Discovery appeal ruling bars RAF from deducting medical scheme costs in South Africa

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RAF barred from deducting medical scheme costs

Highlights

The Supreme Court of Appeal ruled that the Road Accident Fund must stop deducting medical scheme payments from compensation to road accident claimants with immediate effect.
The SCA set aside the December 2024 High Court decision, finding the RAF and former CEO Collins Letsoalo breached a prior court order and their constitutional duty by making such deductions.
The ruling invalidates RAF directives issued on 13 April 2023 and 2 November 2023, enhancing compensation rights for medical scheme members and increasing compliance obligations for the RAF.

SCA ruling resets compensation practice

As reported by Moneyweb, the Supreme Court of Appeal ruled on Friday that the Road Accident Fund is interdicted with immediate effect from making deductions from compensation paid to claimants because their medical expenses have been or will be paid by their medical aid schemes.

The judgment follows an appeal lodged by Discovery Health. That appeal challenged a December 2024 judgment by a full bench of the High Court in Pretoria, which dismissed Discovery's application for an order declaring that the RAF was in breach of an earlier high court order dealing with the fund's liability for past medical expenses of road accident victims who belong to medical schemes.

The SCA set aside and replaced the High Court judgment, declaring that the RAF and former RAF chief executive Collins Letsoalo are in breach of the court order and judgment dated 27 October 2022, and of their constitutional duty to obey and implement that judgment.

Implications for the RAF and medical schemes

The earlier ruling by Judge Mbongwe on 27 October 2022 declared unlawful a 12 August 2022 RAF directive that instructed employees not to make payments to claimants if their medical aid scheme had already paid medical expenses arising from a road accident.

In its latest order, the SCA also interdicted the RAF and Letsoalo, with immediate effect, from giving effect to directives issued on 13 April 2023 and 2 November 2023. The decision strengthens the position of medical scheme members seeking compensation for past treatment costs and raises compliance pressure on the RAF over how it calculates and settles claims.

Our earlier article covered a Court of Appeal decision in Malaysia holding that a lawyer with commission-partner status at a firm can be treated as a partner under the Partnership Act 1961 and therefore be liable for firm-related debts. The ruling overturned lower-court findings and underscored that titles such as “salaried partner” or “commission partner” may still carry personal exposure when disputes arise over missing client or transaction funds.

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