Subrogation and Medical Schemes

Donald Dinnie

Van Tonder v Road Accident Fund (1736/2020; 9773/2021) [2023] ZAWCHC 305 (1 December 2023)

The court consolidated two matters against the Road Accident Fund, for payment of each plaintiff’s past medical and hospital expenses, which were rejected by the RAF due to the fact that both plaintiffs were members of private medical aid schemes, who had covered those medical expenses.

The court canvassed the RAF’s attitude to medical aid payments, including the Discovery case discussed, and the RAF’s failed application for leave to appeal to the Constitutional Court.

The RAF tried to reclassify the plaintiff’s medical costs as being related to emergency medical conditions, in an attempt to fit them under the Prescribed Minimum Benefits as defined in the Medical Schemes Act – which is regarded as an exclusion in the RAF Act.

The RAF reasoned that because the medical scheme is bound to pay certain minimum benefits without any deduction, including for emergency medical conditions, that precludes the scheme from relying on the doctrine of subrogation. Since the scheme cannot claim repayment by virtue of subrogation, then the scheme cannot claim against the RAF for past medical expenses.

The court held that the RAF’s argument was contrived and was an attempt to avoid the consequences of the Constitutional Court’s refusal of leave to appeal. The court was informed that despite the Constitutional Court’s refusal, the RAF nonetheless persisted in refusing to pay claims for past medical expenses. The court deprecated the RAF’s actions and ordered the RAF to pay the claims.

First published by: Financial Institutions Legal Snapshot