Road Accident Fund in Crisis: Landmark Court Rulings, R500bn Debt & Reform Proposals – 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 the state-owned entity under unprecedented scrutiny. Here is a comprehensive overview of the latest developments affecting the RAF, road accident victims, and South Africa’s national fiscus.

1. Landmark SCA Ruling: RAF Must Compensate All 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, delivered by a full bench of three judges led by Judge Norman Davis, set aside a RAF directive that required foreign claimants to prove they were legally present in South Africa at the time of the accident. The SCA 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 documentation 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 RAF had appealed a 2024 Gauteng High Court ruling that had already struck down the directive, arguing that its policy was aimed at preventing fraud and avoiding conflict with the Immigration Act. The SCA dismissed the appeal with costs.

Parliament’s Transport Committee Chairperson welcomed the ruling, stating that RAF funding is intended for victims of road accidents and that no one should be excluded based on nationality.

The ruling has significant financial implications. Reports indicate that the RAF had previously confirmed it would pay out millions to undocumented foreigners following a Limpopo bus crash, and the broader ruling now opens the door to a wider class of claimants.

2. SCA Ruling on Unlawful 2022 Claim Form Could Trigger R180 Billion Liability

In another devastating blow to the RAF, the SCA ruled that the RAF Form 1 introduced in 2022 to register claims was unlawful, ordering the fund to revert to the 2008 version of the form. This means that 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 the consequences are catastrophic:

• An estimated 600,000 claims were not accepted because of the unlawful form.
• At an average value of R300,000 per claim, this creates a potential liability of at least R180 billion.
• This is on top of the RAF’s already strained financial position, with unrecorded liabilities of approximately R300 billion, potentially pushing total obligations beyond R500 billion.

Beesley stated that ActionSA would write to Finance Minister Enoch Godongwana requesting an urgent parliamentary briefing. 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.

3. RAF Dealt Twin Blows by SCA — With No Clear Path to Pay

In March 2026, the SCA handed the RAF two further resounding defeats on the same day:

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 interest on late judgment debts automatically — even when the original court order is silent on the subject. The court 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 hands down its order.

Sunshine Hospital: RAF Ordered to Pay R92 Million

In the 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. The hospital had accumulated a mountain of unpaid invoices after the RAF stopped paying in March 2020. Notably, the court directed the RAF’s acting CEO, Radikwena Phora, by name to ensure compliance — a reflection of the court’s dwindling patience with institutional non-compliance.

4. The R400–R500 Billion Debt Crisis: South Africa’s Next Big SOE Disaster?

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

• 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.
• The RAF receives approximately R50 billion per year from fuel levies, with overheads of about R7 billion and payouts of about R43 billion — leaving virtually no surplus.
• The fund has more than 430,000 outstanding claims, some dating back more than a decade.
• The RAF previously handled 250,000 claims per year; it now handles only 70,000.
• National Treasury’s 2026 Budget Review projects the RAF’s long-term provisions will 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 fix all its administrative issues and finalise all its claims tomorrow, it would collapse. “Resolving this is like unravelling spaghetti,” he said.

The RAF levy has risen from 41.5 cents per litre in 2008 to R2.25 per litre from 1 April 2026 — an annualised increase of about 9.8% — yet this remains woefully inadequate to cover the fund’s obligations.

5. Governance Failures, Corruption, and the Letsoalo Legacy

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

• 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.
• He was placed on special leave in May 2025 pending a Special Investigation Unit (SIU) probe, and his contract ended in August 2025.
• The SIU uncovered RAF bank accounts with between R1 million and R100 million.
• 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 senior executives manipulated procurement processes and split invoices to bypass approval limits.
• The RAF accumulated more than R15 billion in default judgments.
• The RAF litigated against the Auditor-General for two years.
• Two media contracts worth R1 billion were awarded — including one to a company that hosted a staff awards ceremony costing nearly R4 million — while the fund had 445,782 outstanding claims.

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. ActionSA’s Beesley has called for criminal charges against Letsoalo and dereliction charges against the former board.

6. Courts Overwhelmed: The Human Cost of the RAF Crisis

The RAF’s dysfunction is not merely a fiscal abstraction — it has a devastating human impact. Personal injury lawyers and victims are bearing the brunt:

• Gauteng courts deal with approximately 300 RAF matters per week, each taking about a day, with only 25 state attorneys to handle the workload.
• A mandatory mediation directive in Gauteng, intended to reduce court backlogs, has been blamed for worsening delays. Advocate Justin Erasmus, chair of the Personal Injury Plaintiff Lawyers Association, has lodged a High Court application to set it aside — due to be heard in June 2026.
• 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.
• One law firm reported receiving only 2% of what the RAF owes its clients in February 2026.

As one attorney put it: “Personal injury plaintiffs are being denied access to justice.”

7. Proposed Solutions: A Hybrid Model for the Future

The Actuarial Society of South Africa (ASSA) released a major research paper in April 2026 proposing a hybrid compensation model to replace the current failing system. ASSA compared three options:

1. The current RAF 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 are viable on their own, but that a hybrid solution is needed — one that combines 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.

SCOPA’s Zibi has also proposed immediate practical steps:

• Finalising matters without going to court where possible.
• Appointing a panel of arbitrators to resolve cases where parties cannot settle.
• Establishing an independent medical panel to assess injuries, rather than paying for two sets of medical experts.
• Changing 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.

However, new legislation is unlikely to come into effect before 2027.

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, the current state of the RAF has serious practical implications:

• Delays are severe — claims can take years, even decades, to resolve.
• Legal representation is essential — the complexity of the claims process and the RAF’s history of non-compliance make it critical to work with an experienced personal injury attorney.
• All victims are entitled to claim — including foreign nationals, regardless of documentation status, following the April 2026 SCA ruling.
• The RAF’s financial instability means that even successful claimants may face delays in receiving payment.
• Legislative reform is coming — but may not benefit those with existing claims.

Key Takeaways: Road Accident Fund News — May 2026

The Road Accident Fund’s crisis is one of the most pressing fiscal and social challenges facing South Africa today. With court rulings continuing to expand the fund’s obligations, a backlog of hundreds of thousands of claims, and a debt burden that threatens the national fiscus, the pressure for meaningful reform has never been greater. South Africans — whether road accident victims, taxpayers, or motorists — have a direct stake in how this crisis is resolved.

Stay updated on the latest Road Accident Fund news and developments by bookmarking this page. If you need assistance with a RAF claim, consult a qualified personal injury attorney.