Court Bars Road Accident Fund From Deducting Payments
The Supreme Court of Appeal has ruled against the fund's practice of reducing compensation based on medical scheme payouts.
Updated on Oct. 16, 2026 in Insurance
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The Supreme Court of Appeal has prohibited the Road Accident Fund from deducting medical scheme payments from claimant compensation. The court found the fund in breach of a 2022 judgment and ordered it to cease enforcing directives that withheld these payments.
Why it matters
The ruling resolves a long-standing dispute regarding the fund's refusal to reimburse claimants who have already had expenses covered by their medical schemes. This decision ensures that medical aid schemes are not forced to shoulder the financial burden of road accident costs that the fund is legally obligated to cover.
Medical schemes face approximately R500 million in irrecoverable losses each year due to non-reimbursement. The court has mandated that the Road Accident Fund prove its compliance in writing to the court registrar within 14 days.
The players
Road Accident Fund
This is a South African public entity responsible for providing compulsory cover to all users of South African roads against injuries or death caused by motor vehicle accidents.
Collins Letsoalo
He is the former CEO of the Road Accident Fund who was specifically named in the court order for his role in the entity's failure to comply with judicial mandates.
Discovery Health
This is the largest medical scheme administrator in South Africa and a key litigant in the efforts to secure reimbursement for medical expenses.
The details
The court set aside a December 2024 High Court judgment and interdicted the fund from applying directives issued throughout 2023 that sought to circumvent previous legal orders. Costs for the proceedings were awarded against the Road Accident Fund and its former CEO, Collins Letsoalo, for their failure to implement the 2022 mandate.
Timeline
12 August 2022: The Road Accident Fund issued an initial directive to withhold payments.
27 October 2022: The High Court declared the fund's directive unlawful.
13 April 2023: The fund issued a new directive attempting to circumvent the court order.
2 November 2023: An additional directive was issued by the fund to avoid compliance.
16 October 2026: The Supreme Court of Appeal issued the final ruling against the fund.
Market Dynamics
The judgment reinforces the regulatory obligations defined by the Road Accident Fund Act, which has been subject to intense litigation over benefit interpretation. This decision marks a significant legal correction against the fund's efforts to unilaterally alter compensation structures.
Claimants who have previously had compensation reduced due to medical aid contributions may now be eligible for restored payments. This ruling provides clarity for those managing insurance disputes and ensures that members of medical schemes are not penalized for their private coverage.
The takeaway
The court's decision affirms that medical aid schemes cannot be made to subsidize the state's road accident liabilities. Claimants should monitor their open files for updates on potential back payments following the court's strict 14-day compliance window.
Further reading
For more context on insurance regulations, visit the Insurance section.
Source note: This article includes information reported by Moneyweb.
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