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The Office of the State Attorney is the biggest litigator in the legal fraternity, as it represents a large portion of the organs of state within the meaning of s 239 of the Constitution.

The legal practitioners that the Office of the State Attorney includes, are ordinarily previously disadvantaged legal practitioners. (For our purposes, ‘legal practitioner’ means an advocate admitted in terms of s 3 of the Admission of Advocates Act 74 of 1964, alternatively in terms of ss 24(2)(a) and 30 respectively of the Legal Practice Act 28 of 2014 (the LPA)).

Since the advent of the Solicitor General’s (the SG) role within the Office of the State Attorney, there have been attempts to regulate how legal practitioners charge, in executing their professional services, when dealing with the State Attorney.

The draft policy on briefing of legal work

A draft policy, Draft Policy Briefing and Outsourcing of Legal Work 2020/2021 (Draft Policy), germinated a project managed by National Treasury, known as tender: RT19-2024.

The publication of this tender caused various advocates associations to be up in arms. The largest association to whom legal practitioners of the Bar belong to, brought a legality review against three respondents responsible for the implementation of tender: RT19-2024, namely, Minister of Finance, Minister of Justice and Correctional Services and the SG (see General Council of the Bar of South Africa and Another v Minister of Finance and Others (GP) (unreported case no 2023/132695, 28-6-2024) (Millar J) (the judgment)).

As regards the legality review, the matter was adjudicated on by Millar J and the outcome of such arguments appears in the case above. Notwithstanding the fact that in my considered view this case has challenges, that attract both administrative law and competition law, only the former challenges were dealt with. Leave to appeal was requested and refused (see General Council of the Bar of South Africa and Another v Minister of Finance and Others (GP) (unreported case no 2023/132695, 2-8-2024) (Millar J)).

The focus in this article will be limited to the competition concerns raised by tender: RT19-2024, and the impact on briefing pattens in the legal fraternity.

The nature of the advocates’ fraternity

The advocates’ fraternity is a referral profession. Irrespective of the name and style of the voluntary association, the advocate’s fraternity is a specialised body composed of people with expert knowledge and experience in the various fields of the law in accordance with s 22 of the Constitution.

The importance of referral advocates was neatly set out in Van der Spuy v General Council of the Bar of South Africa and Others 2002 (10) BCLR 1092 (CC) at para 16 and 17 respectively.

The referral practice was neither conceived by the legislature, nor was it devised by the courts. It came through centuries of experience and development, first in the United Kingdom and later in South Africa.

Section 217(1) of the Constitution identifies five values that an organ of state must consider when procuring goods and services, namely fairness, equity, transparency, cost-effectiveness, and competitiveness. Competitiveness is exactly what the advocates practice is built on.

Competition is characterised by an urge to compete. It minimizes the risk of the one procuring goods, from receiving substandard goods. In the advocacy profession, it keeps practitioners on their toes and gives an incentive to grow.

Competition concerns in briefs for legal work by State Attorney

The Competition Act 89 of 1998 as amended (the Act) has a quintessential preamble which states that: ‘Apartheid and other discriminatory laws and practices of the past resulted in excessive concentrations of ownership and control within the national economy, inadequate restraints against anti-competitive trade practices, and unjust restrictions on full and free participation in the economy by all South Africans’ (my italics). This should be the basis of bringing about transformation from the State Attorney’s side in the legal fraternity.

During 2021/2022 the Draft Policy was publicised, however, it is my view that the Draft Policy is a failed and purposeless document, which will collapse justice for deserving organs of state and adversely affect the competitive environment in the advocacy fraternity for the pointed reasons below from the extracts from the Draft Policy.

For instance, the Draft Policy in terms of clause 4.1.1.2 states that: ‘The State Attorney Offices through the Office of the Solicitor General have the all prevailing right and discretion to appoint legal practitioners in accordance with this policy.’

Variety is the spice of life. The above quote means that the organ of state/client is rendered useless as regards skills transfer, consumer choice and growth prospects for legal practitioners. This, in my view, has the following tenets:

• Barriers to access state attorney work are heightened.
• Public interest concerns, which inherently come into play when organs of state litigate, will not be open to the highly skilled and experienced practitioners who must pass skills down to interested and upcoming practitioners. This is anticompetitive, as consumer choice is removed by the policy implementers.
• Professional standards will drop, as the latter have been described as tools to protect the public from professionals who are able to take unfair advantage of the consumer’s situation.
• Recently, the process followed in briefing legal practitioners provides for the request of quotations (the quotation system). The latter is counterproductive for the following reasons:
• The State Attorneys already have fee agreements with different legal practitioners and, therefore, requesting a quotation where the fee of a legal practitioner is known is irrational.
• The quotation system amounts to a box ticking exercise for State Attorneys to favour their friends with briefs and prevent the underutilized legal practitioners from getting any work from the office of the State Attorney. This stifles competitiveness, which is the backbone of the advocacy legal practice.
• The quotation system removes the organ of state’s choice of legal practitioner and creates a quid pro quo rapport between the State Attorney and limited legal practitioners.
• It does not consider whether the legal practitioner has the requisite expertise to diligently produce good results for the brief, which eventually amounts to setting that legal practitioner up for failure.
• In any event, there are enough safety and competitive pricing mechanisms to avoid anticompetitive behaviour by legal practitioners.

The Draft Policy creates an entitlement mentality to briefs from the Office of the State Attorney, without the need to perform and produce viable results for the organ of state being represented.

Organs of state, in turn, will lose out on qualitative work, well developed jurisprudence in their favour and training the upcoming and underutilized legal practitioners, simply because experienced practitioners refuse to subject themselves to the state attorney tariff, which has no rational basis.

Clause 4.1.1.6 provides that: ‘There is a predetermined tariff that is payable to a legal practitioner. Increased fees must be approved by the Office of the Solicitor General. The National Briefing Committee (NBC) within the [Office of the SG] will monitor the briefs allocated to legal practitioners and the fees thereof.’

This is yet another competition concern. Neither the SG or the Minister of Justice have made an application for exemption in terms of items 1 and 2 of part A of sch 1 of the Act, yet restrictive practices are being imposed on legal practitioners.

In order to assess whether or not the restrictions contained in the policy is necessary for the prescribed purpose, the public interest or client’s interests must prevail. The policy fails on both legs because of clause 5.10. This clause deals with charges for preparation and states that: ‘(ii) Preparation to draft pleadings or for consultations (other than perusing the documents) will not be allowed, as a legal practitioner will be paid for the drafting of the pleadings, for reading and for consultations.’

Proper preparation prevents poor performance. The proposed tariff is literally setting the organs of state up for failure because the independence of pricing based on experience, skills and knowledge is not considered. What will routinely happen is that gross ineptitude will be displayed throughout litigation based on the tariff, which will prove to be more expensive in the long run.

Competition analysis and the impact of proposed briefing system of State Attorneys

Competition authorities have always held a stern view of regulating professional fraternities in a competition compliant manner. Tender: RT19-2024 is found wanting as far as referral advocates are concerned, owing to s 34(2)(a)(i) of the LPA (34. Forms of legal practice – (2)(a) An advocate may render legal services in expectation of a fee, commission, gain or reward as contemplated in this Act or any other applicable law – (i) upon receipt of a brief from an attorney).

‘The enforcement of legal rules is made possible by the strength of those base interests’ (Karl Marx Critique of the Gotha Programme (1938) in Jason Brickhill Public Interest Litigation in South Africa (Cape Town: Juta 2018)). When considering the tariff imposed in tender: RT19-2024, the tariff has several hurdles to clear.

First, the Office of Fair Trading in March 2001 (OFT 328), performed a study on competition in professions. It comes as no surprise that the legal fraternity was thoroughly considered too (OFT ‘Competition in professions’ at page 44-83 (https://webarchive.nationalarchives.gov.uk, accessed 19-10-2024).

Clause 16 of RT19-2024 imposes Annexure C as a tariff, which is irrational as it has not considered any prior studies before being forced through a tying and bundling mechanism for legal practitioners.

The points above are where the pulse of the competition concerns are identified in the judgment from paras 59-62.

Second, the South African Law Reform Commission has performed a useful study and prepared a report named: ‘Report Project 142 Investigation into Legal Fees – Including Access to Justice and Other Interventions’ (www.justice.gov.za, accessed 19-10-2024).

Annexure F: Fee parameters for counsel acting on the instruction of the state (see page 476 – 477). These fees are higher than the proposed fixed fees in tender: RT19-2024.

The State Attorney, through the auspices of the SG has not been granted any exemption under s 10(2) of the Act, yet it is applying a price fixing mechanism through Annexure C of tender RT19-2024, which is irrational and an abuse of power as it is not backed up by any lawful process. For the administrative law part, para 51 of the judgment settles this point.

Annexure C chokes legal practitioners, who may be briefed on anticompetitive and irrational fee structures which do not consider factors such as the expertise the legal practitioner has built over the years, the hidden talents from underutilised legal practitioners and the nature, complemented by the magnitude of the matter, which in itself, is non-transformative.

Thus, the fixed tariffs substantially prevent the organ of state’s choice to recommend or even engage services of a legal practitioners with the requisite skills and experience, on a case-by-case basis.

The fixed tariff is likely to eradicate or seriously reduce the benefits that competitive markets deliver for consumers, namely competitive prices and choice of legal practitioner to be briefed.

‘The low level of concentration suggests that competition issues within the profession are more likely to arise from regulatory structures than from concentration in the market’ (The Competition Authority ‘Competition in Professional Services – solicitors and barristers’ www.ccpc.ie, accessed 19-10-2024)). This is in and of itself anti-transformative. Thus, fixed tariffs do not permit the provision of competitive prices to organs of state/consumers. They are likely to eradicate or seriously reduce the benefits that competitive markets deliver for the organs of consumers, namely competitive prices and consumer choice on briefs.

Stripped of all rhetoric, recommended prices, like fixed prices, may have a significant negative effect on competition. Firstly, recommended prices ‘may facilitate the coordination of prices between service providers’ (Aitor Ciarreta, María Paz Espinosa and Aitor Zurimendi ‘Are Bar Associations Anticompetitive? An Empirical Analysis of Recommended Prices for Legal Services in Spain’). Secondly, recommended prices can in fact mislead consumers about reasonable prices (Ciarreta, Espinosa and Zurimendi (op cit)). It is accepted in international anti-trust law that recommendations of prices have the effect of becoming the ruling price for service.

Conclusion

The Minister’s role in the anticompetitive behaviour is that she, as the custodian of the State Attorney Act 56 of 1957, the proponent of just administrative action, the pioneer of transformation and the rule of law, remained silent when the SG, at whim flouts the law.

Thus, the anticompetitive behaviour has to be stopped and the exercise of public power must be within the confines of the enabling parameters. Until the fixed tariff is challenged at the Competition Tribunal on the identified basis above, the fixed tariff remains implementable at the Office of the State Attorney, including under tender RT19-2024.

Kamogelo Maputla LLB (UL) is a legal practitioner at the Tshwane Society of Advocates in Pretoria.
This article was first published in De Rebus in 2024 (December) DR 36.