Road Accident Fund in Crisis: Court Rulings, R400bn Debt, and What It Means for South Africans (May 2026)

The Road Accident Fund (RAF) is once again dominating South African headlines in May 2026, as a wave of landmark court rulings, mounting financial pressures, and calls for systemic reform converge to paint a picture of an institution at a critical crossroads. From hundreds of thousands of rejected claims being revived to a potential R400 billion hole in the national fiscus, here is everything you need to know about the latest RAF developments.

1. Supreme Court Orders RAF to Revive Up to 600,000 Rejected Claims

In one of the most significant RAF rulings in recent memory, the Supreme Court of Appeal (SCA) handed down judgment on 30 April 2026, declaring the revised RAF 1 claim form — introduced by the Minister of Transport in July 2022 — unlawful and invalid.

The 2022 RAF 1 form had dramatically raised the bar for lodging claims, requiring extensive documentation upfront. The result was devastating for claimants: weekly claim registrations plummeted from nearly 2,000 to just over 300, and new claims fell from 328,173 in 2018/19 to just 65,732 in 2024/25. Thousands of legitimate road accident victims found their claims rejected or simply not acknowledged.

The SCA found that:

• The RAF had no authority to prescribe binding claim requirements — that power rests solely with the Minister of Transport.
• The Minister’s approval of the revised form was also unlawful, as it lacked proper public participation and independent judgement.
• The revised form created barriers to access that were inconsistent with the RAF Act’s purpose of compensating road accident victims.

As a result, the 2008 RAF 1 form has been reinstated as the applicable standard. Claimants whose submissions were rejected under the 2022 regime may resubmit their claims by 30 September 2026, and those claims will be treated as if they were lodged on the original date — protecting them from prescription.

RAF Acting CEO Radikwena Phora welcomed the judgment, stating the fund is committed to its full implementation and will engage with the Minister of Transport to adopt a revised RAF 1 Form within six months.

“Our office has court orders against the RAF for payment of these claims in excess of R100 million. There are hundreds more practitioners facing the same challenge.” — RAF law expert Gert Nel

The Financial Fallout: Up to R180 Billion in New Liabilities

ActionSA MP Alan Beesley warned that the ruling could have “far-reaching consequences for South Africa’s national fiscus, to the tune of nearly R180 billion.” With preliminary estimates suggesting up to 600,000 claims may have been unlawfully excluded — at an average claim value of R300,000 — the financial exposure is staggering. This is on top of the RAF’s already precarious financial position.

RAF attorney Gert Nel also flagged the issue of “phantom” claims — claims lodged in full compliance with the Act but not acknowledged by the RAF under the now-overturned form. These claims have since secured default judgments estimated at R4.8 billion that are now immediately payable.

2. RAF Must Compensate Everyone — Including Undocumented Foreigners

In a separate but equally significant ruling in April 2026, the SCA dismissed two appeals by the RAF concerning whether undocumented foreign nationals are entitled to claim compensation under the RAF Act.

The court clarified that section 17(1) of the RAF Act uses the phrase “any person,” which does not exclude foreign nationals — even those in South Africa illegally. The RAF had attempted to argue that illegal foreigners should be excluded from compensation, but both the Pretoria High Court and the SCA rejected this interpretation.

The ruling has sparked political debate, with the RAF’s Interim Board Chair raising concerns about the policy implications and calling for a review of whether mandatory medical insurance should be required for foreign visitors entering South Africa. A new draft RAF bill has also been proposed that would exclude foreign nationals from claiming — though this remains in draft form.

3. The R400 Billion Crisis: RAF Technically Bankrupt

The RAF’s financial situation has been described as nothing short of catastrophic. According to Daily Maverick’s analysis and parliamentary testimony from SCOPA chairperson Songezo Zibi:

• The RAF’s contingent liabilities could exceed R400 billion — with the Treasury’s 2026 Budget Review projecting long-term provisions rising from R387 billion to R426 billion by 2028/29.
• Current liabilities stand at approximately R100 billion, while the RAF receives only about R50 billion per year from fuel levies.
• The fund has been declared technically bankrupt by the Department of Transport.
• The RAF now handles only 70,000 claims per year, down from 250,000 previously, while sitting on a backlog of over 400,000 outstanding claims.
• Legal fees per claim have quadrupled, and the value per claim has increased by 70%.

Zibi described the situation bluntly: “The fiscus can’t deal with that. Resolving this is like unravelling spaghetti.”

The Auditor-General has issued disclaimed or adverse audit opinions for five consecutive years, and the RAF has accumulated more than R15 billion in default judgments.

Governance Failures and the Letsoalo Legacy

Much of the RAF’s current crisis has been attributed to the tenure of former CEO Collins Letsoalo (2020–2025), who was placed on special leave in May 2025 pending a Special Investigation Unit (SIU) probe. Among the allegations:

• Letsoalo earned R6 million per year plus a 40% performance bonus — despite five years of adverse audit opinions.
• The SIU uncovered RAF bank accounts with between R1 million and R100 million.
• A 200-bed Johannesburg hospital was closed after the RAF failed to pay over R300 million in outstanding debt.
• Senior executives were accused of manipulating procurement processes and splitting invoices to bypass approval limits.
• A lavish R4 million staff party included R40,000 spent on executive drinks.

Transport Minister Barbara Creecy has since appointed an interim RAF board and written to President Cyril Ramaphosa to expand the SIU’s investigation scope.

4. Calls for a Hybrid Compensation Model

The Actuarial Society of South Africa (ASSA) released a major research paper in April 2026 proposing that the current RAF system be replaced with a hybrid compensation model. The study compared three systems:

1. The current RAF fault-based system
2. The proposed no-fault Road Accident Benefit Scheme (RABS)
3. Compulsory third-party insurance offered by private insurers

ASSA concluded that none of these systems is viable on its own and recommended a hybrid solution combining elements of all three. One proposed model would provide basic no-fault benefits for medical care and rehabilitation, supplemented by fault-based liability insurance for additional damages — delivered through a public-private partnership under strong regulatory oversight.

Actuary George Schwalb noted: “We conclude that none of these general systems are viable on their own, but that we do need a hybrid solution.”

5. Litigation Funding Adding Strain to the RAF

A Business Day opinion piece highlighted another growing pressure on the RAF: the rise of litigation funding. As funded cases increase, they are driving delays, higher payouts, and additional financial pressure on the already-strained fund. The combination of litigation funding and the RAF’s administrative failures has created a perfect storm that is accelerating the fund’s financial deterioration.

What Should Claimants Do Now?

If your RAF claim was previously rejected, here is what you need to know:

• You have until 30 September 2026 to resubmit your claim using the reinstated 2008 RAF 1 form.
• When resubmitting, include proof that your original claim was submitted within three years of the accident.
• Submit as many relevant documents as possible relating to the accident — additional documentation can follow later.
• The RAF will be launching a communication campaign in the coming weeks to assist affected claimants.
• Consult a qualified RAF attorney to ensure your claim is correctly lodged and protected from prescription.

Key Takeaways: The Road Ahead for the RAF

The RAF faces an unprecedented convergence of challenges in 2026:

• A potential avalanche of 600,000 revived claims following the SCA ruling
• Total financial exposure potentially exceeding R500 billion
• Ongoing governance and corruption investigations into the Letsoalo era
• Courts overwhelmed with RAF matters — with some trial dates set as far out as November 2033
• Legislative reform being explored, including capping payouts and moving to staggered payments
• A proposed hybrid compensation model that could fundamentally reshape how road accident victims are compensated

For millions of South Africans who depend on the RAF for compensation after road accidents, the stakes could not be higher. The coming months will be critical in determining whether the fund can be stabilised — or whether it will become South Africa’s next major state-owned enterprise crisis.

Stay updated on the latest Road Accident Fund news by bookmarking this page. If you or a loved one has been affected by a road accident, consult a qualified RAF attorney to understand your rights and ensure your claim is properly lodged before the 30 September 2026 deadline.