Road Accident Fund Crisis Deepens: Board Dissolved, Mediation Fails, and Settlement Backlogs Mount in 2025

The Road Accident Fund (RAF) in South Africa continues to face unprecedented challenges in 2025, with recent developments highlighting the depth of the crisis affecting this critical state entity. From board dissolutions to failed mediation processes and mounting settlement backlogs, the RAF’s ability to serve road accident victims effectively has come under severe scrutiny.

Minister Barbara Creecy Dissolves RAF Board

In a decisive move on July 15, 2025, Transport Minister Barbara Creecy dissolved the entire Board of Directors of the Road Accident Fund, citing persistent governance and operational challenges that have significantly undermined the entity’s ability to discharge its statutory mandate.

Key Governance Failures Leading to Board Dissolution

The minister identified several critical issues that necessitated this drastic action:

• Costly Litigation: The RAF pursued protracted and expensive litigation on accounting standards application, further straining the entity’s financial resources
• CEO Suspension Mishandling: Inconsistent and reckless handling of the Chief Executive Officer’s suspension attracted legal challenges and created institutional uncertainty
• Default Judgments: Frequent incurrence of default judgments against the RAF, exacerbating contingent liabilities and weakening financial sustainability
• Board Division: 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

Mandatory Mediation System Failing

Recent reports from the Personal Injury Plaintiff Lawyers Association (Pipla) reveal that the mandatory mediation system introduced to reduce court backlogs is not working effectively. The statistics are alarming:

Mediation Capacity Crisis

• Only 3 out of 1,000 mediation notices served on the RAF in the past four months have been mediated
• None of the mediated cases have resulted in settlements
• Only 35 out of over 1,000 Rule 41A notices have received responses from the RAF
• The system requires 60 state attorneys dedicated solely to mediation to keep pace with demand, but only 35 state attorneys are available in Gauteng for all responsibilities

Court System Under Strain

The civil justice system is experiencing unprecedented delays:

• Civil trials in Johannesburg are being allocated dates as far as November 2027
• Pretoria High Court civil trials are currently being scheduled for January 2029
• The waiting time between allocation and hearing has reached 4.5 years

Block Settlement Drive Initiative

In an attempt to address the mounting backlog, the RAF launched a national block settlement drive initiative in August 2025, starting with the Pretoria Regional Office from August 6-8, 2025.

Settlement Drive Details

• Law firms can submit a maximum of 10 qualifying claims per firm
• Processing occurs on a first-come, first-served basis
• Only claims fully prepared for settlement are considered
• The initiative aims to reduce processing times while maintaining service quality

Road Accident Benefit Scheme Bill Controversy

The reintroduction of the Road Accident Benefit Scheme Bill has been met with criticism from various stakeholders. Critics argue that instead of introducing new legislation, the government should focus on properly executing the existing Road Accident Fund Act.

Proposed No-Fault System

Minister Creecy has emphasized the department’s intent to finalize the Road Accident Benefit Scheme Bill, which would introduce a no-fault system designed to:

• Make it easier for road accident victims to access benefits
• Reduce costly legal bills for claimants
• Streamline the claims process

Financial and Operational Challenges

The RAF continues to face significant financial pressures and operational difficulties:

Current Challenges Include:

• Mounting contingent liabilities from default judgments
• Insufficient capacity to handle the volume of claims
• Administrative inefficiencies leading to processing delays
• Lack of critical executive leadership positions
• Ongoing SIU investigation under Proclamation 44 of 2024

Minister’s Intervention Measures

Following the board dissolution, Minister Creecy has implemented several intervention measures:

Immediate Actions Taken:

• Interim Accounting Authority: Request to National Treasury to appoint an interim functionary under Section 49(3) of the PFMA
• New Board Recruitment: Initiation of a transparent, merit-based selection process for a new board
• Expert Advisory Committee: Establishment of independent experts to review RAF’s business processes
• SIU Investigation Expansion: Request to expand the current investigation scope to cover recent events

Impact on Road Accident Victims

The ongoing crisis has severe implications for road accident victims who depend on the RAF for compensation and support:

Victim Challenges:

• Extended waiting periods for claim resolution
• Increased legal costs due to system inefficiencies
• Uncertainty about claim outcomes
• Limited access to justice due to court backlogs

Looking Forward: Reform and Recovery

The RAF’s path to recovery will require comprehensive reforms addressing both governance and operational issues. Key areas for improvement include:

Priority Reform Areas:

• Strengthening governance structures and accountability
• Improving claims processing efficiency
• Enhancing mediation capacity and effectiveness
• Addressing court system backlogs
• Implementing sustainable financial management practices

Conclusion

The Road Accident Fund’s current crisis represents a critical juncture for South Africa’s road accident compensation system. While Minister Creecy’s decisive action in dissolving the board demonstrates commitment to reform, the challenges ahead are substantial. Success will depend on effective implementation of intervention measures, adequate resource allocation, and sustained political will to address systemic issues.

For road accident victims and their families, the hope is that these reforms will ultimately lead to a more efficient, accessible, and compassionate system that can fulfill its mandate of providing timely support to those affected by road accidents.

Stay updated with the latest developments in the Road Accident Fund crisis by following our ongoing coverage of this critical issue affecting thousands of South Africans.