Ethical and liability considerations of a termination of the legal practitioner’s mandate

September 1st, 2022
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The relationship between a legal practitioner and their client originates from the mandate given by the latter to the former. The relationship exists for as long as the mandate is in place. If the client terminates the mandate, the legal practitioner has a duty to withdraw as attorney of record and cannot take any further action purportedly in the pursuit of the terminated mandate. The mandate is the basis of the contractual relationship between the legal practitioner and the client and the authority on which the legal practitioner’s action in the matter is based.

What, then, are the consequences if a legal practitioner continues acting in a matter after their mandate has been terminated by the client? Put differently, can a legal practitioner continue to act in a matter where their authority to act has been terminated?

The Legal Practice Act, Code of Conduct, and the Court Rules

Section 34(1) of the Legal Practice Act 28 of 2014 (the Act) provides that: ‘An attorney may render legal services in expectation of any fee, commission, gain, or reward as contemplated in this Act or any other applicable law, upon receipt of a request directly from the public for that service’ (my italics).

Paragraph 3.7 of the Code of Conduct for all Legal Practitioners, Candidate Legal Practitioners and Juristic Entities (the Code) published in terms of s 97(1)(b) of the Act provides that legal practitioners, including candidate legal practitioners and juristic entities shall ‘respect the freedom of clients to be represented by a legal practitioner of their choice’ (my italics).

If a legal practitioner persists in acting in a matter where the client has terminated the mandate, that legal practitioner will thus be acting in violation of the Act and the Code.

Rule 16(2)(a) of the Uniform Rules of Court provides that ‘[any] party represented by an attorney in any proceedings may at any time, … terminate such attorney’s authority to act and may thereafter act in person or appoint another attorney to act in the proceedings, whereupon such party or the newly appointed attorney on behalf of such party shall forthwith give notice to the registrar and to all other parties of the termination of the former attorney’s authority, and if such party has appointed a further attorney to act in the proceedings, such party or the newly appointed attorney on behalf of such party shall give the name and address of the attorney so appointed.’

For proceedings in the other courts, regard must be had to the rules of the court in which the proceedings are being conducted. For example, see r 9 (Power of attorney or authorisation to act) of the Rules of the Constitutional Court, r 5 of the Rules of the Supreme Court of Appeal and r 52 and r 52A of Rules Regulating the Conduct of the Proceedings of the Magistrates’ Courts of South Africa.  It will be noted from the rules of the respective courts that the authority to act for the party concerned is central to authorisation of the attorneys representing the parties to the proceedings in those forums.

Some lessons from decided cases
  • Sayed NO v Road Accident Fund 2021 (3) SA 538 (GP)

In Sayed NO the defendant’s attorneys of record had played an active role in the proceedings but had, at some point before the hearing of the matter, played no further role in the proceedings yet failed to withdraw as attorneys of record and did not appear at the hearing. The broader context of this matter is that the Road Accident Fund (RAF) had decided to change its litigation model and terminated the mandates of the firms on its panel. That termination was challenged by several firms (see Mabunda Incorporated and Others v Road Accident Fund; Diale Mogashoa Inc v Road Accident Fund (GP) (unreported case no 15876/2020, 30-4-2020) (Davis J) and Road Accident Fund and Others v Mabunda Incorporated and Others and related matters (Law Society of South Africa and Others as Intervening Parties) [2021] 1 All SA 255 and FourieFismer Inc and Others v Road Accident Fund; Mabunda Inc and Others v Road Accident Fund; Diale Mogashoa Inc v Road Accident Fund (GP) (unreported case nos 17518/2020; 15876/2020; 18239/2020, 8-7-2020) (Hughes J)). The court in the Sayed NO matter did not have the benefit of an explanation from the defendant’s attorneys concerned of the reasons for the stance that they had adopted.

Mahon J stated the following:

An attorney’s duty to withdraw

As a general principle, but subject to certain exceptions, whatever the nature of the matter at hand, a client is entitled at any time to put an end to the attorney and client relationship, and upon his doing so the attorney must accept the dismissal. This is a long-established principle in England and has been followed in South Africa and remarked upon as being implicit in our system of administration of justice.

In the handling of any matter which comes or is to come before any court an attorney must at all times act with proper respect for that court so as not in any way to impair its authority and dignity.

An attorney of record in litigation is no mere post box or conduit for the receipt and dispatch of documents. He plays a pivotal role in the progress of litigation, the functioning of courts and the administration of justice. The attorney’s function is to understand his client’s problem and, even where he knows that counsel will be briefed, to go as far as he reasonably can in the time available not only to grasp the facts, but also to investigate the legal questions involved. It goes without saying that these duties cannot be fulfilled where the attorney has washed his hands of the matter and is present in name only.

It must be remembered that an attorney owes duties not only to his client, but also to the court and, indeed, to his opponents and their clients’ (footnotes omitted).

The court considered the relevant portions of r 16 of the Uniform Rules of Court (paras 10 – 11) and held that:

‘… an attorney, when acting for a litigant, is required to place himself on record in terms of [r 16]. Axiomatically, where that attorney ceases to act in the matter, he is similarly duty-bound to deliver a notice of withdrawal as attorney of record.

This serves an important purpose, not only for the parties involved but also for the protection of the attorney himself … .

[I]f an attorney should deliberately act in a manner which is at odds with his ethical duties in an effort to preserve his own financial self-interest, that would, in my view, render the attorney guilty of unprofessional conduct. It must be remembered that an attorney’s profession is more than a mere commercial enterprise – it is a noble undertaking which carries with it the privilege of serving the administration of justice. An attorney’s ethical obligations will always outweigh matters of financial or commercial expediency.’

The court found (at para 20), on the facts of the matter, that the defendant’s legal practitioners were either required to withdraw timeously or to continue acting in the matter (even at their own financial risk). A copy of the judgment was intended to be delivered to the Legal Practice Council (LPC) for the LPC to consider investigating the conduct of the RAF’s legal practitioners of record in all the matters before the court (para 24).

Mr Rubushe, purportedly acting on a contingency fee agreement, had represented Mr Mfengwana in a claim against the RAF. The matter was before Plasket J (as he was then) where the court was requested to make a settlement agreement an order of court. Plasket J, in that matter (Mfengwana v Road Accident Fund 2017 (5) SA 445 (ECG)), inter alia, declared the contingency fee agreement entered into between Messrs Mfengwana and Rubushe to be in conflict with the Contingency Fees Act 66 of 1997 and set it aside. The registrar was also ordered to deliver a copy of the judgment to the then Cape Law Society.

The Rubushe matter, a sequel to the Mfengwana judgment, was before Jolwana and Govindjee JJ as an application launched by the LPC against Mr Rubushe (the respondent). For present purposes, I focus only on one aspect of the Rubushe matter, namely the respondent’s conduct after he withdrew as Mr Mfengwana’s attorney of record. In the judgment penned by Jolwana J, it is noted that after he had withdrawn as Mr Mfengwana’s attorney of record, the respondent –

  • charged for attendances including an opinion from counsel on the validity of his contingency fee agreement (at para 28.11 of the LPC’s founding affidavit quoted in para 11 of the judgment);
  • settled the party and party costs; and
  • (through his correspondent attorneys) issued a warrant of execution against the RAF for payment of the amount claimed and received payment thereof into his trust account (para 14).

On this point, Jolwana J noted that:

‘How an attorney, having withdrawn as an attorney of record, still considers himself or herself entitled to have a warrant of execution issued in that same matter, not for costs taxed and allowed but for the capital amount of the damages claimed is beyond comprehension. It is in fact clear that in withdrawing as an attorney of record in the matter the respondent merely sought, with connivance, to avoid having to comply with Plasket J’s order issued on 28 November 2016. He, at the same time appropriated for himself, unlawfully, the right to pursue the Road Accident Fund for the capital amount which the Road Accident Fund was ordered to pay with an obvious intention, again, unlawfully, to retain
R 204 889,17. This conduct on its own is of egregious proportions to say the least. It is, in my view, also a manifestation of dishonesty and deceitfulness on the part of the respondent.’

In so far as terminations of mandates and the duty to withdraw as attorney of record are concerned, regard can also be had to the following judgments:

Factors to be considered by legal practitioners

Once a law firm receives notice from a client that their mandate has been terminated, it is prudent to immediately withdraw as attorneys of record and to ensure that the notice of withdrawal complies with the court rules and is timeously served on all parties and filed with the court. In this regard, see S v Ndima 1977 (3) SA 1095 (N), MacDonald t/a Happy Days Cafe v Neethling 1990 (4) SA 30 (N), Makuwa v Poslson 2007 (3) SA (T) and Transorient Freight Transporters Corporation v Eurocargo Co-ordinators (Pty) Ltd 1984 (3) SA 542 (W).

Continuing to purportedly act for a client in a matter after the mandate has been terminated exposes the legal practitioners concerned to the risk of disciplinary action being instituted against them by the LPC.

The client may dispute liability for fees incurred after the mandate has been terminated. Furthermore, as happened in the Maclean case, the former client may seek to transfer liability for costs incurred after the termination to the firm.

Lastly, the client (and third parties) may look to the firm for indemnification of any losses suffered because of actions undertaken by the legal practitioner after the mandate has been terminated. Unscrambling the proverbial egg of consequences of unauthorised actions may well be a very expensive and complicated exercise. Consider, for example, circumstances where a settlement agreement made an order of court is sought to be set aside on the basis that the legal practitioner acting for one of the parties no longer had a mandate to act. If the analogy is extended to divorce proceedings the complications and list of possible permutations is very extensive.

The Legal Practitioners Indemnity Fund NPC Master Policy will not indemnify claims against legal practitioners in these circumstances as they are excluded from the policy, because such claims –

  • will be for trading debts (clause 16(a));
  • may arise from an order to pay costs de bonis propriis (clause 16(g));
  • relate to legal services carried out in violation of the Act and the rules (clause 16(t)); or
  • will be claims arising out of dishonesty or fraud (clause 18).

Thomas Harban BA LLB (Wits) is the General Manager of the Legal Practitioners’ Indemnity Insurance Fund NPC in Centurion.

This article was first published in De Rebus in 2022 (September) DR 8.

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