Discovery Health has been granted leave to appeal to the Supreme Court of Appeal (SCA) in its long-standing dispute with the Road Accident Fund (RAF) over the state-run fund's refusal to pay claims submitted by medical schemes to recoup their payouts to members injured in traffic accidents.
Fin24 reports that Judge Dunstan Mlambo, Judge President of the Gauteng High Court, also awarded costs to Discovery in a judgment handed down yesterday. The dispute goes back to 2022, when the RAF instructed its staff to reject claims that have already been paid by medical schemes. In October 2022, the High Court ruled that this decision by the RAF was unlawful.
The RAF responded by trying to appeal the High Court ruling by Judge Mandla Mbongwe, who refused to hear it. However, Mbongwe also refused an application by Discovery to force the RAF to resume payments to medical schemes on behalf of members. Subsequent appeals by the RAF to the SCA and the Constitutional Court also failed.
However, while the RAF was waiting for those appeal outcomes, it issued a further directive to its staff in April and November 2023 telling them to only process claims from medical aid members if they didn’t fall within the prescribed minimum benefits (PMB) or emergency medical conditions (EMC) of their medical aids.
Meanwhile, Discovery approached the courts seeking an enforcement order that would compel the RAF to resume paying claims from medical aids in accordance with the ruling by Mbongwe. However, the court, headed by Judge Khumalo, dismissed Discovery’s application on the basis that it was a medical schemes administrator and not the medical scheme itself.
In November 2023, the RAF again issued another directive to staff saying they should not pay out medical aid members who have entered into any agreement with another party for reimbursement for past medical expenses. The RAF’s argument was that it is not an insurer but a social benefit fund funded by the public purse.
The RAF’s continued refusal to pay claims from medical schemes on behalf of members prompted Discovery to approach the High Court again, claiming that the fund and its CEO were in contempt of the order by Mbongwe. Discovery ended up losing that case in a split decision that saw two judges rule against it in December 2024, though one judge ruled in its favour.
The two judges who ruled against Discovery found that medical schemes have no claim against the RAF after discharging their contractual and statutory duty towards their members.
However, in a minority ruling, Judge Ingrid Opperman ruled the RAF had tried to re-litigate an issue already decided by Mbongwe by conjuring up new justifications for its refusal to pay claims by medical aid members.
In granting Discovery leave to appeal the December 2024 High Court ruling, Mlambo said there was a need to clarify whether a medical schemes administrator could institute litigation, rather than the medical scheme itself.
"These are important principles of our law and it is in the interests of justice that leave be granted to enable the superior courts to provide a definitive view and necessary guidance to lower courts," Mlambo wrote in his ruling.
Mlambo also said the superior courts have not authoritatively decided on the legal principles surrounding third-party claims involving the RAF and medical aid schemes, saying it was therefore prudent that leave to appeal be granted.
Fin24 – Discovery wins right to appeal RAF's refusal to repay medical aid claims