Road Accident Fund (RAF) in Crisis: Landmark Court Rulings, Mounting Debt & Reform Efforts – April 2026 Update

The Road Accident Fund (RAF) continues to dominate South African headlines in April 2026, with a series of landmark court rulings, a deepening financial crisis threatening a R400–R500 billion hole in the national fiscus, and cautious signs of governance reform. Here is a comprehensive roundup of the latest developments every South African should know about.

1. Landmark SCA Ruling: RAF Must Compensate All Victims — Including Undocumented Foreigners

In one of the most significant legal developments of the year, the Supreme Court of Appeal (SCA) on 17 April 2026 dismissed the RAF’s appeal and ruled that the fund must compensate all road accident victims in South Africa — regardless of immigration status.

The case arose after the Gauteng High Court in Pretoria struck down a RAF directive requiring foreign nationals to prove legal presence in South Africa at the time of injury. 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 — citizens and undocumented foreigners alike.

“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 SCA dismissed the RAF’s appeal with costs, finding that neither the Transport Minister nor the RAF is permitted to amend or limit the scope of the Act through policy decisions or novel interpretations.

This ruling has significant financial implications for the already cash-strapped fund, potentially opening the door to thousands of additional claims from foreign nationals previously excluded.

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

In late March 2026, the SCA handed the RAF two further resounding defeats on the same day, compounding the fund’s acute institutional crisis.

Blow 1: Automatic Post-Judgment Interest

In 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 order is handed down.

Blow 2: Sunshine Hospital Must Be Paid

In the second matter, Newnet Property (Pty) Ltd t/a Sunshine Hospital vs The Road Accident Fund, the SCA reversed a High Court ruling and ordered the RAF to pay Sunshine Hospital more than R92 million. The hospital had accumulated a mountain of unpaid invoices after the RAF stopped paying in March 2020. The court went further, directing the RAF’s acting CEO, Radikwema Phora, by name to ensure compliance — a mandamus reflecting the court’s dwindling patience with institutional non-compliance.

3. RAF Ordered to Pay 209 Victims R47 Million in 30 Days

Adding to the fund’s legal woes, the Klerksdorp Regional Court in early April 2026 compelled the RAF to comply with all valid and existing court orders in favour of 209 road accident victims and to pay them a combined total of more than R47.3 million within 30 days.

The RAF had argued it could not process payments because certain claims were “not registered” on its internal administrative system — a defence the court rejected outright. Regional Court Magistrate MB Mamana ruled that internal administrative errors cannot override valid court orders, and that the RAF’s conduct “reflects a systemic failure to discharge its obligations.”

The court warned that in the event of non-compliance, claimants are granted leave to approach the court for further relief, including contempt of court proceedings.

4. The R400–R500 Billion Debt Time Bomb

The RAF’s financial position remains dire. According to analysis by Daily Maverick and Currency News, the fund faces a debt crisis of staggering proportions:

• Contingent liabilities are estimated at above R400–R500 billion — nearly one-fifth of the national government’s entire annual budget.
• Current liabilities stand at approximately R100 billion.
• The fund receives approximately R50 billion per year from fuel levies, with overheads of about R7 billion and payouts of about R43 billion — leaving virtually no buffer.
• The RAF has more than 440,000 outstanding claims, some dating back over a decade.
• The fund previously processed 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 resolving the crisis is “like unravelling spaghetti” and that the fiscus simply cannot absorb the full liability.

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 insufficient to cover the fund’s obligations.

5. Governance Failures and the Letsoalo Legacy

Much of the RAF’s current crisis is attributed to governance failures during the tenure of former CEO Collins Letsoalo (2020–2025). Key allegations and findings 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.
• A R79 million lease in Johannesburg was linked to Letsoalo.
• A 200-bed Johannesburg hospital 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.

Scopa has since started the process to criminally charge the former CEO. 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 into the RAF.

6. Signs of Recovery? Parliament Cautiously Optimistic

Despite the grim picture, the Portfolio Committee on Transport expressed cautious optimism in February 2026. Chairperson Donald Selamolela acknowledged that the RAF is a “challenged entity” but said the committee is “satisfied that indeed there is work happening to improve governance and stabilise operations.”

Deputy Minister of Transport Mkhuleko Hlengwa likened the reform process to “fixing an aeroplane while airborne,” emphasising that direct claims processing remains an immediate priority.

The committee called on the department to move swiftly to review RAF legislation to close all loopholes.

7. Proposed Reforms: What Needs to Change?

Experts and parliamentarians have proposed several reforms to stabilise the RAF:

• Cap payouts for future loss of income and medical expenses.
• Move from lump sum payments to staggered disbursements to improve liquidity.
• Appoint a panel of arbitrators to resolve cases without going to court.
• Establish an independent medical panel to assess injuries, eliminating the cost of two sets of medical experts.
• Finalise outstanding claims without litigation where possible.
• Increase the fuel levy to adequately fund the RAF’s obligations.
• Consider legislative reform of the entire compensation model.

However, new laws are unlikely to come into effect before 2027, meaning the immediate crisis must be managed within the existing framework.

What This Means for Road Accident Victims

For the hundreds of thousands of South Africans waiting for RAF compensation, the situation remains deeply concerning. Many victims are languishing in pain, unable to afford rehabilitation, while their claims are mired in administrative backlogs and legal delays.

In Gauteng alone, courts deal with approximately 300 RAF matters per week, with only 25 state attorneys available to handle the workload. Trial dates in some jurisdictions are reportedly being set as far out as November 2033.

If you have a pending RAF claim, it is advisable to:

1. Ensure your claim is properly registered on the RAF’s system.
2. Work with a qualified personal injury attorney.
3. Keep records of all correspondence with the RAF.
4. Be aware of your right to enforce existing court orders through mandamus proceedings.

Conclusion

The Road Accident Fund stands at a critical crossroads in 2026. Landmark court rulings are expanding its obligations, its debt is spiralling toward half a trillion rand, and governance reforms are still in their early stages. While Parliament and the new interim board are working to stabilise the entity, the road to recovery will be long and difficult.

South Africans — whether road accident victims, taxpayers, or motorists — have a direct stake in the RAF’s future. Staying informed about these developments is the first step toward holding the fund accountable and ensuring that those who need compensation receive it.

Stay tuned to this blog for daily updates on the Road Accident Fund and other key South African legal and financial news.

Sources: IOL Business, Daily Maverick, Currency News, Moneyweb, Africa24 TV, Business Day