Medical scheme administrator Discovery Health has intensified its legal challenge against the Road Accident Fund (RAF) and its CEO, Collins Letsoalo. On Thursday, Discovery Health requested the court to declare the RAF and Letsoalo in breach of a previous judgment and to resume paying claims from medical schemes.
Initially, Discovery sought a contempt of court ruling against the RAF and Letsoalo based on an October 2022 judgment by Judge Mandla Mbongwe. However, they decided this aspect should be addressed later, allowing the RAF and Letsoalo to explain their breach of the order.
A contempt of court finding could result in fines or imprisonment. Discovery Health’s original application even called for Letsoalo’s incarceration and for him to be held personally liable for costs.
Conflict
The conflict between Discovery and the RAF began nearly two years ago when the RAF instructed its staff to stop processing claims from medical schemes in August 2022. This directive was unexpected as the RAF had traditionally reimbursed medical schemes for their members’ road traffic accident-related health costs.
Discovery Health secured an urgent high court ruling in October 2022, declaring the RAF’s directive unlawful. However, the RAF contested the ruling up to the Constitutional Court, which declined to hear the matter in October last year.
The core issue in the legal dispute is whether Mbongwe’s judgment, upheld by the apex court, obliges the RAF to resume paying medical schemes. Discovery asserts that it does, while the RAF claims it does not need to comply due to two new directives issued after Mbongwe’s judgment.
Attempt to circumvent the judge’s ruling
During the hearing at the Pretoria high court, Wim Trengove, representing Discovery, argued that the RAF had violated Mbongwe’s judgment, which prohibited withholding payments for past medical expenses covered by medical schemes. He described the new directives as attempts to circumvent the ruling.
Judge President Dunstan Mlambo questioned the RAF’s legal team on whether the new directives shared the same objectives as the original August 2022 directive. RAF’s legal counsel, Cedric Puckrin, argued that the new directives were narrower in scope. Discovery countered by asserting that despite different justifications, all three directives aimed to prevent payments for medical expenses covered by medical schemes. Judgment was reserved.