Mapula Thebe – Editor
The much contested issue of common law contingency fee agreements was resolved by the recent Constitutional Court (CC) judgment in De la Guerre v Ronald Bobroff & Partners Inc and Others (CC) (unreported case no CCT 122/13 , CCT 123/13, 20-2-2014) (Moseneke ACJ, Skweyiya ADCJ, Cameron J, Dambuza AJ, Froneman J, Jafta J, Madlanga J, Van der Westhuizen J and Zondo J) and The South African Association of Personal Injury Lawyers v The Minister of Justice and Constitutional Development (The Road Accident Fund Intervening [2013] 2 All SA 96 (GNP). Both these cases dealt with the issue of the constitutionality of the Contingency Fees Act 66 of 1997 (the Act). In the cases, the issue debated was whether it was justifiable for legal practitioners to charge contingency fees outside of the 25% the Act provides for. The cases also dealt with whether it was rational that the non-regulation of agreements concluded by lay persons where one party undertakes to promote litigation financially or otherwise in return for a share in the proceeds.
At para 2 the court stated: ‘At issue are contingency fees. Under the common law legal practitioners were not allowed to charge their clients a fee calculated as a percentage of the proceeds the clients might be awarded in litigation. The Act changed this. It makes provision for these fees to be charged in regulated instances and at set percentages. Certain law societies made rulings allowing their members to charge in excess of the percentages set in the Act. Uncertainty reigned in the attorneys’ profession about the correct legal position in relation to contingency fees.’
The CC unanimously found that the legislature’s decision to regulate contingency agreements in the case of legal practitioners only was not irrational. The CC also found no merit to the challenge to particular provisions of the Act. The court emphasised that the matter concerned the right of access to justice by practitioners’ clients and not a right of the legal practitioners.
Both these matters were on appeal from the North Gauteng High Court in Pretoria and were dismissed with costs.
This article was first published in De Rebus in 2014 (April) DR 3.
