Road Accident Fund (RAF) in Crisis: Landmark Court Rulings, R400bn Debt Bomb & Reform Efforts – April 2026 Update

Published: 28 April 2026

South Africa’s Road Accident Fund (RAF) continues to dominate headlines in 2026, with a series of landmark court rulings, mounting financial pressures, and urgent calls for legislative reform. From a Supreme Court of Appeal (SCA) ruling that extends compensation rights to undocumented foreign nationals, to court orders compelling the RAF to pay hundreds of millions of rands it has failed to settle, the state-owned insurer finds itself at the centre of one of the country’s most pressing fiscal and governance crises. Here is a comprehensive overview of the latest developments.

1. Landmark SCA Ruling: Undocumented Foreigners Must Be Compensated

In one of the most significant legal developments of April 2026, the Supreme Court of Appeal (SCA) dismissed the RAF’s appeal and ruled that the fund must compensate all road accident victims in South Africa — including undocumented foreign nationals.

The ruling, handed down on 17 April 2026, confirmed an earlier Gauteng High Court decision that struck down a RAF directive requiring foreign nationals to prove legal presence in South Africa at the time of injury. A full bench 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, regardless of their 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 Davis stated.

The RAF had argued that its policy was aimed at preventing fraud and avoiding conflict with the Immigration Act. The SCA dismissed these arguments with costs, finding that neither the Transport Minister nor the RAF is legally permitted to amend or limit the scope of the Act through policy decisions.

The ruling has significant financial implications for the already cash-strapped RAF, as it opens the door to a broader class of claimants.

2. Twin SCA Blows: Post-Judgment Interest and Sunshine Hospital Payments

In late March 2026, the SCA dealt the RAF two further legal defeats on the same day — both with serious cost implications.

Post-Judgment Interest Is Automatic

In the matters of RAF vs Sheriff of the High Court, Pretoria East and Others and its companion case RAF vs Stoffels and Another, the SCA ruled unanimously that the RAF is obliged to pay post-judgment interest automatically on every late settlement, even when the original court order is silent on the subject.

Justice Keoagile Elias Matojane confirmed that under section 2(1) of the Prescribed Rate of Interest Act, every judgment debt bears interest from the day it becomes payable — as a matter of law, not by court order. In RAF matters, this clock starts ticking 14 days after judgment is handed down.

The RAF had argued that a 1997 legislative amendment replaced this automatic mechanism. The court rejected this, clarifying that silence in a judgment is not a determination — it is simply silence.

Sunshine Hospital: R92 Million Ordered Within Seven Days

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 Sunshine Hospital more than R92 million within seven days.

Sunshine Hospital had accumulated a mountain of unpaid invoices after the RAF stopped paying in March 2020. Despite obtaining multiple court orders collectively compelling the fund to pay over R403 million, the RAF paid R336 million and then stopped. The SCA ordered the RAF’s acting CEO, Radikwena Phora, personally by name, to ensure compliance — a mandamus reflecting the court’s dwindling patience with institutional non-compliance.

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

In early April 2026, the Klerksdorp Regional Court 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.

Regional Court Magistrate MB Mamana ruled that the RAF’s reliance on internal administrative processes — specifically its claim that it “cannot process payment until the claim is registered on its system” — cannot override valid court orders. She found that the RAF’s conduct “reflects a systemic failure to discharge its obligations.”

The court granted mandamus (judicial command) relief, and warned that non-compliance could lead to contempt of court proceedings. While a contempt finding was not made at this stage due to insufficient evidence of wilfulness, the ruling sends a clear message: the rule of law applies to the RAF.

4. The R400 Billion Debt Bomb: SA’s Next Big SOE Crisis

Behind the court battles lies a financial crisis of staggering proportions. According to analysis published by Daily Maverick in March 2026, the RAF’s contingent liabilities could exceed R400 billion — with current liabilities standing at approximately R100 billion.

Key figures paint a dire picture:

• The RAF receives approximately R50 billion per year from fuel levies.
• Overheads consume around R7 billion, leaving roughly R43 billion for claims.
• The fund has more than 440,000 outstanding claims, some dating back over a decade.
• The value per claim has increased by 70%, and legal fees per claim have quadrupled.
• National Treasury’s 2026 Budget Review projects RAF long-term provisions rising from R387 billion this financial year to R426 billion by 2028/29.
• The RAF levy has risen from 41.5 cents per litre in 2008 to R2.25 per litre from 1 April 2026.

Scopa chairperson Songezo Zibi described the situation bluntly: “The RAF is technically insolvent.” He warned that the fund’s total debt liability is above R400 billion, and that resolving it is “like unravelling spaghetti.”

ActionSA MP Alan Beesley called the situation “flabbergasting,” noting that the current liability of R100 billion must be seen in the context of total liabilities of R500 billion — nearly one-fifth of the national government’s entire annual budget.

5. Governance Failures and the Letsoalo Legacy

Much of the RAF’s current crisis is attributed to the tenure of former CEO Collins Letsoalo (2020–2025), who was placed on special leave in May 2025 pending a Special Investigation Unit (SIU) probe.

Parliamentary scrutiny has revealed a litany of governance failures:

• The SIU uncovered RAF bank accounts with between R1 million and R100 million.
• 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.
• A 200-bed Johannesburg hospital 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.
• Letsoalo defied a parliamentary subpoena to appear before Scopa.

In August 2025, Transport Minister Barbara Creecy dissolved the entire RAF board and appointed an interim board. Scopa has since started the process to criminally charge the former CEO.

6. Signs of Recovery? Parliament Cautiously Optimistic

Despite the grim picture, there are cautious signs of progress. In February 2026, the Chairperson of the Portfolio Committee on Transport, Mr Donald Selamolela, said the RAF is “on the road to recovery.”

“We are satisfied that indeed there is work happening to improve governance and stabilise the operation of RAF,” he said, while acknowledging that concerns about organisational structure remain.

Deputy Minister of Transport Mkhuleko Hlengwa likened the reform process to “fixing an aeroplane while airborne,” and confirmed that direct claims processing is an immediate area of attention.

The RAF also hosted its second Settlement Drive at Ngwelezane Hospital in February 2026, aimed at resolving outstanding claims directly with claimants.

7. Legislative Reform: The Road Ahead

The Department of Transport is working on a revised RAF Bill that would introduce a no-fault compensation system and annuity payments instead of lump sums — a move aimed at making the fund more financially sustainable.

Key proposed reforms include:

• Capping payouts for future loss of income and medical expenses.
• Replacing lump-sum payments with staggered annuity payments.
• Establishing an independent medical panel to assess injuries.
• Appointing a panel of arbitrators to resolve disputes without litigation.
• Reviewing the RAF Act to close loopholes, including those related to foreign national claims.

However, new legislation is unlikely to come into effect before 2027, and experts warn that any changes cannot be applied retrospectively to the existing R100 billion-plus liability.

8. Court Backlogs: A Tsunami on the Horizon

The RAF’s crisis is also clogging South Africa’s courts. In Gauteng alone, courts deal with approximately 300 RAF matters per week, each taking about a day, with only 25 state attorneys available to handle the workload.

Advocate Justin Erasmus, chair of the Personal Injury Plaintiff Lawyers Association, warned: “If you can get a trial date, it is for November 2033. The courts will face a tsunami soon if this is not resolved.”

A mandatory mediation directive in Gauteng, intended to reduce court backlogs, has been blamed for worsening delays, and a high court application to set it aside is expected to be heard in June 2026.

What This Means for RAF Claimants

For the hundreds of thousands of South Africans waiting for RAF compensation, the situation remains deeply challenging. Key takeaways for claimants include:

• All road accident victims — including undocumented foreign nationals — are legally entitled to claim from the RAF.
• Courts are increasingly willing to grant mandamus orders to force the RAF to comply with existing judgments.
• Post-judgment interest accrues automatically — claimants do not need a separate court order.
• Delays remain severe, with some claims taking years to resolve.
• Legislative reform may change the compensation model in future, but existing claims will be processed under current rules.

If you have a pending RAF claim or have been involved in a road accident, it is advisable to seek legal assistance from a qualified personal injury attorney to navigate the complex claims process.

Conclusion

The Road Accident Fund stands at a critical crossroads in 2026. Landmark court rulings have expanded the fund’s obligations, while its financial position remains precarious and its governance legacy deeply troubled. Parliament, the courts, and the Department of Transport are all working — with varying degrees of urgency — to stabilise and reform an institution that touches the lives of millions of South Africans.

The coming months will be decisive: Scopa’s report is expected imminently, the RAF Bill is in development, and the courts continue to hold the fund accountable. For road accident victims across South Africa, the hope is that reform will translate into faster, fairer compensation — before the fiscal avalanche becomes impossible to contain.

Sources: IOL Business, Daily Maverick, Currency News, Moneyweb, Africa24 TV, Parliament of South Africa. This article is for informational purposes only and does not constitute legal advice.