ActionSA has officially called for an urgent parliamentary briefing with the Minister of Finance following a landmark Supreme Court of Appeal (SCA) ruling that could potentially cripple the South African national fiscus.
The ruling, delivered yesterday, struck down the Road Accident Fund (RAF) Form 1 introduced in 2022, declaring it unlawful. The court has ordered the RAF to revert to the 2008 version of the claim form, a move that effectively reopens the door for hundreds of thousands of previously rejected claimants.
The massive financial fallout
According to a statement released by ActionSA Member of Parliament, Alan Beesley, the fiscal implications are staggering. The party's preliminary assessment suggests that the ruling exposes the state to nearly R180 billion in unprovisioned liabilities.
This estimate is based on approximately 600,000 claims that were not accepted due to the unlawful form, with an average claim value of R300,000. When added to the RAF's existing unrecorded liabilities of R300 billion, the total debt could now exceed R500 billion.
ActionSA warns that this debt burden now exceeds the financial crises seen at other state-owned enterprises like Eskom and Transnet, placing the national fiscus in an extremely vulnerable position.
Operational collapse and reckless governance
Beyond the raw numbers, the ruling highlights a looming administrative disaster. The RAF, which is already struggling with a massive backlog, reportedly lacks the capacity to process the anticipated influx of 600,000 resubmitted claims.
The party warns of a vicious cycle of litigation where administrative overload prevents the Fund from investigating claims fast enough, leading to default judgements and escalating legal costs that will drive the cost per claim far beyond reasonable levels.
A crisis of accountability
ActionSA has leveled harsh criticism at the leadership involved, specifically targeting RAF CEO Collin Letsoalo, the current board, and former Minister of Transport Fikile Mbalula for a complete lack of rational decision-making and a failure in oversight.
“The scale and severity of the consequences arising from the RAF's irrational and unlawful conduct are immense and will be felt for generations to come,” Beesley stated.
The party also highlighted the human cost, noting that unlawful 2022 form disproportionately affected the most vulnerable road accident victims who were barred from seeking legitimate compensation.
Next steps
ActionSA is currently exploring legal avenues to hold those responsible personally accountable, including the possibility of criminal charges. The party maintains that South African taxpayers should not be forced to bear the cost of reckless governance and systemic failure.
The request for a briefing before Parliament remains a priority to determine how the government intends to plug the R180 billion hole without further destabilising economy.