Road Accident Fund in Crisis: Landmark Court Rulings, R500bn Debt & Reform Calls – May 2026 Update

The Road Accident Fund (RAF) is once again dominating South African headlines in 2026, as a series of landmark Supreme Court of Appeal (SCA) rulings, a deepening financial crisis, and urgent calls for systemic reform converge to put South Africa’s state-owned road accident insurer under unprecedented scrutiny. Here is a comprehensive roundup of the latest developments as of May 2, 2026.

1. SCA Rules: 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 on 17 April 2026 that the Road Accident Fund must compensate all road accident victims in South Africa — including undocumented foreign nationals.

The ruling dismissed the RAF’s appeal against an earlier Gauteng High Court decision that had struck down a RAF directive requiring foreign claimants to prove they were legally present in South Africa at the time of the accident. A full bench of three judges, led by Judge Norman Davis, 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 Davis stated.

The RAF had argued that its policy was aimed at preventing fraud and avoiding conflict with the Immigration Act. The SCA dismissed these arguments with costs. The RAF had already allocated R546 million to foreign national claims in the 2024/25 financial year, and this ruling is expected to significantly increase that figure going forward.

Parliament’s Portfolio Committee on Transport has since called for the expedited reform of the RAF Act to manage and process claims more effectively in light of the ruling.

2. SCA Delivers Twin Blows: Post-Judgment Interest and Hospital Debt

The RAF was dealt two further legal defeats by the SCA in late March 2026, with major cost implications for the already cash-strapped fund.

Post-Judgment Interest Must Be Paid Automatically

In the matter of RAF vs Sheriff of the High Court, Pretoria East and Others, the SCA ruled unanimously that the RAF is obliged to pay post-judgment interest automatically on every late settlement — even when the original court order is silent on the subject. Writing for a three-judge panel, Justice Keoagile Elias Matojane confirmed that under the Prescribed Rate of Interest Act, every judgment debt bears interest from the day it becomes payable as a matter of law. In RAF matters, this clock starts ticking 14 days after the court order is handed down.

Sunshine Hospital: R92 Million Enforcement Order

In a second matter, Newnet Property (Pty) Ltd t/a Sunshine Hospital vs The Road Accident Fund, the SCA reversed a Pretoria High Court ruling and ordered the RAF to pay the remaining R92 million owed to Sunshine Hospital — a private facility that had treated motor vehicle accident patients and accumulated unpaid invoices after the RAF stopped paying in March 2020. The court ordered the RAF’s acting CEO, Radikwena Phora, personally by name, to ensure compliance — a stark reflection of the court’s dwindling patience with institutional non-compliance.

3. Unlawful 2022 Claims Form Could Trigger R180 Billion Liability

In yet another devastating SCA ruling, the court found that the RAF Form 1 introduced in 2022 to register claims was unlawful, ordering the fund to revert to the 2008 version. This means that an estimated 600,000 claimants who were previously unable to lodge claims under the invalid form will now be allowed to resubmit them.

ActionSA MP Alan Beesley warned that at an average claim value of R300,000, this creates a potential new liability of at least R180 billion — on top of the RAF’s already strained financial position. Beesley has called for an urgent briefing from Finance Minister Enoch Godongwana before Parliament.

“These are effectively state liabilities and place the national fiscus in an extremely vulnerable position, exceeding the financial burdens posed by entities such as Eskom and Transnet,” Beesley said.

He also criticised the decision-making that led to the introduction of the 2022 form, calling into question the role of former RAF leadership and government oversight, and said ActionSA is exploring legal options, including the possibility of criminal charges against those responsible.

4. The R400–R500 Billion Debt Bomb: SA’s Next Big SOE Crisis

The RAF’s financial position has been described as nothing short of catastrophic. According to analysis published by Daily Maverick in March 2026:

• The RAF’s contingent liabilities could exceed R400–R500 billion — nearly one-fifth of the national government’s entire annual budget.
• Current liabilities stand at approximately R100 billion, with minimal cash reserves.
• The fund is technically insolvent, receiving approximately R50 billion per year from fuel levies, with overheads of R7 billion and payouts of R43 billion — leaving virtually no buffer.
• The RAF’s long-term provisions are expected to rise from R387 billion in the current financial year to R426 billion by 2028/29, according to the National Treasury’s 2026 Budget Review.
• The backlog of outstanding claims stood at more than 440,000 at the end of March 2025.
• The fund previously handled 250,000 claims per year; it now handles only 70,000.

Scopa chairperson Songezo Zibi described the situation bluntly: “The RAF is technically insolvent… Resolving this is like unravelling spaghetti.”

The RAF’s primary income source — a fuel levy — has risen from 41.5 cents per litre in 2008 to R2.25 per litre from April 1, 2026, but this remains woefully inadequate to cover the fund’s mounting obligations.

5. 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. Key allegations 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 SIU uncovered RAF bank accounts with between R1 million and R100 million in unexplained funds.
• Letsoalo was implicated in a R79 million lease deal 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.
• Senior executives were accused of manipulating procurement processes and splitting 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 dissolved the entire RAF board in July 2025 and appointed an interim board. She also wrote to President Cyril Ramaphosa requesting an expanded SIU investigation scope. ActionSA MP Beesley called Letsoalo a “sociopathic CEO” and has called for criminal charges.

6. Actuarial Society Calls for Hybrid Compensation Model

The Actuarial Society of South Africa (ASSA) released a major research paper in April 2026 proposing a fundamental overhaul of the RAF system. The study compared the current RAF model with the proposed no-fault Road Accident Benefit Scheme (RABS) and compulsory third-party insurance, concluding that none of these systems are viable on their own.

ASSA actuary George Schwalb explained: “We conclude that none of these general systems are viable on their own, but that we do need a hybrid solution. We recommend it should have components of the current RAF, the proposed RABS and compulsory third-party insurance that is quite common in most developed countries.”

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.

The Transport Committee has also called for the expedited reform of the RAF Act, while Scopa has recommended that the RAF explore appointing independent arbitrators and medical panels to resolve cases without going to court.

7. Court Backlogs and Access to Justice Crisis

The RAF’s dysfunction is creating a severe access-to-justice crisis for road accident victims. In Gauteng alone, courts deal with approximately 300 RAF matters per week, each taking about a day, with only 25 state attorneys available to handle the workload.

A mandatory mediation directive in Gauteng — intended to reduce court backlogs — has been blamed for worsening delays, with Advocate Justin Erasmus, chair of the Personal Injury Plaintiff Lawyers Association, lodging a high court application to set it aside. Trial dates in Gauteng are reportedly being set as far out as November 2033.

Some claims relating to accidents that occurred more than 20 years ago are only now proceeding to trial, according to ASSA. Personal injury lawyers report receiving as little as 2% of what the RAF owes their clients in monthly payments.

8. Signs of Recovery? Transport Committee Weighs In

Despite the overwhelming challenges, the Transport Committee Chairperson has noted that the RAF is showing some signs of recovery under its new interim board, and has called for reform efforts to accelerate. The RAF also hosted a Settlement Drive at Ngwelezane Hospital in February 2026 as part of efforts to clear its backlog of outstanding claims.

Scopa’s comprehensive report on the RAF’s financial affairs is expected to be released imminently, with recommendations for both punitive action against those responsible for mismanagement and structural reforms to make the fund viable.

What This Means for Road Accident Victims in South Africa

If you or a loved one has been involved in a road accident in South Africa, here is what you need to know:

• You have the right to claim from the RAF regardless of your nationality or immigration status, following the April 2026 SCA ruling.
• Delays are significant — the RAF is processing far fewer claims than it receives, and backlogs are severe.
• Legal representation is advisable — given the complexity of the claims process and the RAF’s history of non-compliance, working with an experienced personal injury attorney is strongly recommended.
• The 2022 RAF Form 1 was unlawful — if your claim was rejected due to the 2022 form, you may be entitled to resubmit it.
• Post-judgment interest is automatic — if you have an existing judgment against the RAF, interest accrues automatically from 14 days after the order.

Conclusion: A Fund at a Crossroads

The Road Accident Fund stands at a critical crossroads in 2026. A cascade of adverse court rulings, a debt burden that could exceed R500 billion, a legacy of governance failures, and over 440,000 outstanding claims paint a picture of an institution in deep crisis. Yet the appointment of a new interim board, parliamentary scrutiny, and growing calls for a hybrid compensation model offer a glimmer of hope that meaningful reform may finally be on the horizon.

For the hundreds of thousands of South Africans waiting for compensation — some for decades — the stakes could not be higher. The RAF’s crisis is not an abstract fiscal problem; it is a human one.

Stay updated on the latest Road Accident Fund news and developments by bookmarking this page. We publish daily updates on RAF claims, court rulings, and reform efforts in South Africa.