Road Accident Fund Crisis Deepens: High Court Denies Payment Extension as RAF Faces Collapse

RAF’s Legal Setback: Court Rejects Extended Payment Moratorium

The Road Accident Fund (RAF) has suffered a significant legal blow as the Gauteng High Court in Pretoria struck down its urgent application for an extended 180-day payment moratorium. Judge Jabulani Nyathi dismissed the application with punitive costs, citing a lack of urgency in the matter.

This ruling comes at a critical time for the financially distressed fund, which currently faces R10.4 billion in unpaid claims and a staggering total claims liability of R40.4 billion as of March 2025.

Board Dissolution Amid Governance Crisis

In July 2025, Transport Minister Barbara Creecy took the unprecedented step of dissolving the entire RAF Board of Directors due to persistent governance failures. The decision followed several critical issues:

• Protracted litigation on accounting standards that strained financial resources
• Inconsistent handling of the CEO suspension process
• Frequent default judgments against the RAF, worsening contingent liabilities
• Deep board divisions with most resolutions requiring casting votes
• Failure to fill critical positions including Chief Claims Officer and Head of Legal

Financial Crisis: Technical Insolvency Looms

According to acting RAF CEO Phathutshedzo Lukhwareni, the fund remains technically insolvent with several alarming financial indicators:

• Accumulated deficit increased to R27.8 billion from R25.5 billion in 2024
• Liabilities exceed assets by R27.7 billion
• Current assets of R13.8 billion include only R2.1 billion in cash
• Unpaid claims rose to R10.4 billion from R8.3 billion in 2024

The fund’s revenue model, tied to fuel levy collections rather than accident risk, cannot adequately cover immediate lump sum payments required for claims.

Legal Fraternity Calls for Systemic Reform

The Law Society of South Africa (LSSA) welcomed the High Court’s decision, emphasizing that temporary relief cannot become perpetual delay. LSSA President Nkosana Mvundlela stated:

“The RAF’s mandate is not abstract, it is a promise embedded in statute and enforced by our courts – to make good, swiftly and fairly, the losses suffered by road-accident victims.”

Legal experts argue that the RAF must address its systemic issues through proper planning and stakeholder cooperation, rather than relying on serial urgent court applications.

Settlement Drive Initiatives

Despite the challenges, the RAF Pretoria Regional Office announced a block settlement drive in August 2025 to fast-track claims ready for settlement. This initiative aims to reduce the backlog of over 300,000 claims currently in the system.

Future Reforms: Road Accident Benefit Scheme Bill

Minister Creecy has emphasized the department’s commitment to finalizing the Road Accident Benefit Scheme Bill 2025, which will:

• Replace the current fault-based system with a no-fault scheme
• Make it easier for road accident victims to access benefits
• Standardize benefit payments
• Reduce costly legal processes

Impact on Claimants and Legal Practitioners

The ongoing crisis has severe implications for road accident victims awaiting compensation. With 215 respondents opposing the RAF’s latest court application, including sheriffs and attorney associations, the legal community is pushing for immediate solutions.

Nicolette de Witt of the Pretoria Attorney’s Association noted that while the court didn’t reject the application on merit, it found no urgency. She emphasized that “this dispute can be resolved outside the courts” if the RAF adopts transparency in its operations.

Expert Advisory Committee and SIU Investigation

To address the crisis, Minister Creecy has initiated several interventions:

• Establishment of an Expert Advisory Committee to review business processes
• Request for SIU investigation expansion under Proclamation 44 of 2024
• Recruitment process for a new board with transparent, merit-based selection
• Request to National Treasury for interim Accounting Authority appointment

Looking Ahead: Critical Decisions Required

The RAF stands at a crossroads, with stakeholders calling for immediate action to prevent institutional collapse. The fund’s ability to fulfill its constitutional mandate of providing social security and healthcare access to road accident victims hangs in the balance.

Key priorities include:

• Governance stabilization through effective board appointment
• Financial restructuring to address the R27.8 billion deficit
• Claims processing improvements to reduce the 300,000+ backlog
• Legislative reform through the new benefit scheme

As the situation develops, road accident victims, legal practitioners, and the broader South African public await decisive action to restore confidence in this critical social security institution.

Stay updated on the latest RAF developments and South African legal news by following our comprehensive coverage of this evolving story.