R500-billion failure for South Africans in car accidents

The state of the road accident fund (RAF) in South Africa is rapidly declining, with growing backlogs and over R500 billion in unpaid claims. Many victims find themselves losing their income, home, and even their lives.

Gert Nel, CEO of Gert Nel Incorporated Attorneys, explained this, saying that South Africa’s road accident victims face unprecedented delays in compensation as the RAF struggles with severe operational and financial crises.

According to the firm, reform is urgently needed to support these vulnerable individuals. In particular, claims processes need to be more efficient to alleviate victims’ burdens.

In an open letter earlier this year, Chris Hunsinger, the Democratic Alliance’s spokesperson for transport, alleged that the RAF had suspended claim payments for nearly four months.

This suspension has led to a 71.5% decline in finalised claims in 2024 compared to the previous two years.

Two weeks later, Transport Minister Barbara Creecy demanded an RAF turnaround plan to address the backlog in the Gauteng High Courts.

Reports indicate that RAF cases have caused delays in personal injury trials, pushing them back until October 2029.

Nel explained that recent discussions with Parliament’s Standing Committee on Public Accounts (SCOPA) have highlighted the RAF’s worsening financial state, with over R500 billion in unpaid claims.

This financial strain is crippling the RAF’s ability to deliver fair compensation to crash victims, whose needs continue to be unmet.

The RAF frequently fails to send representatives to court, resulting in an increasing number of default judgments—court orders granted in the claimant’s favour due to the RAF’s absence.

According to the Special Investigations Unit (SIU), these default judgments cost the RAF billions.

In September this year, Leonard Lekgetho, the RAF’s chief operations officer, told SCOPA about the impact of changes made in 2020 by RAF chief executive Collins Letsoalo.

Since Letsoalo discontinued using a panel of attorneys to represent the fund in court, default judgments against the RAF have skyrocketed, amounting to R4.7 billion between 2018 and the second quarter of 2023.

Policies such as Board Notice 271, refusal to pay certain court-ordered expenses, and non-compliance with the 180-day payment deadline compound RAF’s challenges, adding to victims’ costs and difficulties.

Nel said a key issue stems from the recent Board Notice 271, which requires accident victims to submit extra paperwork, including costly medical and official reports, to process their claims.

This requirement hits financially vulnerable victims the hardest, as many cannot afford these documents, which are essential to prove their injuries and financial losses.

For those unable to secure this paperwork, claims are often delayed or even “prescribed” – meaning they are invalidated due to missed deadlines.

In other words, instead of streamlining access to compensation, Board Notice 271 has created even more barriers, increasing financial and emotional strain on those already in hardship.

Victims now face additional costs and delays that make it even more difficult to receive the compensation they urgently need, which contradicts the RAF’s mission to support crash victims.

The firm explained another problem stems from the false accusations against legal and medical professionals.

The RAF has repeatedly blamed legal and medical professionals for delays in claim settlements and accused them of unnecessarily prolonging the process.

However, the RAF’s current passive approach has not fully leveraged available remedies under the Act or adopted procedural safeguards to manage claims efficiently, which has resulted in increased litigation.

In many cases, securing a trial date is the only way to compel the RAF to address and settle cases. In fact, 99% of trial-allocated cases are eventually resolved before reaching trial, underscoring the RAF’s lack of proactive case management.

“We are still in court daily and have yet to encounter any meaningful attempt by the RAF to ‘develop a plan’ to settle directly and reduce the backlog on the trial rolls,” Nel said.

In addition, the firm said the RAF’s delays require medical professionals to repeatedly update reports as victims’ conditions evolve, which adds significant costs.

These delays in compensation negatively impact victims’ health and recovery and often involve postponing specialised treatments until it is too late.

Decision makers must recognise that left unchecked, the RAF is collapsing under its own strain, creating an ever-growing backlog, while victims’ needs continue to be neglected.

Some have lost their homes, others their livelihoods, and, tragically, some have passed away while awaiting relief.

Data from legal professionals across the country show that these delays are widespread, with some victims waiting five to seven years for payment and some claims remaining unresolved indefinitely.

Nel stressed the importance of settling claims outside of court wherever possible.

Settlements, including compensation for medical costs, lost income, and general damages, provide a faster and less costly resolution for victims.

However, the RAF frequently bypasses these opportunities, especially in cases already on the Court Rolls.

The firm recommended that RAF consider establishing a “Settlement Hub” staffed by experienced claims handlers. This could help reduce the backlog, alleviate court congestion, and lower legal costs for all involved.

“This crisis requires more than a financial bailout; it demands a fundamental reform in RAF’s approach to managing claims. Every day of delay comes at the cost of the very people RAF is meant to protect,” Nel said.

This article was first published by Daily Investor and is reproduced with permission.