Court closes RAF’s ‘no papers’ loophole

The Supreme Court of Appeal (SCA) has dealt the beleaguered Road Accident Fund (RAF) – South Africa’s state third-party motor vehicle accident insurer – yet another damaging legal defeat this week, ruling that it cannot exclude foreign nationals who were in South Africa illegally from claiming compensation for road accidents, and that it also had no basis to halt the enforcement of court orders in already-settled cases. 

In a unanimous judgment written by judge Ashton Schippers, the court held that section 17(1) of the RAF Act obliges the fund to compensate “any person”, and that neither the fund nor the minister of transport has the power to carve out an exception for undocumented foreigners.

It’s not clear precisely what the financial implications are for the RAF in this case, but the decision tops a series of recent legal defeats that ratchet up the RAF’s already huge financial woes to yet another level.

The RAF’s own 2024/25 annual report shows claims requested but not yet paid of R10.4bn, total current claims liabilities of R40.4bn, a deficit of R2.3bn for the year, and liabilities exceeding assets by R27.7bn. National Treasury’s 2026 Budget Review says the fund’s long-term provisions are expected to rise from R370.3bn in 2024/25 to R426.2bn by 2028/29. 

The two appeals arose from a June 2022 RAF management directive and a July 2022 amendment to the RAF 1 claim form. Together, they required foreign claimants to provide documentary proof that they were lawfully in South Africa at the time of the accident, including passport stamps and visa records. The SCA held that this was unlawful. The court said the act itself contains no such limitation, and that the fund and the minister had effectively tried to amend the statute by administrative means, something only parliament can do.

The ‘greatest possible protection’

The finding constitutes a blunt rejection of a strategy the RAF adopted as part of a broader effort to limit who gets paid and when. Schippers said the act is social-security legislation intended to give the “greatest possible protection” to people injured in road accidents, and that there is nothing in its text, purpose or structure suggesting that “any person” should be read narrowly. On the contrary, the court said, if parliament had intended to exclude a class of claimants, it would have said so.

The RAF had argued that the Immigration Act justified the restriction: organs of state should verify the status of foreigners and should not facilitate public services for people not entitled to them.

The SCA rejected that argument too. It found that the Immigration Act itself does not prevent the provision of services to which foreigners are entitled “under any law”, and the RAF Act is such a law. It also rejected the fund’s claim that tighter documentation rules were needed to prevent fraud, saying the existing claim form already requires detailed accident information and that there was “simply no evidence of any fraudulent claims by illegal foreigners”.

Strike two

Just as importantly, the fund lost the companion appeal in which it had tried to stop 13 foreign nationals from executing on judgments and settlement orders already granted against it. The RAF had refused payment, saying the claimants were undocumented foreigners and that the legality of their claims was still under challenge. The SCA said that argument collapsed once the fund’s interpretation of the act failed. 

More than that, the court said the directive and amended claim form were not retrospective, so they could not be used to unwind claims lodged before June and July 2022. Nor could the RAF sidestep settlements it had already concluded and court orders it had not challenged. In effect, the fund was told that a deal is a deal, and an order is an order.

For the RAF, the implications are immediate and uncomfortable. One administrative barrier to claims has now been struck down completely. Any claim that was rejected, delayed or obstructed because a foreign claimant could not produce proof of lawful presence will now be payable. And for those claimants who already have settlements or court orders, the judgment strengthens their hand in enforcing them.

The reason why the legislature did not restrict third-party payments to foreigners in the first place is simply that doing so would risk foreign jurisdictions from permitting South African road accident victims from claiming against the foreign country’s insurance system. 

Expanding rights

Last month the SCA also ruled against the fund in separate litigation over post-judgment interest, adding yet another legal cost to an institution already short of cash and administrative credibility. In RAF vs Sheriff/Stoffels, the court held that every compensation award against the RAF is a judgment debt that automatically bears interest 14 days after the order, even if the order says nothing about interest; the same applies to costs once taxed or agreed. 

So, this judgment does not merely expand the rights of a politically vulnerable group of claimants. It narrows the RAF’s ability to use internal directives, paperwork and delay tactics as a substitute for law – something it was doing at a huge rate in order to try and match its exposure to its income.

In plain terms, the court has said the fund cannot rewrite its obligations because it is broke, overwhelmed or irritated by the claimants standing in front of it. 

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