What are your comments on the tariff recommendations by the SALRC for legal services offered by attorneys and advocates? Deadline: 30 November 2020
The Legal Practice Act 28 of 2014 (LPA) came into full force on 1 November 2018. The LPA drastically changed the regulation of the South African legal profession. The major changes included:
- Attorneys and advocates were merged into a single profession, referred to as “legal practitioners”. Prior to the LPA, attorneys and advocates had different statutes and were self-regulated professions.
- Admission requirements were standarised for attorneys and advocates.
- Work reservations were indicated for attorneys and advocates.
- Advocates who desire to serve the public directly, may become “Trust Account Advocates” and must operate a Trust Account, similar to attorneys.
- Governing and leadership structures changed and transformed. All legal practitioners are now governed by the South African National Legal Council, which includes representatives of all members of the legal profession and government, based on the demographics of our country.
- The LPA also changed the process of attorneys and advocates engaging clients and each other. In this regard, Section 35 in particular prescribes how legal practitioners should obtain instructions and indicate, negotiate and agree legal fees with clients prior to proceeding with billable legal services. It further plans to prescribe and implement tariffs to govern legal fees of legal practitioners in private sector.
How should legal fees be determined in terms of Section 35 of the LPA?
Section 35 (1) of the LPA instructed the South African Law Reform Commission (SALRC) to investigate and make recommendations to the Minister of Justice, within 2 years of the commencement of the LPA, to prescribe and implement payment of legal fees in respect of litigious and non-litigious legal services rendered by legal practitioners, juristic entities, law clinics or Legal Aid South Africa. The purpose of this investigation is to make recommendations on how to determine and prescribe fixed tariffs for legal services.
Section 35(2)–(4) broadly prescribed the factors to be taken into account conducting the investigation and determining the tariffs.
Section 35(3) states that, despite any other law to the contrary, nothing precludes any client of litigious or non-litigious legal services, on his or her own initiative, from agreeing with a legal practitioner in writing, to pay fees for the services in question in excess of or below any tariffs determined as contemplated in terms of this Section 35.
Section 35(6) further provides that the Minister may by notice in the Gazette determine maximum tariffs payable to legal practitioners who are instructed by any State Department or Provincial or Local Government in any matter.
The SALRC concluded their investigations and published preliminary recommendations on the law and determination of tariffs for legal fees in South Africa in its Discussion Paper 150 in September 2020. This Discussion Paper 150 is now open for comments by the public and legal practitioners until 30 November 2020.
What are the recommendations to determine the tariffs?
The right of access to courts is a fundamental human right embodied in Section 34 of our Constitution. Legal fees pose a barrier for the majority of the people of South Africa to access courts (or equivalent forums) for due process, and thus justice. The focus of the preliminary recommendations regarding tariffs for legal fees is thus firstly on legal fees (tariffs) for civil litigation services (access to courts).
Court proceedings are synonymous with litigation services provided by legal practitioners in civil matters. Non-litigation services are generally associated with any legal assistance prior or different to instituting formal court (forum) proceedings in civil matters.
The Discussion Paper 150 is lengthy and include drafts to legislation amendments. In our attempt to help busy legal practitioners and clients to digest the high level preliminary recommendations faster, we share the summary below:
- The Commission is of the view that the current status quo in terms of which there is neither a statutory tariff nor fee guidelines for legal services is contrary to the purpose of the LPA and therefore undesirable. It thus supports the view that the absence of a prescribed compulsory tariff is undesirable for the legal profession and the economy of South Africa, as the majority of the people in South Africa are denied access to justice.
- The Commission recommends that the Rules Board for Courts of Law, instituted in terms of the Rules Board for Courts of Law Act 1985, is the appropriate mechanism to determine and prescribe fixed tariffs for legal services in relation to civil litigious matters.
- The Commission proposes to equate attorney-and-client fees with party-party costs in litigious matters in respect of clients of legal services in the lower and middle income bands. Alternatively, the proposal is that if attorney-and-client fees should be higher than the party-and-party tariff, then this must be in terms of a fixed percentage, so that it is predictable and determinable upfront.
- For purposes of considering options for attorney-and-client fees, clients of legal services should be divided into 3 socio-economic bands, namely: the lower income; middle income; and upper income bands.
- The following 3 options for attorney-and-client fees have been identified by the Commission and are open for comment:
Option 1: Use of Rules Board’s litigious tariff with limited targeting – This option means that attorney-and-client fees will be the same as the party-and-party tariff in respect of clients of legal services who fall within the lower and middle income bands in litigious matters.
Option 2: Use of Rules Board’s litigious tariff with limited targeting subject to additional surcharge to be approved by Minister – This option means that attorney-and-client fees will not be the same as the party-and-party tariff in respect of clients of legal services who fall within the lower and middle income bands in litigious matters.
Option 3: Development of service-based fee guidelines by the Legal Practice Council (LPC) in litigious and non-litigious matters – The Commission proposes that the LPC, as the regulatory body for the legal profession, is the appropriate body to develop service-based attorney and client Fee Guidelines for determining legal fees in respect of all branches of the law.
To get the background and follow the arguments for the SALRC’s recommendations, you are encouraged to review and read the full report at:
How can LWFH assist?
LWFH (Lawyers Working From Home) supports legal practitioners and clients who favour remote and online legal services, as we believe widely available technologies make legal services more accessible and affordable in South Africa. The recommendations by the SALRC and upcoming changes in our legal profession will impact us all. We are happy to receive your feedback and prepare comments for submission to the Commission on your behalf by 30 November 2020.
You are welcome to email comments to management@lawyersworkingfromhome.co.za or WhatsApp 067 426 7141, well before the deadline of 30 November 2020.
Thank you for your participation and attention to this important process.
LWFH Management