Godongwana to request an urgent briefing before Parliament following the judgement.
This comes on top of the RAF’s already strained financial position. Beesley said the fund is understood to have unrecorded liabilities of about R300-billion, linked to incorrect accounting policy changes, which could push total obligations beyond R500-billion.
“These are effectively state liabilities and place the national fiscus in an extremely vulnerable position, exceeding the financial burdens posed by entities such as Eskom and Transnet,” said Beesley.
“Beyond the fiscal implications, the operational consequences for the RAF are equally severe. The fund does not have the administrative capacity to register, process and investigate the anticipated influx of claims. This will likely overwhelm an institution already struggling to manage its existing caseload,” he added.
He said delays are expected to lead to more litigation, which could further increase costs. With limited resources to defend cases, the RAF faces the risk of default judgements, potentially driving up payouts significantly.
Leadership showed lack of rational thought process
Beesley also criticised the decision-making that led to the introduction of the 2022 form, calling into question the role of former RAF leadership and government oversight.
“ActionSA is deeply concerned by the complete lack of rational decision-making and due process that led to the unlawful introduction of the 2022 RAF Form 1.
“It is further troubling that the RAF persisted in defending the unlawful form despite multiple adverse court rulings, compounding the financial and administrative damage,” said Beesley.
He said the issue has also had a direct impact on road accident victims, many of whom were prevented from lodging legitimate claims.
He said ActionSA is exploring legal options, including the possibility of criminal charges against those responsible.
“South Africans cannot be expected to carry the cost of reckless governance and systemic failure of this magnitude.”
- The Supreme Court of Appeal ruled the Road Accident Fund's (RAF) 2022 claim registration form unlawful, forcing reversion to the 2008 form and allowing previously rejected claims to be resubmitted.
- An estimated 600,000 unaccepted claims at an average of R300,000 each could create a R180-billion liability, worsening the RAF’s already strained finances.
- ActionSA MP Alan Beeseley warned this increased liability poses a serious risk to South Africa’s national fiscus, potentially surpassing burdens from Eskom and Transnet.
- The RAF lacks the administrative capacity to handle the expected influx of claims, likely causing delays, increased litigation, and higher payouts due to default judgments.
- Beeseley criticized RAF leadership and government oversight for the unlawful form’s introduction and defended it despite court rulings, with ActionSA considering legal action against responsible parties.
