The RAF has been ordered to pay hundreds of millions to a Gauteng hospital as courts crack down on non-compliance. Picture Credit: Moneyweb
By Aisha Zardad
Gauteng – The Road Accident Fund (RAF) has been dealt a significant legal blow after the Supreme Court of Appeal ordered it to pay a Gauteng private hospital a total of R251 million, while also confirming that the fund is liable for interest on late payments.
In a separate but related ruling, the court directed the RAF to pay more than R92 million to Sunshine Hospital within seven days, with an additional R159 million to be settled within 30 days.
The hospital, operated by Newnet, had treated numerous patients injured in road accidents — many of whom were referred by the RAF or transferred from state facilities unable to provide the necessary care.
However, despite invoicing for services rendered, the hospital experienced ongoing payment challenges. By March 2020, the RAF had stopped payments entirely, forcing the facility to temporarily shut its doors before later reopening.
Over several years, courts consistently ruled in favour of the hospital, yet payments were not made. Attempts to recover funds through the attachment of RAF movable assets also proved unsuccessful.
In its defence, the RAF argued that it lacked the financial capacity to settle the debts. However, Judge Fayeeza Kathree-Setiloane rejected this claim, emphasising the fund’s constitutional duty to comply with court orders.
“As an organ of state, the Fund bears a constitutional obligation to comply with court orders,” she said, adding that the RAF had “deliberately and publicly demonstrated its refusal” to do so.
The court also heard that the RAF had enlisted police to prevent the lawful attachment of its assets — a move strongly criticised in the judgment.
In a further ruling, the SCA clarified that the RAF is automatically liable for post-judgment interest under the Prescribed Rate of Interest Act, even where court orders are silent on interest.
This decision followed two consolidated cases — known as the Stoffels and Herold matters — where the RAF delayed payments of millions of rands in damages but refused to pay interest, arguing that it had not been explicitly ordered by the courts.
The SCA dismissed this argument, confirming that interest begins accruing automatically 14 days after judgment, regardless of whether it is expressly stated.
The court has now ordered RAF Acting CEO Radikwena Phora to ensure compliance with the rulings, placing further pressure on the embattled fund to meet its legal and financial obligations.
