Road Accident Fund Crisis Deepens: Board Dissolved, CEO Dispute Escalates, and Settlement Drives Launch in August 2025

Major Developments Rock South Africa’s Road Accident Fund

The Road Accident Fund (RAF) continues to face unprecedented challenges in August 2025, with significant governance upheavals, leadership disputes, and operational reforms dominating headlines. These developments have far-reaching implications for road accident victims, legal practitioners, and the broader South African public who depend on the fund’s services.

Former CEO Takes Dispute to CCMA

In the latest development, former RAF CEO Collins Letsoalo has referred a dispute with the fund to the Commission for Conciliation, Mediation and Arbitration (CCMA). The dispute reportedly centers on Letsoalo’s expectation of contract renewal, with allegations that the now-dissolved RAF board had made an offer to reappoint him for another term.

Letsoalo’s contract expired on August 6, 2025, with Transport Minister Barbara Creecy confirming that “he’s gone.” The former CEO had previously launched an unsuccessful urgent application in the High Court in Pretoria, seeking to declare his suspension unlawful and resume his duties immediately.

Judge Graham Moshoana ruled in late June 2025 that Letsoalo’s suspension was lawful, rational, and reasonable, dismissing his application with costs. The judge noted that there was “no factual or legal basis” for Letsoalo’s claim of having acquired a right to reappointment.

Minister Dissolves RAF Board Amid Governance Crisis

On July 15, 2025, Transport Minister Barbara Creecy took the drastic step of dissolving the entire RAF Board of Directors, citing persistent governance and operational challenges that significantly undermined the fund’s ability to discharge its statutory mandate.

The minister identified several critical governance failures:

• Costly litigation: Protracted and expensive legal battles over accounting standards that strained the entity’s financial resources
• CEO suspension mishandling: Inconsistent and reckless handling of the Chief Executive Officer’s suspension, leading to legal challenges and institutional uncertainty
• Default judgments: Frequent incurrence of default judgments against the RAF, exacerbating contingent liabilities
• Board divisions: Deep divisions within the Board, with most resolutions passed through casting votes rather than consensus
• Critical vacancies: Failure to fill essential executive positions, including Chief Claims Officer and Head of Legal

Settlement Drive Aims to Reduce Claims Backlog

Despite the governance turmoil, the RAF has launched a national initiative to address the mounting backlog of claims ready for settlement. The program began with the Pretoria Regional Office from August 6-8, 2025, and will be rolled out across all regions.

Key features of the settlement drive include:

• Maximum of ten qualifying claims per participating law firm
• First-come, first-served processing basis
• Specific submission requirements including Link Number, Claim Number, and attorney details
• Focus on claims fully prepared for settlement

RAF Acting CEO Phathutshedzo Lukhwareni emphasized the fund’s commitment to reducing settlement processing times while maintaining compassionate and efficient service to all claimants.

Parliamentary Oversight Intensifies

The Standing Committee on Public Accounts (SCOPA) has adopted terms of reference for a comprehensive inquiry into RAF financial matters. The committee aims to begin the inquiry in mid-September 2025, with completion targeted for the end of October 2025.

This parliamentary oversight comes amid concerns about the RAF’s financial sustainability and operational effectiveness, with the fund facing mounting contingent liabilities and administrative challenges.

Road Accident Benefit Scheme Bill Progress

Minister Creecy has reiterated her department’s commitment to finalizing the Road Accident Benefit Scheme Bill, which will introduce a no-fault system designed to make it easier for road accident victims to access benefits without costly legal proceedings.

However, some stakeholders have criticized the reintroduction of the bill as “ill-advised,” arguing that proper execution of the existing Road Accident Fund Act would be more effective.

Interim Measures and Future Outlook

To address the governance vacuum, Minister Creecy has implemented several interim measures:

• Requesting National Treasury to appoint an interim Accounting Authority under Section 49(3) of the PFMA
• Initiating recruitment for a new board through transparent, merit-based selection
• Establishing an Expert Advisory Committee to review business processes
• Requesting SIU investigation expansion to cover recent events

Impact on Stakeholders

These developments have significant implications for various stakeholders:

Road accident victims may experience continued delays in claim processing, though the settlement drives aim to provide some relief for ready claims.

Legal practitioners face uncertainty about future RAF operations and potential changes to the claims process under the proposed new legislation.

Healthcare providers and other service providers may continue to experience payment delays and administrative challenges.

Looking Ahead

The RAF crisis represents one of the most significant challenges facing South Africa’s social security system. With an interim board expected to be appointed soon and parliamentary oversight intensifying, stakeholders are watching closely for signs of stability and reform.

The success of the settlement drives and the effectiveness of the new governance structures will be critical indicators of whether the RAF can overcome its current challenges and fulfill its mandate to provide timely, efficient compensation to road accident victims.

As the situation continues to evolve, affected parties are advised to stay informed about developments and work closely with their legal representatives to navigate the changing landscape of RAF claims and procedures.