Road Accident Fund Crisis Deepens: High Court Order Threatens Collapse – September 2025 Update

Road Accident Fund Faces Unprecedented Crisis in September 2025

The Road Accident Fund (RAF) in South Africa is experiencing its most severe crisis to date, with a recent High Court order potentially pushing the financially distressed entity toward complete collapse. As of September 4, 2025, the RAF continues to grapple with mounting governance failures, financial instability, and operational challenges that threaten its ability to serve road accident victims across the country.

High Court Order Strikes Major Blow to RAF Operations

In a significant judicial setback, Judge Jabulani Nyathi of the High Court in Pretoria struck the RAF’s application from the court roll with costs, citing a lack of urgency. The RAF had applied for the extension, revival, or reinstatement of a 180-day moratorium on the execution of writs and warrants for capital and interest against it.

This moratorium had provided crucial temporary legal protection from immediate enforcement of court-ordered payments, allowing the RAF up to 180 days to settle claims. Without this protection, the organization now faces a potential “flood of executions” that could severely prejudice the fund and its claimants.

RAF’s Financial Position Remains Critical

According to acting RAF CEO Phathutshedzo Lukhwareni, the fund’s financial situation remains precarious:

• Unpaid claims: R10.4 billion at the end of March 2025 (up from R8.3 billion in 2024)
• Total claims liability: R40.4 billion
• Accumulated deficit: R27.8 billion (increased from R25.5 billion in 2024)
• Technical insolvency: Liabilities exceed assets by R27.7 billion

Despite these challenges, the RAF maintains it has sufficient liquidity to meet obligations over the next 12 months, with current assets of R13.8 billion, including R2.1 billion in cash.

Minister Barbara Creecy Dissolves RAF Board

On July 15, 2025, Transport Minister Barbara Creecy took decisive action by dissolving the entire Board of Directors of the Road Accident Fund. This drastic measure followed persistent governance and operational challenges that significantly undermined the RAF’s statutory mandate.

Key Governance Failures Leading to Board Dissolution

Minister Creecy identified several critical issues that necessitated the board’s dissolution:

1. Protracted litigation: Costly legal battles on accounting standards applications, straining financial resources
2. CEO suspension mishandling: Inconsistent handling of CEO Collins Letsoalo’s suspension, creating institutional uncertainty
3. Default judgments: Frequent court defaults against the RAF, exacerbating contingent liabilities
4. Board divisions: Deep internal conflicts with most resolutions passed through casting votes rather than consensus
5. Critical vacancies: Failure to fill essential positions including Chief Claims Officer and Head of Legal

Parliamentary Inquiry and SIU Investigation Expansion

The Standing Committee on Public Accounts (SCOPA) has launched a comprehensive parliamentary inquiry into RAF financial matters, with proceedings scheduled for mid-September 2025. The Democratic Alliance has called for the investigation to cover all wrongdoing to be meaningful and worthwhile.

Additionally, Minister Creecy has requested the Special Investigating Unit (SIU) to expand its current investigation under Proclamation 44 of 2024 to cover recent governance failures and events from the past three months.

Impact on Road Accident Victims and Claims Processing

Despite the ongoing crisis, the RAF continues processing claims through various initiatives:

Settlement Drives and Fast-Tracking Initiatives

• Block settlement drives: The Pretoria Regional Office announced a drive in August 2025 to fast-track claims ready for settlement
• 120-day settlement target: The RAF has committed to settling eligible claims within 120 days
• Strategic shift: Moving away from litigation toward claims management

Challenges for Claimants

Road accident victims continue to face significant challenges:

• Extended waiting periods for claim settlements
• Uncertainty about payment timelines
• Potential impact from the lifted moratorium
• Need for legal representation in complex cases

Road Accident Benefit Scheme Bill Progress

Minister Creecy has emphasized her department’s commitment to finalizing the Road Accident Benefit Scheme Bill, which will introduce a no-fault system designed to:

• Make it easier for road accident victims to access benefits
• Reduce costly legal proceedings
• Standardize benefit structures
• Improve overall system efficiency

Expert Advisory Committee and Reform Initiatives

To support sustainable operational and governance reforms, Minister Creecy has initiated several measures:

Interim Leadership Structure

• Interim board appointment: New board appointed in August 2025 to ensure operational continuity
• Acting CEO: Phathutshedzo Lukhwareni continues as acting CEO following Collins Letsoalo’s suspension
• Expert Advisory Committee: Independent experts reviewing business processes and proposing recommendations

What This Means for Current and Future Claimants

Road accident victims and their families should be aware of the following developments:

Immediate Implications

• Claims processing continues despite governance challenges
• Settlement drives are actively addressing backlogs
• Legal representation remains important for complex claims
• The lifted moratorium may affect payment timelines

Future Outlook

• The proposed no-fault system may simplify future claims
• Governance reforms aim to improve operational efficiency
• Parliamentary oversight may drive accountability improvements
• Expert recommendations could reshape RAF operations

Industry Response and Legal Perspectives

Legal practitioners and industry stakeholders have expressed concerns about the RAF’s situation. Advocates representing 186 respondents in the recent High Court case described the RAF’s approach as “heartless and inhumane,” noting the organization’s pattern of promising 180-day settlements while failing to deliver.

The legal community has criticized the RAF for processing claims “at the pace of an arthritic snail” and engaging in “egregious contempt of court” by failing to comply with previous court orders.

Looking Ahead: RAF at a Critical Crossroads

The Road Accident Fund stands at a pivotal moment in September 2025. The convergence of High Court challenges, governance reforms, parliamentary scrutiny, and financial pressures creates both risks and opportunities for meaningful change.

Key Factors for Success

• Effective interim leadership: The new board’s ability to stabilize operations
• Parliamentary oversight: SCOPA’s inquiry driving accountability
• Legislative reform: Successful implementation of the Road Accident Benefit Scheme Bill
• Financial sustainability: Addressing the structural funding challenges
• Stakeholder confidence: Rebuilding trust with claimants and legal practitioners

Conclusion: Urgent Reform Needed for RAF Survival

The Road Accident Fund’s current crisis represents both a significant challenge and an opportunity for comprehensive reform. While the High Court order and governance failures have created immediate pressures, the appointment of interim leadership, parliamentary inquiry, and proposed legislative changes offer pathways to stability.

For the RAF to survive and effectively serve South Africa’s road accident victims, urgent action is required on multiple fronts: financial restructuring, governance reform, operational efficiency improvements, and the successful implementation of the no-fault benefit scheme.

Stakeholders across the spectrum – from road accident victims and legal practitioners to government officials and civil society – will be closely monitoring developments as the RAF works to restore institutional stability and enhance its capacity to fulfill its critical mandate.

Stay informed about RAF developments and ensure you understand your rights as a road accident victim in South Africa. For specific claims assistance, consult with qualified legal professionals experienced in RAF matters.

Key Takeaways for Road Accident Victims

• The RAF continues processing claims despite current challenges
• Settlement drives are underway to address backlogs
• Legal representation remains important for complex cases
• The proposed no-fault system may simplify future claims
• Stay updated on developments through official channels