BM_Lindsey_RAF vs ASB 
When Minister of Transport Barbara Creecy dissolved the entire 11-member board of the Road Accident Fund (RAF) on 15 July, the long-overdue house-cleaning at an institution described as being in “a state of advanced collapse” was celebrated.
Creecy has moved quickly since being assigned the Department of Transport in 2024, and continued that momentum by appointing an interim board chaired by Kenneth Brown and establishing a panel of independent experts to review the fund's operations.
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Now Songezo Zibi is tasked with figuring out what happened as he chairs the Standing Committee on Public Accounts oversight inquiry into the Road Accident Fund. This task had him asking witnesses to limit their accounts to “just tell us how, what has happened at the RAF [that] affected you personally and your families? Not what someone else told you, just what you have evidence for.”
You can follow all the juicy daily details of the parliamentary enquiry here, but longtime observers of the RAF’s turbulent shenanigans were left with a sense of déjà vu – haven’t we been here before?
Original sin
To understand why the RAF crisis feels like a replay, you need to go back to 1996. Wait, make that even further back to 1942, when South Africa first attempted to solve the problem of uncompensated road accident victims. The RAF is the fourth iteration of a system that has been failing, reforming and failing again for more than 80 years.
First, there was the Motor Vehicle Insurance Act of 1942, which relied on private insurers who promptly went bankrupt. Then, in 1965, the state Motor Vehicle Accident Fund had to step in as a reinsurer when the private sector couldn’t handle the risk.
In 1986, there was further reform to introduce the fuel levy, a frankly communist philosophical shift from individual insurance to social taxation, but it carried a fatal flaw: an agency system where private insurance companies administered claims on behalf of the state.
By 1989, this system transformed into the Multilateral Motor Vehicle Accidents Fund, which inherited all the contradictions of its predecessor: socialised funding through the fuel levy, but a privatised, profit-driven claims administration.
The result was entirely predictable: rampant fraud, spiralling costs and a deficit that doubled every three years.
Why was RAF made, by Lindsey Schutters
A first attempted fix
The RAF Act of 1996 was supposed to fix this by chucking out the agency system in favour of centralised control. Creecy’s actions echo this exact logic because she’s trying to address a failed board, a fragmented system and a need for centralised control and accountability.
But here’s what successive ministers, boards, and reform committees have consistently failed to address: the RAF’s fundamental contradiction.
The fund operates as social insurance – drivers (the overwhelming aggressors in road accidents) pay into it through the fuel levy, and it’s meant to function as a social safety net. But it’s built on a fault-based legal system inherited from common law delicts, meaning claimants must prove negligence on the part of the other party. This turns what should be a straightforward social insurance payout into a legal battle.
The RAF is simultaneously a social welfare provider and an indemnity insurer for negligent drivers. It’s trying to be Sassa and a personal injury law firm at the same time.
The result? In its 2023/24 financials, the fund paid R103.1-million in corporate legal services on panel attorneys for the year. The system was designed to incentivise the very litigation that bankrupts it.
This is the original sin that has never been corrected. The 1996 reform solved administrative fragmentation, but kept the expensive, courtroom-heavy, fault-based system.
Same song, different instruments
Fast forward to 2025, and the RAF faces liabilities estimated to exceed R500-billion. The Auditor-General flagged R340-billion in liabilities for 2022/2023 alone, and the fund has received bad audit outcomes for three consecutive years.
But the current crisis isn’t just about money; there is also accountability theatre. The RAF pursued costly litigation against the Auditor-General and National Treasury to defend its use of Ipsas 42 accounting standards instead of the prescribed Generally Recognised Accounting Practices (Grap) standards.
This accounting sleight of hand artificially reduced reported liabilities from R330-billion to R27-billion, effectively erasing just over R300-billion from the books.
The board told Parliament that it took no legal advice before deciding to litigate against the Auditor-General. All the claims where no offers had been made were simply excluded from their liability calculations. This means thousands of legitimate claims simply vanished from the financial statements.
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Meanwhile, procurement irregularities allegedly exceeded R1-billion – the topic under discussion as this article was being finalised. The Special Investigating Unit (SIU) found money flowing from attorneys to family members and even money flowing to a family trust of an RAF executive.
Also, default judgments against the RAF jumped from R1.64-billion in 2023/24 to R3.99-billion in 2024/25, partly because the fund employs one legal representative for every 1,500 cases.
A funny, familiar long-term fix
Former CEO Collins Letsoalo earned R9.4 million in 2023/24 while a draft SIU report implicated him in procurement irregularities. For more than two years, the board failed to fill critical positions, including the chief claims officer and head of legal.
Minister Creecy’s long-term solution is to finalise the Road Accident Benefit Scheme (Rabs) Bill, which would replace the fault-based system with a no-fault social security scheme featuring defined benefits and structured payouts.
This addresses the core problem. A no-fault system would eliminate the need to prove negligence, reducing legal costs and speeding up compensation.
RAF funding, by Lindsey Schutters
The RAF’s own strategic plan concludes it is “unlikely to survive the next five years without legislative reform”.
But here’s the catch: we’ve been talking about no-fault reform for decades. Previous commissions and inquiries recommended similar changes.
The question isn’t whether Rabs is a good idea – it probably is – the question is whether the political will exists to implement it, and whether the same governance failures that plague the current system will simply migrate to the new one.
After all, the 1996 reform was also supposed to be transformative. It centralised administration, imposed accountability and created a clean institutional structure. Yet within years, the RAF was again bogged down in deficits, fraud and dysfunction.
Mission improbable
Kenneth Brown’s interim board is mandated to ensure financial and governance stability, fill critical vacancies, cooperate with SIU investigations and address frequent default judgments.
All while managing liabilities that exceed half a trillion rand.
They’ve made progress on some fronts: some senior positions have been advertised, the acting head of legal position has been filled, and RAF management claims to be cooperating more fully with audits. The Integrated Claims Management System (ICMS), despite being behind schedule, is supposed to create efficiencies and establish “a single source of truth” for claims.
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But the Auditor-General doesn’t buy it. The ICMS is being built around the disputed RAF 1 form that courts have found unlawful. The project’s milestones aren’t clear, and key components such as medical assessments have been descoped. The AG cannot yet confirm whether the system will produce reliable, auditable data.
The 2012 patch job
To be fair to the local courts, they tried to help Parliament fix things last decade. In 2011, the Constitutional Court exposed another fundamental injustice embedded in the RAF system. The Mvumvu judgment found that Section 18 of the RAF Act indirectly discriminated against black South Africans by capping compensation at R25,000 for passengers in taxis and buses.
In that case, the claimant was a taxi passenger who suffered serious injuries, lost her job and found herself limited to the R25,000 the RAF had already paid for medical bills, despite the fund admitting liability. The (unlicensed) driver was at fault, and the taxi was unlicensed, so she fell into the capped category.
The court reasoned that other accident victims enjoyed full compensation simply because they didn’t use public transport, and this undermined the RAF Act’s stated purpose as social security legislation meant to provide “the greatest possible protection” to accident victims.
The Constitutional Court suspended its invalidity order for 18 months to give Parliament time to fix the discrimination.
But then budget reality collided with constitutional rights: evidence showed that unlimited retrospective effect would increase the fund’s liability by about R3-billion and threaten its sustainability.
The RAF already had a deficit exceeding R40-billion.
Parliament’s solution was the Road Accident Fund (Transitional Provisions) Act of 2012, which came into effect in February 2013.
Twenty-six years after its creation, the RAF continues to operate as a system where fundamental rights are subject to fiscal sustainability calculations, and where each court-ordered reform creates new categories of inequality rather than addressing the structural flaw that generates them in the first place.
Minister Creecy has shown courage and decisiveness. But courage without a clear break from the past simply means rearranging deck chairs with more conviction. The Titanic still sinks. DM