Discovery goes after defiant RAF for contempt of court

Medical scheme administrator Discovery Health says it will launch contempt of court proceedings against the Road Accident Fund (RAF) and its CEO, Collins Letsoalo, “within the next few days”, because it has not yet complied with a Constitutional Court ruling.

The apex court’s decision on October 19 marked the end of the RAF’s attempts to appeal against a high court ruling that effectively ordered it to resume payments to medical schemes.

The RAF is a statutory body charged with compensating victims of road traffic accidents, and is funded by a levy of R2.18/l on the sale of petrol and diesel.

It has been locked in a legal battle with Discovery Health for more than a year after it directed staff to stop processing claims from medical schemes in August 2022. Medical schemes have for decades covered the medical bills of members injured in road traffic accidents, and then claimed the money back from the RAF.

Discovery Health won an urgent high court application to have the RAF’s directive declared unlawful and set aside, effectively compelling the organisation to resume paying medical scheme claims. The RAF sought to appeal against the ruling, taking its challenge all the way to the Constitutional Court, which in October declined to hear the matter.

“Regrettably, despite the clear position of the courts declaring the RAF’s directive to halt payments of medical scheme members’ valid claims from the RAF unlawful, the RAF has not resumed payments of these valid claims [to medical scheme members]” said Discovery Health CEO Ryan Noach. “To the best of our understanding, this is in direct breach of the high court ruling, which was enforced by the Supreme Court of Appeal and the Constitutional Court.”

The Constitutional Court handed down its decision more than two weeks ago.

“Given the RAF’s concerning conduct in this regard, this has left Discovery with no alternative but unfortunately to resort to seeking an order declaring the RAF and its CEO in contempt of court. The contempt application will be served on the RAF and its CEO within the next few days,” said Noach.

Discovery Health, which has 19 clients, including Discovery Health Medical Scheme and 18 smaller restricted schemes, has previously said its clients are collectively owed about R140m by the RAF.

Discovery’s decision to challenge the RAF’s defiance comes

hard on the heels of a separate matter in which the high court in Pretoria found Letsoalo to be in contempt of court due to the RAF’s failure to comply with a 2018 court order directing it to provide accident victim Nelson Mazibuko with an undertaking to cover his future medical expenses.

On October 12, judge Elizabeth Kubushi ordered Letsoalo to be jailed for three months, suspended for a year, provided he complied with the 2018 order within 15 days of being served with the ruling.

She awarded a punitive cost order against Letsoalo, compelling him to cover all the legal fees in the matter.

While more than 15 days have elapsed since Kubushi found Letsoalo in contempt of court, the sheriff of the court by Monday has been unable to serve him personally with the ruling, and thus no warrant has been issued for his arrest, said Alicia Steenkamp from Van Dyk Steenkamp Attorneys, the corresponding attorneys for Mazibuko at the Pretoria high court.

The RAF had not responded to Business Day’s request for comment by the time of publication.