Legal Practice Act: What’s happening now?

August 25th, 2015
Mapula Thebe – Editor

Mapula Thebe – Editor

Since the enactment of the Legal Practice Act 28 of 2014 in September 2014, reasonable progress has been made. To recapitulate, the organised legal profession has entered the transitional phase of the Legal Practice Act. During this phase, the National Forum on the Legal Profession (NF), which was established in terms of ch 10 of the Legal Practice Act – which was enacted earlier this year – is tackling its tasks to iron out all issues and ensure a smooth handover to the envisaged Legal Practice Council (LPC). The NF will be in existence for a period not exceeding three years from February 2015. This transitional phase is the first phase of implementing the Legal Practice Act, with the second phase following once the NF has completed its duty.

Practitioners will be glad to hear that the work of the NF is well under way. The NF has made headway in the process by establishing four working committees to deal with different aspects during the period. The NF has met twice out of its four mandated meetings this year, with another meeting set for 19 September.

Some issues that the NF does not have to deal with, but which the profession must engage with, include s 35 of the Act which governs fees in respect to legal services and the issue of multidisciplinary practices, which has an enabling clause in the Act under s 6(5)(i).

As regards fees, the Rules Board must determine tariff fees for litigious and non-litigious legal services rendered by practitioners, juristic entities, law clinics or Legal Aid South Africa. The Act envisages a legal practitioner providing the client with a cost estimate notice, in writing, specifying all particulars, including –

  • the likely financial implications including fees, charges, disbursements and other costs;
  • the practitioner’s hourly fee rate and an explanation of the right to negotiate the fees;
  • an outline of the work to be done in respect of each stage of the litigation process, where applicable;
  • the likelihood of engaging an advocate, and an explanation of the different fees that can be charged by different advocates, depending on aspects such as seniority or expertise; and
  • if the matter involves litigation, the legal and financial consequences of the client’s withdrawal from the litigation as well as the costs recovery regime.

The estimate must be in writing and must also be explained verbally to the client. Non-compliance by a practitioner with the process can be construed as misconduct and the client is not required to pay any legal costs until the LPC has reviewed the matter and made a determination regarding amounts to be paid.

From the side of the profession, these requirements have raised the following:

  • No distinction is made between litigious and non-litigious costs. Therefore, non-litigious work will be bound to the litigious tariffs for the interim.
  • It is important to distinguish between bigger commercial clients and individuals.
  • It appears as if the Act confuses assessment of fees and setting tariffs.
  • A global cost estimate is impractical and unreasonable. Should a fee estimate rather be based on an hourly agreed tariff?
  • Classifying failure to provide and explain a written mandate as misconduct appears to be unduly harsh.
  • Subsection 11 dealing with non-compliance could be utilised as a delaying tactic by clients to pay their bills.

As already published in previous issues of De Rebus, this is an important time as the profession makes its way towards the new dispensation and practitioners are encouraged to make input to the process. This phase will, in essence, determine the future shape of the organised legal profession.

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This article was first published in De Rebus in 2015 (Sep) DR 3.

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