ActionSA will write to the Minister of Finance requesting an urgent briefing before Parliament following yesterday’s ruling by the Supreme Court of Appeal against the Road Accident Fund, which carries far reaching consequences not only for the RAF itself but for South Africa’s national fiscus, to the tune of nearly R180 billion.
Our preliminary assessment indicates that this ruling could expose the fiscus to claims amounting to approximately R180 billion, liabilities for which no provision has been made. The Court found that the RAF Form 1 introduced in 2022 to register claims was unlawful and directed that the RAF revert to the 2008 version of the form. Importantly, claimants who were previously denied the opportunity to lodge claims under the unlawful 2022 form will now be permitted to resubmit them.
It is estimated that approximately 600 000 claims were not accepted due to the unlawful form. At an average claim value of R300 000, this translates into an unrecorded liability of roughly R180 billion. This is in addition to the RAF’s already precarious financial position, including unrecorded liabilities estimated at R300 billion arising from incorrect changes to accounting policies. As such, total liabilities may now exceed R500 billion.
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.
Beyond the fiscal implications, the operational consequences for the RAF are equally severe. The Fund does not have the administrative capacity to register, process and investigate the anticipated influx of claims. This will likely overwhelm an institution already struggling to manage its existing caseload.
It is expected that delays in processing claims will inevitably lead to increased litigation. With limited resources to defend these cases, the RAF faces a growing risk of default judgments, which in turn will drive up the cost per claim well beyond reasonable levels.
ActionSA is deeply concerned by the complete lack of rational decision-making and due process that led to the unlawful introduction of the 2022 RAF Form 1. The role of disgraced RAF CEO Collin Letsoalo, together with a demonstrably useless board, raises serious questions of accountability. Equally concerning is the apparent failure in oversight by the then Minister of Transport, Fikile Mbalula.
It is further troubling that the RAF persisted in defending the unlawful form despite multiple adverse court rulings, compounding the financial and administrative damage.
This matter has also had devastating human consequences. Thousands of road accident victims, many of whom are among the most vulnerable in society, were unjustly prevented from lodging legitimate claims. The impact of this failure has been borne disproportionately by those least able to absorb it.
The scale and severity of the consequences arising from the RAF’s irrational and unlawful conduct are immense and will be felt for generations to come.
ActionSA will be exploring all available legal avenues, including the potential for criminal charges against those responsible to ensure they deservedly are locked up in orange overalls without delay.
South Africans cannot be expected to carry the cost of reckless governance and systemic failure of this magnitude.
ActionSA Raises Alarm Over Supreme Court Ruling Against RAF Set to Create R180 Billion Hole in National Fiscus
ActionSA will write to the Minister of Finance requesting an urgent briefing before Parliament following yesterday’s ruling by the Supreme Court of Appeal against the Road Accident Fund, which carries far reaching consequences not only for the RAF itself but for South Africa’s national fiscus, to the tune of nearly R180 billion.
Our preliminary assessment indicates that this ruling could expose the fiscus to claims amounting to approximately R180 billion, liabilities for which no provision has been made. The Court found that the RAF Form 1 introduced in 2022 to register claims was unlawful and directed that the RAF revert to the 2008 version of the form. Importantly, claimants who were previously denied the opportunity to lodge claims under the unlawful 2022 form will now be permitted to resubmit them.
It is estimated that approximately 600 000 claims were not accepted due to the unlawful form. At an average claim value of R300 000, this translates into an unrecorded liability of roughly R180 billion. This is in addition to the RAF’s already precarious financial position, including unrecorded liabilities estimated at R300 billion arising from incorrect changes to accounting policies. As such, total liabilities may now exceed R500 billion.
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.
Beyond the fiscal implications, the operational consequences for the RAF are equally severe. The Fund does not have the administrative capacity to register, process and investigate the anticipated influx of claims. This will likely overwhelm an institution already struggling to manage its existing caseload.
It is expected that delays in processing claims will inevitably lead to increased litigation. With limited resources to defend these cases, the RAF faces a growing risk of default judgments, which in turn will drive up the cost per claim well beyond reasonable levels.
ActionSA is deeply concerned by the complete lack of rational decision-making and due process that led to the unlawful introduction of the 2022 RAF Form 1. The role of disgraced RAF CEO Collin Letsoalo, together with a demonstrably useless board, raises serious questions of accountability. Equally concerning is the apparent failure in oversight by the then Minister of Transport, Fikile Mbalula.
It is further troubling that the RAF persisted in defending the unlawful form despite multiple adverse court rulings, compounding the financial and administrative damage.
This matter has also had devastating human consequences. Thousands of road accident victims, many of whom are among the most vulnerable in society, were unjustly prevented from lodging legitimate claims. The impact of this failure has been borne disproportionately by those least able to absorb it.
The scale and severity of the consequences arising from the RAF’s irrational and unlawful conduct are immense and will be felt for generations to come.
ActionSA will be exploring all available legal avenues, including the potential for criminal charges against those responsible to ensure they deservedly are locked up in orange overalls without delay.
South Africans cannot be expected to carry the cost of reckless governance and systemic failure of this magnitude.