Road Accident Fund in Crisis: Landmark Court Rulings, R400bn Debt Bomb & Calls for Reform – May 2026 Update

The Road Accident Fund (RAF) is once again dominating South African headlines in 2026 — and for all the wrong reasons. From landmark Supreme Court of Appeal (SCA) rulings that could open the floodgates to hundreds of billions in new claims, to a deepening financial crisis that threatens to blow a R400-billion hole in the national fiscus, the RAF’s troubles are escalating at an alarming pace. Here is a comprehensive roundup of the latest news and developments surrounding the Road Accident Fund in South Africa.

1. Landmark SCA Ruling: RAF Must Compensate All Accident Victims — Including Undocumented Foreigners

In one of the most significant legal developments of 2026, the Supreme Court of Appeal (SCA) ruled in April that the Road Accident Fund must compensate all road accident victims in South Africa — including undocumented foreign nationals.

The case arose after the RAF issued a directive in 2022 requiring foreign claimants to provide proof that they were legally present in South Africa at the time of the accident. The Gauteng High Court in Pretoria had already struck down this directive, and the RAF appealed to the SCA.

A full bench of three judges, led by Judge Norman Davis, dismissed the RAF’s appeal with costs. The court found that the RAF Act makes no exclusion based on immigration status, and that the phrase “any person” in the Act includes all road accident victims — regardless of nationality or legal status.

“These accidents don’t discriminate in respect of the victims thereof between race, gender, age or between illegal foreigners and citizens of this country.” — Judge Norman Davis

The ruling has significant financial implications. The RAF had already allocated R546 million to foreign national claims in the 2024/25 financial year. Parliament’s Transport Committee chairperson welcomed the ruling, emphasising that RAF funding is intended for victims of road accidents and should not be withheld based on nationality.

2. SCA Strikes Down Unlawful RAF Claim Form — Potentially Triggering R180 Billion in New Claims

In another devastating blow to the RAF, the SCA ruled that the RAF Form 1 introduced in 2022 to register claims was unlawful. The court ordered the fund to revert to the 2008 version of the form.

The consequences are staggering. According to ActionSA MP Alan Beesley, an estimated 600,000 claims were not accepted because of the invalid form, at an average value of R300,000 per claim. This creates a potential new liability of at least R180 billion — on top of the RAF’s already catastrophic existing debt.

Beesley warned that the RAF does not have the administrative capacity to register, process, and investigate the anticipated influx of claims, and that delays will likely lead to more litigation, default judgments, and even higher payouts.

ActionSA has written to Finance Minister Enoch Godongwana requesting an urgent parliamentary briefing on the matter, and the party is exploring legal options — including the possibility of criminal charges against those responsible for introducing the unlawful form.

“South Africans cannot be expected to carry the cost of reckless governance and systemic failure of this magnitude.” — Alan Beesley, ActionSA MP

3. The R400 Billion Debt Bomb: SA’s Next Big SOE Crisis

The RAF’s financial position has been described as nothing short of catastrophic. According to Daily Maverick and parliamentary sources, the fund’s contingent liabilities could exceed R400 billion — with current liabilities sitting at approximately R100 billion.

Key financial facts:

• The RAF receives approximately R50 billion per year from fuel levies.
• Overheads consume around R7 billion, leaving roughly R43 billion for payouts.
• The fund has more than 430,000 outstanding claims, some dating back over a decade.
• The value per claim has increased by 70%, and legal fees per claim have quadrupled.
• The RAF previously handled 250,000 claims per year — it now handles only 70,000.
• According to the Treasury’s 2026 Budget Review, the RAF’s long-term provisions are expected to rise from R387 billion this financial year to R426 billion by 2028/29.

Scopa chairperson Songezo Zibi described the situation bluntly: “The RAF is technically insolvent.” He warned that if the RAF could somehow finalise all its claims tomorrow, it would collapse — and that the fund’s debt represents one of the largest liabilities on South Africa’s balance sheet.

Zibi added that legal opinions are being sought on how to change the law to allow the RAF to cap payouts for future loss of income and medical expenses, and to pay in staggered amounts rather than lump sums.

4. Governance Failures, Corruption, and the Letsoalo Legacy

Much of the RAF’s current crisis has been attributed to years of mismanagement and alleged corruption under former CEO Collins Letsoalo, who led the fund from 2020 to 2025.

Key allegations and findings include:

• Letsoalo earned R6 million per year plus a 40% performance bonus — despite five consecutive years of disclaimed or adverse audit opinions from the Auditor-General.
• The Special Investigation Unit (SIU) uncovered RAF bank accounts with between R1 million and R100 million that were not properly accounted for.
• Letsoalo was implicated in a R79 million lease in Johannesburg.
• A 200-bed Johannesburg hospital was closed in May 2025 after the RAF failed to pay more than R300 million in outstanding debt.
• A whistleblower alleged that senior executives manipulated procurement processes and split invoices to bypass approval limits.
• The RAF accumulated more than R15 billion in default judgments.
• Letsoalo defied a parliamentary subpoena to appear before Scopa.

Transport Minister Barbara Creecy appointed an interim RAF board in August 2025 and wrote to President Cyril Ramaphosa requesting an expanded SIU investigation. ActionSA’s Beesley has called for criminal charges against Letsoalo and dereliction charges against the former RAF board.

5. Courts Overwhelmed: The Access to Justice Crisis

The RAF’s dysfunction is not just a fiscal problem — it is a human rights crisis. Personal injury lawyers and court officials have raised the alarm about the devastating impact on road accident victims.

Advocate Justin Erasmus, chair of the Personal Injury Plaintiff Lawyers Association, has lodged a high court application to set aside a Gauteng directive making mediation mandatory for all civil trials — a measure intended to reduce court backlogs that has instead worsened delays.

Key statistics from Gauteng courts:

• Gauteng courts deal with approximately 300 RAF matters per week, each taking about a day.
• There are only 25 state attorneys to handle this workload.
• If you can get a trial date, it is currently set for November 2033.

One personal injury lawyer told Daily Maverick: “Personal injury plaintiffs are being denied access to justice. My firm received 2% of what the RAF owes our clients in February.”

6. Calls for a Hybrid Model: ASSA Proposes Reform

The Actuarial Society of South Africa (ASSA) has released a major research paper proposing a fundamental overhaul of the road accident compensation system. The study, released in April 2026, argues that none of the three existing options — the current RAF system, the proposed no-fault Road Accident Benefit Scheme (RABS), or compulsory third-party insurance — are viable on their own.

Instead, ASSA recommends a hybrid solution that combines elements of all three, potentially structured as:

• Basic no-fault benefits for medical care and rehabilitation.
• Supplementary fault-based liability insurance for additional damages.
• Delivery through a public-private partnership involving the current RAF and private insurers, under strong regulatory oversight.

Actuary George Schwalb, part of the ASSA research team, emphasised that the goal is a system that is sustainable long-term, affordable, and equitable for all road accident victims.

7. RAF Settlement Drive: Reaching Victims in Communities

Amid the crisis, the RAF has continued its Settlement Drive initiative, hosting the second instalment at Ngwelezane Hospital in February 2026. The drive aims to settle outstanding claims directly with victims in their communities, reducing the need for costly litigation and bringing relief to claimants who have been waiting for years.

What Does This Mean for Road Accident Victims in South Africa?

If you or a loved one has been injured in a road accident in South Africa, the current state of the RAF has serious implications:

• Delays are severe — claims can take years, or even decades, to be resolved.
• Legal representation is essential — the complexity of the claims process means that navigating it without an attorney is extremely difficult.
• Your rights are protected by law — the SCA has confirmed that all persons injured in road accidents in South Africa are entitled to claim, regardless of nationality.
• Reform is coming — legislative changes are expected in 2027 that may cap certain payouts and change how compensation is structured.
• Stay informed — the RAF landscape is changing rapidly, and keeping up with the latest developments is crucial for anyone with a pending claim.

Key Takeaways: Road Accident Fund News — May 2026

This article is a news summary compiled from publicly available South African media sources including IOL, Daily Maverick, Eyewitness News, Sunday World, and Parliament of South Africa press releases. It is intended for informational purposes only and does not constitute legal advice. If you have a pending RAF claim, consult a qualified personal injury attorney.