Road Accident Fund South Africa: Latest News, Court Rulings, and Financial Crisis Updates April 2026

Road Accident Fund South Africa: Latest News and Critical Updates

The Road Accident Fund (RAF) in South Africa continues to dominate headlines as the state-owned enterprise faces mounting legal challenges, a catastrophic financial crisis, and governance failures. As of April 2026, the RAF is grappling with a debt exceeding R500 billion, over 440,000 outstanding claims, and a series of landmark court rulings that have expanded its compensation obligations while simultaneously exposing its inability to pay.

Supreme Court Rules RAF Must Compensate All Accident Victims, Including Undocumented Foreigners

In a landmark decision on April 17, 2026, the Supreme Court of Appeal (SCA) ruled that the Road Accident Fund must compensate all road accident victims, including undocumented foreign nationals. This decision represents a significant expansion of RAF’s compensation obligations and has major financial implications for the already-struggling fund.

The SCA dismissed the RAF’s appeal with costs, finding that the RAF Act makes no exclusion based on immigration status. Justice Norman Davis previously stated: “These accidents don’t discriminate in respect of the victims thereof between race, gender, age or between illegal foreigners and citizens of this country.”

The RAF had argued that undocumented foreign nationals should not fall within the compensation scheme, claiming the policy was aimed at preventing fraud and avoiding conflicts with the Immigration Act. However, the court found that “any person” in the RAF Act includes all road accident victims in the country, regardless of their legal status.

RAF Faces R400 Billion Financial Crisis

The Road Accident Fund faces an imminent financial crisis that threatens to blow a R400 billion hole in South Africa’s national budget. According to recent parliamentary inquiries, the RAF’s contingent liabilities could exceed R400 billion, with current liabilities standing at approximately R100 billion.

The fund’s financial position is dire:

• Outstanding claims: Over 440,000 cases dating back more than a decade
• Annual income: Approximately R50 billion from fuel levies
• Annual expenditure: R43 billion in payouts plus R7 billion in overheads
• Claims processing: Reduced from 250,000 annually to just 70,000
• Debt trajectory: Expected to rise from R387 billion to R426 billion by 2028/29

The Standing Committee on Public Accounts (Scopa) has described the RAF as “technically insolvent” and warned that the fund’s debt overshadows Eskom’s debt “by a country mile.”

Supreme Court of Appeal Delivers Twin Blows to RAF

On March 26, 2026, the SCA handed the RAF two resounding defeats in a single day, further exacerbating the fund’s institutional crisis:

Post-Judgment Interest Ruling

In the cases of RAF vs Sheriff of the High Court, Pretoria East and Others and RAF vs Stoffels and Another, the SCA ruled unanimously that the RAF must pay post-judgment interest automatically on every late settlement. Under section 2(1) of the Prescribed Rate of Interest Act, every judgment debt bears interest automatically from the day it becomes payable, unless the order expressly states otherwise.

The RAF had argued that a 1997 amendment to interest legislation effectively replaced this automatic mechanism, but the court rejected this argument, clarifying that post-judgment interest has operated as a matter of law since the 1970s.

Sunshine Hospital Payment Ruling

In Newnet Property (Pty) Ltd t/a Sunshine Hospital vs The Road Accident Fund, the SCA ordered the RAF to pay R92 million in outstanding invoices to Sunshine Hospital, a private facility that treated motor-vehicle accident patients. The hospital had accumulated unpaid invoices after the RAF stopped paying in March 2020.

Notably, the SCA personally directed the RAF’s acting CEO, Radikwena Phora, by name to ensure compliance with payment obligations—a mandamus reflecting the court’s dwindling patience with institutional non-compliance.

Governance Crisis and Corruption Allegations

The RAF’s financial crisis is compounded by well-documented corruption and maladministration. Former CEO Collins Letsoalo, who earned R6 million annually plus a 40% performance bonus, was placed on special leave in May 2025 pending investigation by the Special Investigation Unit (SIU).

Key governance failures include:

• Disclaimed or adverse audit opinions for five consecutive years
• R79 million lease investigation implicating the former CEO
• R300 million in unpaid hospital debt leading to facility closure
• R4 million staff awards ceremony with R40,000 spent on executive drinks
• Procurement fraud involving invoice splitting to bypass approval limits
• Over 50 employees on paid suspension for more than three years without finalized disciplinary cases
• R1 billion in media contracts awarded during the claims crisis

Outstanding Claims Backlog and Processing Delays

The RAF’s administrative dysfunction has created a massive backlog of outstanding claims. As of March 2025, the fund faced:

• 440,000+ outstanding claims
• Claims dating back more than a decade without resolution
• 70% increase in average claim value
• 400% increase in legal fees per claim
• Processing capacity reduced from 250,000 to 70,000 claims annually

Personal injury lawyers report that the RAF’s complicated claims processes have deliberately delayed settlements. The fund demanded claims be sent by registered mail but then refused to acknowledge them, forcing victims to pursue costly litigation.

Fuel Levy and Funding Challenges

The RAF’s primary income source is a fuel levy, which has increased from 41.5 cents per litre in 2008 to R2.25 per litre as of April 2026. However, this increase has not kept pace with growing claims volumes, litigation costs, and administrative overheads.

The structural problem is that the RAF operates on a pay-as-you-go basis rather than as a properly capitalized insurer, a choice that planted the seeds of the current crisis decades ago.

Parliamentary Inquiry and Reform Efforts

Parliament’s Standing Committee on Public Accounts has opened a comprehensive inquiry into the RAF’s financial affairs. Scopa chairperson Songezo Zibi has recommended several immediate steps:

• Finalize matters without court proceedings where possible
• Appoint arbitration panels to resolve disputed cases
• Establish independent medical panels to assess injuries
• Implement legislative reforms to cap future payouts and allow staggered payments instead of lump sums

However, legal opinions are still being sought on how to change the law to make these reforms possible, with new legislation unlikely to take effect until 2027.

Implications for Road Accident Victims

While the courts have expanded RAF’s compensation obligations, the fund’s inability to pay creates a paradox. Road accident victims face:

• Years-long delays in receiving compensation
• Inability to afford rehabilitation while waiting for settlements
• Denial of access to justice due to court backlogs
• In Gauteng, trial dates scheduled for November 2033 for some cases

Conclusion: A Systemic Risk to South Africa’s Fiscus

The Road Accident Fund represents one of the largest debts on South Africa’s balance sheet. With contingent liabilities potentially exceeding R500 billion—nearly one-fifth of the national government’s entire annual budget—the RAF crisis poses a systemic risk to the country’s fiscal stability.

The recent court rulings have clarified legal obligations while exposing the fund’s inability to meet them. Without significant legislative reform, improved administration, and substantial additional funding, the RAF’s crisis will continue to grow, ultimately placing the burden on South African taxpayers.

As Scopa chairperson Songezo Zibi stated: “Resolving this is like unravelling spaghetti.” The challenge now is whether government can act decisively to prevent this ticking time bomb from exploding.