Medical Scheme Members Win: SCA Says the Road Accident Fund Must Still Pay

On 16 October 2026, the Supreme Court of Appeal (SCA) upheld Discovery Health’s appeal against the Road Accident Fund (RAF) and its former chief executive, Collins Phutjane Letsoalo.

In Discovery Health (Pty) Ltd v Road Accident Fund and Another [2026] ZASCA 140, the Court declared that both respondents had breached a High Court order issued on 27 October 2022 and their constitutional duty to obey and implement it.

The SCA prohibited the RAF and its former CEO from implementing two subsequent directives, issued on 13 April and 2 November 2023. It also barred them, with immediate effect, from deducting compensation because a claimant’s medical expenses had been or would be paid by a medical scheme.

The respondents were ordered to take the necessary compliance steps within 14 days and report in writing to the Court’s Registrar and Discovery’s attorneys. Costs were awarded against them.

The decision was therefore not simply a disagreement over medical expenses. It was also a ruling on the limits of administrative power and the obligation of public institutions to respect final court orders.

The dispute began in August 2022, when the RAF directed its claims officers to reject past medical expense claims if a medical scheme had already paid the costs.

The RAF’s position was that claimants had not personally incurred those expenses and therefore had no corresponding loss for which the Fund was required to compensate them.

Discovery challenged that approach. On 27 October 2022, the High Court declared the original directive unlawful and interdicted the RAF from implementing it. The RAF’s attempts to obtain leave to appeal were unsuccessful, including its application to the Constitutional Court, which declined to hear the matter.

The RAF subsequently issued two more directives. The first introduced additional reasoning involving medical schemes’ statutory obligations to cover certain treatments. The second relied on section 19(1)(d)(i) of the Road Accident Fund Act, which addresses particular agreements involving assistance with or financing of claims in return for a share of compensation.

Discovery argued that these directives continued to produce the outcome the High Court had already prohibited.

The SCA’s central concern was the substance of the new directives, not merely how they were worded.

The Court held that both directives sought to preserve the RAF’s refusal to compensate claimants for past medical expenses already paid by their schemes. Changing the legal justification did not change the essential issue previously decided.

The doctrine of res judicata prevents parties from reopening matters that have already been finally determined between them. Closely related, the “once and for all” rule prevents parties from splitting a single dispute into successive proceedings or defences when they could reasonably have been raised together.

The SCA concluded that the RAF could issue lawful operational directives, but it could not use new directives to contradict the earlier order or circumvent its effect. The Court described the later directives as “clearly contrived” to get around the High Court’s judgment.

This distinction matters beyond the RAF. Government institutions need room to administer their statutory responsibilities, but that authority does not include the power to neutralise judicial decisions by repackaging a previously rejected position.

The judgment also addressed the legal treatment of medical scheme payments.

Under the common-law principle known as res inter alios acta, certain benefits received by an injured person from a third party are not used to reduce the damages payable by the wrongdoer. The reasoning is that the benefit arises from a separate legal relationship and should not automatically relieve the party responsible for the injury of its liability.

The SCA reaffirmed that medical scheme payments for past medical expenses fall within this principle. It also rejected the argument that reimbursement arrangements between schemes and their members necessarily fall within the exclusion in section 19(1)(d)(i) of the RAF Act.

The Court drew an important distinction: an agreement requiring a member to reimburse a medical scheme after the RAF settles a claim is not the same as an agreement to share compensation with a third party in exchange for assistance or financing.

That distinction preserves the difference between recovering medical costs paid on a member’s behalf and arrangements that may fall within a statutory exclusion.

For road accident victims who belong to medical schemes, the ruling confirms that the RAF cannot reduce compensation simply because the scheme has already paid the relevant medical expenses.

That does not mean every claim must automatically be paid in full. Claimants must still establish entitlement to compensation under the Road Accident Fund Act, and the Fund may rely on lawful grounds for disputing a claim. The judgment addresses the specific basis of exclusion challenged in this litigation.

The ruling also has implications for medical schemes. Their rules may require members to reimburse the scheme from compensation recovered for expenses the scheme previously paid. If the RAF refuses to compensate those expenses solely because the scheme paid them first, that recovery mechanism can be undermined.

Discovery had previously argued that the dispute imposed significant costs on schemes. Those potential financial consequences were part of the wider context, but the SCA’s binding orders rest on the legal conclusions in its judgment—not on any particular estimate of industry-wide losses.

The wider constitutional message

The SCA’s decision reinforces the constitutional principle that court orders bind public institutions. Section 165 of the Constitution protects judicial authority and requires organs of state to assist and protect the courts in ensuring their independence, dignity, accessibility and effectiveness.

A public body may disagree with a judgment, but disagreement does not authorise non-compliance. The proper course is to pursue available legal remedies, not to preserve the same prohibited outcome through new administrative instructions.

The significance of this case is therefore twofold: it protects the established treatment of medical scheme payments in RAF claims, and it confirms that compliance with a court order must be substantive, not merely formal.

The RAF must now implement the SCA’s order and report its compliance within the prescribed 14-day period. The judgment makes clear that the authority to administer a public compensation system does not include the authority to work around the courts.