Road Accident Fund Crisis Deepens: Major Governance Overhaul and Settlement Drive Launch – August 2025 Update

Road Accident Fund Faces Major Governance Crisis in 2025

The Road Accident Fund (RAF) in South Africa is experiencing unprecedented governance challenges in 2025, with Transport Minister Barbara Creecy taking decisive action to address systemic issues that have plagued the institution. This comprehensive update covers the latest developments affecting road accident victims and legal practitioners across the country.

Minister Dissolves RAF Board Amid Governance Failures

On July 15, 2025, Transport Minister Barbara Creecy made the dramatic decision to dissolve the entire Road Accident Fund Board following persistent governance and operational challenges that significantly undermined the RAF’s ability to discharge its statutory mandate.

The key governance issues that led to this unprecedented action include:

• Protracted and costly litigation on accounting standards applications, straining financial resources
• Inconsistent handling of CEO suspension, creating institutional uncertainty and legal challenges
• Frequent default judgments against the RAF, worsening contingent liabilities
• Deep board divisions with most resolutions passed through casting votes rather than consensus
• Failure to fill critical positions including Chief Claims Officer and Head of Legal

RAF Settlement Drive Initiative Launched

Despite the governance crisis, the RAF has launched a national settlement drive aimed at reducing the massive backlog of claims ready for settlement. This initiative began with the Pretoria Region from August 6-8, 2025, and will be rolled out across all regions.

Key Details of the Settlement Drive:

• Law firms can submit a maximum of 10 qualifying claims per firm
• Submissions processed on a first-come, first-served basis
• Only claims lodged with regional offices and fully prepared for settlement are considered
• Claims dismissed or rejected by courts are excluded
• Individual attorney submissions not accepted – only law firms

RAF Acting CEO Phathutshedzo Lukhwareni emphasized the Fund’s commitment to reducing settlement processing times while maintaining compassionate and efficient service to all claimants.

Parliamentary Inquiry and SIU Investigation

The Standing Committee on Public Accounts (SCOPA) has adopted terms of reference for a comprehensive inquiry into RAF financial matters, scheduled to begin in mid-September 2025 with completion targeted for end-October 2025.

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

Road Accident Benefit Scheme Bill Progress

Despite criticism from some quarters, Minister Creecy has reiterated her department’s intent to finalize the Road Accident Benefit Scheme Bill. This legislation aims to introduce a no-fault system that would make it easier for road accident victims to access benefits without costly legal proceedings.

However, some non-profit organizations argue that the focus should be on properly executing the existing Road Accident Fund Act rather than introducing new legislation.

Financial Impact and Claim Statistics

Recent data reveals the scale of the RAF’s financial challenges:

• Average RAF claim value in 2023/2024: R287,000
• Medical claims averaged: R29,700
• General damages averaged: R565,055
• Recent significant payout: R4,630,008

Expert Advisory Committee and Interim Measures

To address the governance vacuum, Minister Creecy has implemented several interim measures:

• Request to National Treasury to appoint an interim Accounting Authority under Section 49(3) of the PFMA
• Establishment of an Expert Advisory Committee to review business processes and propose recommendations
• Initiation of recruitment process for a new board through transparent, merit-based selection

Impact on Road Accident Victims

The ongoing crisis continues to affect thousands of road accident victims waiting for compensation. The RAF’s administrative and financial challenges have made claiming from the fund a time-consuming process, with many victims facing extended delays in receiving crucial financial support.

The settlement drive initiative represents a positive step toward addressing the backlog, but systemic issues require comprehensive reform to ensure sustainable operations.

Looking Ahead: What This Means for Claimants

For current and potential RAF claimants, these developments signal both challenges and opportunities:

• Short-term relief through the settlement drive for ready claims
• Potential improvements in governance and operational efficiency
• Continued uncertainty during the transition period
• Possible legislative changes that could affect future claims processes

Conclusion

The Road Accident Fund’s current crisis represents a critical juncture for South Africa’s road accident compensation system. While the dissolution of the board and launch of settlement drives indicate serious efforts to address systemic problems, the path to sustainable reform remains challenging.

Road accident victims, legal practitioners, and stakeholders must stay informed about these rapidly evolving developments as the RAF undergoes this significant transformation period. The success of these reform efforts will ultimately determine the Fund’s ability to fulfill its crucial mandate of providing timely and adequate compensation to road accident victims across South Africa.

Stay updated with the latest RAF developments and ensure your claims are properly prepared for upcoming settlement opportunities. For legal assistance with RAF claims, consult with experienced road accident attorneys who understand the evolving landscape.