Simon Nare
Parliament’s public accounts watchdog has found that changes to the Road Accident Fund’s claim system created an onerous, costly and impractical process that marginalised poor and illiterate claimants.
The Standing Committee on Public Accounts (SCOPA) met virtually on Friday to consider its draft Road Accident Fund Oversight Enquiry Report, which followed months of hearings into alleged maladministration, financial impropriety and misuse of public funds at the RAF.
The inquiry heard testimony from current and former RAF managers, board members and other witnesses.
In its draft report, SCOPA found that the amended RAF 1 claim form was complex, difficult to comply with and costly because of its onerous requirements, to the detriment of claimants, especially the most vulnerable in society.
The committee found that the system made it difficult for claimants to lodge direct claims because of its complexity and the costs attached to the process, making it impractical to lodge a claim without the assistance of a lawyer.
“These initial costs can easily exceed R100 000 — a sum that is simply out of reach for ordinary claimants. In turn, attorneys, especially those with small and medium-sized practices, are unlikely to have the risk appetite and the financial resources to process claims of claimants who are unable to fund the sourcing of the various medico-legal and other records themselves.”
The preliminary report found that the introduction of the system appeared to have increased costs because of its legal consequences and the litigation that followed.
“The committee notes further with concern that there appears to be a trend in which the Board was not aware of or fully apprised of all information necessary for it to take rational and legally sound decisions,” it said.
“There is no evidence that the former board properly interrogated executive management on the legality of the proposed changes to the RAF 1 Form. On the contrary, the former Board appears to have merely rubberstamped a decision taken by Executive Management,” it said.
The RAF later lost court challenges over aspects of the amended claim system. The Gauteng High Court in Pretoria set aside a directive and amended RAF 1 requirements that sought to exclude claims by foreign nationals without lawful immigration status. The Supreme Court of Appeal upheld that ruling on 16 April, finding that the RAF Act’s reference to “any person” did not exclude such claimants.
The ruling forced the RAF to revert to the previous process and opened the door for claimants who had been rejected under the amended system to resubmit their claims.
There are concerns that, once these claims are consolidated, they could push the RAF’s liabilities even higher.
ActionSA’s Alan Beesley said this was not highlighted higher up in the report and warned that the agency’s debt could be pushed to R500 billion.
“The RAF is broken. It is completely broken. This is going to destroy the RAF, but more importantly, impact on the fiscus of our country. When I put the R500 billion on the table, people laughed. It is actually going to be more than R500 billion, chair. And I don’t think we are highlighting this enough,” he said.
The committee said in the report it was concerning that the former board did not properly consider the impact the amended claim system would have on claimants.
It said that even in the absence of legal advice and reliable information from management, the board should have appreciated the challenges the system would create.
“Yet it appears that the rights of claimants, whose interests are protected by law, were ignored. As such, the committee finds that the former Board acted irrationally in approving the Management Directive.
“The failure of the RAF to register claims based on non-compliance with the 2022 RAF 1 Form has increased litigation costs as claimants are compelled to seek court intervention to have their claims accepted by the RAF.
“Consequently, this has contributed to a dramatic surge in contingent liabilities, rising from R656.6 million in 2022/23 to R1.7 billion in 2024/25, as indicated in the recent annual reports,” the report said.
Members of the committee welcomed the draft report and praised the secretariat for producing what they said was a balanced and well-presented document.
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