RAF/Discovery judgement: the RAF did not ‘win’ – experts

The Road Accident Fund (RAF) did not ‘win’ despite the North Gauteng High Court judgement that the Fund does not have an obligation to pay claims for accident victims whose healthcare costs were already paid by their medical aid schemes.

A full bench of the North Gauteng High Court dismissed a case brought by Discovery Health to force the Road Accident Fund (RAF) to reimburse the medical scheme for costs it pays to its members. In its application, Discovery Health asked the court to force the RAF to comply with an earlier order by Judge Mandla Mbongwe to pay these disputed medical expenses.

The RAF said in a statement that it welcomes the judgement. “Discovery Health paid for medical costs of its members involved in car accidents but in a strange twist, the medical scheme would then pass on these payments to the Fund by asking its members to claim from the RAF and pay these monies back to Discovery.

“This practice was stopped in its tracks by the current management and Discovery responded by running to the courts to reinstate its gravy train,” Collins Letsoalo, CEO of the RAF, said.

“We are delighted to be finally vindicated by this judgement. The RAF management received a lot of criticism from many interested parties on this matter. We were correct to stay the course and refuse to be intimidated. This outcome is now case law which will be studied by law students and quoted in court cases well into the future.”

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Dismissal of Discovery’s case does not diminish rights of road crash victims

However, emeritus professor Hennie Klopper from the University of Pretoria, says the dismissal of Discovery Health’s application does not diminish the rights of road accident victims to claim medical costs from the RAF.

“The RAF’s so-called victory came at a great expense to taxpayers and victims, who are left waiting for their medical costs to be paid. The RAF achieved nothing in terms of escaping its financial liability and will now face the challenge of ensuring that thousands of legitimate court orders are paid, as mandated by various court judgements.”

Klopper says the ongoing legal battle between Discovery Health and the RAF raises important questions about the legal standing of medical aids in relation to RAF claims.

“From the outset, I was sceptical about the merits of Discovery Health’s action, despite its well-intentioned objective of ensuring that the RAF compensates road crash victims for their medical expenses.”

The Road Accident Fund Act clearly states that road crash victims (referred to as third parties) and hospitals and medical practitioners (referred to as suppliers) are entitled to claim from the RAF, in accordance with the stipulations of the Act. However, medical aid does not fall under either of these categories and, therefore, does not have any direct right of recourse against the RAF.

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Judgement does not stop road crash victims from claiming from RAF

“Recent media coverage seems to suggest that the dismissal of Discovery Health’s application could impede road crash victims from recovering their medical costs from the RAF, but this is not the case. The legal relationship between the Fund and road crash victims is governed by common law and remains intact.

“Under the common law collateral source rule, compensation from third parties, such as medical aid payouts, does not absolve the RAF of its liability to reimburse the victim for medical expenses incurred.”

Klopper emphasises that the RAF’s liability remains intact despite the judgement. “This principle was reaffirmed by several High Court judgements. The Fund is liable for medical costs even if those costs were initially covered by a claimant’s medical aid.

“Medical aids, in turn, derive their reimbursement rights from their contractual rules with members, which typically require members to claim from the Fund and refund the medical aid upon receiving payment.”

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Judgment does not absolve RAF from statutory and common law duty to pay claims

Gert Nel from Gert Inc. Personal Injury Practitioners says although Letsoalo expressed delight in the outcome, stating that the RAF is delighted to be finally vindicated by the judgement, this celebration overlooks the broader realities of the Fund’s operations.

“While the judgement clarifies the legal standing of medical aids in relation to the RAF Act, it does not absolve the Fund of its statutory and common-law duty to compensate road crash victims. The ruling does not address the systemic inefficiencies and ongoing neglect that continue to harm victims.”

Nel points out that the RAF has a troubling history of misquoting or misinterpreting the Act to sidestep its obligations, such as:

• Board Notice 271 of 2022 introduced onerous documentation requirements, creating insurmountable barriers for financially vulnerable claimants. This notice contradicted the RAF Act’s intent of simplifying access to compensation and instead prolonged delays and denied justice to victims.
• The RAF frequently shifted blame onto legal and medical professionals for increasing costs, ignoring its own inefficiencies that include failure to attend court proceedings, leading to costly default judgements and refusing to comply with the statutory 180-day payment deadline, further compounding delays and financial instability.
• The RAF’s introduction of ‘phantom directives,’ as seen in recent litigation, reflects a pattern of circumventing court orders. These directives undermine judicial authority and the principles of administrative justice.

“The focus must remain on the RAF’s statutory duty to serve road crash victims with fairness and efficiency. Misleading public narratives and systemic failures cannot substitute meaningful reform. South Africa’s road crash victims deserve a fund that fulfils its mandate with integrity and compassion,” Nel says.

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Dr Ron Whelan, CEO of Discovery Health, said Discovery Health noted the judgement in the matter of Discovery Health versus the RAF with concern.

“Discovery Health respectfully disagrees with the judgement delivered by Judge President Dunstan Mlambo and Judge Noluntu Bam and aligns with the dissenting judgement by Judge Ingrid Opperman.

“Given the far-reaching implications of the judgement, Discovery Health intends to apply for leave to appeal and believes the matter warrants the attention of the Supreme Court of Appeal.”