RAF defiant despite ConCourt ruling

The Road Accident Fund (RAF) has reacted defiantly to the Constitutional Court order refusing its application for leave to appeal a high court judgment on its directive on payments to medical aid schemes.

In response to a request for comment from Moneyweb, RAF CEO Collins Letsoalo said on Thursday that there are “no implications on the RAF”.

Read: Discovery Health hails ConCourt’s RAF ruling

“The [Constitutional] court order did not deal with any merits. It raised issues of a lack of jurisdiction,” he said.

“The RAF issued an internal directive on 12 April 2023 stating its legal position about prescribed minimum benefits and emergency medical conditions and how those claims should be processed.

“That directive has neither been challenged nor set aside and thus still applies,” he said.

Moneyweb requested further clarity and details from the RAF about the 12 April 2023 internal directive referred to by Letsoalo but has not received a response yet.

This request was prompted by the fact that Judge Mandla Mbongwe’s judgment handed down in the High Court in Pretoria in October 2022 was to a Discovery Health application to review and set aside an RAF directive issued on 12 August 2022 by the RAF’s acting chief claims officer.

Mbongwe declared unlawful this directive unlawful.

New RAF directive?

This directive instructed RAF employees not to pay claimants if their medical aid scheme has already paid for their medical expenses arising from a road accident.

Discovery Health CEO Dr Ryan Noach said on Thursday it is unaware of any further directive.

“The only directive we know about is the internal memo sent by the RAF on 12 August 2022,” he said.

Noach added that prescribed minimum benefits (PMBs) are defined by the Medical Schemes Act and are “relevant only to the conduct of medical schemes in terms of how specific conditions are funded”.

“PMBs have no legal bearing whatsoever on the RAF,” he said.

Ruling final and binding

Commenting on the Constitutional Court ruling on Wednesday, Noach said it now confirms all prior rulings, making the decision final and binding on the RAF.

“The Constitutional Court ruling means that medical scheme members retain the right and entitlement to claim medical expenses from the RAF, in accordance with the Road Accident Fund Act, and over a century of common law precedent.

“This is an important fairness and equity principle that has prevailed and represents a victory in the public interest for all members of medical schemes in South Africa,” he said.

Read:
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Noach said Discovery Health and all related parties involved in the process of claiming from the RAF will immediately ensure that the valid claims submitted to the RAF are advanced to ensure the rightful processing and settlement of these claims for members of schemes.

The Constitutional Court order said it had considered the RAF’s application for leave to appeal and concluded that “it does not engage the jurisdiction of the court”.

“Consequently, leave to appeal must be refused. The court has decided to award costs. Leave to appeal is refused with costs,” it said.

Previous dismissals

The high court and Supreme Court of Appeal (SCA) previously dismissed appeals by the RAF against the 27 October 2022 judgment and order of the High Court in Pretoria.

Judge Mbongwe said when handing down judgment on 27 October 2022 that the legal position is that the RAF is not entitled to seek to free itself of the obligation to pay full compensation to victims of motor vehicle accidents.

“Thus, the directive challenged in the present process is outside the authority given by the enabling statute. More specifically, the directive is inconsistent with the express provisions of Section 17 [of the RAF Act] and is, consequently, unlawful,” he said.

Read:
Council for Medical Schemes red flags RAF non-payment
Spat over no-payment directive to medical funds intensifies

The RAF was set up as a public entity to compensate victims of road accidents and pay the medical expenses associated with treating these injuries.

It is funded by a special fuel levy on petrol and diesel, which is currently R2.18 per litre.

Finances impacted?

The Constitutional Court ruling and the dismissal by both the high court and SCA could have a negative impact on the RAF’s finances.

The financially distressed fund last month reported a deficit of R8.43 billion for its 2022/23 financial year compared to a surplus of R428 million in the prior year.

However, its CEO spoke glowingly about the fund’s financial and operational performance and achievements in the financial year against the targets in its 2020-25 Strategic Plan, as audited by the Auditor-General.

Read: RAF CEO: Crisis? What crisis?

Letsoalo said the RAF had achieved 91.3% of its predetermined targets for the 2022/23 year, representing a steady improvement from the 57% in the fund’s 2019/20 financial year.

He said the value of claims paid by the RAF has increased by 15% to R45.6 billion in 2023 from R39 billion in 2019 and admitted “the RAF is not out of the woods yet”.

Read: RAF launches digital solution it believes legal fraternity will ‘hate’